MCLEAN, Va., Oct. 13, 2016 (GLOBE NEWSWIRE) — Gladstone Commercial Corporation (NASDAQ:GOOD) (“Gladstone Commercial”) announced today that the tenant in its existing 170,000 square foot light industrial manufacturing facility in Vance, Alabama has exercised its expansion right. Gladstone Commercial will expand the property by 75,000 square feet for an estimated project cost of $7.0 million. Upon completion of the expansion, the tenant will enter into a new 225,000 square foot 10-year lease.
Gladstone Commercial acquired the property for $13.4 million in May 2013. The seller-developer constructed the property as a forward build-to-suit for the tenant that is strategically located near a key customer. The property had an initial 10-year lease that ran through April 2023. Upon completion of the expansion premises, the lease term for the entire property will be reset for a new 10-year firm term upon construction completion. The re-set going-in cap rate will be 9.50% with an average cap rate of 10.40% over the 10-year lease term. Lease commencement is anticipated to occur in the 3rd quarter of 2017.
“Expanding this high quality facility that supports a major auto assembly plant is consistent with our growth strategy,” said Buzz Cooper, Senior Managing Director of Gladstone Commercial. “All parties were involved from the initial stages of the original investment and worked together to complete a successful transaction.”