STAG Industrial, Inc.
For the period ended Jun 30, 2025. Filed Jul 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.
Jun 30, 2025 · Filed Jul 29, 2025
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3. Rental Property
- Rental Property
The following table summarizes the components of rental property, net as of June 30, 2025 and December 31, 2024.
| Rental Property (in thousands) | June 30, 2025 | December 31, 2024 |
|---|---|---|
| Land | $782,046 | $771,794 |
| Buildings, net of accumulated depreciation of $802,739 and $738,348, respectively | 4,616,637 | 4,634,634 |
| Tenant improvements, net of accumulated depreciation of $44,470 and $42,092, respectively | 42,360 | 44,987 |
| Building and land improvements, net of accumulated depreciation of $330,413 and $305,426, respectively | 555,992 | 396,883 |
| Construction in progress | 110,378 | 218,616 |
| Deferred leasing intangibles, net of accumulated amortization of $406,658 and $386,627, respectively | 392,677 | 428,865 |
| Total rental property, net | $6,500,090 | $6,495,779 |
Acquisitions
The following table summarizes the Company’s acquisitions during the three and six months ended June 30, 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 | ||
| Louisville, KY(2) | May 7, 2025 | — | — | 5,497 | |
| Chicago, IL | June 12, 2025 | 183,200 | 1 | 18,399 | |
| Three months ended June 30, 2025 | 183,200 | 1 | 23,896 | ||
| Six months ended June 30, 2025 | 576,764 | 4 | $67,181 | ||
(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.
(2) The Company acquired a vacant land parcel.
On May 7, 2025, the Company formed a joint venture with a third party, and the venture is primarily engaged in the development and eventual operation of an industrial real estate property located in Shepherdsville, Kentucky. The Company determined to account for its investment in the joint venture under the voting interest model of consolidation. See Note 7 for further discussion of the third party’s noncontrolling interest in the joint venture.
The following table summarizes the allocation of the consideration paid at the date of acquisition during the six months ended June 30, 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 | $12,112 | N/A |
| Buildings | 41,475 | N/A |
| Tenant improvements | 743 | N/A |
| Building and land improvements | 2,653 | N/A |
| Construction in progress | 1,281 | N/A |
| Deferred leasing intangibles - in-place leases | 5,269 | 3.8 |
| Deferred leasing intangibles - tenant relationships | 3,782 | 7.8 |
| Deferred leasing intangibles - below market leases | (134) | 2.5 |
| Total purchase price | $67,181 |
Dispositions
The following table summarizes the Company’s dispositions during the six months ended June 30, 2025. The dispositions were sold to third parties and were accounted for under the full accrual method.
| Sales of rental property, net (dollars in thousands) | Six months ended June 30, 2025 |
|---|---|
| Number of buildings | 2 |
| Building square feet (in millions) | 0.5 |
| Proceeds from sale of rental property, net | $72,590 |
| Net book value | $16,985 |
| Gain on the sales of rental property, net | $55,605 |
The following table summarizes the results of operations for the six months ended June 30, 2025 and 2024 for the buildings sold during the six months ended June 30, 2025, which is included in the Company’s Consolidated Statements of Operations prior to the date of sale.
| Three months ended June 30, | Six months ended June 30, | |||
|---|---|---|---|---|
| Sales of rental property, net (dollars in thousands) | 2025 | 2024 | 2025 | 2024 |
| Sold buildings contribution to net income(1) | $328 | $391 | $322 | $817 |
(1) Exclusive of gain on the sales of rental property, net.
Loss on Impairment
The following table summarizes the Company’s loss on impairment for assets held and used during the three and six months ended June 30, 2025.
| Market(1) · Buildings · Event or Change in Circumstance Leading to Impairment Evaluation(2) · Valuation Technique Utilized to Estimate Fair Value · Fair Value(3) · Loss on Impairment | ||||||
|---|---|---|---|---|---|---|
| (in thousands) | ||||||
| Lewiston, ME | 1 | Change in estimated hold period | Discounted cash flows | (4) | $2,831 | $888 |
| Three and six months ended June 30, 2025 | $888 | |||||
(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.
(2)The Company tested the asset group for impairment utilizing a probability weighted recovery analysis of certain scenarios, and it was determined that the carrying value of the property and intangibles were not recoverable from the estimated future undiscounted cash flows.
(3)The estimated fair value of the property is based on Level 3 inputs and is a non-recurring fair value measurement. Level 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
(4)Level 3 inputs used to determine fair value for the property impaired: discount rate of 12.0% and exit capitalization rate of 10.0%.
Involuntary Conversion
During the three and six months ended June 30, 2025 and 2024, the Company recognized a gain on involuntary conversion of approximately $0 million, $5.7 million, $1.9 million, and $5.7 million, respectively, related to tornado damage toone of the Company’s buildings in December 2023.
Deferred Leasing Intangibles
The following table summarizes the deferred leasing intangibles, net on the accompanying Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024.
| June 30, 2025 | December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| Deferred Leasing Intangibles (in thousands) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net |
| Above market leases | $73,789 | $(40,101) | $33,688 | $76,232 | $(39,335) | $36,897 |
| Other intangible lease assets | 725,546 | (366,557) | 358,989 | 739,260 | (347,292) | 391,968 |
| Total deferred leasing intangible assets | $799,335 | $(406,658) | $392,677 | $815,492 | $(386,627) | $428,865 |
| Below market leases | $62,920 | $(33,876) | $29,044 | $64,703 | $(31,368) | $33,335 |
| Total deferred leasing intangible liabilities | $62,920 | $(33,876) | $29,044 | $64,703 | $(31,368) | $33,335 |
The following table summarizes the net increase (decrease) to rental income and amortization expense for the amortization of deferred leasing intangibles during the three and six months ended June 30, 2025 and 2024.
| Three months ended June 30, | Six months ended June 30, | |||
|---|---|---|---|---|
| Deferred Leasing Intangibles Amortization (in thousands) | 2025 | 2024 | 2025 | 2024 |
| Net increase (decrease) to rental income related to above and below market lease amortization | $637 | $(840) | $1,215 | $(543) |
| Amortization expense related to other intangible lease assets | $20,937 | $25,142 | $42,031 | $47,216 |
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