STAG Industrial(STAG) - 2025 Q2 - Quarterly Report

PART I. Financial Information Presents the company's unaudited consolidated financial statements and related notes Item 1. Financial Statements (unaudited) This item includes the company's unaudited consolidated financial statements, comprising balance sheets, statements of operations, comprehensive income, equity, and cash flows, along with detailed notes explaining the company's organization, accounting policies, rental property, debt, derivatives, equity, noncontrolling interests, equity incentive plan, leases, earnings per share, commitments, contingencies, and subsequent events Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 Presents the company's financial position including assets, liabilities, and equity at specific dates | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $6,825,148 | $6,833,335 | | Total Liabilities | $3,304,489 | $3,304,227 | | Total Equity | $3,520,659 | $3,529,108 | | Cash and cash equivalents | $15,379 | $36,284 | | Unsecured credit facility | $51,000 | $409,000 | | Unsecured notes, net | $1,966,291 | $1,594,092 | Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 Details the company's revenues, expenses, and net income for specified periods | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Total revenue | $207,593 | $189,777 | $17,816 | 9.4% | | Total expenses | $128,607 | $130,148 | $(1,541) | (1.2)% | | Net income | $51,063 | $61,074 | $(10,011) | (16.4)% | | Net income per share (basic & diluted) | $0.27 | $0.33 | $(0.06) | (18.2)% | | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Total revenue | $413,167 | $377,320 | $35,847 | 9.5% | | Total expenses | $260,063 | $254,161 | $5,902 | 2.3% | | Net income | $144,425 | $98,527 | $45,898 | 46.6% | | Net income per share (basic & diluted) | $0.76 | $0.53 | $0.23 | 43.4% | Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024 Reports net income and other comprehensive income components for the periods | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net income | $51,063 | $61,074 | $(10,011) | (16.4)% |\n| Other comprehensive income (loss) | $(7,021) | $(2,967) | $(4,054) | 136.6% |\n| Comprehensive income attributable to STAG Industrial, Inc. | $43,130 | $56,884 | $(13,754) | (24.2)% | | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net income | $144,425 | $98,527 | $45,898 | 46.6% |\n| Other comprehensive income (loss) | $(18,002) | $4,109 | $(22,111) | (538.1)% |\n| Comprehensive income attributable to STAG Industrial, Inc. | $123,778 | $100,431 | $23,347 | 23.2% | Consolidated Statements of Equity for the Three and Six Months Ended June 30, 2025 and 2024 Outlines changes in stockholders' equity and noncontrolling interests over time - Total stockholders' equity decreased from $3.458 billion at December 31, 2024, to $3.445 billion at June 30, 2025, primarily due to dividends and distributions exceeding net income, and other comprehensive loss[17][18] - Noncontrolling interest in operating partnership increased from $69.9 million at December 31, 2024, to $72.4 million at June 30, 2025, reflecting contributions and net income allocation[17][18] Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 Summarizes cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $215,408 | $227,397 | $(11,989) | (5.3)% |\n| Net cash used in investing activities | $(89,629) | $(247,611) | $157,982 | (63.8)% |\n| Net cash provided by (used in) financing activities | $(127,327) | $32,866 | $(160,193) | (487.4)% |\n| Cash and cash equivalents and restricted cash—end of period | $35,845 | $34,520 | $1,325 | 3.8% | Notes to Consolidated Financial Statements Provides detailed explanations and disclosures supporting the consolidated financial statements 1. Organization and Description of Business Describes the company's structure, operations, and business model - STAG Industrial, Inc operates as an UPREIT, owning and managing industrial properties across the United States[23] - As of June 30, 2025, the Company owned 600 industrial buildings in 41 states, with approximately 118.3 million rentable square feet[24] 2. Summary of Significant Accounting Policies Outlines the key accounting principles and methods used in financial reporting - The interim financial statements are prepared in conformity with GAAP and do not include all disclosures required for complete annual financial statements[25] - The Company's consolidated financial statements include the accounts of STAG Industrial, Inc, its Operating Partnership, and their consolidated subsidiaries, eliminating all significant intercompany balances and transactions[26] - The Company manages its operations on an