STAG 10-Q
STAG Industrial, Inc. (STAG)
10-Q
2025-10-29
For: 2025-09-30
View Original
Added on
April 08, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________________________
FORM 10-Q
____________________________________________________________________________
For the Quarterly Period Ended September 30, 2025
OR
For the transition period from to .
Commission file number 1-34907
____________________________________________________________________________
(Exact name of registrant as specified in its charter)
____________________________________________________________________________
| (State or other jurisdiction of | (IRS Employer Identification No.) | ||||||||||
| incorporation or organization) | |||||||||||
| (Address of principal executive offices) | (Zip code) | ||||||||||
(617 ) 574-4777
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of common stock outstanding at October 28, 2025 was 186,750,070 .
STAG Industrial, Inc.
Table of Contents
PART I. | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
2
Part I. Financial Information
Item 1. Financial Statements
STAG Industrial, Inc.
Consolidated Balance Sheets
(unaudited, in thousands, except share data)
| September 30, 2025 | December 31, 2024 | ||||||||||
| Assets | |||||||||||
| Rental Property: | |||||||||||
| Land | $ | $ | |||||||||
Buildings and improvements, net of accumulated depreciation of $ | |||||||||||
Deferred leasing intangibles, net of accumulated amortization of $ | |||||||||||
| Total rental property, net | |||||||||||
| Cash and cash equivalents | |||||||||||
| Restricted cash | |||||||||||
| Tenant accounts receivable | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| Interest rate swaps | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Assets held for sale, net | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Equity | |||||||||||
| Liabilities: | |||||||||||
| Unsecured credit facility | $ | $ | |||||||||
| Unsecured term loans, net | |||||||||||
| Unsecured notes, net | |||||||||||
| Mortgage note, net | |||||||||||
| Accounts payable, accrued expenses and other liabilities | |||||||||||
| Interest rate swaps | |||||||||||
| Tenant prepaid rent and security deposits | |||||||||||
| Dividends and distributions payable | |||||||||||
Deferred leasing intangibles, net of accumulated amortization of $ | |||||||||||
| Operating lease liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 11) | |||||||||||
| Equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Cumulative dividends in excess of earnings | ( | ( | |||||||||
| Accumulated other comprehensive income | |||||||||||
| Total stockholders’ equity | |||||||||||
| Noncontrolling interest in operating partnership | |||||||||||
| Noncontrolling interest in joint ventures | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
STAG Industrial, Inc.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Rental income | $ | $ | $ | $ | |||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Property | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Loss on impairment | |||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest and other income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Debt extinguishment and modification expenses | ( | ( | ( | ( | |||||||||||||||||||
| Gain on involuntary conversion | |||||||||||||||||||||||
| Gain on the sales of rental property, net | |||||||||||||||||||||||
| Total other income (expense) | ( | ( | ( | ( | |||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: income attributable to noncontrolling interest in operating partnership | |||||||||||||||||||||||
| Net income attributable to STAG Industrial, Inc. | |||||||||||||||||||||||
| Less: amount allocated to participating securities | |||||||||||||||||||||||
| Net income attributable to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding — basic | |||||||||||||||||||||||
| Weighted average common shares outstanding — diluted | |||||||||||||||||||||||
| Net income per share — basic and diluted | |||||||||||||||||||||||
| Net income per share attributable to common stockholders — basic | $ | $ | $ | $ | |||||||||||||||||||
| Net income per share attributable to common stockholders — diluted | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
STAG Industrial, Inc.
Consolidated Statements of Comprehensive Income
(unaudited, in thousands)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive loss: | |||||||||||||||||||||||
| Loss on interest rate swaps | ( | ( | ( | ( | |||||||||||||||||||
| Other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||
| Income attributable to noncontrolling interest | ( | ( | ( | ( | |||||||||||||||||||
| Other comprehensive loss attributable to noncontrolling interest | |||||||||||||||||||||||
| Comprehensive income attributable to STAG Industrial, Inc. | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
STAG Industrial, Inc.
Consolidated Statements of Equity
(unaudited, in thousands, except share data)
| Preferred Stock | Common Stock | Additional Paid-in Capital | Cumulative Dividends in Excess of Earnings | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | Noncontrolling Interest in Operating Partnership | Noncontrolling Interest in Joint Ventures | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Par Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from sales of common stock, net | — | — | — | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions, net ($ | — | — | — | — | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash compensation activity, net | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of common units to common stock | — | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rebalancing of noncontrolling interest in operating partnership | — | — | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interest in joint ventures | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from sales of common stock, net | — | — | — | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions, net ($ | — | — | — | — | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash compensation activity, net | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of common units to common stock | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rebalancing of noncontrolling interest in operating partnership | — | — | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interest in joint ventures | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nine months ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from sales of common stock, net | — | — | — | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions, net ($ | — | — | — | — | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash compensation activity, net | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of common units to common stock | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rebalancing of noncontrolling interest in operating partnership | — | — | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interest in joint ventures | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nine months ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from sales of common stock, net | — | — | — | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions, net ($ | — | — | — | — | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash compensation activity, net | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of common units to common stock | — | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rebalancing of noncontrolling interest in operating partnership | — | — | — | ( | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from controlling interest in joint ventures | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
STAG Industrial, Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands)
| Nine months ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Loss on impairment | |||||||||||
| Gain on involuntary conversion | ( | ( | |||||||||
| Non-cash portion of interest expense | |||||||||||
| Amortization of above and below market leases, net | ( | ||||||||||
| Straight-line rent adjustments, net | ( | ( | |||||||||
| Debt extinguishment and modification expenses | |||||||||||
| Gain on the sales of rental property, net | ( | ( | |||||||||
| Non-cash compensation expense | |||||||||||
| Change in assets and liabilities: | |||||||||||
| Tenant accounts receivable | |||||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||
| Accounts payable, accrued expenses and other liabilities | |||||||||||
| Tenant prepaid rent and security deposits | ( | ||||||||||
| Total adjustments | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Additions of land and buildings and improvements | ( | ( | |||||||||
| Acquisitions of land and buildings and improvements | ( | ( | |||||||||
| Acquisitions of other assets | ( | ||||||||||
| Proceeds from sale of rental property, net | |||||||||||
| Acquisition deposits, net | ( | ( | |||||||||
| Acquisitions of deferred leasing intangibles | ( | ( | |||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from unsecured credit facility | |||||||||||
| Repayment of unsecured credit facility | ( | ( | |||||||||
| Proceeds from unsecured term loans | |||||||||||
| Repayment of unsecured term loans | ( | ||||||||||
| Proceeds from unsecured notes | |||||||||||
| Repayment of unsecured notes | ( | ||||||||||
| Repayment of mortgage notes | ( | ( | |||||||||
| Payment of loan fees and costs | ( | ( | |||||||||
| Proceeds from sales of common stock, net | ( | ( | |||||||||
| Dividends and distributions | ( | ( | |||||||||
| Repurchase and retirement of share-based compensation | ( | ( | |||||||||
| Contributions from noncontrolling interest in joint ventures | |||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Increase (decrease) in cash and cash equivalents and restricted cash | ( | ||||||||||
| Cash and cash equivalents and restricted cash—beginning of period | |||||||||||
| Cash and cash equivalents and restricted cash—end of period | $ | $ | |||||||||
| Supplemental disclosure: | |||||||||||
Cash paid for interest, net of amounts capitalized of $ | $ | $ | |||||||||
| Supplemental schedule of non-cash investing and financing activities | |||||||||||
| Acquisitions of land and buildings and improvements | $ | ( | $ | ( | |||||||
| Acquisitions of deferred leasing intangibles | $ | ( | $ | ( | |||||||
| Additions to building and other capital improvements from involuntary conversion | $ | ( | $ | ( | |||||||
| Investing other receivables due to involuntary conversion of building | $ | $ | |||||||||
| Change in additions of land, building, and improvements included in accounts payable, accrued expenses and other liabilities | $ | ( | $ | ( | |||||||
| Additions to building and other capital improvements from non-cash compensation | $ | ( | $ | ( | |||||||
| Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses and other liabilities | $ | ( | $ | ( | |||||||
| Dividends and distributions accrued | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
STAG Industrial, Inc.
