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STAG Industrial to Offer Shares

Zacks Equity Research

STAG Industrial, Inc. (STAG), a real estate investment trust (:REIT), has recently priced 8.0 million shares at $14.15 each to enhance its liquidity. The company has also decided to grant the underwriters a 30-day option to purchase up to an additional 1.2 million shares to cover the over-allotment options.  

STAG Industrial intends to use the net proceeds from the offering to partially fund the purchase of $138.8 million worth of the STAG Investments II, LLC portfolio. Remaining proceeds will be utilized to repay debt under its secured corporate revolving credit facility and for general working capital purposes.

Earlier, during second quarter 2012, STAG industrial completed an equity offering of about 8.3 million shares including 1.1 million shares exercised under the underwriters' over allotment option. The company generated approximately $107 million in gross proceeds before underwriting discounts and offering expenses. The proceeds generated were utilized to fund acquisitions and to repay debt under its revolving facility. Also during the second quarter 2012, STAG industrial increased the annual common stock dividend from $1.04 to $1.08 per share.

By the end of second quarter 2012, the company had approximately $292 million of debt outstanding with an average term of 3.7 years.  At quarter-end, the company had $95 million available under its revolving credit facility with a cash balance of $5.1 million.

STAG Industrial is focused on the acquisition, ownership and management of single-tenant industrial properties throughout the United States. The company’s portfolio consists of 121 properties in 29 states with approximately 20.4 million rentable square feet

STAG Industrial currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We have a long-term Neutral recommendation on the stock. One of its competitors, First industrial Realty Trust Inc (FR) also retains a Zacks# 3 rank.

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