STAG Industrial(STAG) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights This section provides a high-level overview of the company's key financial and operational achievements for the period Second Quarter 2025 Highlights STAG Industrial reported strong operational performance in Q2 2025, with increases in Core FFO per diluted share, Cash NOI, and Same Store Cash NOI. The company also completed strategic acquisitions and dispositions, maintained high occupancy, and achieved significant rent changes on new and renewal leases. Moody's upgraded the corporate credit rating | Metric | Q2 2025 | Q2 2024 | Change | % Change | | :----------------------------------- | :------ | :------ | :----- | :------- | | Net income per basic and diluted common share | $0.27 | $0.33 | ($0.06) | (18.2)% | | Net income attributable to common stockholders | $50.0 million | $59.7 million | ($9.7 million) | (16.2)% | | Core FFO per diluted share | $0.63 | $0.61 | $0.02 | 3.3% | | Cash NOI | $161.7 million | $148.4 million | $13.3 million | 8.9% | | Same Store Cash NOI | $145.3 million | $141.0 million | $4.3 million | 3.0% | | Cash Available for Distribution | $98.8 million | $95.1 million | $3.7 million | 3.9% | - Acquired one building (183,200 square feet) for $18.4 million with a Cash Capitalization Rate of 7.1%[4] - Sold one building (151,200 square feet) for $9.1 million[4] - Achieved an Occupancy Rate of 96.3% on the total portfolio and 97.0% on the Operating Portfolio as of June 30, 2025[4] - Commenced Operating Portfolio leases of 4.2 million square feet, resulting in a Cash Rent Change of 24.6% and Straight-Line Rent Change of 41.1%[4] - Experienced 75.3% Retention for 3.5 million square feet of leases expiring in the quarter[4] - Moody's Investor Services raised the Company's corporate credit rating to Baa2 with a stable outlook from Baa3 with a positive outlook on May 8, 2025[4] - As of July 28, 2025, 90.8% of expected 2025 new and renewal leasing (13.3 million square feet) has been addressed, achieving a Cash Rent Change of 24.5%[4] Financial Performance This section provides a comparative overview of key financial metrics for the three and six months ended June 30, 2025, versus 2024, highlighting changes in net income, NOI, FFO, and CAD Key Financial Measures This section provides a comparative overview of key financial metrics for the three and six months ended June 30, 2025, versus 2024, highlighting changes in net income, NOI, FFO, and CAD | Metrics | Three months ended June 30, 2025 ($ millions) | Three months ended June 30, 2024 ($ millions) | % Change (QoQ) | Six months ended June 30, 2025 ($ millions) | Six months ended June 30, 2024 ($ millions) | % Change (YoY) | | :-------------------------------- | :------------------------------- | :------------------------------- | :--------------- | :------------------------------- | :------------------------------- | :--------------- | | Net income attributable to common stockholders | $49.963 | $59.737 | (16.4)% | $141.316 | $96.317 | 46.7 % | | Net income per common share — basic | $0.27 | $0.33 | (18.2)% | $0.76 | $0.53 | 43.4 % | | Net income per common share — diluted | $0.27 | $0.33 | (18.2)% | $0.76 | $0.53 | 43.4 % | | Cash NOI | $161.688 | $148.432 | 8.9 % | $318.885 | $293.904 | 8.5 % | | Same Store Cash NOI | $145.266 | $140.984 | 3.0 % | $289.726 | $280.758 | 3.2 % | | Adjusted EBITDAre | $152.017 | $138.726 | 9.6 % | $298.430 | $273.393 | 9.2 % | | Core FFO | $120.506 | $113.147 | 6.5 % | $235.760 | $222.186 | 6.1 % | | Core FFO per share / unit — diluted | $0.63 | $0.61 | 3.3 % | $1.24 | $1.20 | 3.3 % | | Cash Available for Distribution | $98.829 | $95.119 | 3.9 % | $205.315 | $193.252 | 6.2 % | - The Same Store pool accounted for 91.6% of the total portfolio square footage as of June 30, 2025[9] Consolidated Balance Sheets The balance sheet shows a slight decrease in total assets and total equity from December 31, 2024, to June 30, 2025, while total liabilities remained relatively stable. Key changes include a significant reduction in unsecured credit facility debt and an increase in unsecured notes | Item | June 