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    STAG
    Earnings call· Mar 2026(Q1 FY26)

    STAG Industrial Q1 FY26 earnings call STAG

    Apr 29, 2026 Source

    Executive summary

    STAG Industrial Q1 FY26 — Strong Leasing Velocity and Data Center Demand

    The company reported a strong Q1 FY26, driven by robust leasing velocity, particularly from data center-related tenants, and healthy same-store NOI growth. Despite anticipated occupancy fluctuations impacting Q2, management maintained its full-year guidance, expressing optimism for market rent growth acceleration in the latter half of the year. Capital markets remain stable, supporting an expanding acquisition pipeline and strategic development initiatives.

    Highlights

    5

    • Core FFO per share increased 6.6% to $0.65 for the quarter.

    • Signed 8 leases totaling 1.6 million square feet to data center-related tenants since early 2025.

    • Commenced 37 leases across 6 million square feet, generating cash and straight-line leasing spreads of 20.9% and 39.6% respectively.

    • Same-store cash NOI grew 4.1% for the quarter.

    • Acquired a 750,000 sq ft building for $80.7 million at a 6.1% cap rate, 100% leased for 12 years with 3.2% annual escalators.

    Concerns

    2

    • Occupancy decline was only partially reflected in Q1 same-store NOI, with the full impact expected in Q2 due to known move-outs occurring late in Q1.

    • Markets like San Diego, Memphis, and Pittsburgh are currently experiencing slower activity.

    Guidance & targets

    5
    CategoryTargetConfidence
    Retention rate
    70% to 80%
    medium materiality
    High
    Cash leasing spreads
    18% to 20%
    medium materiality
    High
    Same-store cash NOI growth
    3%
    high materiality
    High
    Market rent growth
    0% to 2%
    high materiality
    Medium
    Average occupancy in same-store pool
    96.5%
    medium materiality
    High

    Operational metrics

    10
    Core FFO per share
    $0.656.6% increase YoY
    Q1 FY26

    Increase compared to last year.

    Net debt to annualized run rate adjusted EBITDA
    5
    Q1 FY26

    Leverage remains low.

    Liquidity
    $806 million
    Q1 FY26 period-end

    Ample liquidity.

    Leases commenced
    37
    Q1 FY26

    Quarterly record in terms of total operating portfolio square feet leased.

    Retention rate
    69.5%
    Q1 FY26

    Maintaining full-year guidance of 70% to 80%.

    Credit loss
    minimal
    Q1 FY26

    Minimal for the first quarter.

    Weighted average escalator across portfolio
    2.9%
    Q1 FY26

    Expected to increase every quarter as new leases are signed with higher escalators.

    New lease escalators
    3% to 3.5%
    Q1 FY26

    Range for newly signed leases.

    Lease-up time assumption
    9 to 12 months
    ongoing

    Assumption for assets when they go vacant.

    Forecasted leasing addressed
    79%
    FY26

    Consistent with initial guidance and previous years at this point.

    Industry KPIs

    11
    MetricValueDetails
    Occupancy rate96.6%%
    Net debt adjusted EBITDA5x
    Quarterly leasing volume6 millionsquare feet
    Leasing spread cash basis20.9%%
    Bad debt credit loss levelminimal
    Data center land bank pipeline1.6 millionsquare feet
    Market fundamentals rent growth0% to 2%%
    Leasing spread net effective basis39.6%%
    Investment cap rate stabilized yield6.1%%
    Development starts dollar value and mix$38 millionUSD
    Same store noi growth cash vs net effective4.1%%

    Orderbook & backlog

    2
    Internal acquisition pipeline$3.9 billionQ1 FY26

    70% single transactions, 30% portfolios

    Development activity not in service1.8 million square feetQ1 FY26 end

    7 buildings in various stages of development

    Deals & partnerships

    1
    UnknownAcquisition of a newly constructed Class A industrial building.$80.7 million12 years

    750,000 square foot building located in Platte City, Missouri. Features 36-foot clear height, ESFR, ample trailer parking, and heavy power. 100% leased.

    Capital programs

    2
    Development activity (7 buildings)underway

    Benefit: 1.8 million square feet

    7 buildings in various stages of development, not in service as of Q1 end, with an expected stabilized yield of 7.1%.

