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STAG INDUSTRIAL ANNOUNCES SECOND QUARTER 2022 RESULTS

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BOSTON, July 27, 2022 /PRNewswire/ -- STAG Industrial, Inc. (the "Company") (NYSE: STAG), today announced its financial and operating results for the quarter ended June 30, 2022.

STAG Industrial Logo. (PRNewsFoto/STAG Industrial, Inc.)
STAG Industrial Logo. (PRNewsFoto/STAG Industrial, Inc.)

"The positive industrial backdrop coupled with our team's operational excellence resulted in another strong quarter," said Bill Crooker, President and Chief Executive Officer of the Company. "Our portfolio is in great position to take advantage of the macro tailwinds for our sector, leading to record internal growth guidance for 2022."

Second Quarter 2022 Highlights

  • Reported $0.18 of net income per basic and diluted common share for the second quarter of 2022, compared to $0.20 of net income per basic and diluted common share for the second quarter of 2021. Reported $32.3 million of net income attributable to common stockholders for the second quarter of 2022, compared to net income attributable to common stockholders of $32.6 million for the second quarter of 2021.

  • Achieved $0.56 of Core FFO per diluted share for the second quarter of 2022, an increase of 7.7% compared to second quarter 2021 Core FFO per diluted share of $0.52. Generated Core FFO of $101.8 million for the second quarter of 2022, compared to $86.3 million for the second quarter of 2021, an increase of 18.0%.

  • Produced Cash NOI of $129.0 million for the second quarter of 2022, an increase of 18.6% compared to the second quarter of 2021 of $108.8 million.

  • Produced Same Store Cash NOI of $105.4 million for the second quarter of 2022, an increase of 4.0% compared to the second quarter of 2021 of $101.3 million.

  • Produced Cash Available for Distribution of $87.2 million for the second quarter of 2022, an increase of 16.6% compared to the second quarter of 2021 of $74.8 million.

  • Acquired nine buildings in the second quarter of 2022, consisting of 1.5 million square feet, for $165.4 million, with a Cash Capitalization Rate of 5.2% and a Straight-Line Capitalization Rate of 5.7%.

  • Achieved an Occupancy Rate of 98.1% on the total portfolio and 98.6% on the Operating Portfolio as of June 30, 2022.

  • Commenced Operating Portfolio leases of 3.2 million square feet for the second quarter of 2022, resulting in a Cash Rent Change and Straight-Line Rent Change of 14.1% and 21.9%, respectively.

  • Experienced 89.6% Retention for 2.1 million square feet of leases expiring in the quarter.

  • Subsequent to quarter end, on July 26, 2022, the Company refinanced $150 million Term Loan D and $175 million Term Loan E with two term loans totaling $375 million, and upsized its revolving credit facility capacity to $1 billion.

Please refer to the Non-GAAP Financial Measures and Other Definitions section at the end of this release for definitions of capitalized terms used in this release.

The Company will host a conference call tomorrow, Thursday, July 28, 2022 at 10:00 a.m. (Eastern Time), to discuss the quarter's results and provide information about acquisitions, operations, capital markets and corporate activities. Details of the call can be found at the end of this release.

Key Financial Measures

SECOND QUARTER 2022 KEY FINANCIAL MEASURES



Three months ended June 30,


Six months ended June 30,

Metrics


2022


2021


% Change


2022


2021


% Change


(in $000s, except per share data)














Net income attributable to common stockholders


$32,317


$32,576


(0.8) %


$85,081


$53,507


59.0 %


Net income per common share — basic


$0.18


$0.20


(10.0) %


$0.48


$0.34


41.2 %


Net income per common share — diluted


$0.18


$0.20


(10.0) %


$0.48


$0.33


45.5 %


Cash NOI


$129,004


$108,768


18.6 %


$251,952


$212,446


18.6 %


Same Store Cash NOI (1)


$105,369


$101,293


4.0 %


$208,001


$198,626


4.7 %


Adjusted EBITDAre


$119,516


$99,031


20.7 %


$232,520


$193,480


20.2 %


Core FFO


$101,759


$86,259


18.0 %


$198,864


$166,098


19.7 %


Core FFO per share / unit — basic


$0.56


$0.53


5.7 %


$1.09


$1.02


6.9 %


Core FFO per share / unit — diluted


$0.56


$0.52


7.7 %


$1.09


$1.02


6.9 %


Cash Available for Distribution


$87,163


$74,759


16.6 %


$169,607


$147,217


15.2 %


 (1) The Same Store pool accounted for 83.6% of the total portfolio square footage as of June 30, 2022.

Definitions of the above-mentioned non-GAAP financial measures, together with reconciliations to net income (loss) in accordance with GAAP, appear at the end of this release. Please also see the Company's supplemental information package for additional disclosure.

