STAG Industrial(US:STAG)2025-04-30 14:00Financial Data and Key Metrics Changes - Core FFO per share was $0.61 for the first quarter, an increase of 3.4% compared to the previous year [15] - Cash available for distribution totaled $106.5 million, an increase of 8.5% compared to the prior period [15] - Leverage remains low with net debt to annualized run rate adjusted EBITDA equal to 5.2 times [15] - Same store cash NOI growth was 3.4% for the quarter, driven by leasing spreads of 27.3% and annual escalators of 2.8% [17] Business Line Data and Key Metrics Changes - The company signed 36 leases totaling 5 million square feet during the quarter, generating cash and straight line leasing spreads of 27.3% and 42.1% respectively [16] - Retention for the quarter was 85.3%, with 78.5% of the operating portfolio square feet expected to lease in 2025 already leased [16][19] - The company achieved cash leasing spreads of 25.1% for the leases commencing in 2025 [8][16] Market Data and Key Metrics Changes - The national under construction pipeline decreased more than 16% sequentially since the fourth quarter [11] - The company noted healthy tenant activity in various markets, with strong demand in the Midwest and Sunbelt regions, while some weakness was observed in Atlanta and San Diego [9][28] Company Strategy and Development Direction - The company aims to benefit from geographic diversity and focus on CBRE Tier one markets, viewing tenant supply chain diversification as a net positive [9] - The company has a strong balance sheet and ample liquidity, positioning itself for sustainable growth in 2025 [20] - The company is evaluating a broad mix of assets for acquisition, including long-term and short-term leases, and is open to opportunities in the current market environment [58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about leasing activity despite macroeconomic uncertainties, noting that tenants are still making decisions albeit at a slower pace [27][36] - The company maintains its 2025 credit loss guidance of 75 basis points, with minimal credit loss experienced in the first quarter [19][60] - Management highlighted ongoing discussions with tenants for early lease renewals, indicating strong demand in the system [29][34] Other Important Information - The company completed acquisitions totaling $43 million in the first quarter, with cash cap rates averaging 6.87% [11] - A significant lease of 500,000 square feet was executed in the Savannah market with zero downtime and a 25% cash leasing spread [10] - The company has approximately 2.5 million square feet of development activity across 11 buildings, with 50% under construction and 16% pre-leased [14] Q&A Session Summary Question: Clarification on new leasing activity - Management confirmed that 1 million square feet of new leases were signed in the last 30 to 60 days, with a mix of new and renewal leases [25][26] Question: Demand across different submarkets - Management noted healthy demand in Midwest markets and the Sunbelt, with some weakness in Atlanta and San Diego, but overall tenant activity remains strong [27][28] Question: Trends in the private transactions market - Management observed that while the private market remains strong, some portfolios have been pulled from the market due to pricing volatility [42][44] Question: Update on credit loss and American Tire - Management stated that American Tire is current on rent, and the guidance for credit loss remains unchanged at 75 basis points [60][61] Question: Insights into leasing activity and concessions - Management indicated that while some concessions may be offered, they are generally holding out for the best net effective rent [106] Question: Update on development pipeline demand - Management reported good activity in development projects, although new leasing for new developments is slower due to macroeconomic factors [72][74]