David Gladstone - Chairman & CEO Michael LiCalsi - General Counsel, Secretary and President, Administrator Bob Cutlip - President Danielle Jones - CFO & Assistant Treasurer

John Roberts - Hilliard Lyons John Massocca - Ladenburg Thalmann

Good day ladies and gentlemen and welcome to Gladstone Commercial Third Quarter Ended September 30, 2015 Earnings Call and Webcast. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today CEO, Mr. David Gladstone. You may begin sir.

All right, Andrew. Thanks for that good introduction and thanks to all of you for calling in this morning. We really do enjoy the times that we have with you on the phone, wish we had more time. We also enjoy the question and answers at the end. So hope we have some good questions today. If you’re ever in this area, the Washington DC area we’re in the suburb called McLean Virginia and if you are in this area, you have an open invitation to stop and to see us. It's about 60 members of the team and I am sure some of them [indiscernible] say hello if you stop by and see us. We’re going to start out first with Michael LiCalsi. He is our General Counsel and Secretary, also serves as President of Gladstone Administrator which serves as the administrator to all of the Gladstone Funds and the related companies as well. He will make a brief announcement regarding some of the legal and regulatory matters concerning this call. Michael?

Good morning, everyone. The report that you are about to hear may include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including statements with regard to the future performance of the Company. These statements involve certain risks and uncertainties that are based on our current plans, which we believe to be reasonable. There are many factors that may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements, including all of the risk factors included in our Forms 10-K and 10-Q that we filed with the SEC. They can be found on our website www.gladstonecommercial.com and on the SEC's website www.sec.gov. The Company undertakes no obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. And in our report today, we also plan to talk about funds from operations, or FFO. FFO is a non-GAAP accounting term, defined as net income excluding the gains or losses from the sale of real estate and any impairment losses from property, plus depreciation and amortization of real estate assets. And the National Association of REITs or NAREIT, has endorsed FFO as one of the non-accounting standards that we can use in discussion of REITs. And please see our Form 10-K, filed yesterday with the SEC, and our financial statements for a detailed description of FFO. And today we also plan to discuss core FFO, generally FFO adjusted for property acquisition costs and other non-recurring expenses. And we believe this is a better indication of the operating results of our portfolio and allows better comparability of period-over-period performance. And to stay up-to-date on our fund, as well as all of the other Gladstone publicly traded funds you can sign up on our website to get e-mail updates on the latest news and you can also follow us on Twitter, username is GladstoneComps and on Facebook, the keyword, The Gladstone Companies. And finally you can visit our general website to see more information at www.gladstone.com. In the presentation today is an overview and we ask you to read our Press Release issued yesterday and our 10-Q, for the quarter ended September 30, 2015. Both can be found on our website gladstonecommercial.com. And now we will begin the presentation today by hearing from Gladstone Commercial’s President, Bob Cutlip.

