PR Newswire
BOSTON, July 26, 2023
BOSTON, July 26, 2023 /PRNewswire/ -- STAG Industrial, Inc. (the "Company") (NYSE:STAG, Financial), today announced its financial and operating results for the quarter ended June 30, 2023.
"Resilient secular tailwinds continued to drive excellent operating results, as evidenced by the record leasing spreads achieved by STAG in the second quarter," said Bill Crooker, President and Chief Executive Officer of the Company. "This, coupled with progress on our development projects and the stabilization of the acquisitions market, will support sustainable bottom line growth in the near-term and beyond."
Second Quarter 2023 Highlights
- Reported $0.29 of net income per basic and diluted common share for the second quarter of 2023, compared to $0.18 of net income per basic and diluted common share for the second quarter of 2022. Reported $51.6 million of net income attributable to common stockholders for the second quarter of 2023, compared to net income attributable to common stockholders of $32.3 million for the second quarter of 2022.
- Achieved $0.56 of Core FFO per diluted share for the second quarter of 2023, equal to the second quarter of 2022 Core FFO per diluted share of $0.56.
- Produced Cash NOI of $134.6 million for the second quarter of 2023, an increase of 4.3% compared to the second quarter of 2022 of $129.0 million.
- Produced Same Store Cash NOI of $124.2 million for the second quarter of 2023, an increase of 4.5% compared to the second quarter of 2022 of $118.9 million.
- Produced Cash Available for Distribution of $87.2 million for the second quarter of 2023, compared to the second quarter of 2022 of $87.2 million.
- Acquired two buildings in the second quarter of 2023, consisting of 235,003 square feet, for $40.7 million, with a Cash Capitalization Rate of 6.2% and a Straight-Line Capitalization Rate of 6.3%.
- Sold five buildings in the second quarter of 2023, consisting of 766,620 square feet, for $33.8 million.
- Achieved an Occupancy Rate of 97.7% on the total portfolio and 97.9% on the Operating Portfolio as of June 30, 2023.
- Commenced Operating Portfolio leases of 3.6 million square feet for the second quarter of 2023, resulting in record Cash Rent Change and Straight-Line Rent Change of 28.0% and 42.6%, respectively.
- Experienced 79.6% Retention for 3.6 million square feet of leases expiring in the quarter.
- Raised gross proceeds of $8.9 million of equity through the Company's At-The-Market offering ("ATM") program for the second quarter of 2023. In addition, raised gross proceeds of $61.7 million of equity on a forward basis through the Company's ATM program for the second quarter of 2023.
- On May 4, 2023, the Company was added to the S&P MidCap 400.
- As of July 25, 2023, addressed 94.2% of expected 2023 new and renewal leasing, consisting of 12.2 million square feet, achieving Cash Rent Change of 30.6%.
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 27, 2023 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 2023 KEY FINANCIAL MEASURES | |||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||
Metrics | 2023 | 2022 | % Change | 2023 | 2022 | % Change | |||||||
(in $000s, except per share data) | |||||||||||||
Net income attributable to common stockholders | $51,553 | $32,317 | 59.5 % | $100,966 | $85,081 | 18.7 % | |||||||
Net income per common share — basic | $0.29 | $0.18 | 61.1 % | $0.56 | $0.48 | 16.7 % | |||||||
Net income per common share — diluted | $0.29 | $0.18 | 61.1 % | $0.56 | $0.48 | 16.7 % | |||||||
Cash NOI | $134,585 | $129,004 | 4.3 % | $267,141 | $251,952 | 6.0 % | |||||||