aggregated, single segment basis, deriving revenues from rental income[30] 3. Rental Property Details the company's rental property portfolio, including acquisitions, dispositions, and impairment | Rental Property (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Total rental property, net | $6,500,090 | $6,495,779 |\n| Construction in progress | $110,378 | $218,616 | | Acquisitions (Six months ended June 30, 2025) | Square Feet | Buildings | Purchase Price (in thousands) | | :-------------------------------------------- | :---------- | :-------- | :---------------------------- | | Total | 576,764 | 4 | $67,181 | | Dispositions (Six months ended June 30, 2025) | Value | | :-------------------------------------------- | :-------- | | Number of buildings | 2 |\n| Building square feet (in millions) | 0.5 |\n| Proceeds from sale of rental property, net | $72,590 |\n| Gain on the sales of rental property, net | $55,605 | - The Company recognized a loss on impairment of $888 thousand for the three and six months ended June 30, 2025, related to a property in Lewiston, ME, due to a change in the estimated hold period[45] 4. Debt Provides information on the company's outstanding debt, including terms and compliance | Indebtedness (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Unsecured credit facility | $51,000 | $409,000 |\n| Unsecured term loans, net | $1,022,522 | $1,021,848 |\n| Unsecured notes, net | $1,966,291 | $1,594,092 |\n| Mortgage note, net | $4,089 | $4,195 |\n| Total / weighted average interest rate | $3,043,902 | $3,029,135 |\n| Weighted average interest rate | 4.24% | N/A | - The Company redeemed $75.0 million of Series G Unsecured Notes at maturity on June 13, 2025, and $100.0 million of Series D Unsecured Notes at maturity on February 20, 2025[61][63] - On April 15, 2025, the Company entered into a note purchase agreement for the private placement of $550.0 million in new senior unsecured notes (Series O, P, and Q) maturing between 2030 and 2035, with fixed annual interest rates ranging from 5.50% to 5.99%[62] - The Company was in compliance with all applicable debt restrictions and financial covenants as of June 30, 2025, and December 31, 2024[64] 5. Derivative Financial Instruments Explains the company's use of derivatives to manage financial risks, primarily interest rate risk - The Company uses interest rate swaps to manage interest rate risk on existing and future liabilities, not for speculative purposes, converting variable rates (Term SOFR or Daily SOFR) to effectively fixed rates[68][69] | Derivative Type (in thousands) | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :----------------------------- | :----------------------- | :--------------------------- | | Interest rate swaps-gross asset | $19,703 | $36,466 |\n| Interest rate swaps-gross liability | $(1,250) | $0 | - Approximately $14.3 million is estimated to be reclassified from accumulated other comprehensive income as a decrease to interest expense over the next 12 months due to cash flow hedges[72] 6. Equity Details the company's equity structure, stock offerings, and compensation plans - As of June 30, 2025, the Company had no preferred stock issued or outstanding, and 186,691,274 shares of common stock issued and outstanding[82][83] | ATM Common Stock Offering Program | Maximum Aggregate Offering Price (in thousands) | Aggregate Available as of June 30, 2025 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :----------------------------------------------------- | | 2025 $750 million ATM | $750,000 | $749,554 | | Forward Sale Agreements Activity (Six months ended June 30, 2025) | Shares | Gross Sales (in thousands) | Weighted Average Gross Sales Price Per Share | | :---------------------------------------------------------------- | :----- | :------------------------- | :------------------------------------------- | | New forward sale agreements | 12,058 | $446 | $37.00 - $37.02 |\n| Forward Sale Agreements Outstanding at June 30, 2025 | 12,058 | $446 | N/A | - Unrecognized compensation expense for restricted shares of common stock was approximately $3.0 million at June 30, 2025, to be recognized over approximately 2.5 years[89] 7. Noncontrolling Interest Describes the ownership interests held by parties other than the parent company in consolidated entities | Noncontrolling Interest in Operating Partnership (Six months ended June 30, 2025) | LTIP Units | Other Common Units | Total Noncontrolling Common Units | Noncontrolling Interest (%) | | :-------------------------------------------------------------------------------- | :--------- | :----------------- | :-------------------------------- | :-------------------------- | | Balance