Good morning, and welcome to the Gladstone Commercial Corporation First Quarter ended March 31, 2012, Shareholders' Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. David Gladstone, Chairman. Please go ahead, sir.

Well, thank you, Denise, for that nice introduction, and thanks to all of you for calling in. As I mention each time, we enjoy these times that we have with you on the phone. And I wish we had a lot more of these times, it'd be a lot more fun. Please come by and visit us if you're ever in the Washington, D.C. area. We are in a suburb called, McLean, Virginia. You have an open invitation for us -- from us to stop by and see us if you're here. You'll see a great team at work. There are 55 members now in the team and we're no longer a little, tiny company, and we have a couple of puppy dogs here every day. We're very dog-friendly. Also I'd like to tell you we're having our Annual Shareholders Meeting on Thursday, this Thursday, May 3, beginning at 11 a.m. We are at the McLean Hilton. It's located at 7920 Jones Branch Drive in McLean, Virginia. You're all welcome to join, and I'm hopeful that all of you have mailed in your proxies and voted. And now let's say a word about forward-looking statements. This report that I'm about to give may include statements that may constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. In our call today, we plan to talk about funds from operation or FFO. And since FFO is a non-GAAP accounting term, I need to define FFO as income, excluding gains or losses from the sale of real estate, plus depreciation and amortization of real estate assets. The National Association of REITs or NAREIT has endorsed FFO as one of those non-accounting standards that we can use in discussion of REITs. Please see our 10-Q filed yesterday with the SEC and our financial statement. And 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 those listed under the caption "Risk Factors" in the company's 10-K and 10-Q filings that are filed with the Securities and Exchange Commission. And those 10-Ks and 10-Qs can be found on our website at www.gladstonecommercial.com and at the SEC website. Just to remind you, the company undertakes no obligation to publicly update or revise any of the forward-looking statements, whether it's future results, new information, or otherwise. And now, I'd like to begin the call today by hearing from our President, Chip Stelljes. Chip is also the Chief Investment Officer of all the Gladstone companies. Chip, take it away.

Good morning, everyone. During the quarter, we acquired one additional property raised for equity and expanded our line of credit. Our pipeline is robust and we hope to announce additional acquisitions in the near future. As of today, all but 2 of our buildings are occupied and all of the buildings that remain occupied continue to pay as agreed. The 2 empty buildings constitute about 2.1% of our gross portfolio income and about 1.3% of the total square footage of space we own. We continue to take appropriate actions to re-tenant these properties as quickly as possible. We acquired one new property with 52,000 square feet for $10.8 million. This property is an office building located in suburban Washington, D.C. And the average cap rate over the term of the lease is 9.2%. This asset is currently pledged to the borrowing base on our line of credit. The market for long-term mortgages has been limited for some time. However, we have recently seen 2 longer-term, 5 to 10 year mortgages become more obtainable. The collateralized mortgage backed securities or CMBS market has made a comeback in recent months, but it's more conservative than it was prior to the recession. The pricing in the market remained somewhat volatile. Consequently, we continue to look primarily to regional banks, insurance companies and other non-bank lenders to finance most of our real estate activities. We did issue one new 10-year mortgage through the CMBS market in April for $19 million of proceeds at an interest rate of 6.1%, and that note collateralized by 4 properties. On the equity side, we issued $38.5 million of our Series C preferred stock, which is trading on the NASDAQ under the ticker symbol GOODN. We used the proceeds to pay down the remaining outstanding balance on our line…

All right, thank you. That's a good presentation. Now let's turn it over to our Chief Financial Officer, Danielle Jones, who will report on the financial results. Danielle?

Good morning. Our quarterly results are positive and reflect our growth from our recent acquisitions. At quarter end, our total assets increased to $468 million, up 12.4% from one year ago. The amount outstanding under long-term mortgages in our line of credit increased slightly to $282.1 million from last year. In addition, our stockholders' equity increased by 6.6% to $131.7 million from our common equity offerings during 2011. Our balance sheet remains strong. During the quarter, we completed a public offering of 1.54 million shares of our 7.125% Series D Term Preferred Stock at a price of $25 per share, resulting in gross proceeds of $38.5 million. We used the proceeds in the offering to repay the remaining outstanding balance on our line of credit. Due to its mandatory redemption future, the preferred stock is classified as a liability on our balance sheet and the costs incurred related to this offering are recorded in deferred offering costs and will amortize over the redemption period ending in January 2017. We have mortgage debt in the aggregate principal amount of $3 million payable during the remainder of 2012, and $58.1 million payable during 2013. We have no mortgage maturities in 2012. The mortgage payments due in 2012 are only principal amortization payments and we have sufficient cash or borrowing capacity under our line of credit to pay these amounts. Of the $58.5 million of principal payable in 2013, $53.9 million are balloon principal payments not due until the fourth quarter of 2013. We are currently in discussions with these lenders and anticipate being able to extend the maturity dates or alternatively refinance the mortgages with new lenders. The weighted average interest rate in our existing mortgages remains at 5.7%. Because of the proceeds from the preferred equity raise, we had nothing outstanding…

