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Classified in: Business
Subject: TNM

STAG Industrial Announces Acquisition Activity And Leasing Activity For June And The Second Quarter 2015



BOSTON, July 1, 2015 /PRNewswire/ -- STAG Industrial, Inc. (the "Company") (NYSE: STAG), a real estate investment trust (REIT) focused on the acquisition and operation of single-tenant, industrial properties throughout the United States, today announced its acquisition and leasing activity for June 2015 and the second quarter of 2015.

Acquisitions

In June, the Company acquired four distribution warehouse buildings and one manufacturing building containing a total of 691,216 square feet, for $41 million.  The acquired buildings are 100% occupied.  The chart below reflects the June acquisition activity:

JUNE 2015 ACQUISITIONS

Location (CBSA) (1)

Date Acquired

Square Feet

Buildings

Purchase Price
($MM)

Weighted Average
Lease Term (Years)

Dayton, OH

6/10/2015

258,680

1

$9.1


5.6

El Paso, TX

6/18/2015

126,456

1

9.7


10.0

Charlotte-Gastonia-Rock Hill, NC-SC

6/25/2015

123,333

1

7.5


4.0

Phoenix-Mesa-Glendale, AZ

6/25/2015

102,747

1

9.5


7.0

Rockford, IL

6/29/2015

80,000

1

5.1


3.8

Total/Weighted Average


691,216

5

$40.9


6.4

(1) Core based statistical area







For the quarter ended June 30, 2015, the Company acquired 12 industrial buildings consisting of approximately 1.6 million square feet for $84 million. The weighted average estimated cap rate for the buildings acquired in the quarter was 8.4%.  Estimated cap rates are calculated by dividing stabilized underwritten cash basis net operating income for the first twelve months by the purchase price.  Actual operating results of the buildings may differ materially from the Company's underwriting.  The chart below reflects the acquisition activity for the six months ended June 30, 2015:

 2015 ACQUISITION ACTIVITY

Quarter

Square Feet (MM)


Buildings


Purchase Price
($MM)


Weighted Average
Lease Term (Years)

Q1

1.5


5


$97.1



5.7

Q2

1.6


12


83.8



6.0

Total/Weighted Average

3.1


17


$180.9



5.8

As of July 1, 2015, the Company has entered into contracts to acquire 15 industrial buildings for $115 million. Included in the acquisitions under contract is one build-to-suit transaction totaling $9 million, which is scheduled to close in the third quarter of 2015. The Company has also executed non-binding letters of intent to acquire 11 additional industrial buildings for $73 million

As of July 1, 2015, the pipeline of potential acquisitions is approximately $1.9 billion and 196 industrial buildings.  The pipeline is a point in time measure that includes all of the transactions under consideration by the Company's acquisitions group that have passed the initial screening process.  It also includes transactions under contract and transactions with non-binding LOIs.

The purchase and sale agreements for the properties under contract are subject to satisfaction of closing conditions, and the properties under LOI require the negotiation and execution of definitive purchase and sale agreements.  There can be no assurance that any of the properties under contract or LOI will be acquired on the terms anticipated or at all.

Leasing 

In June, the Company executed seven leases totaling 887,485 square feet comprised of 176,000 square feet of expansion leases and 711,485 square feet of renewal leases. The chart below reflects the June leasing activity:

JUNE 2015 LEASING ACTIVITY

Lease Type

Square Feet

Base Rent
$/PSF

Lease
Commissions
$/PSF

Tenant
Improvements
$/PSF

Total Costs
$/PSF

Cash Rent
Change  (1)(3) 

GAAP Rent
Change  (2)(3) 

New Leases

176,000


$5.30


$0.10


$0.00


$0.10


N/A

N/A

Renewal Leases

711,485


4.24


0.33


0.46


0.79


-3.7%

0.1%

Total /Weighted Avg New & Renewal

887,485


$4.46


$0.29


$0.37


$0.66


-3.7%

0.1%

Temporary Leases

0












Total Leasing Activity

887,485












(1) Cash basis rent growth is a ratio of the change in net effective rent (excluding straight-line rent adjustments as required by GAAP) of the comparable lease.