Notes to Consolidated Financial Statements
(unaudited)
1. Organization and Description of Business
STAG Industrial, Inc. (the “Company”) is an industrial real estate operating company focused on the acquisition, development, and operation of industrial properties throughout the United States. The Company was formed as a Maryland corporation and has elected to be treated and intends to continue to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). The Company is structured as an umbrella partnership REIT, commonly called an UPREIT, and owns all of its properties and conducts substantially all of its business through its operating partnership, STAG Industrial Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”). As of September 30, 2025 and December 31, 2024, the Company owned 98.0 % and 98.0 %, respectively, of the common units of the limited partnership interests in the Operating Partnership. The Company, through its wholly owned subsidiary, is the sole general partner of the Operating Partnership. As used herein, the “Company” refers to STAG Industrial, Inc. and its consolidated subsidiaries, including the Operating Partnership, except where context otherwise requires.
As of September 30, 2025, the Company owned 601 industrial buildings in 41 states with approximately 119.2 million rentable square feet.
2. Summary of Significant Accounting Policies
Interim Financial Information
The accompanying interim financial statements have been presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements include all adjustments, consisting of normal recurring items, necessary for their fair statement in conformity with GAAP. Interim results are not necessarily indicative of results for a full year. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Basis of Presentation
The Company’s consolidated financial statements include the accounts of the Company, the Operating Partnership, and their consolidated subsidiaries. Interests in the Operating Partnership not owned by the Company are referred to as “Noncontrolling Common Units.” These Noncontrolling Common Units are held by other limited partners in the form of common units (“Other Common Units”) and long term incentive plan units (“LTIP units”) issued pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”). All majority-owned subsidiaries and joint ventures over which the Company has a controlling financial interest are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in the consolidation of entities. The financial statements of the Company are presented on a consolidated basis for all periods presented.
Restricted Cash
The following table presents a reconciliation of cash and cash equivalents and restricted cash reported on the accompanying Consolidated Balance Sheets to amounts reported on the accompanying Consolidated Statements of Cash Flows.
| Reconciliation of Cash and Cash Equivalents and Restricted Cash (in thousands) | September 30, 2025 | December 31, 2024 | ||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||
| Total cash and cash equivalents and restricted cash | $ | $ | ||||||||||||
Uncertain Tax Positions
As of September 30, 2025 and December 31, 2024, there were no
8
Segment Reporting
The Company manages its operations on an aggregated, single segment basis for purposes of assessing performance and making operating decisions and, accordingly, has only one
The chief operating decision maker (“CODM”) of the Company, which is its Chief Executive Officer, assesses performance of the segment and decides how to allocate resources based on net income that is reported on the accompanying Consolidated Statements of Operations.
The CODM also assesses the performance of the segment based on funds from operations (“FFO”) and net operating income (“NOI”). FFO is calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts. FFO represents GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating buildings, impairment write-downs of depreciable real estate, real estate related depreciation and amortization (excluding amortization of deferred financing costs and fair market value of debt adjustment) and after adjustments for unconsolidated partnerships and joint ventures. NOI is defined as rental income, which includes billings for common area maintenance, real estate taxes and insurance, less property expenses, real estate tax expense and insurance expense.
Concentrations of Credit Risk
3. Rental Property
The following table summarizes the components of rental property, net as of September 30, 2025 and December 31, 2024.
| Rental Property (in thousands) | September 30, 2025 | December 31, 2024 | ||||||||||||
| Land | $ | $ | ||||||||||||
Buildings, net of accumulated depreciation of $ | ||||||||||||||
Tenant improvements, net of accumulated depreciation of $ | ||||||||||||||
Building and land improvements, net of accumulated depreciation of $ | ||||||||||||||
| Construction in progress | ||||||||||||||
Deferred leasing intangibles, net of accumulated amortization of $ | ||||||||||||||
| Total rental property, net | $ | $ | ||||||||||||
9
Acquisitions
The following table summarizes the Company’s acquisitions during the three and nine months ended September 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 | $ | ||||||||||||||||||||||||
| Chicago, IL | February 27, 2025 | |||||||||||||||||||||||||
| Three months ended March 31, 2025 | ||||||||||||||||||||||||||
Louisville, KY(2) | May 7, 2025 | |||||||||||||||||||||||||
| Chicago, IL | June 12, 2025 | |||||||||||||||||||||||||
| Three months ended June 30, 2025 | ||||||||||||||||||||||||||
Houston, TX(3) | September 15, 2025 | |||||||||||||||||||||||||
Dayton, OH(2) | September 23, 2025 | |||||||||||||||||||||||||
Dayton, OH(3) | September 23, 2025 | |||||||||||||||||||||||||
| Three months ended September 30, 2025 | ||||||||||||||||||||||||||
| Nine months ended September 30, 2025 | $ | |||||||||||||||||||||||||
(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.
(3) These buildings were acquired through reverse like-kind exchange agreements pursuant to Section 1031 of the Code (“Reverse 1031 Exchanges”) with a third-party intermediary. See below under “Variable Interest Entities” for additional information.
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 accounts 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 nine months ended September 30, 2025 for the acquired assets and liabilities in connection with the acquisitions identified in the table above.
| Nine Months Ended September 30, 2025 | ||||||||||||||
| Acquired Assets and Liabilities | Purchase Price (in thousands) | Weighted Average Amortization Period (years) of Intangibles at Acquisition | ||||||||||||
| Land | $ | N/A | ||||||||||||
| Buildings | N/A | |||||||||||||
| Tenant improvements | N/A | |||||||||||||
| Building and land improvements | N/A | |||||||||||||
| Construction in progress | N/A | |||||||||||||
| Deferred leasing intangibles - in-place leases | ||||||||||||||
| Deferred leasing intangibles - tenant relationships | ||||||||||||||
| Deferred leasing intangibles - below market leases | ( | |||||||||||||
| Total purchase price | $ | |||||||||||||
Dispositions
The following table summarizes the Company’s dispositions during the nine months ended September 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) | Nine months ended September 30, 2025 | |||||||
| Number of buildings | ||||||||
| Building square feet (in millions) | ||||||||
| Proceeds from sale of rental property, net | $ | |||||||
| Net book value | $ | |||||||
| Gain on the sales of rental property, net | $ | |||||||
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The following table summarizes the results of operations for the three and nine months ended September 30, 2025 and 2024 for the buildings sold during the nine months ended September 30, 2025, which is included in the Company’s Consolidated Statements of Operations prior to the date of sale.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| Sales of rental property, net (dollars in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
Sold buildings contribution to net income(1) | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Exclusive of gain on the sales of rental property, net.
Assets Held for Sale
As of September 30, 2025, the related land, building and improvements, net, and deferred leasing intangibles, net, of approximately $0.5 million, $5.6 million, and $0 , respectively, for three buildings were classified as assets held for sale, net on the accompanying Consolidated Balance Sheets. Two of the buildings were sold subsequent to September 30, 2025 to a third-party. The remaining building is anticipated to be sold to a third-party within one year.
Variable Interest Entities
In conjunction with the acquisition of the Houston, Texas and Dayton, Ohio buildings noted above, the Company entered into Reverse 1031 Exchanges with a third-party intermediary, which, for a maximum of 180 days, allows the Company to defer for tax purposes gains on the sale of other properties identified and sold within this period. Until the earlier of the termination of the exchange agreements or 180 days after the acquisition dates, the third-party intermediary is the legal owner of the entities that own these properties. The agreements that govern the operations of these entities provide the Company with the power to direct the activities that most significantly impact the entities’ economic performance. These entities are deemed a variable interest entity (“VIE”) as of September 30, 2025 because it does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties. The Company has determined that it is the primary beneficiary of these VIEs as a result of having the power to direct the activities that most significantly impact its economic performance and the obligation to absorb losses, as well as the right to receive benefits that could be potentially significant to the VIEs. Accordingly, the Company has consolidated the entities and its operations as of the acquisition date. As of September 30, 2025, the VIEs had total assets, primarily consisting of real estate, and liabilities of approximately $101.8 million and $2.0 million, respectively.