All right. Thank you, Danielle, for that good report. We encourage all of the listeners to read the press release and the quarterly reports that were filed yesterday with the SEC, called Form 10-Q. There's a lot of good information and material in those documents, and you can find them on our website at www.gladstonecommercial.com and on the SEC website. To stay up-to-date in the latest news involving the Gladstone Commercial and our other public companies, please follow us on Twitter, using the name, "GladstoneComps," and also on Facebook, keyword, "The Gladstone Companies," and you can go to our general website to see more information about our fund. That's www.gladstone.com. The main news report for the quarter is that we were able to acquire additional property and raise preferred equity and expand our line of credit. All of these are very positive news for shareholders. We've built a nice pipeline of properties that we intend to acquire during the next quarter, the quarter that we're in, and because of that pipeline, we hope to be able to grow the assets even more during 2012. And with the increase in the portfolio and the properties come greater diversification and we believe better earnings for our shareholders. We're still selling some senior common stock and have sold over $1 million to date. Momentum is building, albeit slowly on that program. And I think this company is in a great position today to increase the assets and to increase the income from those assets. I just believe 2012 is going to be a great year for us. On another note, we've been able to find some attractive long-term mortgages to finance our unencumbered properties. And after the March 31 quarter, we put $19 million mortgage debt on the 4 properties. That's a very…

[Operator Instructions] And our first question will come from John Roberts of Hilliard Lyons.

Can you talk a little bit about what your expectations are for the year for acquisitions, and what the existing pipeline looks like at this point?

Sure. Chip, you want to talk about that? I know we have a couple that are coming close to closing, but we all hold our breath, as we get near to closing because sometimes they fall out. But Chip, go ahead.

Yes, with the pipeline still, we've got multiple deals until a letter of intent right now. They are somewhere in the due diligence closing process, and it's often hard to forecast quarter-to-quarter, but we certainly feel like we can make more than one acquisition per quarter on average. And so we're pushing forward. We have a good pipeline. I hate to be too specific because as David said, sometimes -- and deals fall out of the pipeline and sometimes goes the wrong direction and we find a problem with them. But I'm confident that we've got enough of a pipeline to deliver a pretty good acquisition year by the end of the fiscal year, December.

But you've got about -- you said $130 million in existing liquidity which you basically can use for acquisitions. Are you anticipating a level where you will not have to do any additional capital raises for the current year?

That's what we're forecasting right now is that we wouldn't have to raise any additional equity by the end of the year at this point. And the only additional equity we would be raising is our ongoing efforts for senior common.

Just to piggyback on that, the goal here obviously, is to put as many good assets on the books as possible without being crazy and just loading up with anything that comes along. And that would allow us -- the marketplace is very receptive to our preferred stock. I think we could sell common stock if we wanted to. I think the stock is a little too low today to be going out for common stock. But if we had the opportunities out there and the numbers work, that is if we raise money at x, and can do it at x-plus, something in terms of return, we're obviously going to do that as long as it's accretive. So who knows? Maybe we'll get very lucky through the summer, close a lot of deals and need to raise money in the fall, but right now, we're making a very conservative production.

I would also note that while we haven't done one historically, we're occasionally looking at some portfolio opportunities that would be multiple transactions or multiple acquisitions, and so that might change that dynamic, too. And we are reviewing those and sometimes we see one that might make some sense for us.

Our next question will come from Daniel Donlan of Janney Capital Markets.

This is actually Elizabeth Bland with Dan Donlan. We were just wondering if you could provide any additional details on leasing progress at your vacant properties, if there's an update on the LOI you had at Richmond or anything on Hazelwood.

Chip, go ahead.

Yes, we had the 2 vacant properties both continue to have some level of interests from the community of brokers in those 2 areas, but we're not close on something on either one of them right now. With the one that we were fairly close on is not going to occur in our Richmond property and so we're, I wouldn't say, back to the drawing board on that, but we're back to talking with new tenants. The good news is, Richmond absorption is improving, and we are seeing interest in our property in the area of the city where the property is because there's some new construction going on and some new retail going on. So we're positive on that one. The other one is in St. Louis, we continue to work on, but there's nothing definite at this point, or no candidate that we're negotiating directly with. But we've had a number of people through the building and showing interest in it, but nothing that we can concretely talk about today.

[Operator Instructions] And we have a question from Jeff Rudner of UBS.

You referred to the dividend and the longevity of the dividend having never been caught paying the $0.125 per month. What would have to occur with the company in order for you to consider raising the dividend beyond the $0.125 monthly level?

Yes, e look at it obviously every quarter. The board considers whether they should raise it or not. We just need to get the FFO up higher than it is today. And I think if you look at how many deals we've put on the books during the last year, most of those were only on for part of the year. As they strengthen and continue to grow, I think this year might be a good chance for us to raise the dividend. I just -- I do want to make any promises, but I think we're getting very strong right now.

And I'm showing no additional questions in the queue. I'd like to turn the conference back over to Mr. David Gladstone for any closing comments.

All right. Again, thank you, all, very much for attending the meeting. And if you have other questions, you can e-mail them in. We'll do the best we can to answer them. And that's the end of this conference.

Ladies and gentlemen, the conference has concluded. We thank you for attending today's presentation. You may now disconnect.