Acquisition and Disposition Activity

For the three months ended June 30, 2022, the Company acquired nine buildings for $165.4 million with an Occupancy Rate of 100.0% upon acquisition. The chart below details the acquisition activity for the quarter:

SECOND QUARTER 2022 ACQUISITION ACTIVITY

Market

Date
Acquired

Square Feet

Buildings

Purchase
Price ($000s)

W.A. Lease
Term (Years)

Cash
Capitalization
Rate

Straight-Line
Capitalization
Rate

Atlanta, GA

4/1/2022

210,858

1

$21,119

6.4



Minneapolis/St Paul, MN

4/4/2022

160,000

1

13,472

4.0



West Michigan, MI

4/14/2022

211,125

2

12,274

6.4



Pittsburgh, PA

4/19/2022

400,000

1

50,178

14.7



Birmingham, AL

5/5/2022

67,168

1

7,871

6.8



South Bay/San Jose, CA

6/7/2022

175,325

1

29,630

7.5



Washington, DC

6/29/2022

140,555

1

20,257

10.0



Hampton Roads, VA

6/29/2022

102,512

1

10,561

10.0



Total / weighted average


1,467,543

9

$165,362

9.1

5.2 %

5.7 %

The chart below details the 2022 acquisition activity and Pipeline through July 27, 2022:

2022 ACQUISITION ACTIVITY AND PIPELINE DETAIL


Square Feet

Buildings

Purchase
Price ($000s)

W.A. Lease
Term (Years)

Cash
Capitalization
Rate

Straight-Line
Capitalization
Rate

Q1

1,799,761

8

$166,351

5.3

5.0 %

5.2 %

Q2

1,467,543

9

165,362

9.1

5.2 %

5.7 %

Total / weighted average

3,267,304

17

$331,713

7.1

5.1 %

5.4 %








As of July 25, 2022







Subsequent to quarter-end acquisitions

0.4 million

2

$40.1 million











Pipeline

25.8 million

151

$3.0 billion




Additionally, in the second quarter, the Company acquired two vacant land parcels for $5.6 million. These assets are excluded from the acquisition activity statistics above.

The chart below details the disposition activity for the six months ended June 30, 2022:

2022 DISPOSITION ACTIVITY


Square Feet

Buildings

Sale Price ($000s)

Q1

237,500

1

$36,115

Q2

90,000

1

3,150

Total

327,500

2

$39,265

Subsequent to quarter end, the Company sold two buildings, consisting of 1.0 million square feet, for gross proceeds of approximately $82.0 million, representing a cash capitalization rate of 5.2%.

Leasing Activity

The chart below details the leasing activity for leases commenced during the three months ended June 30, 2022:

SECOND QUARTER 2022 OPERATING PORTFOLIO LEASING ACTIVITY

Lease Type

Square
Feet

Lease
Count

W.A.
Lease
Term
(Years)

Cash

Base
Rent

$/SF

SL Base
Rent

$/SF

Lease

Commissions

$/SF

Tenant
Improvements
$/SF

Cash Rent
Change 

SL Rent
Change

Retention


New Leases

1,312,102

7

4.4

$4.51

$4.65

$1.47

$0.17

14.8 %

22.0 %



Renewal Leases

1,915,146

15

4.1

$4.94

$5.17

$0.54

$0.27

13.7 %

21.9 %

89.6 %


Total / weighted average

3,227,248

22

4.3

$4.76

$4.96

$0.92

$0.23

14.1 %

21.9 %



The chart below details the leasing activity for leases commenced during the six months ended June 30, 2022:

2022 YEAR TO DATE OPERATING PORTFOLIO LEASING ACTIVITY

Lease Type

Square
Feet

Lease
Count

W.A.
Lease
Term
(Years)

Cash

Base

Rent

$/SF

SL Base
Rent

$/SF

Lease

Commissions

$/SF

Tenant
Improvements
$/SF

Cash Rent
Change 

SL Rent
Change

Retention


New Leases

2,491,326

17

5.7

$5.24

$5.50

$1.94

$0.64

20.2 %

29.6 %



Renewal Leases

3,875,818

34

5.0

$4.96

$5.25

$0.53

$0.35

11.2 %

19.8 %

70.5 %


Total / weighted average

6,367,144

51

5.3

$5.07

$5.35

$1.08

$0.46

14.6 %

23.6 %



Additionally, for the three and six months ended June 30, 2022, leases commenced totaling 237,123 and 748,359 square feet, respectively, related to Value Add assets and first generation leasing. These are excluded from the Operating Portfolio statistics above.

Capital Markets Activity

On June 28, 2022, the Company funded a note purchase agreement to issue $400 million of fixed rate senior unsecured notes in a private placement offering with an interest rate of 4.12% and a ten-year term maturing on June 28, 2032.

As of June 30, 2022, net debt to annualized Run Rate Adjusted EBITDAre was 5.1x and Liquidity was $643.0 million.

