STAG Industrial Inc
For the period ended Mar 31, 2025. Filed Apr 29, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 29, 2025
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3. Rental Property
- Rental Property
The following table summarizes the components of rental property, net as of March 31, 2025 and December 31, 2024.
| Rental Property (in thousands) | March 31, 2025 | December 31, 2024 |
|---|---|---|
| Land | $776,387 | $771,794 |
| Buildings, net of accumulated depreciation of $769,777 and $738,348, respectively | 4,639,358 | 4,634,634 |
| Tenant improvements, net of accumulated depreciation of $42,056 and $42,092, respectively | 43,702 | 44,987 |
| Building and land improvements, net of accumulated depreciation of $317,513 and $305,426, respectively | 488,122 | 396,883 |
| Construction in progress | 140,595 | 218,616 |
| Deferred leasing intangibles, net of accumulated amortization of $386,560 and $386,627, respectively | 412,441 | 428,865 |
| Total rental property, net | $6,500,605 | $6,495,779 |
Acquisitions
The following table summarizes the Company’s acquisitions during the three months ended March 31, 2025. The Company accounted for all of its acquisitions as asset acquisitions.
| Market(1) · Date Acquired · Square Feet · Number of Buildings · Purchase Price (in thousands) | |||||
|---|---|---|---|---|---|
| Minneapolis, MN | January 9, 2025 | 161,600 | 1 | $16,537 | |
| Chicago, IL | February 27, 2025 | 231,964 | 2 | 26,748 | |
| Three months ended March 31, 2025 | 393,564 | 3 | $43,285 | ||
(1) As defined by CBRE-EA industrial market geographies. If the building is located outside of a CBRE-EA defined market, the city and state is reflected.
The following table summarizes the allocation of the consideration paid at the date of acquisition during the three months ended March 31, 2025 for the acquired assets and liabilities in connection with the acquisitions identified in the table above.
| Acquired Assets and Liabilities | Purchase Price (in thousands) | Weighted Average Amortization Period (years) of Intangibles at Acquisition |
|---|---|---|
| Land | $6,025 | N/A |
| Buildings | 29,635 | N/A |
| Tenant improvements | 109 | N/A |
| Building and land improvements | 1,318 | N/A |
| Deferred leasing intangibles - in-place leases | 3,619 | 3.3 |
| Deferred leasing intangibles - tenant relationships | 2,713 | 7.3 |
| Deferred leasing intangibles - below market leases | (134) | 2.5 |
| Total purchase price | $43,285 |
Disposition
The following table summarizes the Company’s disposition during the three months ended March 31, 2025. The disposition was sold to a third party and was accounted for under the full accrual method.
| Sale of rental property, net (dollars in thousands) | Three months ended March 31, 2025 |
|---|---|
| Number of buildings | 1 |
| Building square feet (in millions) | 0.3 |
| Proceeds from sale of rental property, net | $63,834 |
| Net book value | $13,921 |
| Gain on the sale of rental property, net | $49,913 |
The following table summarizes the results of operations for the three months ended March 31, 2025 and 2024 for the building sold during the three months ended March 31, 2025, which is included in the Company’s Consolidated Statements of Operations prior to the date of sale.
| Three months ended March 31, | ||
|---|---|---|
| Sale of rental property, net (dollars in thousands) | 2025 | 2024 |
| Sold building contribution to net income (loss)(1) | $(144) | $321 |
(1) Exclusive of gain on the sale of rental property, net.
Involuntary Conversion
During the three months ended March 31, 2025, the Company recognized a gain on involuntary conversion of approximately $1.9 million related to tornado damage toone of the Company’s buildings in December 2023. The Company did not recognize a gain or loss on involuntary conversion during the three months ended March 31, 2024.
Deferred Leasing Intangibles
The following table summarizes the deferred leasing intangibles, net on the accompanying Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024.
| March 31, 2025 | December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Deferred Leasing Intangibles (in thousands) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net |
| Above market leases | $74,053 | $(38,817) | $35,236 | $76,232 | $(39,335) | $36,897 |
| Other intangible lease assets | 724,948 | (347,743) | 377,205 | 739,260 | (347,292) | 391,968 |
| Total deferred leasing intangible assets | $799,001 | $(386,560) | $412,441 | $815,492 | $(386,627) | $428,865 |
| Below market leases | $62,921 | $(31,692) | $31,229 | $64,703 | $(31,368) | $33,335 |
| Total deferred leasing intangible liabilities | $62,921 | $(31,692) | $31,229 | $64,703 | $(31,368) | $33,335 |
The following table summarizes the net increase to rental income and amortization expense for the amortization of deferred leasing intangibles during the three months ended March 31, 2025 and 2024.
| Three months ended March 31, | ||
|---|---|---|
| Deferred Leasing Intangibles Amortization (in thousands) | 2025 | 2024 |
| Net increase to rental income related to above and below market lease amortization | $578 | $297 |
| Amortization expense related to other intangible lease assets | $21,094 | $22,074 |
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