STAG Industrial, Inc. 10-K Summary: A Closer Look

Business Overview STAG Industrial, Inc. (STAG) stands as a leading owner and operator of industrial properties across the U.S. As a Real Estate Investment Trust (REIT), STAG specializes in acquiring and managing single-tenant industrial properties, primarily warehouses and distribution centers. The company provides essential space for businesses needing storage and logistics solutions, solidifying its strategic role in the industrial real estate sector.

Financial Performance STAG delivered strong financial results last year. Revenue grew by a healthy percentage, and the company reported robust growth in Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) per share—key metrics for REITs. This solid performance supported consistent dividend payments throughout 2024 and 2025, with dividends also projected for 2026. This track record underscores STAG's commitment to shareholder returns, operational efficiency, and portfolio strength.

Risk Factors Several key risks could impact STAG. Fluctuations in interest rates, for instance, could significantly raise borrowing costs, especially as substantial debt maturities approach in 2025. While acquisitions fuel growth, they also introduce challenges like integration difficulties, potential market downturns affecting property values, and tenant credit risk. The broader economic environment, including inflation and potential recessions, could also dampen tenant demand and rental income. Furthermore, the industrial real estate market is highly competitive, requiring STAG to continuously attract and retain high-quality tenants to maintain its market position.

Management Discussion (MD&A Highlights) Throughout 2024 and into early 2025, STAG actively managed its portfolio. The company strategically expanded its footprint by acquiring a significant number of industrial properties, totaling several million square feet, for hundreds of millions of dollars. These acquisitions diversified STAG's presence across numerous U.S. markets, including:

• Minneapolis
• Chicago
• Louisville
• Houston
• Fresno
• Kansas City
• Nashville
• Cincinnati
• Raleigh
• Portland
• El Paso
• Columbus
• Reno
• LaGrange
• Boston
• Philadelphia
• Phoenix
• Salt Lake City

At the same time, STAG optimized its portfolio by selling a number of properties for tens of millions of dollars, demonstrating a disciplined approach to asset management and capital recycling. Strong leasing activity and rising rental rates across its portfolio drove the company's financial performance, including revenue and FFO/AFFO growth. Management also focused on maintaining a flexible capital structure and proactively addressing upcoming debt maturities.

Financial Health STAG maintains a flexible capital structure, using a mix of unsecured notes, term loans, and a revolving line of credit. Total debt stands at approximately several billion dollars, supported by a healthy net debt to EBITDA ratio, which indicates prudent leverage and strong debt service capacity. To manage interest rate exposure and stabilize borrowing costs, STAG actively uses interest rate swaps. These agreements allow the company to exchange interest payments with another party, helping to fix or cap interest expenses. A portion of its debt, amounting to hundreds of millions of dollars, matures in 2025, which STAG plans to address through refinancing or other capital market activities. The company successfully raised capital through its "At-The-Market" (ATM) equity program and forward sale agreements, issuing millions of common shares for net proceeds in the hundreds of millions of dollars. These proceeds primarily funded STAG's acquisition strategy and strengthened its balance sheet, enhancing overall liquidity.

Future Outlook Looking ahead, STAG's strategy prioritizes disciplined growth through targeted acquisitions of industrial properties, with several purchases already identified for various quarters in 2025. The company will also focus on managing its 2025 debt maturities to ensure financial flexibility and a strong balance sheet. With a consistent history of dividend payments and a forecast for continued shareholder returns into 2026, STAG aims to deliver long-term value to its investors by leveraging its robust portfolio, strategic capital management, and ongoing operational excellence.

Competitive Position STAG operates within a highly competitive industrial real estate market, vying with other publicly traded REITs, private real estate funds, institutional investors, and local developers for property acquisitions and tenants. The company's competitive advantages stem from its diversified portfolio of single-tenant industrial properties across numerous markets, which helps spread risk and provides a broad tenant base. Its scale and operational expertise enable efficient property management and strong tenant retention. STAG also uses a data-driven acquisition strategy to identify attractive investment opportunities and maintain a robust pipeline. Its efficient access to capital markets further supports its growth and competitive standing within the industrial sector.