Same Store Cash NOI (1) | $124,231 | $118,930 | 4.5 % | $246,569 | $234,239 | 5.3 % | |||||||
Adjusted EBITDAre | $125,410 | $119,516 | 4.9 % | $247,736 | $232,520 | 6.5 % | |||||||
Core FFO | $103,497 | $101,759 | 1.7 % | $205,081 | $198,864 | 3.1 % | |||||||
Core FFO per share / unit — basic | $0.56 | $0.56 | 0.0 % | $1.12 | $1.09 | 2.8 % | |||||||
Core FFO per share / unit — diluted | $0.56 | $0.56 | 0.0 % | $1.12 | $1.09 | 2.8 % | |||||||
Cash Available for Distribution | $87,168 | $87,163 | 0.0 % | $177,267 | $169,607 | 4.5 % | |||||||
(1) The Same Store pool accounted for 92.6% of the total portfolio square footage as of June 30, 2023. | |||||||||||||
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, 2023, the Company acquired two buildings for $40.7 million with an Occupancy Rate of 100.0% upon acquisition. The chart below details the acquisition activity for the quarter:
SECOND QUARTER 2023 ACQUISITION ACTIVITY | |||||||
Market | Date | Square Feet | Buildings | Purchase | W.A. Lease | Cash | Straight-Line |
Central New Jersey, NJ | 4/24/2023 | 101,381 | 1 | $26,660 | 1.5 | ||
Greensboro, NC | 5/5/2023 | 133,622 | 1 | 14,004 | 1.8 | ||
Total / weighted average | 235,003 | 2 | $40,664 | 1.7 | 6.2 % | 6.3 % | |
The chart below details the 2023 acquisition activity and Pipeline through July 25, 2023:
2023 ACQUISITION ACTIVITY AND PIPELINE DETAIL | ||||||
Square Feet | Buildings | Purchase Price | W.A. Lease | Cash | Straight-Line | |
Q1 | — | — | $— | — | NA | NA |
Q2 | 235,003 | 2 | 40,664 | 1.7 | 6.2 % | 6.3 % |
Total / weighted average | 235,003 | 2 | $40,664 | 1.7 | 6.2 % | 6.3 % |
As of July 25, 2023 | ||||||
Subsequent to quarter-end acquisitions | 0.5 million | 6 | $70.7 million | |||
Pipeline | 24.5 million | 151 | $3.1 billion | |||
The chart below details the disposition activity for the six months ended June 30, 2023:
2023 DISPOSITION ACTIVITY | |||
Square Feet | Buildings | Sale Price ($000s) | |
Q1 | 407,710 | 2 | $37,213 |
Q2 | 766,620 | 5 | 33,809 |
Total | 1,174,330 | 7 | $71,022 |
Leasing Activity
The chart below details the leasing activity for leases commenced during the three months ended June 30, 2023:
SECOND QUARTER 2023 OPERATING PORTFOLIO LEASING ACTIVITY | |||||||||||
Lease Type | Square | Lease | W.A. | Cash Base $/SF | SL Base $/SF | Lease Commissions $/SF | Tenant | Cash Rent | SL Rent | Retention | |
New Leases | 702,961 | 10 | 4.4 | $5.95 | $6.21 | $1.60 | $0.82 | 27.1 % | 35.8 % | ||
Renewal Leases | 2,852,761 | 19 | 3.8 | $5.43 | $5.70 | $1.05 | $0.06 | 28.3 % | 44.5 % | 79.6 % | |
Total / weighted average | 3,555,722 | 29 | 3.9 | $5.53 | $5.80 | $1.16 | $0.21 | 28.0 % | 42.6 % | ||
The chart below details the leasing activity for leases commenced during the six months ended June 30, 2023:
2023 YEAR TO DATE OPERATING PORTFOLIO LEASING ACTIVITY | |||||||||||
Lease Type | Square Feet | # | W.A. | Cash | GAAP | Lease Commissions /SF | Tenant | Cash Rent | GAAP | Retention | |
New Leases | 1,478,285 | 19 | 4.1 | $6.76 | $7.04 | $1.78 | $1.06 | 38.1 % | 46.7 % | ||
Renewal Leases | 6,878,735 | 51 | 4.2 | $5.13 | $5.39 | $0.85 | $0.16 | 23.5 % | 36.2 % | 76.2 % | |
Total / weighted average | 8,357,020 | 70 | 4.2 | $5.42 | $5.68 | $1.01 | $0.32 | 26.5 % | 38.4 % | ||
Additionally, for the three and six months ended June 30, 2023, leases commenced totaling 341,927 and 1.1 million square feet related to Value Add assets and first generation leasing. These are excluded from the Operating Portfolio statistics above.
As of July 25, 2023, addressed 94.2% of expected 2023 new and renewal leasing, consisting of 12.2 million square feet, achieving Cash Rent Change of 30.6%.