Loss on Impairment
The following table summarizes the Company’s loss on impairment for assets held and used during the nine months ended September 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 | Change in estimated hold period | Discounted cash flows | (4) | $ | $ | |||||||||||||||||||||||||||
| Nine months ended September 30, 2025 | $ | |||||||||||||||||||||||||||||||
(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 nine months ended September 30, 2025 and 2024, the Company recognized a gain on involuntary conversion of approximately $0 , $3.6 million, $1.9 million, and $9.3 million, respectively, related to tornado damage to one of the Company’s buildings in December 2023.
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Deferred Leasing Intangibles
The following table summarizes the deferred leasing intangibles, net on the accompanying Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024.
| September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Deferred Leasing Intangibles (in thousands) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||||
| Above market leases | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Other intangible lease assets | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total deferred leasing intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Below market leases | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Total deferred leasing intangible liabilities | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
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 nine months ended September 30, 2025 and 2024.
| Three months ended September 30, | Nine months ended September 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 | $ | $ | $ | $ | ( | |||||||||||||||||||||
| Amortization expense related to other intangible lease assets | $ | $ | $ | $ | ||||||||||||||||||||||
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4. Debt
The following table summarizes the Company’s outstanding indebtedness, including borrowings under the Company’s unsecured credit facility, unsecured term loans, unsecured notes, and mortgage note as of September 30, 2025 and December 31, 2024.
| Indebtedness (dollars in thousands) | September 30, 2025 | December 31, 2024 | Interest Rate(1)(2) | Maturity Date | Prepayment Terms(3) | |||||||||||||||||||||||||||
| Unsecured credit facility: | ||||||||||||||||||||||||||||||||
Unsecured Credit Facility(4) | $ | $ | Term SOFR + | i | ||||||||||||||||||||||||||||
| Total unsecured credit facility | ||||||||||||||||||||||||||||||||
| Unsecured term loans: | ||||||||||||||||||||||||||||||||
| Unsecured Term Loan A | % | i | ||||||||||||||||||||||||||||||
| Unsecured Term Loan H | % | i | ||||||||||||||||||||||||||||||
| Unsecured Term Loan I | % | i | ||||||||||||||||||||||||||||||
Unsecured Term Loan F(5) | % | i | ||||||||||||||||||||||||||||||
Unsecured Term Loan G(6) | % | i | ||||||||||||||||||||||||||||||
| Total unsecured term loans | ||||||||||||||||||||||||||||||||
| Total unamortized deferred financing fees and debt issuance costs | ( | ( | ||||||||||||||||||||||||||||||
| Total carrying value unsecured term loans, net | ||||||||||||||||||||||||||||||||
| Unsecured notes: | ||||||||||||||||||||||||||||||||
| Series D Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series G Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series B Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series C Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series E Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series H Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series L Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series O Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series M Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series I Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series K Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series P Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series J Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series N Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Series Q Unsecured Notes | % | ii | ||||||||||||||||||||||||||||||
| Total unsecured notes | ||||||||||||||||||||||||||||||||
| Total unamortized deferred financing fees and debt issuance costs | ( | ( | ||||||||||||||||||||||||||||||
| Total carrying value unsecured notes, net | ||||||||||||||||||||||||||||||||
| Mortgage note (secured debt): | ||||||||||||||||||||||||||||||||
| United of Omaha Life Insurance Company | % | ii | ||||||||||||||||||||||||||||||
| Total mortgage note | ||||||||||||||||||||||||||||||||
| Unamortized fair market value discount | ( | ( | ||||||||||||||||||||||||||||||
| Total carrying value mortgage note, net | ||||||||||||||||||||||||||||||||
Total / weighted average interest rate(7) | $ | $ | % | |||||||||||||||||||||||||||||
(1)Interest rate as of September 30, 2025. At September 30, 2025, the one-month Term Secured Overnight Financing Rate (“Term SOFR”) and Daily Secured Overnight Financing Rate (“Daily SOFR”) was 4.1292 % and 4.2400 %, respectively. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts. The spread over the applicable rate for the Company’s unsecured credit facility and unsecured term loans is based on the Company’s debt rating and leverage ratio, as defined in the respective loan agreements.
(2)The unsecured credit facility has a stated interest rate of one-month Term SOFR plus a spread of 0.775 %. The Unsecured Term Loans A, G, H, and I have a stated interest rate of one-month Term SOFR plus a spread of 0.85 %. The Unsecured Term Loan F has a stated interest rate of Daily SOFR plus a spread of 0.85 %. All of the unsecured term loans have been swapped to a fixed rate, and such fixed rates inclusive of the spreads are presented in the table above. Effective February 5, 2026, the Unsecured Term Loan G will be swapped to a fixed rate inclusive of the spread of 3.94 %.
(3)Prepayment terms consist of (i) pre-payable with no penalty; and (ii) pre-payable with penalty.
(4)The capacity of the unsecured credit facility is $1.0 billion. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately $8.0 million and $10.1 million are included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, respectively. The initial maturity date is September 8, 2028, or such later date which may be extended pursuant to two six-month extension options exercisable by the Company in its discretion upon advance written notice.
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Exercise of each six-month option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension; (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions. The Company is required to pay a facility fee on the aggregate commitment amount (currently $1.0 billion) at a rate per annum of 0.1 % to 0.3 %, depending on the Company’s debt rating, as defined in the credit agreement. The facility fee is due and payable quarterly.
(5)The initial maturity date of the Unsecured Term Loan F is March 25, 2027, or such later date which may be extended pursuant to two -year extension options exercisable by the Company in its discretion upon advance written notice. Exercise of each one-year option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension; (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions.
(6)The initial maturity date of the Unsecured Term Loan G is March 15, 2030, or such later date which may be extended pursuant to a one-year extension option exercisable by the Company in its discretion upon advance written notice. Exercise of the option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension; (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee. The extension option is not subject to lender consent, assuming proper notice and satisfaction of the conditions.
(7)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $1,025.0 million of debt and is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts.
The aggregate undrawn nominal commitment on the unsecured credit facility as of September 30, 2025 was approximately $886.8 million, including issued letters of credit. The Company’s actual borrowing capacity at any given point in time may be less or restricted to a maximum amount based on the Company’s debt covenant compliance. Total accrued interest for the Company’s indebtedness was approximately $30.5 million and $13.7 million as of September 30, 2025 and December 31, 2024, respectively, and is included in accounts payable, accrued expenses and other liabilities on the accompanying Consolidated Balance Sheets.
The following table summarizes the costs included in interest expense related to the Company’s debt arrangements on the accompanying Consolidated Statement of Operations for the three and nine months ended September 30, 2025 and 2024.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| Costs Included in Interest Expense (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Amortization of deferred financing fees and debt issuance costs and fair market value discount | $ | $ | $ | $ | ||||||||||||||||||||||
| Facility, unused, and other fees | $ | $ | $ | $ | ||||||||||||||||||||||
Debt Activity
On September 15, 2025, the Company entered into a second amended and restated term loan agreement for the Unsecured Term Loan G to (i) extend the maturity date to March 15, 2030, with a one-year extension option, subject to certain conditions (discussed below), that would extend the maturity date to March 14, 2031 if exercised, (ii) remove the 0.10 % interest rate adjustment for SOFR loans, and (iii) provide that borrowings under the Unsecured Term Loan G will, at the Company’s election, bear interest based on a Base Rate, Term SOFR, or Daily Simple SOFR (each as defined in the loan agreement), plus an applicable spread based on the Company’s debt rating and leverage ratio (each as defined in the loan agreement). Other than the maturity date and interest rate provisions described above, the material terms of the Unsecured Term Loan G remain unchanged.
The Unsecured Term Loan G’s initial maturity date is March 15, 2030, or such later date which may be extended pursuant to a one-year extension option exercisable by the Company in its discretion upon advance written notice. Exercise of the option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension; (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee equal to 0.125 % of the outstanding amount on the effective day of each extension period. The extension option is not subject to lender consent, assuming proper notice and satisfaction of the conditions. Upon execution of the amended loan agreement for the Unsecured Term Loan G, the Company intended to exercise the extension option. In connection with the amended loan agreement, the Company incurred approximately $1.8 million in costs, which have been deferred, including the approximately $0.4 million accrued extension fee, and will amortize through the extended maturity date of March 14, 2031. The Company also incurred approximately $1.5 million of modification expenses which were recognized in debt extinguishment and modification expenses in the accompanying Consolidated Statements of Operations.