at December 31, 2024 | 2,307,662 | 1,464,718 | 3,772,380 | 2.0% |\n| Granted/Issued | 280,334 | — | 280,334 | N/A |\n| Redemptions from Other Common Units to common stock | — | (126,554) | (126,554) | N/A |\n| Balance at June 30, 2025 | 2,505,793 | 1,420,367 | 3,926,160 | 2.1% | - The Company held interests of 96.8% in a Reno, Nevada joint venture, 91.4% in a Concord, North Carolina joint venture, and 95.0% in a Shepherdsville, Kentucky joint venture as of June 30, 2025[99] 8. Equity Incentive Plan Outlines the company's equity-based compensation programs for employees and directors - On January 7, 2025, performance units were granted under the 2011 Plan with a measuring period from January 1, 2025, to December 31, 2027[100] - The fair value of performance units granted was determined using a lattice-binomial option-pricing model based on a Monte Carlo simulation, utilizing Level 3 inputs[101] | Non-Cash Compensation Expense (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Restricted shares of common stock | $412 | $457 | $806 | $932 |\n| LTIP units | $1,109 | $923 | $2,217 | $1,822 |\n| Performance units | $1,537 | $1,399 | $3,019 | $2,756 |\n| Director compensation | $190 | $174 | $388 | $351 |\n| Total non-cash compensation expense | $3,248 | $2,953 | $6,430 | $5,861 | 9. Leases Presents information on the company's lease agreements, including rental income and operating lease costs | Rental Income (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Fixed lease payments | $157,620 | $144,278 | $314,402 | $286,389 |\n| Variable lease payments | $44,193 | $38,218 | $87,952 | $80,407 |\n| Total rental income | $207,438 | $186,467 | $412,800 | $373,869 | - The Company entered into a new lease agreement for its headquarters in Boston, MA, commencing July 1, 2026, with a total base rent of approximately $23.0 million over an estimated 10.8-year term[112] | Operating Lease Cost (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total operating lease cost | $1,129 | $1,047 | $2,256 | $2,093 | 10. Earnings Per Share Details the calculation of basic and diluted earnings per share for the periods | EPS Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income per share — basic and diluted | $0.27 | $0.33 | $0.76 | $0.53 | - Unvested restricted shares of common stock were considered participating securities for EPS computation, with 114,015 shares (weighted average) for the three months ended June 30, 2025[118] 11. Commitments and Contingencies Discloses potential future obligations and uncertain events that may affect the company - The Company is subject to various legal proceedings and claims in the ordinary course of business, which management believes will not have a material adverse effect on its financial position, results of operations, or cash flows[121] - As of June 30, 2025, the Company had approximately $3.2 million in letters of credit related to construction projects and other agreements[122] 12. Subsequent Events Reports significant events occurring after the balance sheet date but before financial statement issuance - On July 3, 2025, the Company sold 1,008,200 shares on a forward basis under the ATM common stock offering program for approximately $37.0 million gross sale price, with a scheduled maturity date of July 2, 2026[123] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance and condition, discussing key factors influencing results, detailed comparisons of operating results for the three and six months ended June 30, 2025 and 2024, non-GAAP financial measures (FFO and NOI), cash flows, and an in-depth analysis of liquidity and capital resources Forward-Looking Statements Highlights statements about future expectations and potential risks that may cause actual results to differ - The report contains forward-looking statements identifiable by words like "anticipates," "believes," "expects," and "will," which reflect current views and assumptions[126] - Actual results may differ materially due to risks such as global recessions, ability to raise equity capital, competitive environment, real estate value fluctuations, decreased rental rates, tenant defaults, acquisition risks, and geopolitical conflicts[126] Certain Definitions Provides explanations for key terms and metrics used in the management discussion and analysis - "Cash Rent Change" measures the percentage change in base rent between a new/renewal lease and the previous comparable lease[128] - "Operating Portfolio" includes all stabilized buildings, excluding non-core flex/office, Value Add, and held-for-sale properties[131] - "Stabilization" for properties under development or redevelopment is defined as