30, 2025 ($ millions) | December 31, 2024 ($ millions) | Change ($ millions) | % Change | | :----------------------------------- | :--------------------- | :--------------------- | :------------- | :------- | | Total rental property, net | $6,500.090 | $6,495.779 | $4.311 | 0.07% | | Cash and cash equivalents | $15.379 | $36.284 | ($20.905) | (57.6%) | | Total assets | $6,825.148 | $6,833.335 | ($8.187) | (0.12%) | | Unsecured credit facility | $51.000 | $409.000 | ($358.000) | (87.5%) | | Unsecured notes, net | $1,966.291 | $1,594.092 | $372.199 | 23.3% | | Total liabilities | $3,304.489 | $3,304.227 | $0.262 | 0.01% | | Total equity | $3,520.659 | $3,529.108 | ($8.449) | (0.24%) | Consolidated Statements of Operations For Q2 2025, total revenue increased year-over-year, primarily driven by higher rental income. However, net income decreased due to a significant reduction in gain on sales of rental property and increased interest expense, despite a slight decrease in total expenses | Item | Three months ended June 30, 2025 ($ millions) | Three months ended June 30, 2024 ($ millions) | % Change (QoQ) | Six months ended June 30, 2025 ($ millions) | Six months ended June 30, 2024 ($ millions) | % Change (YoY) | | :----------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------- | :--------------------------------------- | :--------------------------------------- | :--------------- | | Rental income | $207.438 | $186.467 | 11.2% | $412.800 | $373.869 | 10.4% | | Total revenue | $207.593 | $189.777 | 9.4% | $413.167 | $377.320 | 9.5% | | Total expenses | $128.607 | $130.148 | (1.2)% | $260.063 | $254.161 | 2.3% | | Interest expense | ($33.618) | ($27.372) | 22.8% | ($66.147) | ($52.793) | 25.3% | | Gain on the sales of rental property, net | $5.692 | $23.086 | (75.4)% | $55.605 | $23.086 | 140.8% | | Net income | $51.063 | $61.074 | (16.4)% | $144.425 | $98.527 | 46.6% | | Net income attributable to common stockholders | $49.963 | $59.737 | (16.4)% | $141.316 | $96.317 | 46.7% | | Net income per share — diluted | $0.27 | $0.33 | (18.2)% | $0.76 | $0.53 | 43.4% | Reconciliations of GAAP to Non-GAAP Measures This section provides detailed reconciliations from GAAP net income to various non-GAAP financial measures, including Net Operating Income (NOI), Cash NOI, EBITDAre, Adjusted EBITDAre, Funds From Operations (FFO), Core FFO, and Cash Available for Distribution (CAD), for both quarterly and year-to-date periods. These reconciliations adjust for non-cash items and other specific expenses/gains to provide a clearer view of operational performance Net Operating Income (NOI) Reconciliation This section reconciles net income to Net Operating Income (NOI) and Cash NOI for the specified periods | Metric | Three months ended June 30, 2025 ($ millions) | Three months ended June 30, 2024 ($ millions) | Six months ended June 30, 2025 ($ millions) | Six months ended June 30, 2024 ($ millions) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net income | $51.063 | $61.074 | $144.425 | $98.527 | | Net operating income | $167.190 | $152.299 | $329.086 | $300.771 | | Cash net operating income | $161.688 | $148.432 | $318.885 | $293.904 | | Same Store NOI | $149.767 | $144.191 | $297.094 | $287.075 | | Same Store Cash NOI | $145.266 | $140.984 | $289.726 | $280.758 | EBITDAre and Adjusted EBITDAre Reconciliation This section reconciles net income to EBITDAre and Adjusted EBITDAre for the specified periods | Metric | Three months ended June 30, 2025 ($ millions) | Three months ended June 30, 2024 ($ millions) | Six months ended June 30, 2025 ($ millions) | Six months ended June 30, 2024 ($ millions) | | :------------------ | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net income | $51.063 | $61.074 | $144.425 | $98.527 | | EBITDAre | $154.347 | $145.593 | $304.220 | $279.883 | | Adjusted EBITDAre | $152.017 | $138.726 | $298.430 | $273.393 | Core Funds From Operations (FFO) Reconciliation This section reconciles net income to Funds From Operations (FFO) and Core FFO for the specified periods | Metric | Three months ended June 30, 2025 ($ millions) | Three months ended June 30, 