On September 15, 2025, the Company entered into amendments to the Unsecured Credit Facility, Unsecured Term Loan A, Unsecured Term Loan F, Unsecured Term Loan H, and Unsecured Term Loan I to remove the 0.10 % interest rate adjustment
14
for SOFR loans, and in the case of the Unsecured Term Loans A, H, and I, provide that borrowings under the respective term loans will, at the Company’s election, bear interest based on a Base Rate, Term SOFR, or Daily Simple SOFR (each as defined in the respective loan agreement). Other than the interest rate provisions described above, the material terms of the Unsecured Credit Facility and the Unsecured Term Loans A, F, H, and I remain unchanged.
On June 13, 2025, the Company redeemed in full at maturity the $75.0 million in aggregate principal amount of the Series G Unsecured Notes with a fixed interest rate of 4.10 %.
On April 15, 2025, the Company entered into a note purchase agreement for the private placement by the Operating Partnership of $350.0 million of senior unsecured notes (the “Series O Unsecured Notes”) maturing June 25, 2030 with a fixed annual interest rate of 5.50 %, $100.0 million of senior unsecured notes (the “Series P Unsecured Notes”) maturing June 25, 2033 with a fixed annual interest rate of 5.82 %, and $100.0 million of senior unsecured notes (the “Series Q Unsecured Notes”) maturing June 25, 2035 with a fixed annual interest rate of 5.99 %. On June 25, 2025, the Operating Partnership issued the Series O Unsecured Notes, Series P Unsecured Notes, and Series Q Unsecured Notes and received the proceeds therefrom. The Company and certain wholly owned subsidiaries of the Operating Partnership are guarantors of the unsecured notes.
On February 20, 2025, the Company redeemed in full at maturity the $100.0 million in aggregate principal amount of the Series D Unsecured Notes with a fixed interest rate of 4.32 %.
Financial Covenant Considerations
Fair Value of Debt
The following table summarizes the aggregate principal amount outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of September 30, 2025 and December 31, 2024.
| September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Indebtedness (in thousands) | Principal Outstanding | Fair Value | Principal Outstanding | Fair Value | ||||||||||||||||||||||
| Unsecured credit facility | $ | $ | $ | $ | ||||||||||||||||||||||
| Unsecured term loans | ||||||||||||||||||||||||||
| Unsecured notes | ||||||||||||||||||||||||||
| Mortgage note | ||||||||||||||||||||||||||
| Total principal amount | $ | $ | ||||||||||||||||||||||||
| Unamortized fair market value discount | ( | ( | ||||||||||||||||||||||||
| Total unamortized deferred financing fees and debt issuance costs | ( | ( | ||||||||||||||||||||||||
| Total carrying value | $ | $ | ||||||||||||||||||||||||
The applicable fair value guidance establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value of the Company’s debt is based on Level 3 inputs.
5. Derivative Financial Instruments
Risk Management Objective of Using Derivatives
The Company’s use of derivative instruments is limited to the utilization of interest rate swaps to manage interest rate risk exposure on existing and future liabilities and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and related costs associated with the Company’s operating and financial structure.
15
During the nine months ended September 30, 2025, the Company entered into four interest rate swaps with an aggregate notional value of $300.0 million which fix Daily SOFR at 3.09 % effective February 5, 2026 and mature on March 15, 2030, and were designated as cash flow hedges.
As of September 30, 2025, the Company had 21 interest rate swaps, all of which are used to hedge the variable cash flows associated with unsecured loans. All of the Company’s interest rate swaps convert the related loans’ Term SOFR or Daily SOFR components, as applicable, to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships are highly effective. The following table summarizes the fair value of the interest rate swaps as of September 30, 2025 and December 31, 2024.
| September 30, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Balance Sheet Line Item (in thousands) | Effective Notional Amount | Fair Value | Effective Notional Amount | Fair Value | ||||||||||||||||||||||
| Interest rate swaps-gross asset | $ | $ | $ | $ | ||||||||||||||||||||||
| Interest rate swaps-gross liability | $ | $ | ( | $ | $ | |||||||||||||||||||||
Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified to interest expense in the same periods during which the hedged transaction affects earnings.
Amounts reported in accumulated other comprehensive income related to derivatives designated as qualifying cash flow hedges will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. The Company estimates that approximately $10.9 million will be reclassified from accumulated other comprehensive income as a decrease to interest expense over the next 12 months.
The following table summarizes the effect of cash flow hedge accounting and the location of amounts related to the Company’s derivatives in the consolidated financial statements for the three and nine months ended September 30, 2025 and 2024.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| Effect of Cash Flow Hedge Accounting (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Income (loss) recognized in accumulated other comprehensive income on interest rate swaps | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||
| Income reclassified from accumulated other comprehensive income into income as interest expense | $ | $ | $ | $ | ||||||||||||||||||||||
| Total interest expense presented in the Consolidated Statements of Operations in which the effect of cash flow hedges are recorded | $ | $ | $ | $ | ||||||||||||||||||||||
Credit-risk-related Contingent Features
The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.
As of September 30, 2025, the Company had not breached the provisions of these agreements and had not posted any collateral related to these agreements. If the Company had breached any of these provisions, it would be required to settle its obligations under the agreements at their termination value.
Fair Value of Interest Rate Swaps
The Company’s valuation of the interest rate swaps is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs including interest rate curves. The fair values of interest rate swaps are determined by using the market standard methodology of netting the discounted future fixed
16
cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.
The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company or its counterparties. However, as of September 30, 2025 and December 31, 2024, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
The following table summarizes the Company’s financial instruments that were recorded at fair value on a recurring basis as of September 30, 2025 and December 31, 2024.
| Fair Value Measurements as of September 30, 2025 Using | ||||||||||||||||||||||||||
| Balance Sheet Line Item (in thousands) | Fair Value September 30, 2025 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
| Interest rate swaps-gross asset | $ | $ | $ | $ | ||||||||||||||||||||||
| Interest rate swaps-gross liability | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
| Fair Value Measurements as of December 31, 2024 Using | ||||||||||||||||||||||||||
| Balance Sheet Line Item (in thousands) | Fair Value December 31, 2024 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
| Interest rate swaps-gross asset | $ | $ | $ | $ | ||||||||||||||||||||||
6. Equity
Preferred Stock
The Company is authorized to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share. As of September 30, 2025 and December 31, 2024, there were no
Common Stock
The Company is authorized to issue up to 300,000,000 shares of common stock, par value $0.01 per share.
The following table summarizes the terms of the Company’s at-the-market (“ATM”) common stock offering program as of September 30, 2025. There was no activity for the ATM common stock offering program during the nine months ended September 30, 2025, except for the shares sold on a forward basis, as discussed below.
ATM Common Stock Offering Program(1) | Date | Maximum Aggregate Offering Price (in thousands) | Aggregate Available as of September 30, 2025 (in thousands) | |||||||||||||||||
| 2025 $750 million ATM | February 13, 2025 | $ | $ | |||||||||||||||||
(1)The 2022 $750 million ATM program was terminated on February 12, 2025.