Thanks, Michael. Good morning everyone. During the third quarter, we acquired $113 million office property in Atlanta, Georgia, raised $9 million of common equity under the ATM program, amended our fee structure to be more in line with our peers, leased our partially vacant property located in Raleigh, North Carolina, leased a majority of our vacant property located in Baytown, Texas, modified one lease such that the tenant will expand into the remaining vacant space in our Indianapolis property in the fourth quarter, and refinanced $11.3 million of maturing debt. Subsequent to the end of the quarter, we also acquired one industrial property for $6.5 million in Atlanta, expanded our line of credit to $110 million, adding three banks and reducing the cost on the facility, renewed the lease with one tenant whose lease was to expire in 2015 and completed negotiations with three tenants whose leases are scheduled to expire in 2016. As you can see our acquisitions capital and asset management teams were quite busy and all contributed to our success this quarter. We had another excellent quarter as we continued to increase our asset base by acquiring new properties. This was our 16th consecutive quarter of closing at least one new acquisition. We crossed the milestone and we now own 102 properties. We are extremely pleased with our activity and consistency and we continue to have a strong pipeline of acquisitions. Now for some details. During the quarter ended September 30, we acquired a 78,000 square foot office building located in Atlanta for $13 million. The average cap rate is 9.9%. We funded this acquisition with cash on hand and the issuance of $7.5 million of mortgage debt. The tenant leased 55,000 square feet of the property for seven years and the remaining 23,000 square feet for 15 years. The tenant in this property is Delta Community Credit Union which is the 23rd largest credit union in the United States and the largest in the state of Georgia with 26 branches. This property houses the flagship retail branch and also serves as an office location. Delta Airlines headquarters is immediately across the street from our property. After the end of the quarter, we acquired a 90,000 square foot industrial facility in the Atlanta sub-market of Villa Rica out the I-20 West Corridor. The purchase price was $6.5 million, the lease term is 18 years and the average cap rate is 9.2%, very accretive for our shareholders. Universal Pasteurization, a market leading high pressure pasteurization food processor is the tenant. Our acquisitions team has been placing significant focus on acquiring properties of secondary growth markets as I remarked in the past few quarters. The hallmark of our continuing high occupancy remains and will continue to remain thorough tenant credit underwriting and the mission critical nature of the property. However closing transactions in growth markets leads to properties in land constrained locations over time and we believe will lead to subsequent increases in property values that will benefit our shareholders. Over the past two years we have invested in Phoenix, Salt Lake City, Denver three times, Dallas four times, Austin, Atlanta, Indianapolis, and Columbus, Ohio to promote this strategy. The last three acquisitions have been in Atlanta and Salt Lake City, two markets in which we wish to increase our concentration. Our asset management team has been quite busy year to date as well renewing existing leases and leasing our available space. Since January of this year, our team has leased or renewed 420,000 square feet attesting to our ability to maintain a high occupancy factor. At quarter end, our portfolio was 97.9% occupied continuing our high occupancy record. As I noted on our last call, 2015 has been a year of lease expirations for us. We originally had 12 leases expiring in 2015 and we have successfully extended the leases for eight of these tenants. And we have a ninth property in which we have signed a sale agreement to sell the property to a subtenant in the fourth quarter. In the 10th property we are in final direct lease negotiations with the existing subtenant to occupy 80% of the building upon the expiration of the primary tenant’s lease term at the end of December. So we