Gladstone Commercial (GOOD) is this Ian Wyatt’s Darling stock?

By | October 10, 2014


Continued from

I recently tried to refinance my mortgage, former Fed Chairman Ben Bernanke said last week, and I was unsuccessful in doing so.

What does it mean when the king of money can’t get his hands on any of the money he created out of thin air?

When the former Chairmen couldn’t get a mortgage you know all is not right with the property market. Well, there lies my answer to the current state of affairs in the money market and Gladstone Commercial.

I do agree with Ian Wyatt on this pick. Gladstone Commercial (GOOD) is a pretty consistent dividend payer with a sharp focus on stability, since the year 2008. To get close to the yield the ad is talking about you need to invest at least $100,000 to buy into Gladstone first, that’s where the ad keeps you in dark. Certainly not a Real Estate Tax Rebate Check to be precise.

I happened to stumble over an excellent article Seeking Alpha ran a couple of months back. I largely subscribe to billionaire real estate investor Sam Zell’s views on the future of commercial property values, and also on global real estate investment. We are approaching a 31/2 years of no development in this sector. With little new supply, the value of properties should shoot up and vacancies should fall.

It seems to me that the nice yield Gladstone Commercial has had was due to low overhead costs and low amount of depreciation on their high-yielding properties. You could very well expect that they don’t need the cash accrued from depreciation of their properties as their clients are responsible for upkeep, maintenance and taxes of their assets. That means GOOD is only a financial partner of their tenants.

Partly that’s due to their large blue chip client base with far flung offices, for which owning a property is a grind on their balance sheets at the same time they need it though.
Gladstone Commercial seems to be solid company that pays a decent dividend with a very little downside in terms of income, since most of their NNN leases have CPI increases, and the best among its peers that include Lexington Realty (LXP), W.P. Carey (WPC), and Realty Income (O).

Whether it makes you rich and wealthy is your call as it’s your money at stake.

As recovery in real estate seems to be imminent you could well hope to make it with (GOOD) but not without investing close to $100,000, as we wait for the banks to turn off the red flashing lights and return to business as usual.

But beware they are volatile as any other mortgage lender if real estate flip flops again. So where do you live let us know through the comment box below.

Disclosure: I don’t have any positions in any stocks mentioned herein, and no plans to initiate any in the near future as well.

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