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The following table summarizes the activity for shares sold on a forward basis under the ATM common stock offering program and shares settled during the three and nine months ended September 30, 2025. The Company initially does not receive any proceeds from the sales of shares on a forward basis. The Company may fully physically settle the applicable forward sale agreements on one or more dates prior to the respective scheduled maturity dates, at which point the Company would receive the proceeds net of certain costs; provided, however, the Company may elect to cash settle or net share settle such forward sale agreements at any time through the respective scheduled maturity dates, which is typically one year from the respective trade dates.
| Forward Sale Agreements | Shares | Gross Sales (in thousands) | Weighted Average Gross Sales Price Per Share | Weighted Average Net Sales Price Per Share | Sales Commissions Per Share(1) | |||||||||||||||||||||||||||
| Forward Sale Agreements Outstanding at December 31, 2024 | $ | |||||||||||||||||||||||||||||||
| New forward sale agreements | $ | $ | $ | |||||||||||||||||||||||||||||
| Forward sale agreements settled | ||||||||||||||||||||||||||||||||
| Forward Sale Agreements Outstanding at March 31, 2025 | ||||||||||||||||||||||||||||||||
| New forward sale agreements | $ | $ | $ | |||||||||||||||||||||||||||||
| Forward sale agreements settled | ||||||||||||||||||||||||||||||||
| Forward Sale Agreements Outstanding at June 30, 2025 | ||||||||||||||||||||||||||||||||
| New forward sale agreements | $ | $ | $ | |||||||||||||||||||||||||||||
| Forward sale agreements settled | ||||||||||||||||||||||||||||||||
| Forward Sale Agreements Outstanding at September 30, 2025 | $ | |||||||||||||||||||||||||||||||
(1)Upon a forward sale, the equity distribution agent typically earns a sales commission of 1 % of the gross sales price.
Restricted Stock-Based Compensation
The Company granted restricted shares of common stock under the 2011 Plan on January 7, 2025 to certain employees of the Company, which will vest over four years in equal installments on January 1 of each year beginning on January 1, 2026, subject to the recipient’s continued employment. The following table summarizes activity related to the Company’s unvested restricted shares of common stock during the nine months ended September 30, 2025.
| Unvested Restricted Shares of Common Stock | Shares | Weighted Average Grant Date Fair Value per Share | ||||||||||||
| Balance at December 31, 2024 | $ | |||||||||||||
| Granted | $ | |||||||||||||
Vested(1) | ( | $ | ||||||||||||
| Forfeited | ( | $ | ||||||||||||
| Balance at September 30, 2025 | $ | |||||||||||||
(1)The Company repurchased and retired 18,456 restricted shares of common stock that vested during the nine months ended September 30, 2025.
The unrecognized compensation expense associated with the Company’s restricted shares of common stock at September 30, 2025 was approximately $2.5 million and is expected to be recognized over a weighted average period of approximately 2.4 years.
The following table summarizes the fair value at vesting for the restricted shares of common stock that vested during the three and nine months ended September 30, 2025 and 2024.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| Vested Restricted Shares of Common Stock | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Vested restricted shares of common stock | ||||||||||||||||||||||||||
| Fair value of vested restricted shares of common stock (in thousands) | $ | $ | $ | $ | ||||||||||||||||||||||
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7. Noncontrolling Interest
Noncontrolling Interest in Operating Partnership
The following table summarizes the activity for noncontrolling interest in the Operating Partnership during the nine months ended September 30, 2025.
| Noncontrolling Interest | LTIP Units | Other Common Units | Total Noncontrolling Common Units | Noncontrolling Interest | ||||||||||||||||||||||
| Balance at December 31, 2024 | % | |||||||||||||||||||||||||
| Granted/Issued | N/A | |||||||||||||||||||||||||
| Forfeited | N/A | |||||||||||||||||||||||||
| Conversions from LTIP units to Other Common Units | ( | N/A | ||||||||||||||||||||||||
| Redemptions from Other Common Units to common stock | ( | ( | N/A | |||||||||||||||||||||||
| Balance at September 30, 2025 | % | |||||||||||||||||||||||||
LTIP Units
The Company granted LTIP units under the 2011 Plan on January 7, 2025 to non-employee, independent directors, which vest in equal quarterly installments over one year , with the first vesting date having been March 31, 2025, subject to the recipient’s continued service. The Company granted LTIP units under the 2011 Plan on January 7, 2025 to certain executive officers and senior employees of the Company, which will vest in equal quarterly installments over four years , with the first vesting date having been March 31, 2025, subject to the recipient’s continued employment. Refer to Note 8 for a discussion of the LTIP units granted on January 7, 2025 pursuant to the 2022 performance units.
The fair value of the LTIP units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the LTIP units are based on Level 3 inputs and non-recurring fair value measurements. The following table summarizes the assumptions used in valuing such LTIP units granted during the nine months ended September 30, 2025 (excluding the LTIP units granted pursuant to the 2022 performance units discussed in Note 8).
| LTIP Units | ||||||||
| Grant date | January 7, 2025 | |||||||
| Expected term (years) | ||||||||
| Expected stock price volatility | % | |||||||
| Expected dividend yield | % | |||||||
| Risk-free interest rate | % | |||||||
| Fair value of LTIP units at issuance (in thousands) | $ | |||||||
| LTIP units at issuance | ||||||||
| Fair value unit price per LTIP unit at issuance | $ | |||||||
The expected stock price volatility is based on a mix of the historical and implied volatilities of the Company and certain peer group companies. The expected dividend yield is based on the Company’s average historical dividend yield and the dividend yield as of the valuation date for each award. The risk-free interest rate is based on U.S. Treasury note yields matching a three-year time period.
The following table summarizes activity related to the Company’s unvested LTIP units during the nine months ended September 30, 2025.
| Unvested LTIP Units | LTIP Units | Weighted Average Grant Date Fair Value per Unit | ||||||||||||
| Balance at December 31, 2024 | $ | |||||||||||||
| Granted | $ | |||||||||||||
| Vested | ( | $ | ||||||||||||
| Forfeited | $ | |||||||||||||
| Balance at September 30, 2025 | $ | |||||||||||||
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The unrecognized compensation expense associated with the Company’s LTIP units at September 30, 2025 was approximately $5.9 million and is expected to be recognized over a weighted average period of approximately 2.4 years.
Noncontrolling Interest in Joint Ventures
At September 30, 2025, the Company held a 97.2 % interest in a joint venture located in Reno, Nevada, a 93.9 % interest in a joint venture located in Concord, North Carolina, and a 95.0 % interest in a joint venture located in Shepherdsville, Kentucky. The third-parties’ equity interest in these joint ventures, totaling approximately $3.7 million at September 30, 2025, is included in noncontrolling interest in joint ventures on the accompanying Consolidated Balance Sheets.
8. Equity Incentive Plan
On January 7, 2025, the compensation committee of the board of directors approved and the Company granted performance units under the 2011 Plan to the executive officers and certain key employees of the Company. The terms of the performance units granted on January 7, 2025 are substantially the same as the terms of the performance units granted in January 2024, except that the measuring period commenced on January 1, 2025 and ends on December 31, 2027.
The fair value of the performance units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units is based on Level 3 inputs and non-recurring fair value measurements. The performance unit equity compensation expense is recognized ratably from the grant date into earnings over the vesting period. The following table summarizes the assumptions used in valuing the performance units granted during the nine months ended September 30, 2025.
| Performance Units | ||||||||
| Grant date | January 7, 2025 | |||||||
| Expected stock price volatility | % | |||||||
| Expected dividend yield | % | |||||||
| Risk-free interest rate | % | |||||||
| Fair value of performance units grant (in thousands) | $ | |||||||
The expected stock price volatility is based on a mix of the historical and implied volatilities of the Company and certain peer group companies. The expected dividend yield is based on the Company’s average historical dividend yield and the dividend yield as of the valuation date for each award. The risk-free interest rate is based on U.S. Treasury note yields matching the three-year performance period.
On December 31, 2024, the measuring period for the 2022 performance units concluded, and it was determined that the Company’s total stockholder return exceeded the threshold percentage and return hurdle. The following table summarizes the issuances of LTIP units and shares of common stock approved by the compensation committee of the board of directors and issued upon the settlement of the 2022 performance units at the conclusion of the applicable measuring period during the nine months ended September 30, 2025.
| Settlement of Performance Units in LTIP Units or Shares of Common Stock | 2022 Performance Units | |||||||
| Measuring period conclusion date | December 31, 2024 | |||||||
| Issuance date | January 7, 2025 | |||||||
| Vested LTIP units | ||||||||
| Vested shares of common stock | ||||||||
| Shares of common stock repurchased and retired | ||||||||
The unrecognized compensation expense associated with the Company’s performance units at September 30, 2025 was approximately $8.3 million and is expected to be recognized over a weighted average period of approximately 1.8 years.
