• Core FFO per Share: $0.61 for Q4 and $2.40 for the year, a 4.8% increase from 2023.
• Cash Available for Distribution: $370 million in 2024.
• Net Debt to Annualized Run Rate Adjusted EBITDA: 5.2 times at year-end.
• Liquidity: $623 million at year-end.
• Leasing Spreads: Cash leasing spreads of 19.4% for Q4 and 28.3% for the year; straight-line leasing spreads of 34.9% for Q4 and 41.8% for the year.
• Same-Store Cash NOI Growth: 4.4% for Q4 and 5.8% for the year.
• Retention Rate: 76.9% for Q4 and 76.6% for the year.
• Acquisition Volume for Q4: $294 million, including 15 buildings.
• Disposition Proceeds for Q4: $29 million from two buildings.
• Development Activity: 2.5 million square feet across 11 buildings, with 16% preleased.
• 2025 Guidance - Core FFO per Share: $2.46 to $2.50.
• 2025 Guidance - Same-Store Cash NOI Growth: 3.5% to 4%.
• 2025 Guidance - Acquisition Volume: $350 million to $650 million.
• 2025 Guidance - Disposition Volume: $100 million to $200 million.

• Warning! GuruFocus has detected 5 Warning Signs with STAG.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Stag Industrial Inc (NYSE:STAG) achieved a core FFO per share increase of 4.8% year-over-year, reaching $2.40 for 2024.
• The company reported strong leasing activity, with 70% of the expected 2025 operating portfolio already leased, achieving cash leasing spreads of 23.8%.
• Same-store cash NOI grew by 5.8% for the year, marking a record growth rate for the company.
• Stag Industrial Inc (NYSE:STAG) completed acquisitions totaling $294 million in the fourth quarter, with attractive cap rates and long-term NOI growth potential.
• The company has a robust development pipeline, with 2.5 million square feet of activity across 11 buildings, and a significant portion of this space is already leased or pre-leased.

Negative Points

• Leasing spreads in the fourth quarter were lower than expected at 19%, due to fixed rate renewal options.
• The company anticipates a decrease in same-store occupancy by 100 basis points during 2025.
• There is uncertainty in the market due to tariffs, which could impact tenant decisions and leasing activity.
• Interest rate volatility has caused a slowdown in the transaction market, affecting acquisition momentum.
• The company expects a wide range in acquisition volume guidance for 2025, indicating uncertainty in the capital market environment.

Q & A Highlights

Q: On leasing and spreads, you had a good year overall in '24, but Q4 was lighter at 19%. You're expected to reaccelerate to 24% on the 70% you did. Is 24% a good place to think about for the full year? Also, the 14 million square feet planned for '25 is less than last quarter's 15 million. What's causing this volatility? A: The Q4 leasing spreads were lower due to some fixed rate renewal options, which were factored into our guidance. Excluding those, spreads would have been 34%. For '25, we're at approximately 24% for 70% of expected leasing, so 24-25% is a good estimate. The change in leasing activity is due to selling a building in Nashua, New Hampshire, and a nonrenewal expected to renew in the back half of next year.

Q: Can you discuss the yields you're seeing in your development portfolio, particularly in Tampa and Spartanburg? A: We're expecting mid-6% yields for Tampa upon stabilization. For Spartanburg, we leased a building at approximately 5%. Leasing activity in Spartanburg has picked up, and we're seeing a lot of interest in our properties there.

Q: What are you hearing from tenants about tariffs, and how might they impact your business? A: There's a lot of uncertainty regarding tariffs. Tenants are storing more finished goods and discussing onshoring and nearshoring, but decisions take time. If tariffs are long-term, it could spur more onshoring. Currently, it's too early to tell the full impact.

Q: Have you seen any slowdown in private transaction activity or changes in pricing due to interest rate changes? A: There's been a pause in the private market, but some portfolios may trade at tighter yields due to shorter lease terms. The year-end was slower, but activity has picked up in February, and we expect it to accelerate throughout the year.

Q: How has leasing activity changed post-election, and is there a difference between existing and development pipelines? A: We've seen a significant uptick in inquiries and tours across our markets, including Greenville, Spartanburg, Milwaukee, Chicago, and the Sunbelt. Both new builds and existing buildings are seeing increased demand, indicating a flight to quality.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.