Good morning and welcome to the Gladstone Commercial Fourth Quarter and Year-Ended December 31, 2012, Conference Call. [Operator Instructions] Please note this event is being recorded. Now, I would like to turn the conference over to David Gladstone. Please go ahead.

All right. Thank you, Emily, and thanks to all of you for calling in. We always enjoy these times that we have with you on the phone and we certainly wish we had more time to talk to you. Please come and visit us if you're ever in the Washington D.C. area. We're located in the suburb called McLean, Virginia. You have an open invitation to stop by and see us if you're in this area. You'll see a great team in work. There's now about 57 members of the team. So, we're no longer a small company, we're sort of midsized. And, oh, we have a few puppy dogs out here as well that come into the office on a regular routine basis. Let me just read the forward-looking statements that we read each time. This report that we're 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, including statements with regard to future performance of the company. These forward-looking statements involve certain risks and uncertainties and are based on our current plans, and we believe those plans to be accurate. There are many factors that may cause our actual results to be materially different from any future results expressed or implied in these forward-looking statements, including those factors listed under the caption "Risk Factors" of our company's 10-Ks and 10-Q filings that we file with the Securities and Exchange Commission. All those 10-Ks and 10-Qs and other documents can be found on our website at www.gladstonecommercial.com and also on the SEC website. The company undertakes no obligation to publicly update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise. In our talk today, we plan to talk about funds from operation or FFO as we abbreviate it. Since FFO is a non-GAAP accounting term, I need to define FFO as net income excluding gains or losses from the sale of real estate plus depreciation and amortization of the real estate assets. The National Association of Real Estate Investment Trusts has endorsed FFO as one of those non-accounting standards that we can use in discussing our REIT. Please see our 10-K filed yesterday with the SEC and all of our financial statements for a detailed definition of FFO. Now, we'll begin the call today by hearing from our President, Bob Cutlip. Bob is out in California looking at real estate. So Bob, why don't you come on the line and tell us about your section?

Thank you, David. Good morning, everyone. Since we last spoke, the company has acquired 2 additional properties, issued or assumed long-term debt on both of these properties, refinanced our largest mortgage, issued common equity under our ATM program and extended the term on 3 of our upcoming expiring leases. Our pipeline remains robust and we hope to announce additional acquisitions in the near future. Now, for some details. At December 31, 2012, all but 2 of our buildings continue to be occupied and all of the occupied buildings' tenants continue to pay as agreed. The 2 empty buildings constitute about 1.9% of our stabilized gross portfolio income and about 1.2% of the total square feet of space we own. We continue to take the appropriate action to re-tenant these properties. We acquired 2 additional properties this quarter. The first property we acquired is an industrial facility with approximately 208,000 square feet, which was purchased for $20 million and is located in a large industrial business park in Fort Worth, Texas. We funded this acquisition through a combination of borrowings from our line of credit and the assumption of $14.2 million of mortgage debt on the property. This property serves as a federal records center for the National Archives and Records Administration in the Southwest region and provides storage for records created or received by over 100 federal agencies located in Arkansas, Louisiana, Oklahoma and Texas, including U.S. district and bankruptcy courts and the Internal Revenue Service. National archives has leased the properties for 14 years and the lease is fully guaranteed by the U.S. government. The second property we acquired this quarter is an office building with approximately 147,000 square feet, which is purchased for $29.2 million and is located in Columbia, South Carolina. We funded this acquisition through a…

All right. Thank you very much. Good presentation. Now let's turn to our Chief Financial Officer and Treasurer, Danielle Jones, for a report on the financial results.

Thanks, David. Good morning, everybody. Our quarterly and year-end results were strong and reflect our growth from our recent acquisitions. This is evidenced by our total assets increasing to $565 million, which is up 25% from 1 year ago. The amounts outstanding under long-term mortgages and our line of credit also increased to $384.2 million, which was a 26.3% increase from last year. In addition, our stockholders' equity, including our term-preferred stock, increased by 18.9% to $160.9 million from our preferred equity offering in January of 2012 and issuance of common stock under our ATM program during the fourth quarter. Reviewing our upcoming long-term debt maturities, we have mortgage debt in aggregate principal amount of $15.6 million payable during 2013, and $24.4 million payable during 2014. The 2013 and 2014 principal amounts payable includes balloon principal payments due in December of 2013 and June of 2014. However, we are initiating conversations with these lenders in advance of these maturities and anticipate being able to extend the maturity date or refinance with new lenders. An investment-grade tenant at a property where our debt matures in December of this year recently extended their lease for an additional 10 years. Thus, we believe we will be able to refinance this mortgage relatively easily. We intend to pay the additional debt and amortization payments from operating cash flow and borrowings under our line of credit. As Bob mentioned, we were able to refinance our largest mortgage, the $45.2 million GE mortgage, that originally matured in 2012 with KeyBank, which closed in October of 2012. The KeyBank mortgage was a $34 million 10-year mortgage on 7 of the 9 properties that have been originally financed under the GE mortgage. We placed the remaining 2 properties in our borrowing base on our line of credit. We…

