Greetings, welcome to the Gladstone Commercial Corporation's second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I would now like to turn the conference over to Chairman David Gladstone. Thank you. You may begin. Well, thank you, Christian. That was a nice introduction, thank all of you for calling in today. We really do enjoy this time with you guys, I hope you have a lot of questions for us today. We'll hear from Catherine Gerkis. She's our Director of Investor Relations; she's got a brief disclosure to read to you regarding certain regulatory matters concerning all of these calls and things that we're doing today. Catherine, go ahead. Thanks, David, good morning, all. Today's call may include forward-looking statements which are based on management's estimates, assumptions, and projections. There are no guarantees of future performance, actual results may differ materially from those expressed or implied in these statements due to various uncertainties, including the risk factors set forth in our SEC filings, which you can find on the investors page of our website, gladstonecommercial.com. We assume no obligation to update any of these statements unless required by law. Please visit our website for a copy of our Form 10-Q and earnings press release for more detailed information. You can also sign up for our email notification service and find information on how to contact our investor relations department. We are also on X at Gladstone Comp, as well as Facebook and LinkedIn. Keyword for both is The Gladstone Companies. Today, we'll discuss FFO, which is funds from operations, a non-GAAP accounting term defined as net income, excluding the gains or losses from the sale of real estate and any impairment losses on property, plus depreciation and amortization of real estate assets. We may also discuss Core FFO, which is generally FFO adjusted for certain other non-recurring revenues and expenses. We believe these metrics can be a better indication of our operating results and allow better comparability of our period-over-period performance. Let's turn the presentation to Buzz Cooper, Gladstone Commercial's CEO and President. Thank you, Catherine, thank you all for joining today's call. We are pleased to update you on our results for the quarter ended June 30, 2026, our current portfolio, and our future outlook. Before I turn to our results, I'll comment briefly on the market. Starting with the broader market, industrial conditions continued to improve during the quarter. According to Cushman & Wakefield, net absorption rose 21% from the prior quarter to 62.1 million square feet. This brings year-to-date net absorption to 113.6 million square feet, the strongest total since 2023. National vacancy declined 10 basis points to 6.9%, which Cushman views as a sign the market has passed the peak of this cycle. Asking rents rose 2.9% year-over-year. Demand remains concentrated in modern, large-format buildings supported by onshoring, nearshoring, and ongoing supply chain optimization. New construction deliveries remain below last year's pace, and while the development pipeline has begun to grow again, roughly 1/3 of it are build-to-suits, which keep speculative supply in check. The overall health of the industrial market remains continued competition for assets of all sizes, particularly those assets that are well-located and mission-critical. Turning to our results during the quarter, we acquired 153,890 sq ft industrial property in Newport News, Virginia, leased to Huntington Ingalls Industries for $22.75 million. This facility supports Huntington's Newport News shipbuilding operation, and we funded the purchase with internally generated cash flow without issuing equity. We sold a 161,458 sq ft industrial building in Monroe, North Carolina, to the tenant ASSA ABLOY. We acquired this asset in 2021. Over the term of our hold period, the property was 100% occupied, and the sale represents a gain on equity and a highly accretive cap rate. This acquisition and sale together illustrate our ability to generate equity and redeploy proceeds into mission-critical industrial assets. The Newport News acquisition represents nearly double the cash and straight-line rents from our North Carolina assets. We were able to achieve this growth without issuing new shares during a period when our common stock price was not attractive for new issuances. Furthermore, we increased portfolio WALT and added another mission-critical location at a great basis. With respect to our existing portfolio, we renewed or leased over 126,000 sq ft of office retail and over 34,000 sq ft of industrial with an increase in straight-line rent of $169,500 annually. We purchased a land parcel adjacent to our Clintonville, Wisconsin facility and simultaneously entered into a lease amendment into which we provide the funding for an approximate expansion of 86,000 sq ft and significant improvements to the existing 521,000 sq ft facility. The completion of these improvements expected to be in the second quarter of 2027. This lease will commence with a new 15-year term. We've collected 100% of the cash base rents in this period and this month. We leased 82,000 sq ft or the second floor at our Austin, Texas office property. We also acquired 146,650 sq ft industrial property in Red Bud, Illinois for $6.5 million. As it relates to the Austin property and other office properties within our portfolio, we acknowledge that office leasing and re-leasing requires CapEx dollars. When office buildings are as mission-critical and well-located as those in our portfolio, we are able to minimize those dollars such that we receive an accretive return on our investment. When we evaluate any office re-leasing, we review payback period, IRR, and ROI, as well as