STAG Industrial, Inc.

Core FFO per share was $0.65 for the quarter, up 3.2% versus last year. Same-store cash NOI grew 3.4% in the quarter and 3.9% year to date. During the quarter, STAG commenced 36 leases across 5.6 million square feet, with cash and straight-line leasing spreads of 19.8% and 33.7%, and retention was 75.7%. Net debt to annualized run-rate adjusted EBITDA was 5.2x, or 5.1x including the unfunded $70 million of forward equity proceeds, and liquidity was $614 million. Guidance changes included credit loss reduced from 50 basis points to 30 basis points, average same-store occupancy raised to 96.25% to 97.25%, retention narrowed to 75%, cash same-store growth raised to 3% to 3.5%, acquisition volume raised to $400 million to $700 million with 6% to 6.5% stabilized cap rates, and Core FFO guidance raised to $2.61 to $2.65 per share.

Bill Crooker struck a constructive tone, saying industrial fundamentals are stabilizing and that vacancy appears to have peaked both nationally and within STAG’s portfolio. He pointed to improving demand from e-commerce, nearshoring/onshoring, and data-center-related users, and said the company believes the supply-demand setup is durable enough to support better rent growth into 2027. He also emphasized that STAG is seeing more development opportunities and that the development platform is a strong use of capital.

Matts Pinard highlighted a stable balance sheet and improving operating metrics. He said leverage was 5.2x net debt to annualized run-rate adjusted EBITDA, or 5.1x including the unfunded $70 million of forward equity, with $614 million of liquidity at quarter end. He also noted $131 million of gross proceeds from 3.4 million forward ATM shares at a $39 average price, the $50 million repayment of Note B after quarter end, and refinancing of the $150 million Term Loan A and $200 million Term Loan F into a single $350 million term loan maturing January 16, 2032, with an aggregate fixed rate of 3.53% until March 2027 and 4.79% thereafter. He said the refinancing and repricing of bank debt produced 5 basis points of savings across all bank debt.

Analysts pressed on acquisition cadence, acquisition pricing, leasing softness in the quarter, development acceleration, regional demand trends, dispositions, and the use of forward equity. Management said it does not have much currently under contract or LOI, so it only modestly raised acquisition guidance, and it is cautious about the back half because of rate and macro volatility. On leasing, Bill said the quarter’s spreads were affected by a mix of leases rolling at different points, but the full-year leasing spread outlook remains 18% to 20%, likely toward the high end. On dispositions, management said it expects more sales in the second half, with noncore disposals more likely than opportunistic sales, and cited recent noncore disposition cap rates of about 8.8% and an opportunistic sale at 5.7%.