have two of the 12 properties unresolved at this time, resulting in an 87% success factor. For these two properties which are both fully vacant, to that end we have engaged a broker to sell the vacant Ohio property and anticipate we will be able to close the sale of his property over the next 12 months. We recognize that our other vacant property located in Eastern Massachusetts will be a challenge due to the slower current transaction velocity in that market. However we are aggressively pursuing new tenants for this 12 property and at this time have 3 full building user prospects for the property. So from a 2015 bottom line perspective, the two vacant properties comprise less than 1.5% of our projected rents and we are hopeful that one of the properties will be sold within the next several months. Sifting to new leasing activity. Sumitomo Electric Corporation leased 87,000 square feet in our manufacturing facility in Raleigh, North Carolina. The lease term is 12 years and it brings that property to 93% occupancy. Their lease commenced the same day that the existing tenant downsized in the building on August 1. Two tenants have also renewed or expanded in our anchored multitenant office building in Indianapolis which will raise that property’s occupancy to a 100% by January. And Cardiac Cath Lab of Baytown leased nearly 7000 square feet in our 12,000 square foot medical office building in that same town in Texas. The lease term is seven years. They took possession of the space in September and rent commences in January of 2016 after completion of their tenant improvements. We are currently marketing the remainder of the space 5000 square feet to other medical users in this Houston submarket. Our team has also begun renewal activity on the three remaining leases that are set to expire in 2015. At this time we have agreed-upon business terms with each tenant. Two of the tenants will extend their leases. For the third tenant who occupy three separate buildings, we will sell two of the properties to the tenant and we will extend their lease in the third property. We expect to complete all of these actions in the fourth quarter well ahead of the expiration date. With these actions completed, we expect our same-store rent to be stable and growing in 2016 and expect our occupancy to remain at high levels. Same-store rents in the out years beyond 2016 also appear to be favorable and stable as the expiring rents in 2017 and 2018 represent less than 2% of our annualized projected rents for each respective year. And as I have noted in the past, locating new tenant and signing leases with existing tenant is going to require capital outlays for tenant improvements and leasing commissions. During the quarter, we also entered into an amended and restated management agreement with our external advisor in order to be more in line with other externally managed REITs. Danielle will more fully explain this amendment in her portion of the presentation. So in summary, at quarter end all of our existing tenants are paying as agreed and our portfolio was 97.9% leased. We acquired one property during the quarter and one property subsequent to quarter end. As I noted, our asset management team was also very busy renewing tenants and leasing our properties with an expected strong finish to 2015 and success on the 2016 expirations. We continue to have an active pipeline of acquisition prospects. Our objective as I noted in the past is to have at least $250 million to $300 million in the pipeline of possible acquisitions with properties in each base, including initial review, letters of intent, due diligence and of course closing. In this manner if we have items in each one of these bases, we will consistently close quarter after quarter as we've done in the past. Our team continues to meet this objective. However we have slowed the acquisition pace citing the current market conditions and our lower stock pricing. With a commitment to staying with our strict underwriting criteria, we’re going to be patient but we still believe it will lead to continuing consistent closings in the months ahead so long as market conditions permit. Now let’s turn to Danielle Jones, our Chief Financial Officer for a report on the financial results.