Capital Markets Activity
The chart below details the ATM program activity for the six months ended June 30, 2023:
2023 ATM ACTIVITY | |||||
Equity (1) | Shares Issued | Price per Share | Gross | Net | |
Q1 | — | $0.00 | $0 | $0 | |
Q2 | 249,016 | $35.55 | $8,854 | $8,765 | |
Total / weighted average | 249,016 | $35.55 | $8,854 | $8,765 | |
(1) Includes only ATM program proceeds settled in the six months ended June 30, 2023, and excludes any ATM issuance on a forward basis. | |||||
In the second quarter of 2023, the Company sold 249,016 shares under the ATM common stock offering program at a price of $35.55 per share, or $8.9 million, and $35.20 per share net of sales agent fees.
In the second quarter of 2023, the Company sold 1.7 million shares on a forward basis under the ATM common stock offering program at a price of $35.90 per share, or $61.7 million. The Company does not initially receive any proceeds from the sale of shares on a forward basis. The Company has until the second quarter of 2024 to settle the forward contract, which had net proceeds of $61.1 million available as of June 30, 2023.
As of June 30, 2023, Net Debt to Annualized Run Rate Adjusted EBITDAre was 4.9x and Liquidity was $794.2 million.
Conference Call
The Company will host a conference call tomorrow, Thursday, July 27, 2023, 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 13739628.
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, 2023 | December 31, 2022 | ||
Assets | |||
Rental Property: | |||
Land | $ 652,173 | $ 647,098 | |
Buildings and improvements, net of accumulated depreciation of $841,488 and $763,128, | 4,684,280 | 4,706,745 | |
Deferred leasing intangibles, net of accumulated amortization of $357,435 and $328,848, | 463,569 | 508,935 | |
Total rental property, net | 5,800,022 | 5,862,778 | |
Cash and cash equivalents | 13,511 | 25,884 | |
Restricted cash | 1,023 | 905 | |
Tenant accounts receivable | 112,334 | 115,509 | |
Prepaid expenses and other assets | 76,767 | 71,733 | |
Interest rate swaps | 72,016 | 72,223 | |
Operating lease right-of-use assets | 30,513 | 31,313 | |
Assets held for sale, net | — | 4,643 | |
Total assets | $ 6,106,186 | $ 6,184,988 | |
Liabilities and Equity | |||
Liabilities: | |||
Unsecured credit facility | $ 216,000 | $ 175,000 | |
Unsecured term loans, net | 1,021,106 | 1,020,440 | |
Unsecured notes, net | 1,195,790 | 1,295,442 | |
Mortgage notes, net | 7,727 | 7,898 | |
Accounts payable, accrued expenses and other liabilities | 91,994 | 97,371 | |
Tenant prepaid rent and security deposits | 44,354 | 40,847 | |
Dividends and distributions payable | 22,515 | 22,282 | |
Deferred leasing intangibles, net of accumulated amortization of $27,467 and $24,593, | 28,412 | 32,427 | |
Operating lease liabilities | 34,429 | 35,100 | |
Total liabilities | 2,662,327 | 2,726,807 | |
Equity: | |||
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at June 30, 2023 | — | — | |
Common stock, par value $0.01 per share, 300,000,000 shares authorized at June 30, 2023 | 1,797 | 1,792 | |
Additional paid-in capital | 4,201,551 | 4,188,677 | |
Cumulative dividends in excess of earnings | (907,061) | (876,145) | |
Accumulated other comprehensive income | 70,313 | 70,500 | |
Total stockholders' equity | 3,366,600 | 3,384,824 | |
Noncontrolling interest | 77,259 | 73,357 | |
Total equity | 3,443,859 | 3,458,181 | |
Total liabilities and equity | $ 6,106,186 | $ 6,184,988 | |
CONSOLIDATED STATEMENTS OF OPERATIONS STAG Industrial, Inc. (unaudited, in thousands, except per share data) | |||||||
Three months ended June 30, | Six months ended June 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Revenue | |||||||
Rental income | $ 171,439 | $ 161,057 | $ 344,707 | $ 319,658 | |||
Other income | 255 | 443 | 540 | 1,051 | |||
Total revenue | 171,694 | 161,500 | 345,247 | 320,709 | |||
Expenses | |||||||