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Non-cash Compensation Expense
The following table summarizes the amount recorded in general and administrative expenses in the accompanying Consolidated Statements of Operations for the amortization of restricted shares of common stock, LTIP units, performance units, and the Company’s director compensation for the three and nine months ended September 30, 2025 and 2024.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| Non-Cash Compensation Expense (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Restricted shares of common stock | $ | $ | $ | $ | ||||||||||||||||||||||
| LTIP units | ||||||||||||||||||||||||||
| Performance units | ||||||||||||||||||||||||||
Director compensation(1) | ||||||||||||||||||||||||||
| Total non-cash compensation expense | $ | $ | $ | $ | ||||||||||||||||||||||
(1)All of the Company’s independent directors elected to receive shares of common stock in lieu of cash for their service during the three and nine months ended September 30, 2025 and 2024. The number of shares of common stock granted was calculated based on the trailing day average common stock price on the third business day preceding the grant date.
9. 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 | $ | $ | $ | $ | ||||||||||||||||||||||
| Variable lease payments | ||||||||||||||||||||||||||
| Straight-line rental income | ||||||||||||||||||||||||||
| Net increase (decrease) to rental income related to above and below market lease amortization | ( | |||||||||||||||||||||||||
| Total rental income | $ | $ | $ | $ | ||||||||||||||||||||||
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 for ten 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, with one 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.
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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) | ||||||||||||||
| Weighted average discount rate | % | % | ||||||||||||
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 | $ | $ | $ | $ | ||||||||||||||||||||||
| Operating lease cost included in general and administrative expense attributable to corporate office leases | ||||||||||||||||||||||||||
| Total operating lease cost | $ | $ | $ | $ | ||||||||||||||||||||||
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) | $ | $ | ||||||||||||
| Right-of-use assets obtained in exchange for new lease liabilities | $ | $ | ||||||||||||
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 | $ | |||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Thereafter | ||||||||
| Total lease payments | ||||||||
| Less: Imputed interest | ( | |||||||
| Present value of operating lease liabilities | $ | |||||||
(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.
10. Earnings Per Share
During the three and nine months ended September 30, 2025 and 2024, there were 112,766 , 122,137 , 113,971 and 123,701 of unvested restricted shares of common stock (on a weighted average basis), respectively, that were considered participating securities for the purposes of computing earnings per share.
22
The following table reconciles the numerators and denominators in the computation of basic and diluted earnings per share of common stock for the three and nine months ended September 30, 2025 and 2024.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| Earnings Per Share (in thousands, except per share data) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Numerator | ||||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
| Denominator | ||||||||||||||||||||||||||
| Weighted average common shares outstanding — basic | ||||||||||||||||||||||||||
Effect of dilutive securities(1) | ||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||
| Shares issuable under forward sale agreements | ||||||||||||||||||||||||||
| Weighted average common shares outstanding — diluted | ||||||||||||||||||||||||||
| Net income per share — basic and diluted | ||||||||||||||||||||||||||
| Net income per share attributable to common stockholders — basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Net income per share attributable to common stockholders — diluted | $ | $ | $ | $ | ||||||||||||||||||||||
11. Commitments and Contingencies
The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance subject to deductible requirements. Management believes that the ultimate settlement of these actions will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
12. Subsequent Events
There were no recognized or non-recognized subsequent events.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion with the financial statements and related notes included elsewhere in Item 1 of this report and the audited financial statements and related notes thereto included in our most recent Annual Report on Form 10-K.
As used herein, except where the context otherwise requires, “Company,” “we,” “our” and “us,” refer to STAG Industrial, Inc. and our consolidated subsidiaries and partnerships, including our operating partnership, STAG Industrial Operating Partnership, L.P. (the “Operating Partnership”).
Forward-Looking Statements
This report contains “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). You can identify forward-looking statements by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. Forward-looking statements in this report include, among others, statements about our future financial condition, results of operations, capitalization rates on future acquisitions, our business strategy and objectives, including our acquisition strategy, occupancy and leasing rates and trends, and expected liquidity needs and sources (including capital expenditures and the ability to obtain financing or raise capital). Our forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by our forward-looking statements are reasonable, we can give no assurance that our plans, intentions, expectations, strategies or prospects will be attained or achieved and you should not place undue reliance on these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and may be affected by a variety of risks and factors including, without limitation:
•the factors included in our Annual Report on Form 10-K for the year ended December 31, 2024, as updated elsewhere in this report, including those set forth under the headings “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations;”
•the risk of global or national recessions and international, national, regional, and local economic conditions;
•decreased economic activity due to fluctuations in trade policies, tariffs and related government actions;
•our ability to raise equity capital on attractive terms;
•the competitive environment in which we operate;
•real estate risks, including fluctuations in real estate values, the general economic climate in local markets and competition for tenants in such markets, and the repurposing or redevelopment of retail properties into industrial properties (in part or whole);
•decreased rental rates or increased vacancy rates;
•the general level of interest rates and currencies;
•potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants;
•acquisition risks, including our ability to identify and complete accretive acquisitions and/or failure of such acquisitions to perform in accordance with projections;
•the timing of acquisitions and dispositions;
•technological developments, particularly those affecting supply chains and logistics;
•potential natural disasters, epidemics, pandemics or outbreak of infectious disease, such as the novel coronavirus disease, and other potentially catastrophic events such as acts of war and/or terrorism (including the ongoing conflict between Ukraine and Russia and the Israel-Hamas war, the risk of such conflicts widening and the related impact on macroeconomic conditions as a result of such conflicts);
•renegotiation or termination of trade agreements or treaties among the United States and foreign countries or increases to U.S. tariffs on foreign goods or to foreign tariffs on U.S. goods;
•potential changes in the law or governmental regulations and interpretations of those laws and regulations, including changes in real estate and zoning laws or real estate investment trust (“REIT”) or corporate income tax laws, and potential increases in real property tax rates;
•financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
•credit risk in the event of non-performance by the counterparties to the interest rate swaps and revolving and unfunded debt;
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•how and when pending forward equity sales may settle;
•lack of or insufficient amounts of insurance;
•our ability to maintain our qualification as a REIT;
•our ability to retain key personnel;
•litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and
•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us.
Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Certain Definitions
In this report:
“Cash Rent Change” means the percentage change in the base rent of the lease commenced during the period compared to the base rent of the Comparable Lease for assets included in the Operating Portfolio. The calculation compares the first base rent payment due after the lease commencement date compared to the base rent of the last monthly payment due prior to the termination of the lease, excluding holdover rent. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses.
“Comparable Lease” means a lease in the same space with a similar lease structure as compared to the previous in-place lease, excluding new leases for space that was not occupied under our ownership.
“GAAP” means generally accepted accounting principles in the United States of America.
“New Lease” means a lease that is signed for an initial term equal to or greater than 12 months for any vacant space, including a lease signed by a new tenant or an existing tenant that is expanding into new (additional) space.
“Occupancy rate” means the percentage of total leasable square footage for which either revenue recognition has commenced in accordance with GAAP or the lease term has commenced as of the close of the reporting period, whichever occurs earlier.
“Operating Portfolio” means all buildings that were acquired stabilized or have achieved Stabilization. The Operating Portfolio excludes non-core flex/office buildings, buildings contained in the Value Add Portfolio, and buildings classified as held for sale.
“Renewal Lease” means a lease signed by an existing tenant to extend the term for 12 months or more, including (i) a renewal of the same space as the current lease at lease expiration, (ii) a renewal of only a portion of the current space at lease expiration, or (iii) an early renewal or workout, which ultimately does extend the original term for 12 months or more.
“Straight-line Rent Change” means the percentage change in the average monthly base rent over the term of the lease that commenced during the period compared to the Comparable Lease for assets included in the Operating Portfolio. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses, and this calculation excludes the impact of any holdover rent.
“Stabilization” for properties under development or being redeveloped means the earlier of achieving 90% occupancy or 12 months after completion. With respect to properties acquired and immediately added to the Value Add Portfolio, (i) if acquired with less than 75% occupancy as of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy or 12 months from the acquisition date; or (ii) if acquired and will be less than 75% occupied due to known move-outs within two years of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy after the known move-outs have occurred or 12 months after the known move-outs have occurred.