Subsequent to quarter end, on July 26, 2022, the Company refinanced Term Loan D, which was scheduled to mature in January 2023, and Term Loan E, which was scheduled to mature in January 2024, with two term loans totaling $375 million. The term loans now mature January 25, 2028 at an aggregate fixed interest rate, inclusive of interest rate swaps, of 3.31% at close.

Subsequent to quarter end, on July 26, 2022, the Company upsized its revolving credit facility by $250 million to a notional of $1 billion. These debt transactions increased the Company's liquidity by $300 million.

Conference Call

The Company will host a conference call tomorrow, Thursday, July 28, 2022, at 10:00 a.m. (Eastern Time) to discuss the quarter's results.  The call can be accessed live over the phone toll-free by dialing (877) 407-4018, or for international callers, (201) 689-8471.  A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers, (412) 317-6671.  The passcode for the replay is 13731200.

Interested parties may also listen to a simultaneous webcast of the conference call by visiting the Investor Relations section of the Company's website at www.stagindustrial.com, or by clicking on the following link:

http://ir.stagindustrial.com/QuarterlyResults

Supplemental Schedule

The Company has provided a supplemental information package with additional disclosure and financial information on its website (www.stagindustrial.com) under the "Quarterly Results" tab in the Investor Relations section.

CONSOLIDATED BALANCE SHEETS

STAG Industrial, Inc.

(unaudited, in thousands, except share data) 


June 30, 2022


December 31, 2021

Assets




Rental Property:




Land

$                    636,274


$                     617,297

Buildings and improvements, net of accumulated depreciation of $682,095 and $611,867,
respectively

4,610,814


4,435,743

Deferred leasing intangibles, net of accumulated amortization of $311,916 and $282,038,
respectively

551,061


567,658

Total rental property, net

5,798,149


5,620,698

Cash and cash equivalents

12,614


18,981

Restricted cash

3,233


4,215

Tenant accounts receivable

100,500


93,600

Prepaid expenses and other assets

66,903


60,953

Interest rate swaps

37,899


5,220

Operating lease right-of-use assets

32,237


29,582

Assets held for sale, net

57,773


Total assets

$                 6,109,308


$                  5,833,249

Liabilities and Equity




Liabilities:




Unsecured credit facility

$                    116,000


$                     296,000

Unsecured term loans, net

971,272


970,577

Unsecured notes, net

1,295,064


896,941

Mortgage notes, net

53,635


54,744

Accounts payable, accrued expenses and other liabilities

84,379


76,475

Interest rate swaps


17,052

Tenant prepaid rent and security deposits

37,549


37,138

Dividends and distributions payable

22,282


21,906

Deferred leasing intangibles, net of accumulated amortization of $24,066 and $21,136,
respectively

36,084


35,721

Operating lease liabilities

35,894


33,108

Liabilities held for sale, net

654


Total liabilities

2,652,813


2,439,662

Equity:




Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at June 30, 2022
and December 31, 2021; none issued or outstanding


Common stock, par value $0.01 per share, 300,000,000 shares authorized at June 30, 2022
and December 31, 2021, 179,211,738 and 177,769,342 shares issued and outstanding at
June 30, 2022 and December 31, 2021, respectively

1,792


1,777

Additional paid-in capital

4,182,165


4,130,038

Cumulative dividends in excess of earnings

(838,437)


(792,332)

Accumulated other comprehensive income (loss)

36,895


(11,783)

Total stockholders' equity

3,382,415


3,327,700

Noncontrolling interest

74,080


65,887

Total equity

3,456,495


3,393,587

Total liabilities and equity

$                 6,109,308


$                  5,833,249





 

CONSOLIDATED STATEMENTS OF OPERATIONS

STAG Industrial, Inc.

(unaudited, in thousands, except per share data)


Three months ended June 30,


Six months ended June 30,


2022


2021


2022


2021

Revenue








Rental income

$            161,057


$            137,805


$            319,658


$            271,630

Other income

443


622


1,051


792

Total revenue

161,500


138,427


320,709


272,422

Expenses








Property

28,874


25,356


60,649


52,358

General and administrative

12,234


12,578


24,547


25,368

Depreciation and amortization

69,279


57,332


136,645


115,739

Other expenses

532


511


1,029


1,363

Total expenses

110,919


95,777


222,870


194,828

Other income (expense)








Interest and other income

23


30


57


62

Interest expense

(17,896)


(15,273)


(35,155)


(30,631)

Debt extinguishment and modification expenses




(679)

Gain on the sales of rental property, net

376


5,976


24,331


12,385

Total other income (expense)

(17,497)


(9,267)


(10,767)


(18,863)

Net income

$             33,084


$             33,383


$             87,072


$             58,731

Less: income attributable to noncontrolling interest after preferred
stock dividends

708


733


1,870


1,206

Net income attributable to STAG Industrial, Inc.

$             32,376


$             32,650


$             85,202


$             57,525

Less: preferred stock dividends




1,289

Less: redemption of preferred stock