Good morning. We continue to grow our asset and equity base. Our total assets increased $838 million from the one acquisition completed this quarter in conjunction with ongoing tenant improvement projects. We continue to focus on decreasing our leverage and then issuing equity under ATM programs to help achieve this goal. However as Bob discussed, with the drop in our stock price and impact to the entire REIT industry, we exclude the amount of equity issuing under the ATM. We expect continue decreasing leverage over the next several years through a combination of lower leverage on new issued debt and refinancing our mortgage maturities of lower leverage. Looking at our capital structure, the amount outstanding under long term mortgages and our line of credit was $538 million at the end of the quarter. In addition, we raised $36 million in common equity under the ATM program during the first nine months of 2015 and have used these funds to acquire properties, refinance maturing debt and to fund capital improvements of certain of our properties. We also amended our line of credit earlier this month in order to position us for growth over the next few years. We expanded the lines from $75 million to $85 million and also added a $25 million five-year term loan facility. We also expanded the maturity date of the line of credit for one year through August 2018. The interest rate on the line of credit was reduced 25 basis points for each leveraged tier and the interest rate on the term loan is 5 basis points less than line of credit. The total maximum commitment was also increased from $100 million to $150 million. We also expanded the number of banks in the line. In addition to KeyBank, Comerica Bank, we added Fifth Third Bank, US Bank and Huntington Bank to the syndicate. We believe this addition of three strong lenders illustrates the confidence in our long term strategy. We thank KeyBank, the lead bank, for their effort. We currently have $49 million outstanding under both the line and term loan facility at a weighted average interest rate of approximately 2.75%. We will continue to only use our line of credit to make acquisitions that we believe can be financed with longer-term mortgage debt or that we believe are good additions to our unsecured property pools acquired under our new line of credit. Long term mortgage debt continues to be available from multiple sources. Interest rates have been very volatile in anticipation that the Federal Reserve will increase interest rates later this year. Between the beginning of the year and the end of the third quarter, the yield on the 10 year treasuries ranged from the low 1.6% at the end of January to high of 2.5% in late June, about a 90 basis point swing. At the end of the third quarter, the yield on the 10 year treasury was 2.1%, it’s about 30 basis points lower than it was at the end of the second quarter. While the yield on the 10 year treasury has declined from its highs earlier this year, lenders have increased the margins which do lend [ph] in response to increased volatility in anticipation of a raise in interest rate. This increase in margin has impacted overall borrowing costs and offset the decline in the 10 year treasury yield. However interest rates still remain effectively low and we continue to manage for acquisitions with cost effective mortgages. Depending on several factors, including the tenant’s credit rating, property type location, the terms agreed, leverage and the amount and term of the loan, we are generally seeing fixed interest rates ranging from 4.3% to about 4.75%. As Bob touched on, we were able to refinance $11.3 million in mortgage debt that matured this quarter with 1.7 million of mortgage debt and the remainder with borrowings under our line of credit and cash on hand. We used equity in this refinancing in line with our strategy to lower the loan’s value of our portfolio. The weighted average interest rate on maturing debt was 5.2% and the rate on the new mortgage debt is variable at LIBOR plus 2.5% which is a rate of about 2.5% today, a 2.7% decrease from the mortgage debt that was repaid. We also locked interest rate by purchasing a cap on this floating rate debt. We also received debt during the third quarter of $7.5 million on our new acquisition at a fixed rate of 4.5% which is the low end of the range making this deal very accretive for our shareholders. Looking at our upcoming debt maturities, we have mortgage debt in the aggregate amount of $5.7 million payable during the remainder of 2015 and about $100 million payable during 2016. The 2015 principal amounts payable includes a $3.9 million principal payment due on one mortgage that matures in December that we expect to refinance with new debt next month. The 2016 principal amounts include $92 million of balloon principal payments due on nine mortgages that matures throughout the year and we also anticipate being able to refinance these with a combination of new mortgage debt and equity. The weighted average interest rate on the 2016 debt is 5.7% and while we do expect interest rates to increase from today, we still expect to achieve at least a 100 basis point interest rate reduction when we refinance these loans in 2016. We've already begun discussions with lenders on the debt that matures during the first quarter of 2016 and expect to refinance some of this before the end of 2015. We will continue to pay the additional debt amortization payments from operating cash flow and borrowings under our line of credit. We continue to implement our strategy of lowering our overall leverage by reducing our weighted average loan to value on both newly issued debt and refinanced debt. We continue to increase our common market capitalization and have issued over 2 million shares of common stock during 2015. We have decreased our loan to value from a high of 67% in 2009 to 52% today. As of today, our available liquidity is approximately $18.3 million, comprised of $4.5 million in cash and an available borrowing capacity of $13.8 million under our line of credit. With our current availability and access to our ATM program, we have enough availability to fund our current operations, deals in our pipeline, and any known upcoming improvements at our properties. Looking at our operating results for the quarter, we believe core FFO, which adjusts for our property acquisition expenses and other non-recurring expenses, allows our investors to better compare period-over-period results. All per share numbers I reference are fully diluted weighted average common shares. Core FFO available to common stockholders for the quarter was approximately $8.3 million or $0.38 per share, which increased slightly when compared to the second quarter. Quarterly core FFO increased because of the additional revenue we achieved from new acquisitions made during the quarter, coupled with a decrease in general and administrative expenses. This was partially offset by an increase in property operating expenses and properties that went vacant during the second quarter. We also completed our first quarter under our revised fee structure and as you can see we do not have a credit terms and fee paid to our advisor this quarter. We believe these changes to the fee structure that is more in line to the current need market practice will facilitate our growth of FFO and distributions to stockholders in the future. We also believe this amended fee structure will allow us to become more competitive reinforcing our talented investment and operations professionals. While 2016 brings it with challenges as we work on debt maturities, we believe we have the right team and plan in place to reposition and continue our growth activities. We're confident with the remainder of the year and 2016 will be successful, as we continue to increase our asset and equity base and decrease our leverage. We are focused on managing our property operating expenses as well. And now, I'll turn the program back over to David.