(2) GAAP basis rent growth is a ratio of the change in net effective rent (including straight-line rent adjustments as required by GAAP) of the comparable lease.

(3) Rent change for new leases where there were no prior comparable leases, due to extended downtime or materially different lease structures are excluded.


For the quarter ended June 30, 2015, the Company executed 15 leases totaling 2,096,940 square feet comprised of 385,295 square feet of new and expansion leases, 1,346,025 square feet of renewal leases, and 365,620 square feet of temporary leases.  The chart below reflects the leasing activity for the quarter ended June 30, 2015:

SECOND QUARTER 2015 LEASING ACTIVITY

Lease Type

Square Feet

Base Rent
$/PSF

Lease
Commissions
$/PSF

Tenant
Improvements
$/PSF

Total Costs
$/PSF

Cash Rent
Change  (1)(3) 

GAAP Rent
Change  (2)(3) 

New Leases

385,295


$5.09


$0.56


$1.37


$1.93


35.1%

37.8%

Renewal Leases

1,346,025


3.71


0.39


0.28


0.67


-2.1%

4.2%

Total /Weighted Avg New & Renewal

1,731,320


$4.02


$0.43


$0.52


$0.95


2.8%

8.5%

Temporary Leases

365,620












Total Leasing Activity

2,096,940












(1) Cash basis rent growth is a ratio of the change in net effective rent (excluding straight-line rent adjustments as required by GAAP) of the comparable lease.


(2) GAAP basis rent growth is a ratio of the change in net effective rent (including straight-line rent adjustments as required by GAAP) of the comparable lease.

(3) Rent change for new leases where there were no prior comparable leases, due to extended downtime or materially different lease structures are excluded.


For the six months ended June 30, 2015, the Company has executed leases for approximately 2.6 million square feet consisting of 1.1 million square feet of new and expansion leases and 1.6 million square feet of renewal leases.  The chart below reflects the leasing activity for the six months ended June 30, 2015:

 2015 LEASING ACTIVITY 

Quarter


New Square Feet


Renewal Square
Feet


Total Leasing
Activity Square
Feet

Q1


347,480


201,653


549,133

Q2


730,915


1,366,025


2,096,940

YTD


1,078,395


1,567,678


2,646,073

Five leases consisting of approximately 468,000 square feet expired in the second quarter and the tenant retention rate for these leases was 29.2%.  The chart below reflects the tenant retention rate for the six months ended June 30, 2015:

2015 RETENTION

Quarter

Expiring Square Footage

Retained Square Footage

Retention Rate (1)

Cash Rent Change (1)

GAAP Rent Change (1)

Q1

1,528,723


979,987


64.1%


6.7%


9.6%


Q2

468,169


136,789


29.2%


3.9%


10.0%


Total / Weighted Average

1,996,892


1,116,776


55.9%


6.3%


9.6%


(1) Based on square feet retained in the period









The Company's occupancy rate for the second quarter increased to 95.0% from 94.2% at the end of the first quarter of 2015. The chart below reflects the occupancy rate and total square footage for the six months ended June 30, 2015:

2015 OCCUPANCY

Quarter

Number of Buildings

Total Square Footage

Occupancy %

Q1

253


48,533,893


94.2%

Q2

265


49,954,019


95.0%

About STAG Industrial, Inc.

STAG Industrial, Inc. is a real estate investment trust (REIT) focused on the acquisition and operation of single-tenant, industrial properties throughout the United States. The Company's portfolio consists of 265 properties in 37 states with approximately 50.0 million rentable square feet.

For additional information, please visit the Company's website at www.stagindustrial.com.

Forward-Looking Statements

This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, are generally identifiable by use of the words "believe," "will," "expect," "intend," "anticipate," "estimate," "should," "project" or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, the risk factors discussed in the Company's annual report on Form 10-K for the year ended December 31, 2014 as updated by the Company's quarterly reports on Form 10-Q. Accordingly, there is no assurance that the Company's expectations will be realized. Except as otherwise required by the federal securities laws, the Company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

SOURCE STAG Industrial, Inc.


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