All right. That was a good report, Danielle. We encourage all our listeners to read our press releases and our annual report, certainly the one that was filed yesterday with the SEC, called Form 10-K. There's a lot of good material in that document. You can find that and all the other documents at our website www.gladstonecommercial.com and also on the SEC website. To stay up-to-date on our latest news involving Gladstone Commercial and our other public companies, please follow us on Twitter using the name GladstoneComps, C-O-M-P-S; and on Facebook, the keyword is, The Gladstone Companies. And you can go to our general website and see more information about all the Gladstone entities, that's at www.gladstone.com. I think the main news today is that we're reporting really good numbers for the quarter, that we were able to acquire $50 million of additional properties, issued long-term debt on both of these acquisitions, refinanced our largest mortgage that came due, and for another 10 years, which just pushes that way out. We issued some common stock under the ATM program and certainly extended 3 of our leases. So this is all very positive news for all of our shareholders and those who are thinking about buying some stock. We've built up a nice pipeline of potential properties. Bob came onboard during the summer and he's been instrumental in helping everyone move this along and we are interested in acquiring because that pipeline, we hope to be able to grow the asset portfolio even more during 2013. With the increase in portfolio of properties comes greater diversification and we certainly believe that's better. We're still selling some of our Senior Common Stock. We've sold about $1.8 million of that. That's been designed for a specific marketplace. We have a new group in…

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

Two questions. And you've sort of answered one, but let me have you expand on a bit. First, pipeline. What are your expectations for acquisitions this year? And second, you mentioned you're likely to raise some common and preferred, which obviously is needed given the leverage, but what's your touchstone as to which way you're going to go?

Well, I'll answer the last one first. We always look at the marketplace for common and preferred and try to make a determination on which is best for shareholders. Obviously, preferreds are usually a little bit different in terms of yield than common, although the common stock has moved up some. Really hard to say that until the moment in time that we need the common or preferred or additional equity. And so, I can't give you much of an answer other than sit down and do the math. And the math usually tells you which is the best of the 2 to go with. On the pipeline, I'll just comment briefly and then I'll ask Bob to comment on it. Pipeline looks much stronger than it has in the past, only because I think the marketplace is shifting. A lot of different people have decided to sell their properties now. It's a -- we didn't see a big pile up of properties for sale coming at the end of the year even though the capital gains changed. It didn't change that much and I think a lot of people are thinking about selling their properties now rather than waiting for capital gains tax to go up again. But Bob, why don't you come on and just talk about the pipeline?

Sure. John -- excuse me. The acquisition team, we've spent a lot of time over the last several months just kind of identifying where we're trying to go. But our ongoing strategy for us to achieve the goals that we achieved this year, we believe, requires us to have about, as a minimum, about $250 million in the pipeline. And by the pipeline, we mean, those that come into the categories of under initial review, letter of intent, negotiating the contract and the due diligence activities. And the emphasis is for all of us, who are sourcing these deals, to have something in each pot so that we have some consistent deal flow and closings. And today, we really exceed that minimum by about 20% to 25%. And I think we'll be able to keep that going -- subject to market conditions. We all know that we are going to be driven by what's going on economically as well as regionally in each of our markets. So we're hopeful that we can repeat the success that we had in 2012 and it looks at least, right now, at least our pipeline is strong, as David indicated.

Well, great answer. Do you think you can close the same amount as you did last year? I mean is that your hope?

Well, we're going to try. I mean our goal is -- when we set goals at the end of the fourth quarter, and the team is pretty pumped about being able to repeat what we did in 2012. And, of course, our goal, David and Danielle's and mine is to probably do a little bit better. But we'll see how things unfold over the next several months.

Okay. Next question, please.

[Operator Instructions] At this time, I'm not seeing any further questions. I'd like to turn the conference back over to Mr. Gladstone.

All right. Well, thank you very much. Obviously, I know John Roberts is asking the perennial question of how are you going to do next year? And we always love to dodge that question because it's really hard to answer and we don't like to give forward-looking statements in that much detail. I do think we're in good position to go forward and be very successful in 2013. Again, thank you all for calling in. And that's the end of this conference.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.