All right. Thank you, Danielle. Good report, good one too from Bob and Michael LiCalsi, and company continues to grow [indiscernible]. Big news again this time is the purchase of the property $13 million and then placing a mortgage on the property for $7.5 million and the real significance of that is locking in the earnings from that property for shareholders come in kind of the disaster that might happen in terms of interest rates, that is in place for the future. We’ve been refinancing our debt and maturities and just a significant of a lower rate. Interest rates were higher seven to 10 years ago when we financed these properties and this year has been a great year to refinance, and 2015 looks great for our refinancing properties and lowering our cost of debt. We raised $9 million in common equity and released some of our vacant space, so overall it was a very positive quarter for the company. We continue to add quality real estate to our portfolio and show up the existing properties and as we continue to grow our market capitalization increases, we hope to see higher trading volumes in our stock and the corresponding uptick in our stock price because the distribution rate today is very high compared to other real estate investment trust. This is just a great stock for people looking for cash dividends that are mostly sheltered from taxes and this year we might be as much as 70% or 80% sheltered, so it would be a great one to put into your first point analysis [ph]. As many of you know the company didn’t cut its monthly cash distributions during the recession because we had everything financed long term, it was quite a success story, we watched some of the great companies in the business cut their distributions and many of them have never recovered from that. But here is what we are doing today. We do need to increase our common stock, market capitalization in order to increase the trading volume and give an investor who wants to buy a lot of stock the ability to do this. These institutions, especially the smaller institutions, those buyers always want to know number of shares outstanding, so if they buy $10 million or $20 million worth of stock, they will be able to get liquidity if they need it, and we still don’t have enough shares outstanding to give them that confidence. So we have been hard pressed to get some of the – well, any of the large institutions but a number of the small institutions to come in. We’ve consistently built the asset and quality base, we’ve doubled the size in the past four years. This growth, we hope, will be more institutional friendly, institutional buyers can come in and get some stock and hopefully help increase the price and lower the cost of capital, so the new investments can be more accretive to our shareholders and our dividend payout can go up. In order to help us grow the income of the company, we amended our fee structure. I think it’s very much in line with people like us, the REITs that are like us, this will decrease our gross expenses and hopefully allow us to grow our funds from operations which are our earnings and ultimately be in a position to increase the dividend. We continue to have promising list of potential quality properties that are interested in – that we are interested in acquiring simply because that list of properties continues to grow as some of the real estate investment trusts have retrenched. We increased the portfolio of properties, there comes greater diversification and we believe a better protection against any earnings decrease. We are focused in our efforts on finding these good properties and long term financing – secondary markets more than primary simply because the rates are better and quite frankly the long term outlook is better. Being able to lock in these long term financings will be good for us. Between 2016 and 2019, we only have 2% of the forecasted rents expiring and our debt maturities after 2016 drop significantly and we believe interest rates are likely to be higher after that point in time. So we are going to spend the rest of the period and 2016 locking in our interest rates and we are set up very well over the next several years and I think people who want consistent dividends and a good chance of increasing dividends should be buying the stock. We are much more optimistic now that things are going – that are still positive for us and looks so positive over the next few years. Much of the industrial base that we have as tenant, they are doing pretty good. Our properties remain steady, we haven’t lost many tenants over the years, in fact, only a couple, that’d really done any damage to us and so that’s quite a testament to the team selecting good properties and putting them on the books. I am very optimistic about our company and I think Bob Cutlip and I will continue to be cautious in our acquisitions, we’re not going to go on some crazy acquisitions out there just to grow the asset base, we want to make sure the assets are great for us long term. We made it through the last recession without cutting dividend or having a lot of problems from the tenants, and I think if there is another recession lurking, although doesn’t look like it but it sort of feels like just based on all the news it comes out, our portfolio is going to continue to stand the test against the time. And if the Fed decides to raise interest rates we are ready for them, we have most of our properties financed with long term fixed rate mortgages, so we don’t use a lot of short term debt and if we do use the short term, we end up turning around trying to put a good long term mortgage on them. In October 2015, the board voted to maintain the monthly distribution of $0.125 per common share for October, November, December for an annual run rate of a $1.50 per share. This is a very attractive rate to a well-managed REIT like ours. And we paid a 134th consecutive common stock cash distribution since the inception of the company and we went through the recession without cutting those distributions, I just think this is a wonderful company today for those who want consistent dividends. Because real estate can be depreciated we're able to shelter the income of the company. In addition, because we had a loss in 2014 related to the property we turned over and [indiscernible] transaction, 2014 was a 100%. We don't expect it to be this high in 2015, could be in around 80%. But we will have to wait and see at the end of the year what’s going to happen in terms of the shelter that we have for those dividends. This is a very tax-friendly stock for individuals and I think it’s a great one to put in your personal accounts as opposed the IRA or retirement plan. This return on capital was mainly due to the depreciation of real estate and other items and causes earnings to remain low after depreciation. And that's why we talk about core FFO because that core FFO means we've added back the real estate depreciation. Depreciation of a building is really just a fiction, it’s something you can do with the IRS in order to shelter your earnings and if you own the stock in a non-retirement account, you don't have to pay any taxes on that part that sheltered by depreciation and that’s considered a return on capital. However, for most of you that return on capital does reduce your cost basis and stock may result in larger capital gains when you sell the stock. So our stock closed yesterday at 16.37, it’s back up from the doldrums but not as high as it needs to be. The distribution is about a 9.2% return, so you get a 9.2% return which a good chunk of that, maybe as much as 80% is sheltered. Our stock price has taken a hit as many of the REITs have, and I just think it’s due to the threat of interest rates increasing and it will be going by the wayside right now. Let me say this again, where REIT universe is trading at about 4.32% yield today, so if we were trading at that, we’d be around $34 a share, that would be wonderful, and net, net, net REITs we are thrown in that category because most of our transactions involve the triple net leases but the net, net REITs are trading at 6.4% yield, so if our stock was trading in that area, it would be trading at $23 a share, and there’s just a lot of room for expansion of the stock base on the REIT stocks that are out there. The Board will vote again in mid-January during our regular scheduled quarterly meeting on the declaration of monthly distribution for January, February and March and I want to stop at this point in time and ask Andrew to come on board and I feel there’s some people that are going to ask some great questions for us.

