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    STAG
    Earnings call· Jun 2026(Q2 FY26)

    STAG Industrial Q2 FY26 earnings call STAG

    Jul 29, 2026 Source

    Executive summary

    STAG Industrial, Inc. Q2 FY26 — Strong Leasing Spreads and Increased Guidance

    Industrial fundamentals stabilized in Q2 FY26, driven by accelerating net absorption and a contracting development pipeline. STAG's portfolio is well-positioned, benefiting from diversified demand tailwinds including e-commerce, nearshoring, and data center operations. The company delivered strong leasing spreads and raised full-year guidance for FFO, same-store NOI, and acquisitions, reflecting confidence in the market trajectory and operational execution.

    Highlights

    5

    • Core FFO per share increased 3.2% to $0.65 for the quarter.

    • Cash and straight-line leasing spreads were 19.8% and 33.7% respectively on commenced leases.

    • 92% of forecasted 2026 leasing has been addressed, consistent with initial guidance.

    • Same-store cash NOI grew 3.4% for the quarter and 3.9% year-to-date.

    • Full-year guidance for Core FFO per share, same-store occupancy, cash same-store NOI growth, and acquisition volume was increased.

    Concerns

    2

    • Volatility in rates and macro environment impacting acquisition cadence

    • Slower market activity in certain port markets and specific regions

    Guidance & targets

    7
    CategoryTargetConfidence
    Credit loss
    30 basis points
    medium materiality
    High
    Average same-store occupancy
    96.25% to 97.5%
    medium materiality
    High
    Retention rate
    75%
    medium materiality
    High
    Cash same-store NOI growth
    3% to 3.5%
    high materiality
    High
    Acquisition volume
    $400 million to $700 million
    high materiality
    Medium
    Stabilized capitalization rate on acquisitions
    6% to 6.5%
    medium materiality
    Medium
    Core FFO per share
    $2.61 to $2.65 per share
    high materiality
    High

    Operational metrics

    16
    Core FFO per share
    $0.653.2% increase YoY
    Q2 FY26
    Net debt to annualized run rate adjusted EBITDA
    5.2x
    Q2 FY26 end
    Net debt to annualized run rate adjusted EBITDA (including unfunded forward equity)
    5.1x
    Q2 FY26 end
    Liquidity
    $614 million
    Q2 FY26 end
    Leases commenced
    36
    Q2 FY26
    Square feet leased (commenced)
    5.6 million
    Q2 FY26
    ATM shares issued
    3.4 million
    YTD FY26
    ATM gross proceeds
    $131 million
    YTD FY26
    ATM proceeds settled
    $59.8 million
    Q2 FY26

    related to forward ATM sales that occurred in the first half of 2026

    Unfunded forward equity proceeds
    $70 million
    Q2 FY26 end

    available to fund at discretion, to pay down revolver and map on net acquisition development pipeline

    Term loan refinancing amount
    $350 million
    July 2026

    Refinanced on July 16, 2026, combining two term loans scheduled to mature in March 2027

    Interest expense savings from refinancing
    5
    ongoing

    achieved across all bank debt

    Forecasted leasing addressed
    92%
    FY26

    at levels consistent with initial guidance and previous years

    Forecasted leasing addressed
    35%ahead of historical 26%-28%
    FY27

    ahead of plan for next year's leasing

    Market rent growth
    0%-2%
    last few years

    historical market rent growth

    Leasing spreads deterioration (if market rents flat)
    5%
    annually

    based on historical trends of 0-2% market rent growth

    Industry KPIs

    10
    MetricValueDetails
    Occupancy rate96%%
    Net debt adjusted EBITDA5.2xx
    Quarterly leasing volume5.6 millionsquare feet
    Leasing spread cash basis19.8%%
    Data center land bank pipeline2.3 millionsquare feet
    Market fundamentals rent growth69 millionsquare feet
    Leasing spread net effective basis33.7%%
    Investment cap rate stabilized yield6.1%%
    Development starts dollar value and mix—
    Same store noi growth cash vs net effective3.4%%

    Orderbook & backlog

    3
    Development activity (not in service)2.3 million sq ftQ2 FY26 end

    9 buildings in various stages of development

    Development pipeline under construction$290 millionQ2 FY26 end

    total value of developments under some sort of construction period, not in stabilized bucket

    Acquisition opportunities under contract/LOIlowQ2 FY26 end

    management states 'not much under contract or LOI right now'

    Deals & partnerships

    4
    MultipleAcquisition of 7 industrial buildings$287.1 million

    Acquisition volume for Q2 FY26. Assets are Class A, generally at or slightly below market, with lease bumps of about 3.3%.

    MultipleDisposition of 3 assets

    Three assets disposed of so far this year. Two were noncore, and one was opportunistic. Expect more dispositions in the second half of the year, skewed more to noncore.

    Fueling solutions providerLease for Tampa development

    Executed in May for 35,000 square feet (25% of the development), commences August 1.

    E-commerce companyLease for Reno development

    Executed subsequent to quarter end for 47,000 square feet (62% of one Reno development), commences September 1.

    Capital programs

    2
    Dallas Build-to-suit Project (Rockwall, TX)underway
    Start: Q2 2026

    Benefit: 343,000 square feet

    Closed in April 2026, located in Northeast Dallas, Rockwall, Texas. Construction commenced in Q2 2026 with an estimated delivery date of Q2 2027 and an expected yield of 7.5%.