“Total annualized base rental revenue” means the monthly base cash rent for the applicable property or properties as of September 30, 2025 (which is different from rent calculated in accordance with GAAP for purposes of our financial statements), multiplied by 12. If a tenant is in a free rent period as of September 30, 2025, the annualized rent is calculated based on the first contractual monthly base rent amount multiplied by 12.
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“Value Add Portfolio” means our properties that meet any of the following criteria: (i) less than 75% occupied as of the acquisition date (ii) will be less than 75% occupied due to known move-outs within two years of the acquisition date; (iii) out of service with significant physical renovation of the asset; or (iv) development.
“Weighted Average Lease Term” means the contractual lease term in years, assuming that tenants exercise no renewal options, purchase options, or early termination rights, as of the lease start date weighted by square footage. Weighted Average Lease Term related to acquired assets reflects the remaining lease term in years as of the acquisition date weighted by square footage.
Overview
We are a REIT focused on the acquisition, ownership, development, and operation of industrial properties throughout the United States. Our platform is designed to (i) identify properties for acquisition that offer relative value across CBRE-EA Tier 1 industrial property types and tenants through the principled application of our proprietary risk assessment model, (ii) provide growth through sophisticated industrial operation and an attractive opportunity set, and (iii) capitalize our business appropriately given the characteristics of our assets. We are a Maryland corporation and our common stock is publicly traded on the New York Stock Exchange under the symbol “STAG.”
We are organized and conduct our operations to maintain our qualification as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), and generally are not subject to federal income tax to the extent we currently distribute our income to our stockholders and maintain our qualification as a REIT. We remain subject to state and local taxes on our income and property and to U.S. federal income and excise taxes on our undistributed income.
Factors That May Influence Future Results of Operations
Our ability to increase revenues or cash flow will depend in part on our (i) external growth, specifically acquisition activity, and (ii) internal growth, specifically occupancy and rental rates on our portfolio. A variety of other factors, including those noted below, also affect our future results of operations.
Outlook
The industrial real estate business is affected by general macro-economic trends including recent changes in interest rates, inflation, trade policies, fiscal policy, and geopolitical tensions. These factors are key drivers of financial market volatility and raise concerns about a slowing global economy. In 2025, U.S. real gross domestic product (“GDP”) growth declined 0.5% in the first quarter and increased 3.8% in the second quarter. Labor conditions are slowing, with unemployment rising to 4.3% as of August 2025 compared to 4.1% at the end of June 2025. In September 2025, following weaker employment data, the Federal Open Market Committee lowered the federal funds rate range by 25 basis points to a target range of 4.00-4.25%. Going forward, due to the U.S.’s recent implementation of extraordinary tariffs, the general consensus among economists is a higher risk of recession or stagflation. While the trade policies and macro-economic conditions continue to evolve and could result in tighter credit conditions, weakening tenant cash flows, and rising vacancy rates, we believe we will continue to benefit from having a well-diversified portfolio across various markets, tenant industries, and lease terms. Additionally, we believe that recent moves toward more regional supply chains and geopolitical tensions have accelerated a number of trends that positively impact U.S. industrial demand. However, given the current uncertainty and events discussed above, our acquisition activity has continued to slow since 2022 relative to our historical acquisition pace.
On the other hand, demographic/consumer trends, geopolitical uncertainty and recent legislation supporting U.S. infrastructure may accelerate trends that support stronger long term demand for industrial space, including:
•the continued growth of e-commerce (as compared to the traditional retail store distribution model) and the concomitant demand by e-commerce industry participants for well-located, functional distribution space;
•the increasing attractiveness of the United States as a manufacturing and distribution location because of the size of the U.S. consumer market, an increase in overseas labor costs, policies that promote domestic and regional manufacturing “onshoring and nearshoring”, a desire for greater supply chain resilience and redundancy which is driving higher inventory to sales ratios and greater domestic warehouse demand over the long term (i.e. the shortening and fattening of the supply chain); and
•the general quality of the transportation infrastructure in the United States.
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Overall, demand across the industrial market is moderating relative to recent peaks. Vacancy and availability rates, while rising, remain near historical standards in many markets. The supply pipeline remains robust, albeit smaller and more notably concentrated in very large warehouses. Construction starts continue to decline as a result of both moderating demand and volatile capital markets.
Our portfolio is diversified across geographies, tenant industries and lease terms. We believe that the current economic environment, while volatile, provides us with an opportunity to demonstrate the strength of our portfolio arising from its diversification. Specifically, we believe our portfolio should benefit from competitive rental rates and strong occupancy. In addition to our diversified portfolio, we believe that certain characteristics of our business and capital structure should position us well in an uncertain environment, including our minimal floating rate debt exposure (taking into account our hedging activities), strong banking relationships and liquidity, and access to capital.
Conditions in Our Markets
The buildings in our portfolio are located in markets throughout the United States. Positive or negative changes in economic or other conditions, new supply, adverse weather conditions, natural disasters, epidemics, and other factors in these markets may affect our overall performance.
Rental Income
We receive income primarily in the form of rental income from the tenants who occupy our buildings. The amount of rental income generated by the buildings in our portfolio depends principally on occupancy and rental rates.
Future economic downturns or regional downturns affecting our submarkets that impair our ability to renew or re-lease space and the ability of our tenants to fulfill their lease commitments, as in the case of tenant bankruptcies, could adversely affect our ability to maintain or increase rental rates at our buildings. Our ability to lease our properties and the attendant rental rate is dependent upon, among other things, (i) the overall economy, (ii) the supply/demand dynamic in our markets, (iii) the quality of our properties, including age, clear height, and configuration, and (iv) our tenants’ ability to meet their contractual obligations to us.
The following table summarizes the Operating Portfolio leases that commenced during the three and nine months ended September 30, 2025. Any rental concessions in such leases are accounted for on a straight-line basis over the term of the lease.
| Operating Portfolio | Square Feet | Cash Basis Rent Per Square Foot | SL Rent Per Square Foot | Total Costs Per Square Foot(1) | Cash Rent Change | SL Rent Change | Weighted Average Lease Term (years) | Rental Concessions per Square Foot(2) | ||||||||||||||||||||||||||||||||||||||||||
| Three months ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| New Leases | 596,845 | $ | 6.98 | $ | 7.43 | $ | 3.71 | 35.0 | % | 49.5 | % | 5.8 | $ | 2.49 | ||||||||||||||||||||||||||||||||||||
| Renewal Leases | 1,557,344 | $ | 6.35 | $ | 6.74 | $ | 1.56 | 24.2 | % | 37.1 | % | 4.6 | $ | 0.26 | ||||||||||||||||||||||||||||||||||||
| Total/weighted average | 2,154,189 | $ | 6.53 | $ | 6.93 | $ | 2.16 | 27.2 | % | 40.6 | % | 4.9 | $ | 0.88 | ||||||||||||||||||||||||||||||||||||
| Nine months ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| New Leases | 2,480,512 | $ | 6.25 | $ | 6.52 | $ | 2.74 | 35.0 | % | 48.9 | % | 5.3 | $ | 1.09 | ||||||||||||||||||||||||||||||||||||
| Renewal Leases | 8,852,590 | $ | 6.08 | $ | 6.47 | $ | 1.59 | 24.0 | % | 39.5 | % | 4.9 | $ | 0.18 | ||||||||||||||||||||||||||||||||||||
| Total/weighted average | 11,333,102 | $ | 6.12 | $ | 6.48 | $ | 1.84 | 26.3 | % | 41.4 | % | 5.0 | $ | 0.38 | ||||||||||||||||||||||||||||||||||||
(1)“Total Costs” means the costs for improvements of vacant and renewal spaces, as well as the contingent-based legal fees and commissions for leasing transactions. Total Costs per square foot represent the total costs expected to be incurred on the leases that commenced during the period and do not reflect actual expenditures for the period.
(2)Represents the total rental concessions for the entire lease term.
Additionally, for the three and nine months ended September 30, 2025, leases commenced totaling 284,357 and 1,995,608, respectively, related to the Value Add Portfolio and first generation leasing. These leases are excluded from the Operating Portfolio statistics above.