[Operator Instructions] And I am showing our first question comes from the line of John Roberts with Hilliard Lyons.

I don’t know if this should go to you or Bob, but property operating expenses were pretty high in the quarter. I was just wondering if there was anything out of the ordinary or why that jump and if that’s something that will continue going forward?

Danielle has got the answer to that. She is the gal with numbers.

Part of it was from the two vacancies in Q2 that hit in Q3 but most of it is really because we bought properties that have or subject to a gross lease, and so you will see an increase in property operating expenses, but you also see an offsetting increase in tenant recoveries, it’s just way we have to account for it.

All right, very good. So should I model that going forward?

Yes, yes, this is probably a good run rate for now, as we re-lease some of the vacant building it should go back down but yes.

How many of the tenant – leases that you have that expire in 2016 or still – you still need to re-sign?

Just the three that I mentioned, we’d already completed a lease renewal of one of our tenant in our anchored multi-tenant building in Columbus is going to take over the balance of the building at the end of 2016 but only the three that I mentioned, those are the only three that we have pending for 2016.

So all the rest are re-signed, you have no others expiring in 2016?

No others expiring and as I indicated, we are hopeful that we will have these three closed before the end of the fourth quarter.

And John, it’s pretty light all the way through 2019 in terms of having anything –-

Yes, this is our biggest year. When David said, with the opportunity we have on the debt refinancing next year, 2017 on up – our maturities also are much lower, so we are much encouraged about the out-years right now.

And what was the average price of stocks sold under the ATM in the quarter?

John, I don’t have that handy but I think it’s somewhere around 16 – it’s in our 10-Q, I will get back to you in a second but I think it’s somewhere in the 16.

Our next question comes from the line of Jeff Render [ph] with UBS.

You’d commented earlier that you were looking to issue more shares so as to make the stock more accessible to larger investors, someone who wanted to buy a large position in the company, they might find it difficult with the only 21 million shares outstanding we have. Do you have a figure in mind as to how many shares you would like to issue over a period of time to bring it up to a sufficient capitalization?