achieving 90% occupancy or 12 months after completion, or specific criteria for acquired properties[134] Overview Presents a high-level summary of the company's business, strategy, and REIT qualification - STAG Industrial, Inc is a REIT specializing in the acquisition, ownership, development, and operation of industrial properties across the United States[139] - The company's platform focuses on identifying value-driven acquisitions, achieving growth through industrial operations, and maintaining appropriate capitalization, while qualifying as a REIT under IRS sections 856-860[139] Factors That May Influence Future Results of Operations Discusses internal and external factors expected to impact the company's future financial performance - Future results depend on external growth (acquisition activity) and internal growth (occupancy and rental rates)[140] - Macroeconomic trends, including interest rates, inflation, trade policies, and geopolitical tensions, are key drivers of financial market volatility and raise concerns about a slowing global economy[141] - Long-term demand for industrial space is supported by e-commerce growth, onshoring/nearshoring trends, and the need for greater supply chain resilience[143] - The company's diversified portfolio, minimal floating rate debt exposure (due to hedging), strong banking relationships, and access to capital are expected to position it well in an uncertain economic environment[144] Results of Operations Analyzes the company's financial performance, comparing revenues, expenses, and net income across periods Comparison of the three months ended June 30, 2025 to the three months ended June 30, 2024 Compares the company's financial results for the three-month periods ended June 30, 2025 and 2024 | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net income | $51,063 | $61,074 | $(10,011) | (16.4)% |\n| Same Store Total Operating Revenue | $185,288 | $178,705 | $6,583 | 3.7% |\n| Same Store Net Operating Income (NOI) | $149,767 | $144,191 | $5,576 | 3.9% |\n| Total Other Income (Expense) | $(27,923) | $1,445 | $(29,368) | (2,032.4)% | - The decrease in net income was primarily attributable to a $17.4 million decrease in gain on sales of rental property and a $6.2 million increase in interest expense[188] - Same store rental income increased by $6.6 million (3.7%), driven by $8.4 million from new leases and renewals, partially offset by $2.0 million reduction from tenant vacancies[174][175] Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024 Compares the company's financial results for the six-month periods ended June 30, 2025 and 2024 | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net income | $144,425 | $98,527 | $45,898 | 46.6% |\n| Same Store Total Operating Revenue | $372,012 | $359,233 | $12,779 | 3.6% |\n| Same Store Net Operating Income (NOI) | $297,094 | $287,075 | $10,019 | 3.5% |\n| Total Other Income (Expense) | $(8,679) | $(24,632) | $15,953 | (64.8)% | - The increase in net income was primarily driven by a $32.5 million increase in gain on sales of rental property[208] - Same store rental income increased by $12.7 million (3.5%), with $16.0 million from new leases and renewals, partially offset by $4.1 million from tenant vacancies[194][195] Non-GAAP Financial Measures Presents and reconciles non-GAAP financial metrics like FFO and NOI to GAAP measures Funds From Operations Explains the calculation and significance of Funds From Operations (FFO) as a REIT performance metric - FFO is calculated in accordance with Nareit standards, adjusting GAAP net income by excluding gains/losses from sales of depreciable operating buildings, impairment write-downs, and real estate-related depreciation and amortization[211] | FFO (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $51,063 | $61,074 | $144,425 | $98,527 |\n| FFO | $120,645 | $118,168 | $237,908 | $226,989 |\n| FFO attributable to common stockholders and unit holders | $120,506 | $118,029 | $237,615 | $226,704 | - FFO is a widely recognized measure for REIT performance comparison but has limitations as it excludes depreciation, amortization, changes in property value, and capital expenditures[213] Net Operating Income Defines and presents Net Operating Income (NOI) as a measure of property-level profitability - NOI is defined as rental income (including common area maintenance, real estate taxes, and insurance billings) less property expenses, real estate tax expense, and insurance expense[216] | NOI (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $51,063 | $61,074 | $144,425 | $98,527 |\n| Net operating income | $167,190 | $152,299 | $329,086 | $300,771 | - NOI is a supplemental