    Dallas build-to-suit developmentunderway$38 million
    Start: shortly

    Benefit: 340,000 square foot facility

    Land acquired adjacent to an existing building in Dallas, Texas. Tenant committed for the building, with an expected yield on cost of 7.4%.

    Risks & headwinds

    2
    Occupancy decline impactQ2 FY26

    Full impact of Q1 period-end occupancy loss (120 bps) to be reflected in Q2

    Mitigation: Expect trough occupancy in Q2, with increases in H2 2026; lease-up assumptions of 9-12 months for vacant assets.

    Slower market activityQ1 FY26

    Markets like San Diego, Memphis, Pittsburgh are slower

    What to watch in Q2 FY26

    5

    Occupancy Cadence

    Q2 FY26, H2 FY26
    Current96.6% same-store occupancy (Q1 period-end)
    TargetTrough occupancy in Q2, increasing in H2 FY26

    Why it matters

    Occupancy trends directly impact same-store NOI and overall portfolio performance, with Q2 expected to show the full impact of recent move-outs.

    If we think about the cadence, we expect the trough occupancy to occur in the second quarter with occupancy increasing during the second half of the year.

    Q&A highlights

    8

    Given the healthier leasing market, are you seeing quicker backfills or any encouraging signs that might lead to a change in retention guidance?

    Management maintained retention guidance of 70-80% and lease-up assumptions of 9-12 months, despite strong Q1 activity (6 million sq ft leased) and continued momentum from Q4 into Q1 and Q2. They noted it's a higher lease expiration year.

    “Yes, I mean, it's certainly a higher lease expiration year. And that's driving our guidance -- our occupancy guidance for the year. With respect to what we're budgeting, it's still 9 to 12 months of lease-up time for assets when they go vacant.”

    asked by Craig Mailman · answered by William Crooker

    2 min read6 chapters

    Detailed Narrative

    01

    Industrial Market Trends

    The industrial market is experiencing strong leasing velocity and volume, with improving year-over-year absorption. Notably, the multi-year weakness in demand for big box product has reversed, and strong activity is observed in the 150,000-250,000 square foot segment. New supply remains subdued, with approximately 40% constructed for build-to-suit projects. National vacancy rates are expected to peak in the coming months⏳, with an inflection point anticipated in the back half of 2026.

    02

    Data Center Demand as a New Driver

    A significant new demand driver has emerged from the rapid acceleration of data center construction, with 3PLs supporting these developments. Since the beginning of 2025, STAG has signed 8 leases totaling 1.6 million square feet to data center-related tenants, primarily in the Southeast and Midwest markets. These leases feature a weighted average term of over 8 years and strong leasing spreads of approximately 35%, indicating robust economics and long-term commitments.

    03

    Capital Markets and Acquisition Pipeline

    Capital markets have remained stable to start the year, positioning industrial product as one of the most liquid asset classes. This stability has fostered increased confidence among both buyers and sellers, leading to an uptick in deal flow. STAG's internal acquisition pipeline has grown to $3.9 billion, with tightening bid-ask spreads suggesting an expected increase in overall industrial transaction volume in Q2.

    04

    Development Platform Expansion

    The company's development platform includes 7 buildings, totaling 1.8 million square feet, currently in various stages of development with an expected stabilized yield of 7.1%. Subsequent to quarter-end, two new development leases were signed, bringing a Greenville building to full occupancy and a Charlotte project to 90% leased. STAG also acquired land in Dallas for a 340,000 square foot build-to-suit facility with a committed tenant, projecting a 7.4% yield on cost.

    05

    Leasing Performance and Outlook

    Q1 saw a record 6 million square feet leased across 37 transactions, reflecting strong tenant demand across diverse industries. The retention rate for the quarter was 69.5%, and management maintained its full-year retention guidance of 70% to 80%. Approximately 79% of the forecasted 2026 leasing has already been addressed, consistent with prior years' pacing.

    06

    Same-Store NOI and Occupancy Dynamics

    Same-store cash NOI grew 4.1% in Q1, a healthy result that was fully anticipated within guidance. However, the full impact of occupancy decline from known move-outs late in Q1 is expected to be reflected in Q2. Management projects trough occupancy in Q2, followed by an increase in the second half of the year, aligning with expectations for market rent growth acceleration.

    AI-generated summary of the company’s earnings call. Not investment advice.