STAG Industrial, Inc. Q4 FY2025 earnings call

• 2025 was a successful year with outperforming budgeted metrics including occupancy, credit loss, leasing spreads, same-store cash NOI, development starts, and core FFO. • Same-store cash NOI grew 4.3% and core FFO per share grew 6.3% in 2025. • 2025 had high leasing volume, with Q4 being the most active transaction quarter. Acquisition volume in Q4 totaled $285,900,000 with seven buildings, and subsequent to quarter end, another building was acquired. • Development activity: 3,500,000 square feet of development activity or recent completions across 14 buildings, 59% completed, 73% leased as of Dec 31. • Commenced a new development in Lenexa, KS with estimated delivery in Q1 2027 and projected cash yield of 7.2%. • Raised dividend 4% and modified payment cadence to quarterly.

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• Same-store cash NOI growth expected to range between 2.75% and 3.25% with components including retention 70%-80%, cash leasing spreads 18%-20%, and average same-store occupancy 96%-97%. • Acquisition volume guidance: $350,000,000 - $650,000,000 with cash cap rate 6.25%-6.75%, weighted to back end of year. • Disposition volume guidance: $100,000,000 - $200,000,000. • G&A expected to be $53,000,000 - $56,000,000. • Core FFO per share range initiated between $2.60 and $2.64 per share. • Increase in interest expense from refinancing will be a $0.03 headwind to core FFO per share growth in 2026.

• Uncertainties in economic trends and tenant activity that could impact leasing prospects and rent collections. • Risks associated with acquisition and disposition timing, as deals can fall out of LOI or contract. • Credit loss uncertainties, with 50 basis points included in same-store cash NOI guidance. • Potential for development delivery timing and market dynamics affecting future performance.

Q: Just kind of curious on the leasing front, with vacancy nationally not peaking until middle of the year but leasing velocity picking up. How does that affect the 100 basis points of occupancy decline and backfill activity?

A: 2025 was successful with leasing, if momentum continues could backfill earlier. Entering 2026 with high occupancy, but budgeted for 9-12 month lease-up period for rolling square feet, though examples in 2025 had zero downtime. Overall industrial market still strong, vacancy peaks mid-2026 and improves later.

Q: On the acquisition front, came out with $81,000,000 but weighted to back end. What's visibility on acquisitions today?

A: Currently disclosed $81,000,000, typically don't disclose LOI or contract acquisitions. Pipeline strong at $3,600,000,000, transaction market healthy with pent-up seller demand continuing into 2026.

Q: Unpack increased tenant activity, are these real demand customers?

A: Tenant activity is real demand, seeing from 3PL, food and beverage, and newer data center tenants. Portfolio is well-fitted to submarkets, maintaining high occupancy, and winning deals over other options.

Q: Outlook for supply, worry about ramp back up in supply?

A: Developers in industrial are prudent, supply falloff was due to demand falloff. New supply will come back prudently, likely middle to late 2027 or later.

Q: Thought process on strategic exits of individual markets and if baked into disposition guidance?

A: Generally have non-core dispositions planned, some opportunistic dispositions. Nothing material shift from past years, just marginally disposing non-core assets to be efficient.

Q: Appetite to hold land for development opportunities?

A: Holding land not in 2026 plan, but looking into phased developments for quasi land position.

Q: Thinking about cost of capital, cost of debt and equity?

A: Cost of debt in private placement 140-150bps over, public bond market 25-30bps benefit, currently 5.5%-5.75% depending on tenor. Cost of equity low 6s, retaining north of $100,000,000 of cash flows after dividend.

Q: Percentage of leases with fixed-rate renewals and chunky ones in coming quarters?

A: Single digits, laddered throughout the year, not unlimited fixed renewal options.

Q: Potential development starts in 2026 and appetite for new spec projects?

A: Eager to start new spec projects, over $100,000,000 of new projects sourced planned for 2026, depending on returns penciling up.

Q: Concession environment in markets, free rent and TIs?

A: Concessions stable since early 2025, some private landlords offering more free rent but not market-wide, TIs not materially changed, sometimes building upgrades instead of tenant-specific TIs.

Q: Leasing executed during quarter and volume vs 2025 average, lease spreads vs guidance?

A: Budgeting almost 18,000,000 square feet of leasing for 2026, largest in year. Leasing spreads in line with 18%-20% guidance, rent bumps holding up.

Q: Same-store guidance starting at 3% vs 2025 4.3%, line of sight into vacancy level?

A: Have line of sight for lease expirations in first half, back half speculative. Same-store NOI components include leasing spreads, bumps, and credit loss. Retention midpoint 75%, potential outperformance if leasing occurs sooner or credit loss lower.

Q: Deliveries in 2026 vs 2025 and cadence to 2027?

A: 2025 deliveries ~225,000,000 sq ft, 2026 ~180,000,000 sq ft, expected to pick back up to 200,000,000-300,000,000 sq ft in 2027. Build-to-suit component around 40%.

Q: Manufacturing activity in markets and role for STAG?

A: Seeing balance of distribution and manufacturing demand in development markets, like 78,000 sq ft lease in Charlotte for manufacturing related to automotive and government uses.

Q: Acquisition market competitiveness and cap rates?

A: More sellers in market, seeing cap rate compression, bidding on deals that fit submarkets and are accretive, cap rate guidance in line with cost of capital.