alternative of selling the property. We acknowledge that the returns are generally not as attractive to us as industrial properties, but they keep a constant stream of cash flow for our shareholders. We are not looking to grow our office portfolio, but until capital markets return fully, capital expenditures are typically more accretive and revenue generating than choosing to sell the asset. Again we evaluate each opportunity on a case-by-case basis, and we target payback periods between six and nine months. Through the efforts of our asset management team, as of June 30, 2026, the portfolio was 98.7% occupied, and the WALT on that portfolio was over 7.1 years. These transactions bring our industrial concentration to 69% of annualized straight-line rent as we continue working toward our near-term goal of 70%. Each of these milestones is a testament to the mission-critical nature of the assets in our portfolio, the quality of tenant credit in our portfolio, and our underwriting capabilities. As evidenced by our execution during and subsequent to the second quarter, we remain steadfast in several key focus areas. Growing our industrial concentration, adding value in our existing portfolio through renewals, extension, and strategic capital investments, disposing of non-core assets and strategically redeploying those proceeds into quality industrial assets. By continuing to execute on these focus areas, we expect to, again, increase our WALT, maintain strong occupancy rates, increase straight-line rent growth across portfolio, and decrease cost of capital. Looking ahead into the second half of 2026, we remain focused on evaluating opportunities to acquire high-quality industrial assets that are mission-critical to tenants and industries, and accretive to our long-term strategy. We are working toward our near-term goal of 70% industrial annualized straight-line rents. We will look to achieve this goal and push past it during the year. While we do not have a timeline for the disposition of our office portfolio, we are keenly focused on growing the industrial concentration of the overall portfolio. At the same time, we will continue to work with our existing tenants to extend leases, capture mark-to-market opportunities, and support tenant growth through tenant expansions, capital improvement initiatives, and build-to-suit opportunities. While we remain aware of the challenging office environment, we will be strategic and intentional in evaluating our specific portfolio, seeking opportune times to dispose of office and non-core industrial as part of our continued capital recycling efforts. With the availability via our increased line of credit, access to private placement bond market, cash on hand, and the ability to raise equity at our ATM. Presently, we believe our current stock price does not reflect the quality of our portfolio, tenant credit, or overall shareholder returns. We are positioned to deploy capital into accretive industrial acquisitions and portfolio improvements. In closing, the team executed well in the first half of the year, and we are focused on continuing that momentum through the remainder of 2026. I will now turn the call over to Gary Gerson to review our financial results for the quarter and the [liquidity position]. Thank you, Buzz. I'll start my remarks regarding our financial results this morning by reviewing our operating results for the second quarter of 2026. All per share numbers referenced are based on fully diluted weighted average common shares. FFO and Core FFO per share available to common stockholders were both $0.38 per share respectively for the quarter. FFO and Core FFO available to common stockholders during the same period in 2025 were $0.33 and $0.35 respectively. FFO and Core FFO per share for the six months ended June 30, 2026 were both $0.72. FFO and Core FFO for the same period in 2025 were $0.67 and $0.69 per share respectively. Same store lease revenue increased by 1.2% in the six months ended June 30, 2026. Over the same period in 2025, due to an increase in recovery revenue from property expenses and an increase in rental rates from the leasing activity subsequent to the six months ended June 30, 2025. Our second quarter results reflected total operating revenues of $44 million, with operating expenses of $26.2 million, as compared to operating revenues of $39.5 million and operating expenses of $25.1 million for the same period in 2025. Operating revenues were higher in 2026 due to an increased portfolio size, increased recovery revenues, higher rental rates, and a 1x termination fee recognized in relation to the sale of a property. Expenses were higher in the second quarter of 2026 versus the same period in 2025, mainly due to higher depreciation from a larger portfolio and the payment of the majority of the incentive fee in the second quarter of 2026. At the end of the quarter, we had no properties held for sale. As of today, we have $17.7 million of loan maturities in 2026 and $51.9 million of loan maturities through the second quarter of 2027. As of the end of the quarter, we had $51.57 million in revolving revolver borrowings outstanding. Looking at our debt profile, as of June 30, 47% was fixed rate, 47% was hedged floating rate, and 6% was floating rate, which is the amount drawn on our revolving credit facility. As of June 30, our effective average SOFR was 3.68%. Our outstanding bank term loans are all hedged to maturity with interest rate swaps. We continue to monitor interest rates closely and update our hedging strategy as needed. During the six months ended June 30, 2026, we did not sell any shares of common stock under our ATM. We continue to manage our equity activity to ensure that we have sufficient liquidity for all upcoming capital