measure for understanding core building operations but should not be viewed as an alternative to GAAP financial performance, as it excludes expenses that could materially impact results[216] Cash Flows Analyzes the company's cash generation and usage from operating, investing, and financing activities Comparison of the six months ended June 30, 2025 to the six months ended June 30, 2024 Compares the company's financial results for the six-month periods ended June 30, 2025 and 2024 | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $215,408 | $227,397 |\n| Net cash used in investing activities | $(89,629) | $(247,611) |\n| Net cash provided by (used in) financing activities | $(127,327) | $32,866 | - The decrease in net cash used in investing activities was primarily due to lower rental property acquisitions ($66.8 million in 2025 vs $281.1 million in 2024)[221] - The shift in financing activities was mainly driven by decreased net borrowings under unsecured credit facilities and notes ($83.0 million and $75.0 million, respectively) and a $4.4 million increase in dividends paid[222] Liquidity and Capital Resources Assesses the company's ability to meet short-term and long-term financial obligations and fund operations Indebtedness Outstanding Details the company's current debt obligations, including types, amounts, interest rates, and maturities | Indebtedness (in thousands) | June 30, 2025 | Interest Rate | Maturity Date | | :-------------------------- | :------------ | :------------ | :------------ | | Unsecured credit facility | $51,000 | Term SOFR + 0.875% | Sep 7, 2029 |\n| Unsecured term loans | $1,025,000 | 1.80% - 4.83% | Feb 5, 2026 - Mar 23, 2029 |\n| Unsecured notes | $1,975,000 | 2.80% - 6.30% | Jul 1, 2026 - Jun 25, 2035 |\n| Mortgage note | $4,212 | 3.71% | Oct 1, 2039 |\n| Total principal outstanding | $3,055,212 | N/A | N/A |\n| Weighted average interest rate | 4.24% | N/A | N/A | - The aggregate undrawn nominal commitment on the unsecured credit facility was approximately $945.8 million as of June 30, 2025[236] - The Company was in compliance with all applicable financial covenants for its debt arrangements as of June 30, 2025[239] Equity Provides an overview of the company's equity structure, stock issuance programs, and outstanding shares - The Company is authorized to issue up to 20,000,000 shares of preferred stock and 300,000,000 shares of common stock; no preferred stock was outstanding as of June 30, 2025[244][245] | ATM Common Stock Offering Program | Maximum Aggregate Offering Price (in thousands) | Aggregate Available as of June 30, 2025 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :----------------------------------------------------- | | 2025 $750 million ATM | $750,000 | $749,554 | - As of June 30, 2025, 12,058 shares were outstanding under forward sale agreements, representing $446 thousand in gross sales[249] Noncontrolling Interest Describes the noncontrolling ownership stakes in the company's consolidated subsidiaries and joint ventures - As of June 30, 2025, the Company owned approximately 97.9% of the common units in its Operating Partnership[251] - The Company holds interests in joint ventures, including 96.8% in Reno, Nevada, 91.4% in Concord, North Carolina, and 95.0% in Shepherdsville, Kentucky[252] Interest Rate Risk Discusses the company's exposure to interest rate fluctuations and its hedging strategies - The Company uses interest rate swaps to fix the rate of its variable rate debt, with all outstanding variable rate debt (except the unsecured credit facility) fixed through initial maturity as of June 30, 2025[253][257] - As of June 30, 2025, the company had approximately $1,076.0 million of variable rate debt, with $51.0 million on its unsecured credit facility unhedged[257] - An increase of 100 basis points in interest rates would increase interest expense by approximately $0.3 million for the six months ended June 30, 2025, assuming the unsecured credit facility balance[260] Off-balance Sheet Arrangements Discloses significant contractual obligations and arrangements not recognized on the balance sheet - As of June 30, 2025, the Company had approximately $3.2 million in letters of credit related to development projects and other agreements[258] - No other material off-balance sheet arrangements were reported as of June 30, 2025[258] Item 3. Quantitative and Qualitative Disclosures about Market Risk Discusses the company's exposure to market risk, primarily interest rate risk, and its management strategy - The primary market risk the Company is exposed to is interest rate risk, which is managed through derivative financial instruments, mainly interest