I think once we see the institutions coming into the stock we will know that we really don’t need to do that any more and we can plan on financing things a little different with perhaps preferred stock or some other mechanism but at this point in time I don’t think we are getting the benefit that many of the triple net REITs are getting, our stock is trading way above the 6.4% that’s going on out there and I think it’s primarily because the institutions aren’t buying.

[Operator Instructions] And I am showing we have a question or comment coming from the line of John Massocca with Ladenburg Thalmann.

A quick question on the Phoenix property that’s underlying the one mortgage not payable you have, how is the progress on construction with that property and are you guys still interested in purchasing it, so utilizing the right to purchase it once construction is complete?

John, we have just received certificate of substantial completion. The punch with is just about complete, the tenant will pay starting November 1. We have a right of first offer, so we do not have the right of first refusal or an absolute right to acquire the property, and the developers who are kind of the lead on this have elected to go out and market the property. They are right now in contract negotiations with a third party buyer. The benefit to us on this transaction is that the way we structured it with the developer is that before the developer can receive any proceeds we will receive a 22% return on our invested capital over the time that is invested and I think on this transaction that’s the way it’s going to turn out, if they fall through on this contract, we may have an opportunity to acquire it but the cap rates are very low which is encouraging for the developer and we will just see how it kind of ends over the next probably two months.

But if it did fall through, you would still be interested in buying the property, being your wheelhouse --

Yes, it’s 15 year lease with an excellent credit tenant, it’s the way we underwrite the credit and it’s on a hospital campus in Phoenix, I mean location is great, the use is great, the tenant would be great.

And then speaking with kind of acquisitions, it’s just kind of slower, more kind of incremental acquisition pace that we saw in 3Q something we’re going to continue seeing, like going for a basis, just given maybe cost of financing and the market out there, or is this just kind of a result of the lumpiness of net lease acquisitions?

It’s a combination of all those, John. I mean it’s interesting we went to the net lease conference just recently and in chatting with a number of our peer groups and the larger peer groups, a number of them were staying on the sidelines a bit or looking at much larger acquisitions as compared to what we acquire. Our sweet spot is between 5 million and 30 million but also we have and in talking with our peers, we’re getting called back as being number two or number three and sellers are wanting to see if we are interested, which is telling me, there may be some modification in a market and that’s why we have been somewhat hesitant but the stock price has affected our desire because our cost of equity is higher right now. So we are going to be patient, we want to stick with our underwriting, we will acquire at the cap rates that we have in the past if we can find something in a good secondary growth market.

And John, Ladenburg just needs to weigh into the stock and get it up in the 20s and then we can –

And then focusing on the one property in Eastern Massachusetts, that is coming off lease. You mentioned you got four potential tenants or prospects – so it was three –

It’s three and they had each toured the property, it’s a food grade facility and each of these prospects are food grade users, and so we have just begun discussions with them. There is no letter of intent, we expect RFP soon from them but nothing of substance right now.

And then if you could try to – if potentially leasing didn’t work out, what’s the market like for selling an asset like that?

Well it’s interesting – these three users are interested in acquiring as well as leasing, and it could be that – in fact, we would be selling – could be selling the asset to one of these users. We are seeing in that market that users are more interested in owning right now than in leasing because of the capital they themselves must place in the building. This has freezer cooler space in it now but as we all know when someone comes in, they have little bit modifications to their process in their business. And so if they are going to invest that money, they sometimes wish to own it first and then maybe do a sale-leaseback. End of Q&A

[Operator Instructions] All right and at this time I am showing no further questions. So with that said, I would like to turn the call back over to Mr. David Gladstone for closing remarks.

All right. Thank you all for calling in. We will talk to you again next quarter and should be even brighter next quarter. Thanks again.

Ladies and gentlemen thank you for participating in today’s conference. This concludes the program. You may now disconnect.