This Passive-Income Machine Has Hit the Accelerator

Core Viewpoint - Stag Industrial is positioned for continued growth in its monthly income stream, supported by robust demand for industrial real estate and a strong operational performance [1][2][10] Financial Performance - The REIT reported a core funds from operations (FFO) per share increase of 8.9% in Q2 2024 and 7.1% in the first half of the year, with cash available for distribution rising by 9.1% in Q2 and 9% in the first half [3] - Same-store net operating income (NOI) grew by 6.1% in Q2 and 6.5% in the first half, driven by high occupancy rates of 97.5% and strong lease renewals [5][4] Demand and Leasing - Stag Industrial has an impressive tenant retention rate of 82.2% and has achieved a 35.3% increase in lease rates on a cash basis [4] - New leases are being signed at an average rate 24.7% higher than previous leases, indicating strong demand for its properties [4] Acquisition Strategy - The REIT accelerated its acquisition pace, purchasing 10 properties for $225.6 million in Q2 at a 6.7% cash capitalization rate, compared to just one property for $50 million in Q1 [6] - Stag Industrial has a robust acquisition pipeline with 162 buildings representing $3.7 billion in investment potential, expecting to invest between $350 million and $650 million this year [8] Future Growth Potential - The company anticipates cash same-store NOI growth of 4.75% to 5.25% for the year, nearly double its historical rate of 2.5% [7] - Stag Industrial's conservative dividend payout ratio of less than 70% of cash available for distribution provides financial flexibility for new investments [9] Financial Health - The REIT maintains a low leverage ratio of 4.9, below its target range of 5 to 5.5, indicating improved financial metrics and flexibility [10] - The combination of earnings growth, acquisition volume, and a strong balance sheet positions Stag Industrial for continued dividend increases and income growth [10]