requirements and new acquisitions. As of today, we have approximately $8.4 million in cash and $68.8 million of availability under our line of credit. We encourage you to review our quarterly financial supplement posted on our website, which provides more detailed financial and portfolio information for the quarter. Our common stock dividend is $0.30 per share per quarter, or $1.20 per year. Now I'll turn the program back to David. That was a good report, Gary, and a good one from Buzz and Catherine. The team has performed very well. Overall, again, a very nice quarter. You have heard a lot today. In summary, during the second quarter of 2026, we acquired 153,000 sq ft industrial property in Newport News using proceeds from the sale of an industrial property in Monroe, North Carolina. That resulted in an increase in the straight-line rent and FFO per share. We renewed a lease for 34,000 sq ft as an industrial property and 26,000 sq ft in office and retail. The company just continues to go along making more money. Subsequent to the end of the quarter, we acquired 146,000 sq ft industrial property in Red Bud, Illinois. That was for $6.55 million. A small one, but again, just adds to the ability to pay more dividends. Now paying about $1.20 per share per year. That is 9.8% yield. That is a great yield for such solid company like this. Gladstone Commercial's team is growing their real estate. We own at a good pace. The team is doing a great job of managing the properties we own, especially during some of these challenging times that come up. Our team of strong professionals continues to pursue quality properties on the list of acquisitions. They are reevaluating what we own in order to get us closer to all properties that are for projects that are critical to some of the tenants that we have. Our acquisition team is seeking strong credit tenants. We are getting that done very well. Let us just stop here for a while and get some questions from our listeners. Operator, if you come on and have some questions for us. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. Press star two if you would like to remove your question from the queue. Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Please, while we poll for questions. Thank you. Our first question comes from the line of Rob Stevenson with Huntington. Please proceed with your question. Good morning, guys. Morning. I think Gary said that there was no properties held for sale. How are you guys thinking about funding future transactions, given the commentary also about how undervalued the stock price is? Well, Rob, we did a redeployment this last time around. We had a sale. Then we redeployed the assets into a new property. We intend to do that going forward. If we have a potential acquisition that is accretive at the stock price wherever we are, we would consider selling stock at that price to make that acquisition. Right now, it's a little tough. We continue to grow, and we're going to invest more into our existing properties as a way to increase our revenues and capital deployment. Okay. At this point, do you think that you guys have any excess preferred capacity to be able to do any issuance there versus the common? We're really not considering doing any more preferred at this time. Okay. You guys have done a good job of maintaining the occupancy level in the portfolio. Can you talk about some of the current vacancy? Are you in process on some of that in terms of signed but not commenced leases? Are you getting close to some new tenants in some places? How should we be thinking about where some of that, I guess, 1.3% of vacancy goes over the next four quarters or so? Sure, Rob. Thank you. As I've mentioned in the past, our portfolio management and asset management team does a great job staying on top of our tenancies, both obviously occupied, unoccupied, and the historical occupancy that we've maintained over the last several years has got to be one of the top in the marketplace. Yes, we are actively engaged with everything within the next 24 months As I mentioned, with the added space taken down in Austin, our office occupancy is going to be north of 95% here going forward for a period of time. Our industrial is 99.8%, which we do have one lease there that'll bring it to 100% occupancy at the end of the year. In the remainder of 2026, we've got four properties that we are working on, as it relates to upping tenancy, if you will, all of those have RFPs or documentation that we are negotiating out. Secondly, going into 2027, we have 11. Again, all have been addressed in conversations with paper going, in some cases, back and forth, whether it's an RFP, whether it is nits within a lease. We feel very confident. Of those, I see one, it is an office building that I have concern over, I believe that we will get something done there before the maturity at the end of 2027. I appreciate that question, we are ahead of the curve as it relates to those properties, I believe we will maintain a high occupancy going forward. Okay. Thank you. Appreciate it, guys. Thank you. Next question. Our next question comes from the line of Craig Kucera with Lucid Capital Markets. Please proceed with your question. Yeah. Hey, good morning. You made mention that there was a termination fee recognized on the North Carolina disposition sold during the quarter. Can you give us a sense of how much that termination fee was? I believe that was $1.9 million. Okay. That's helpful. Then I think you have in the queue, there's an additional $1.6 million of what you refer to as accelerated rent. None of it's been recognized. When do you expect to recognize that? Over a period of time. This is a termination. Again, this will be through, I think, the mid of next year. Oh, I'm sorry, this