2024 ($ millions) | Six months ended June 30, 2025 ($ millions) | Six months ended June 30, 2024 ($ millions) | | :------------------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net income | $51.063 | $61.074 | $144.425 | $98.527 | | Funds from operations | $120.645 | $118.168 | $237.908 | $226.989 | | Core funds from operations | $120.506 | $113.147 | $235.760 | $222.186 | | Core funds from operations per share / unit - diluted | $0.63 | $0.61 | $1.24 | $1.20 | Cash Available for Distribution (CAD) Reconciliation This section reconciles Core FFO to Cash Available for Distribution (CAD) for the specified periods | Metric | Three months ended June 30, 2025 ($ millions) | Three months ended June 30, 2024 ($ millions) | Six months ended June 30, 2025 ($ millions) | Six months ended June 30, 2024 ($ millions) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Core funds from operations | $120.506 | $113.147 | $235.760 | $222.186 | | Cash available for distribution | $98.829 | $95.119 | $205.315 | $193.252 | Operational Activities This section details STAG Industrial's acquisition, disposition, and leasing activities, alongside capital market initiatives Acquisition, Development and Disposition Activity STAG Industrial engaged in both acquisition and disposition activities during Q2 2025 and year-to-date 2025, acquiring one building and one vacant land parcel in Q2, while disposing of one building. The company also maintains a significant acquisition pipeline Acquisition Activity Details of property acquisitions, including purchase prices, square footage, and capitalization rates - In Q2 2025, acquired one building (183,200 square feet) for $18.4 million in Chicago, IL, with 100.0% occupancy upon acquisition and a Cash Capitalization Rate of 7.1%[10][11] | Period | Square Feet | Buildings | Purchase Price ($ millions) | W.A. Lease Term (Years) | Cash Capitalization Rate | | :------- | :---------- | :-------- | :--------------------- | :---------------------- | :----------------------- | | Q1 2025 | 393,564 | 3 | $43.285 | 3.2 | 6.8% | | Q2 2025 | 183,200 | 1 | $18.399 | 5.0 | 7.1% | | Total YTD | 576,764 | 4 | $61.684 | 3.8 | 6.9% | - Acquisition Pipeline: 28.4 million square feet across 168 buildings, with a total purchase price of $3.4 billion[13] - Acquired one vacant land parcel for $5.5 million as part of a joint venture in Q2 2025[13] Disposition Activity Overview of property dispositions, including sale prices and square footage | Period | Square Feet | Buildings | Sale Price ($ millions) | | :------- | :---------- | :-------- | :----------------- | | Q1 2025 | 337,391 | 1 | $67.000 | | Q2 2025 | 151,200 | 1 | $9.100 | | Total YTD | 488,591 | 2 | $76.100 | Leasing Activity The company reported robust leasing activity for both Q2 and year-to-date 2025, with significant rent increases on new and renewal leases and a solid retention rate within the operating portfolio Q2 2025 Operating Portfolio Leasing Activity Summary of Q2 2025 operating portfolio leasing performance, including rent changes and retention rates | Lease Type | Square Feet | Lease Count | W.A. Lease Term (Years) | Cash Rent Change | SL Rent Change | Retention | | :----------- | :---------- | :---------- | :---------------------- | :--------------- | :------------- | :-------- | | New Leases | 1,604,612 | 11 | 5.4 | 35.2% | 49.0% | - | | Renewal Leases | 2,611,673 | 21 | 5.8 | 18.7% | 36.7% | 75.3% | | Total / weighted average | 4,216,285 | 32 | 5.7 | 24.6% | 41.1% | - | Year-to-Date Operating Portfolio Leasing Activity Summary of year-to-date operating portfolio leasing performance, including rent changes and retention rates | Lease Type | Square Feet | Lease Count | W.A. Lease Term (Years) | Cash Rent Change | SL Rent Change | Retention | | :----------- | :---------- | :---------- | :---------------------- | :--------------- | :------------- | :-------- | | New Leases | 1,883,667 | 15 | 5.2 | 35.0% | 48.7% | - | | Renewal Leases | 7,295,246 | 53 | 5.0 | 23.9% | 40.0% | 81.4% | | Total / weighted average | 9,178,913 | 68 | 5.0 | 26.1% | 41.7% | - | - As of July 28, 2025, 90.8% of expected 2025 