STAG Industrial, Inc.
For the period ended Sep 30, 2025. Filed Oct 29, 2025.
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Sep 30, 2025 · Filed Oct 29, 2025
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9. Leases
- Leases
Lessor Leases
The Company has operating leases in which it is the lessor for its rental property. Certain leases contain variable lease payments based upon changes in the Consumer Price Index (“CPI”). Billings for real estate taxes and other expenses are also considered to be variable lease payments. Certain leases contain options to renew or terminate the lease, and options for the lessee to purchase the rental property, all of which are predominately at the sole discretion of the lessee.
The following table summarizes the components of rental income included in the accompanying Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024.
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| Rental Income (in thousands) | 2025 | 2024 | 2025 | 2024 |
| Fixed lease payments | $159,934 | $147,075 | $474,336 | $433,464 |
| Variable lease payments | 43,238 | 38,800 | 131,190 | 119,207 |
| Straight-line rental income | 6,160 | 3,887 | 15,391 | 11,503 |
| Net increase (decrease) to rental income related to above and below market lease amortization | 663 | 524 | 1,878 | (19) |
| Total rental income | $209,995 | $190,286 | $622,795 | $564,155 |
As of September 30, 2025 and December 31, 2024, the Company had accrued rental income of approximately $134.3 million and $118.6 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.
As of September 30, 2025 and December 31, 2024, the Company’s total liability associated with lease security deposits was approximately $25.1 million and $23.9 million, respectively, which is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.
Lessee Leases
The Company has operating leases in which it is the lessee for its ground leases and corporate office leases. These leases have remaining lease terms of approximately 0.7 years to 57.0 years. Certain ground leases contain options to extend the leases forten years to 20 years, all of which are reasonably certain to be exercised and are included in the computation of the Company’s right-of-use assets and operating lease liabilities.
On June 10, 2025, the Company entered into a new lease agreement for its headquarters. The property subject to the lease is located in Boston, Massachusetts, and consists of approximately 28,041 square feet of rentable space. The lease term is estimated to commence on July 1, 2026, and expire on April 30, 2037, withone option to extend the lease for an additional five years at prevailing market rental rates. The total base rent is approximately $23.0 million over the approximately 10.8 year term and the Company will recognize the related right-of-use assets and corresponding operating lease liabilities upon lease commencement.
The following table summarizes supplemental information related to operating lease right-of-use assets and operating lease liabilities recognized in the Company’s Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024.
| Operating Lease Term and Discount Rate | September 30, 2025 | December 31, 2024 |
|---|---|---|
| Weighted average remaining lease term (years) | 35.5 | 34.9 |
| Weighted average discount rate | 6.9% | 6.9% |
The following table summarizes the operating lease cost included in the Company’s Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024.
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| Operating Lease Cost (in thousands) | 2025 | 2024 | 2025 | 2024 |
| Operating lease cost included in property expense attributable to ground leases | $695 | $619 | $2,090 | $1,851 |
| Operating lease cost included in general and administrative expense attributable to corporate office leases | 432 | 430 | 1,293 | 1,291 |
| Total operating lease cost | $1,127 | $1,049 | $3,383 | $3,142 |
The following table summarizes supplemental cash flow information related to operating leases in the Company’s Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024.
| Nine months ended September 30, | ||
|---|---|---|
| Operating Leases (in thousands) | 2025 | 2024 |
| Cash paid for amounts included in the measurement of lease liabilities (operating cash flows) | $3,182 | $2,976 |
| Right-of-use assets obtained in exchange for new lease liabilities | $175 | $— |
The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office leases as of September 30, 2025.
| Year | Maturity of Operating Lease Liabilities(1) (in thousands) |
|---|---|
| Remainder of 2025 | $1,070 |
| 2026 | 3,288 |
| 2027 | 2,331 |
| 2028 | 2,374 |
| 2029 | 2,340 |
| Thereafter | 94,551 |
| Total lease payments | 105,954 |
| Less: Imputed interest | (71,915) |
| Present value of operating lease liabilities | $34,039 |
(1)Operating lease liabilities do not include estimates of CPI rent changes required by certain ground lease agreements. Therefore, actual payments may differ from those presented.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.