is through 2029. Because of the straight-line rent requirements, this won't be something you'll see in a block. This will be a small amount every month for a couple of years. For a few years. Okay. That's helpful. Given the leasing at the Austin asset this quarter, what does that bring occupancy to at that building? Does that bring it up closer to 60% or 70%? Well, the occupancy currently is at 69%, this is going to bring it north of 90%. Okay, perfect. Just given your commentary about capital, the Austin asset that has been out there for a while, sounds like that's not one that you're looking to sell, that you're expecting based on your leasing commentary, that will be renewed? We are looking at all opportunities there, whether it be, again, additional tenancy or sale. We also are looking at get good value out of it. It has been a good asset for us. Obviously troubling with the vacancy within it during COVID, we will entertain offers, we are exploring quietly in the marketplace. Okay, that's helpful. Obviously, your cost of capital is a little bit high to do a lot with equity right now, but I'm curious sort of what you're screening as far as your investment pipeline right now, and what you're seeing in the marketplace. We have one deal that we have an LOI out on for approximately $32 million. We should hear about that transaction here in the next few weeks. We, of course, always are evaluating the marketplace. We've got 15 that we currently are digging into their financials upon and looking to see if the property makes sense for us. We've got a healthy pipeline. Having just closed that one deal here subsequent to the end of the quarter, obviously we look to backfill that, make it stronger. We will evaluate, as we always have, making sure that these are accretive transactions. Okay. Thank you. That's it for me. Thank you. Our next question comes from the line of Dave Storms with Stonegate Capital. Please proceed with your question. Morning. Thanks for taking my questions. Sticking with the acquisition pipeline, we're going to get ahead maybe around the cap rates in the industrial market. It looks like Newport was high sixes, Red Bud, low nines. Obviously, there's some variance between those two properties. Is there any of the puts and takes that we should be thinking about to maybe get a better beat on cap rates? Sure. As you know, Dave, we're not able to compete down in the sixes at this point in time. Although we are, as we sell non-core assets, able to take the cash from those sales, put them into new deals. Obviously, it doesn't cost us to raise that money. It makes the transaction more accretive for us. The cap rates that we're seeing are going to be 7.5% north. That 9% that you referenced was an average as it relates over the term of the lease. Longer the term, the better for us. We are looking at transactions that have a cap rate going in the door approximately 7.5%, looking to get to averages north of 9%. Understood. Very helpful. Thank you. It also looked like spend and improvements, existing real estate maybe came in a little bit lower. I know you mentioned this in your prepared remarks. Is that mostly a timing thing there, or is there anything else we should read into that? I don't believe there's anything else you would read into that. Yes, it is a matter of timing, and as I mentioned, we're not going to spend money that's not going to be accretive to us at the end of the day. We look to have a payback period on our tenant improvements, as a general rule, of between six to nine months. We want to make sure those dollars are obviously recaptured, because we want to be cognizant and, again, tenancy and cash flow is important. Understood. Thank you. Then maybe just last one. Made a land purchase. If I remember right, that was right next to an existing property. Is that the kind of profile that you're looking for in land purchases? Are there other variables that you try to keep in mind there? That property, the purchase was, again, for the expansion. It will come along at the end of the day with a 15-year lease. The average cap rate on that transaction is north of 9.5. I'm not sure, because I got a little garbled there, exactly if I hit all of your question, but that is a very opportune purchase for us. We'll build it out here and hope to have that completed by second quarter of next year. That's perfect. Thank you for taking my questions. You bet. Thanks, Dave. Okay, we've got some more questions. Our next question comes from the line of Gaurav Mehta with Alliance Global Partners. Please proceed with your question. Thank you. Good morning. I wanted to ask you on the industrial asset that you had decided to sell. Just want to get some more color on why you sold that asset, and are there any more industrial assets in your portfolio that you may look to sell? We had that asset. We purchased it in 2021, Gaurav. The reason for the sale is the tenant came to us with a very profitable number. We were able to redeploy those assets into the Huntington transaction that doubled the straight-line rent and the current rent. It made all the sense in the world, and we didn't have to raise equity to do the transaction. More questions, Gaurav. Any more industrial properties in your portfolio that you could look to sell to redeploy that into other industrial assets? We have, certainly within our portfolio, some of the leases carry a purchase option. I don't have any at the moment that I would classify that are going to happen anytime imminently. Are there a few out there that could happen? Yes. Nothing that I have today, although certainly we are looking at some to see if we could sell them at economics that make sense, we would. All right. Thank you. That's all I had. Thank you. All right. Next