new and renewal leasing (13.3 million square feet) has been addressed, achieving a Cash Rent Change of 24.5%[19] Capital Markets Activity STAG Industrial successfully raised $550 million in fixed-rate senior unsecured notes and received a credit rating upgrade from Moody's, enhancing its financial flexibility and market position - On May 8, 2025, Moody's Investor Services raised the Company's corporate credit rating to Baa2 with a stable outlook from Baa3 with a positive outlook[20] - On June 25, 2025, the Company funded a note purchase agreement issuing $550 million of fixed rate senior unsecured notes in a private placement offering with a weighted average fixed interest rate of 5.65% and a weighted average tenor of 6.5 years[21] - As of June 30, 2025, Net Debt to Annualized Run Rate Adjusted EBITDAre was 5.1x and Liquidity was $961.2 million[22] Additional Information This section provides supplementary details including conference call information, non-GAAP measure definitions, and forward-looking statements Conference Call & Supplemental Information The company announced details for its Q2 2025 earnings conference call and directed stakeholders to its website for supplemental information - The Company will host a conference call on July 30, 2025, at 10:00 a.m. (Eastern Time) to discuss the quarter's results and provide information about acquisitions, operations, capital markets, and corporate activities[23] - Interested parties can access the call live over the phone or via a simultaneous webcast on the Investor Relations section of the Company's website[23][24] - A supplemental information package with additional disclosure and financial information is available on the Company's website under the 'Quarterly Results' tab[24] Non-GAAP Financial Measures and Other Definitions This section provides detailed definitions for various non-GAAP financial measures used in the earnings release, such as Cash Available for Distribution, Cash Capitalization Rate, EBITDAre, FFO, NOI, Occupancy Rate, and others, along with explanations of their utility and limitations - Definitions are provided for key terms including Acquisition Capital Expenditures, Cash Available for Distribution, Cash Capitalization Rate, Cash Rent Change, Comparable Lease, EBITDAre, Adjusted EBITDAre, Annualized Adjusted EBITDAre, Run Rate Adjusted EBITDAre, Annualized Run Rate Adjusted EBITDAre, Funds from Operations (FFO), Core FFO, GAAP, Liquidity, Market, Net Debt, Net operating income (NOI), Cash NOI, Run Rate Cash NOI, Occupancy Rate, Operating Portfolio, Pipeline, Renewal Lease, Repositioning, Retention, Same Store, Stabilization, Straight-Line Capitalization Rate, Straight-Line Rent Change (SL Rent Change), Value Add Portfolio, and Weighted Average Lease Term[35][39][42][46][51][55][57][58][59][60][61][62][63][64] - The document emphasizes that non-GAAP measures should not be considered as alternatives to net income (determined in accordance with GAAP) and may not be comparable to similarly titled measures disclosed by other REITs[37][45][48][54] Forward-Looking Statements This section serves as a disclaimer, stating that the earnings release contains forward-looking statements subject to known and unknown risks and uncertainties, and that actual results may differ materially from expectations. The company disclaims any obligation to update these statements - This earnings release contains forward-looking statements covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[66] - Forward-looking statements are based on certain assumptions and describe future plans, strategies, and expectations, identifiable by words such as 'believe,' 'will,' 'expect,' 'intend,' 'anticipate,' 'estimate,' 'should', 'project' or similar expressions[66] - Such statements involve known and unknown risks, uncertainties, and other factors beyond STAG's control, which could materially affect actual results, performances, or achievements, as discussed in STAG's most recent Annual Report on Form 10-K[66] - STAG disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement to reflect any change in expectations or circumstances[66]