rate swaps[259] - As of June 30, 2025, $1,076.0 million of variable rate debt was outstanding, with $51.0 million on the unsecured credit facility unhedged[260] - A 100 basis point increase in interest rates would increase interest expense by approximately $0.3 million for the six months ended June 30, 2025, on the unhedged portion of debt[260] Item 4. Controls and Procedures Reports on the effectiveness of disclosure controls and internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[261][262] - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[263] PART II. Other Information Includes legal proceedings, risk factors, equity sales, and other corporate disclosures Item 1. Legal Proceedings Details routine legal proceedings and claims, with no expected material adverse effect - The Company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations[265] Item 1A. Risk Factors Updates risk factors, including new risks from trade policies and forum selection provisions - New risk factors include potential declines in economic activity due to changes in trade policies, tariffs, and related government actions, which could increase costs, decrease margins, and adversely affect tenants' businesses and the company's operations[267] - The company's bylaws designate Maryland state courts or the U.S District Court in Maryland as the sole forum for certain actions, and federal district courts for Securities Act claims, potentially limiting stockholders' choice of judicial forum[268][269][270] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports on unregistered sales of equity securities, including unit exchanges and stock redemptions - During the quarter ended June 30, 2025, the Operating Partnership issued 28,843 common units upon exchange of outstanding LTIP units[271] - The Company issued 73,194 shares of common stock upon redemption of 73,194 common units in the Operating Partnership[272] Item 3. Defaults Upon Senior Securities States that no defaults upon senior securities occurred during the reported period - No defaults upon senior securities occurred during the quarter ended June 30, 2025[274] Item 4. Mine Safety Disclosures Indicates that this item is not applicable to the company's operations - This item is not applicable to the Company[275] Item 5. Other Information Covers various corporate information, including trading arrangements, bylaws, and personnel changes Director and Officer Trading Arrangements Reports on trading plans adopted or terminated by the company's directors and officers - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the three months ended June 30, 2025[277] Amended and Restated Bylaws Details recent changes to the company's bylaws, including governance and forum selection provisions - The Fourth Amended and Restated Bylaws, effective July 28, 2025, incorporate SEC's "universal proxy rules" and enhance procedural/disclosure requirements for stockholder nominations and proposals[278][284] - The bylaws designate Maryland state courts or the U.S District Court in Maryland as the exclusive forum for certain internal corporate claims and federal district courts for Securities Act claims[278][284] 2026 Annual Meeting of Stockholders; Date for Submission of Stockholder Proposals Provides deadlines and procedures for stockholder proposals for the upcoming annual meeting - The deadline for stockholder proposals for the 2026 annual meeting (excluding Rule 14a-8 proposals) is between December 29, 2025, and January 28, 2026, due to changes in the Amended and Restated Bylaws[281][282] Promotion of Steven T. Kimball to Chief Operating Officer Announces the promotion of Steven T Kimball to Chief Operating Officer and details his compensation - Steven T Kimball was promoted to Executive Vice President and Chief Operating Officer, effective August 1, 2025[283] - Mr Kimball's new role includes a base salary of $500,000 annually, with an initial term through December 31, 2026[286] - Mr Kimball previously served as Executive Vice President—Real Estate Operations and held leadership positions at PGIM Real Estate and Prologis, Inc[283][285] Item 6. Exhibits Lists all supplementary documents filed with the quarterly report - The exhibits include the Fourth Amended and Restated Bylaws, the Note Purchase Agreement for Series O, P, and Q Unsecured Notes, and certifications from the Chief Executive Officer and Chief Financial Officer[288] SIGNATURES Confirms the official submission of the report by authorized company officers - The report is signed by Matts S Pinard, Chief Financial Officer, Executive Vice President and Treasurer, and Jaclyn M Paul, Chief Accounting Officer, on July 29, 2025[293]