question. Our next question comes from the line of John Massocca with B. Riley. Please proceed with your question. Hi, good morning. Good morning. Morning. Technical one. If I think about the accelerated rent versus the lease termination fee, and understanding those are separate things, is there a GAAP impact from that accelerated rent as well? Or is that even the top-line impact of that will be kind of over time? I'm just trying to determine if there's different kind of cash and GAAP kind of impact from the accelerated rent. Well, it will have- The termination all hit in the current quarter. Yes. The termination fee was a 1x. It hit in the quarter. The accelerated rent, you can call that, it's a variation on the same theme. This will have a GAAP effect. You take the amount of that termination fee, divide it by the total amount of months that you have left on your lease, and then you straight line it through. Yes, it'll have a small GAAP impact. It's not a significant amount. Okay. There will be cash. $1.9 million. Go ahead. The cash has already been received. The $1.9 million, though, was all impacting in 2Q, correct? Yeah. Correct. Okay. Apologies if I missed this earlier in the call, I kind of was cutting in and out. The leasing activity, can you maybe provide a little color on where kind of rents moved for kind of all the leasing activity you discussed, and if there's any kind of significant CapEx associated with any of those leases? As I mentioned, we look for the CapEx to get a payback on that, obviously as quickly as we can, and we try to keep that CapEx and lease commissions as low as we can. On average, we see a payback of between six to nine months. The approximately $200,000 that we had in leases that were renewed as a plus-up prior at the end of the quarter, is an average across the portfolio of the leases that we renewed. We always look to do what we can, too. I hate to put it this way, get as much as we can. The market is improving, as referenced in my remarks, that lease rates are going up. We are very cognizant of the CapEx dollars needed, but I'd rather have the property occupied and paying and creating cash flow for us, versus, obviously, vacancy. Okay. And then, yeah, I guess as we look out on the kind of future lease expiration schedule, maybe out over the next two years, where do those assets maybe sit versus kind of market roughly? I know that's for exact numbers, but just kind of up or down. They are all positioned and with the numbers that we are discussing with the tenancies They are all, except maybe two, are up. We've got 15 between this year and next year that we're looking at, two of which are going to go vacant. We have had tours within the buildings. I feel confident that at the end of the day, as a net-net, it's going to be a plus-up. Again, I have one office building down in Florida that we are working on, and that does not mature until September of 2027. I don't want to say we have time, we are aggressively addressing it. Means occupied and/or sold. Okay. That's it for me. Thank you very much for taking questions. Thank you. Is there another question? Our next question comes from the line of Francois Swanepoel, a private investor. Please proceed with your question. Good morning. I would like to ask about if you could clarify our current payout ratio. What is our current payout ratio with the dividend at $0.10 a month? Let me get this for you. It is in the low 80s. Actually, it was what? 79%, I think, this time around. Hold on. I believe our payout ratio is just under 80%. This quarter. Quarter, yeah. My question on that is, as a REIT, shouldn't we be keeping that as a percentage of profit at closer to 90% to keep our status as a REIT? As a triple net, we typically are paying more than a non-triple net as far as a distribution ratio of dividends over to FFO. We would like to maintain more internal cash flow. You'll see the triple nets are probably in the mid-70s to low 80s as a general group. We would like to get our distribution ratio a little lower. It's better for the shareholders in the long run, as we can redeploy the capital into our portfolio and grow the portfolio and earnings over time. Eventually we can then increase the dividend. If you look at some of the bigger REITs, and their yields, they have a much lower distribution than we do. Over time, if you can do that, you can then reinvest those proceeds or that cash into new properties without having to sell new equity and thus potentially dilute the shareholders. I understand that. My question on that is according to the IRS's rule, what's the rule of keeping that at 90% for us to qualify as a corporation to not pay taxes on that income? Yes, that's a 90% of taxable income, not of GAAP income. We probably pay out, probably in many cases, way above the 90% required to maintain REIT status. Okay. We are above. We're definitely doing that. Oh, yeah, absolutely. We will not lose our REIT status there. Okay. Will the annual increases in rent, if they are implemented and when they are implemented, I'm not sure when you guys implement annual increases on rent. Will we be able to use those proceeds to maybe look at an increase in the dividend? We'll certainly consider it, but that's something to look at in the future. All right. Thank you very much. Appreciate it. Thank you. Thank you. Thank you. We have no further questions. Do we have any additional questions? We have no questions at this time. Any questions? Mr. Gladstone, I'd like to turn the floor back to you for closing comments. Well, thank you very much, everybody, for listening to this, and we appreciate the questions. Hope you have a lot more questions next quarter. That's the end of this. Thank you again. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.