STAG Industrial Q2 2025 slides show 9.4% revenue growth, robust leasing activity

Introduction & Market Context

STAG Industrial, Inc. (NYSE:STAG) released its second quarter 2025 supplemental information package, highlighting continued growth in its industrial real estate portfolio. The company’s stock has shown resilience in the current market environment, trading at $36.26 as of October 14, 2025, up 1.53% for the day and positioned near the upper range of its 52-week trading band of $28.61 to $39.21.

The industrial REIT continues to capitalize on strong market fundamentals in the logistics and manufacturing sectors, with its diversified portfolio of 600 buildings spanning 41 states positioning it well to navigate regional economic variations.

Quarterly Performance Highlights

STAG reported total revenue of $207.6 million for Q2 2025, representing a 9.4% increase compared to $189.8 million in the same period last year. This growth was primarily driven by new acquisitions and strong leasing activity with significant rent increases.

Net operating income (NOI) reached $167.2 million, up 9.8% from $152.3 million in Q2 2024, while Cash NOI increased 8.9% to $161.7 million. However, net income decreased to $51.1 million from $61.1 million in the prior year period.

As shown in the following chart detailing the company’s NOI performance:

Same Store Cash NOI, a key metric for evaluating organic growth, increased by 3.0% year-over-year for the quarter, demonstrating STAG’s ability to effectively manage its existing portfolio and capture rent growth.

The company’s adjusted EBITDAre, a measure of earnings before interest, taxes, depreciation and amortization for real estate companies, grew to $152.0 million, a 9.6% increase from $138.7 million in Q2 2024.

Portfolio Management and Leasing Activity

STAG’s portfolio maintained strong occupancy levels, with total portfolio occupancy at 96.3% and operating portfolio occupancy at 97.0% as of June 30, 2025. The company’s weighted average lease term stands at 4.2 years with an average rent of $5.79 per square foot.

The second quarter saw robust leasing activity covering 4.2 million square feet across 32 leases, achieving impressive cash rent increases of 24.6% and straight-line rent increases of 41.1%. The company also maintained a high retention rate of 75.3%, indicating strong tenant satisfaction.

Year-to-date, STAG has executed 68 leases covering 9.2 million square feet with cash rent increases of 26.1% and straight-line rent increases of 41.7%, while maintaining an 81.4% retention rate.

The company’s portfolio remains well-diversified across markets, tenants, and industries, reducing concentration risk. The following chart illustrates this diversification:

Development and Acquisition Strategy

STAG continued its disciplined approach to portfolio growth in Q2 2025. The company acquired one building in Chicago, IL for $18.4 million, adding 183,200 square feet to its portfolio. This acquisition came with a 5-year weighted average lease term and a cash capitalization rate of 7.1%.

Year-to-date, STAG has acquired four buildings totaling 576,764 square feet for $61.7 million, with a weighted average lease term of 3.8 years and a cash capitalization rate of 6.9%. Additionally, the company acquired a vacant land parcel for $5.5 million as part of a joint venture during the second quarter.

The company’s development pipeline remains active with 1.26 million square feet under construction, representing an estimated investment of $159.0 million and an expected stabilized yield of 7.1%. STAG also has 435,807 square feet of substantially completed development properties not yet in service and 1.31 million square feet of development properties in service.

On the disposition front, STAG sold one building in Calhoun, GA during Q2 for $9.1 million. Year-to-date, the company has sold two buildings totaling 488,591 square feet for gross proceeds of $76.1 million, demonstrating its commitment to recycling capital from non-core assets.

Capital Structure and Financial Position

STAG maintains a solid balance sheet with a net debt to annualized run rate adjusted EBITDAre ratio of 5.1x and a consolidated leverage ratio of 29.1%. The company’s debt maturity schedule is well-staggered, providing flexibility and reducing refinancing risk.

The following chart illustrates STAG’s debt maturity profile:

The company continues to reward shareholders with a monthly dividend of $0.124167 per share, which annualizes to $1.49, representing a yield of approximately 4.1% based on current share prices.

According to the earnings call transcript, Moody’s recently upgraded STAG’s corporate credit rating to Baa2, reflecting the company’s improved financial profile and disciplined growth strategy. CEO Bill Crooker noted during the call that "these large sophisticated tenants expect that market rent growth will start increasing probably at a little faster pace," suggesting continued optimism for future performance.

2025 Guidance and Outlook

STAG maintained its 2025 guidance, projecting Core FFO per share between $2.48 and $2.52. The company expects acquisition volume of $350-650 million and disposition volume of $100-200 million for the year.

Same Store Cash NOI growth is projected at 3.75-4.00%, with retention rates expected to remain strong at 70-75%. The company anticipates general and administrative expenses of $52-54 million.

CFO Mads Pinard highlighted the company’s financial health during the earnings call, noting that "We retain north of $100 million of cash flow after dividends paid," which provides significant flexibility for future investments and growth initiatives.

CIO Mike Chase expressed optimism about the second half of the year, stating, "We’re cautiously optimistic about the fact that we will have an active second half of the year," suggesting potential acceleration in acquisition activity.

STAG’s disciplined approach to capital allocation, strong operational performance, and diversified portfolio position it well to navigate market challenges while continuing to deliver value to shareholders. The company’s focus on industrial properties, which continue to benefit from e-commerce growth and supply chain reconfiguration, provides a solid foundation for sustained performance in the evolving real estate landscape.

Full presentation:

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