    Phoenix Development Project (Southeast Phoenix, AZ)planned
    Start: late Q3 2026

    Benefit: 184,000 square feet

    Closed in April 2026, 12-acre site well located within the Southeast Valley submarket with immediate access to i10. Anticipate breaking ground in late Q3 2026 with an estimated delivery date of Q3 2027.

    Risks & headwinds

    2
    Volatility in rates and macro environment impacting acquisition cadencebalance of the year

    not a lot of volatility

    Mitigation: If rates stay stable and there's not a lot of volatility in the macro environment, we feel pretty confident we can keep up this pace [of acquisitions].

    Slower market activity in certain port markets and specific regionscurrent

    Savannah being one, Charleston being one, they're a little bit slower. And then El Paso is a little bit slower just given the U.S. Mexico relations and Reno has been a little bit slower.

    Mitigation: Overall, the portfolio is performing really well, and we're optimistic as we move into 2027.

    What to watch in Q3 FY26

    5

    Acquisition cadence

    H2 FY26
    CurrentNot much under contract or LOI right now
    TargetKeep up this pace [of acquisitions]

    Why it matters

    Indicates ability to deploy capital and grow the portfolio, especially given raised guidance.

    We don't have much under contract or LOI right now, which is why we only raised the guidance, I think, $50 million at the midpoint. We're seeing good activity. There's a lot of sellers out there, bid-ask spreads have tightened. And so the cadence typically Q4 is our largest acquisition quarter. But just given the volatility in rates and the macro environment, we didn't feel that confident in the cadence in the third and fourth quarter, just given what's going on in the macro environment. That being said, if rates stay stable and there's not a lot of volatility in the macro environment, we feel pretty confident we can keep up this pace.

    Q&A highlights

    7

    What is the expected cadence for acquisitions in the second half of 2026, given the strong Q2 and raised guidance, and what is the current state of opportunities under contract?

    The company currently has limited opportunities under contract or LOI. While Q4 is typically the largest acquisition quarter, the macro environment and rate volatility make the cadence uncertain. However, if rates stabilize, they are confident in maintaining the current pace.

    “We don't have much under contract or LOI right now, which is why we only raised the guidance, I think, $50 million at the midpoint. We're seeing good activity. There's a lot of sellers out there, bid-ask spreads have tightened.”

    asked by Craig Mailman · answered by William Crooker

    2 min read6 chapters

    Detailed Narrative

    01

    Industrial Market Fundamentals and Supply Dynamics

    Industrial fundamentals stabilized in Q2 FY26, with net absorption accelerating to 69 million square feet, contributing to a total of 111 million square feet in the first half, marking the best start to a year since 2022. The development pipeline has contracted by roughly half from its 2022 peak, with under-construction product now representing just 2% of total stock, 55% of which is pre-leased. This improved supply-demand balance is expected to drive better rent growth into 2027.

    02

    Diversified Demand Tailwinds

    Demand tailwinds remain intact and diversified, with e-commerce reaching a record high percentage of retail sales. Nearshoring and onshoring trends are emerging as new sources of demand for supply chain diversification. Notably, the company has leased 2.3 million square feet to data center-related tenants since early 2025, primarily for servicing existing data centers, with a weighted average lease term of 7 years and 33% rent roll-up. Inland markets continue to outperform coastal markets in demand and net absorption.

    03

    Acquisition Strategy and Activity

    Q2 FY26 acquisition volume totaled $287.1 million across 7 buildings, with cash and straight-line cap rates of 6.1% and 6.8% respectively. The company focuses on acquiring Class A assets in strong submarkets, with lease bumps around 3.3%. While portfolio premiums are observed in the $500 million to $1 billion range, STAG underwrites individual asset pricing and does not pay portfolio premiums, focusing on assets that are at or slightly below market rents.

    04

    Development Platform Expansion

    The development platform is performing strongly, with 9 buildings totaling 2.3 million square feet currently in various stages of development, not yet in service, and expected stabilized yields of 7.1%. Recent projects include a 343,000 square foot build-to-suit in Dallas (7.5% yield, Q2 2027 delivery) and a 184,000 square foot project in Phoenix (Q3 2027 delivery). The company aims to increase its development pipeline by a couple of hundred million dollars over time⏳, leveraging internal sourcing, JV partners, and existing land.

    05

    Leasing Performance and Outlook

    The company commenced 36 leases across 5.6 million square feet in Q2 FY26, generating cash and straight-line leasing spreads of 19.8% and 33.7%. Retention for the quarter was 75.7%. For the full year 2026, 92% of forecasted leasing has been addressed, with spreads expected at the higher end of the 18%-20% range. Early renewals for FY27 are ahead of historical pace, with 35% of the plan addressed compared to a historical 26%-28% at this time.

    06

    Balance Sheet and Capital Markets Activity

    Core FFO per share was $0.65, an increase of 3.2% year-over-year. Net debt to annualized run rate adjusted EBITDA was 5.2x (5.1x including unfunded forward equity). Liquidity stood at $614 million. The company issued 3.4 million shares via its ATM program for $131 million gross proceeds year-to-date, settling $59.8 million in Q2. Debt refinancing included a $350 million term loan maturing in January 2032 at a fixed rate of 4.79% from 2027, achieving a 5 basis point savings across all bank debt.

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