Property Operating Expenses
Our property operating expenses generally consist of utilities, real estate taxes, management fees, insurance, and site repair and maintenance costs. For the majority of our tenants, our property operating expenses are controlled, in part, by the triple net provisions in tenant leases. In our triple net leases, the tenant is responsible for all aspects of and costs related to the building and its operation during the lease term, including utilities, taxes, insurance, and maintenance costs, but typically excluding roof
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and building structure. However, we also have modified gross leases and gross leases, as well as leases with expense caps, in our building portfolio, which may require us to absorb certain building related expenses of our tenants. In our modified gross leases, we are responsible for certain building related expenses during the lease term, but most of the expenses are passed through to the tenant for reimbursement to us. In our gross leases, we are responsible for all expenses related to the building and its operation during the lease term. Our overall performance will be affected by the extent to which we are able to pass-through property operating expenses to our tenants.
Scheduled Lease Expirations
Our ability to re-lease space subject to expiring leases will impact our results of operations and is affected by economic and competitive conditions in our markets and by the desirability of our individual buildings. Leases that comprise approximately 9.2% of our total annualized base rental revenue will expire during the period from October 1, 2025 to September 30, 2026, excluding month-to-month leases. We assume, based upon internal renewal probability estimates, that some of our tenants will renew and others will vacate and the associated space will be re-let subject to downtime assumptions. Using the aforementioned assumptions, we expect that the rental rates on the respective new leases will be greater than the rates under existing leases expiring during the period October 1, 2025 to September 30, 2026, thereby resulting in an increase in revenue from the same space.
The following table summarizes lease expirations for leases in place as of September 30, 2025, plus available space, for each of the ten calendar years beginning with 2025 and thereafter in our portfolio. The information in the table assumes that tenants do not exercise renewal options or early termination rights.
| Lease Expiration Year | Number of Leases Expiring | Total Rentable Square Feet | Percentage of Total Occupied Square Feet | Total Annualized Base Rental Revenue (in thousands) | Percentage of Total Annualized Base Rental Revenue | |||||||||||||||||||||||||||
| Available | — | 5,022,436 | — | % | $ | — | — | % | ||||||||||||||||||||||||
| Month-to-month leases | 1 | 18,143 | — | % | 120 | — | % | |||||||||||||||||||||||||
Remainder of 2025(1) | 11 | 945,311 | 0.8 | % | 5,942 | 0.9 | % | |||||||||||||||||||||||||
| 2026 | 105 | 11,940,563 | 10.5 | % | 70,509 | 10.5 | % | |||||||||||||||||||||||||
| 2027 | 134 | 17,782,149 | 15.6 | % | 100,707 | 15.0 | % | |||||||||||||||||||||||||
| 2028 | 123 | 15,034,973 | 13.2 | % | 86,862 | 13.0 | % | |||||||||||||||||||||||||
| 2029 | 109 | 17,483,234 | 15.3 | % | 102,314 | 15.3 | % | |||||||||||||||||||||||||
| 2030 | 101 | 14,402,447 | 12.6 | % | 90,981 | 13.6 | % | |||||||||||||||||||||||||
| 2031 | 80 | 13,134,806 | 11.5 | % | 72,462 | 10.8 | % | |||||||||||||||||||||||||
| 2032 | 33 | 5,725,323 | 5.0 | % | 36,405 | 5.4 | % | |||||||||||||||||||||||||
| 2033 | 22 | 3,474,243 | 3.0 | % | 20,267 | 3.0 | % | |||||||||||||||||||||||||
| 2034 | 14 | 3,459,133 | 3.0 | % | 24,470 | 3.6 | % | |||||||||||||||||||||||||
| Thereafter | 38 | 10,820,536 | 9.5 | % | 59,361 | 8.9 | % | |||||||||||||||||||||||||
| Total | 771 | 119,243,297 | 100.0 | % | $ | 670,400 | 100.0 | % | ||||||||||||||||||||||||
(1)Leases previously scheduled to expire in 2025, totaling approximately 13.1 million square feet, have been amended to extend their lease expiration date as of September 30, 2025. These leases are excluded from 2025 expirations and are now reflected in the new year of expiration.
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Portfolio Acquisitions
The following table summarizes our acquisitions during the three and nine months ended September 30, 2025.
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 | |||||||||||||||||||||||
Houston, TX(3) | September 15, 2025 | 462,250 | 1 | 47,485 | ||||||||||||||||||||||
Dayton, OH(2) | September 23, 2025 | — | — | 2,944 | ||||||||||||||||||||||
Dayton, OH(3) | September 23, 2025 | 524,160 | 1 | 54,043 | ||||||||||||||||||||||
| Three months ended September 30, 2025 | 986,410 | 2 | 104,472 | |||||||||||||||||||||||
| Nine months ended September 30, 2025 | 1,563,174 | 6 | $ | 171,653 | ||||||||||||||||||||||
(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) We acquired a vacant land parcel.
(3) These buildings were acquired through reverse like-kind exchange agreements pursuant to Section 1031 of the Code.
Portfolio Dispositions
During the nine months ended September 30, 2025, we sold three buildings comprised of approximately 0.6 million rentable square feet with a net book value of approximately $20.5 million to third parties. Net proceeds from the sales of rental property were approximately $78.3 million and we recognized the full gain on the sales of rental property, net, of approximately $57.8 million for the nine months ended September 30, 2025.
Top Markets
The following table summarizes information about the 20 largest markets in our portfolio based on total annualized base rental revenue as of September 30, 2025.
Top 20 Markets(1) | % of Total Annualized Base Rental Revenue | |||||||
| Chicago, IL | 8.1 | % | ||||||
| Greenville, SC | 5.8 | % | ||||||
| Minneapolis, MN | 4.3 | % | ||||||
| Pittsburgh, PA | 3.9 | % | ||||||
| Columbus, OH | 3.7 | % | ||||||
| Detroit, MI | 3.6 | % | ||||||
| South Central, PA | 3.3 | % | ||||||
| Philadelphia, PA | 3.0 | % | ||||||
| Houston, TX | 2.5 | % | ||||||
| El Paso, TX | 2.5 | % | ||||||
| Boston, MA | 2.4 | % | ||||||
| Milwaukee, WI | 2.1 | % | ||||||
| Kansas City, MO | 2.1 | % | ||||||
| Charlotte, NC | 2.0 | % | ||||||
| Sacramento, CA | 1.9 | % | ||||||
| Indianapolis, IN | 1.9 | % | ||||||
| Cleveland, OH | 1.8 | % | ||||||
| Cincinnati, OH | 1.7 | % | ||||||
| Raleigh, NC | 1.4 | % | ||||||
| Columbia, SC | 1.3 | % | ||||||
| Total | 59.3 | % | ||||||
(1) Market classification based on CBRE-EA industrial market geographies.
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Top Industries
The following table summarizes information about the 20 largest tenant industries in our portfolio based on total annualized base rental revenue as of September 30, 2025.
Top 20 Tenant Industries(1) | % of Total Annualized Base Rental Revenue | |||||||
| Air Freight & Logistics | 10.8 | % | ||||||
| Containers & Packaging | 7.4 | % | ||||||
| Machinery | 6.7 | % | ||||||
| Automobile Components | 6.0 | % | ||||||
| Commercial Services & Supplies | 5.9 | % | ||||||
| Trading Companies & Distribution (Industrial Goods) | 5.2 | % | ||||||
| Distributors (Consumer Goods) | 4.7 | % | ||||||
| Building Products | 4.6 | % | ||||||
| Broadline Retail | 3.6 | % | ||||||
| Consumer Staples Distribution | 3.6 | % | ||||||
| Specialty Retail | 2.9 | % | ||||||
| Household Durables | 2.9 | % | ||||||
| Media | 2.8 | % | ||||||
| Food Products | 2.6 | % | ||||||
| Electrical Equipment | 2.5 | % | ||||||
| Beverages | 2.4 | % | ||||||
| Electronic Equip, Instruments | 2.0 | % | ||||||
| Chemicals | 1.9 | % | ||||||
| Ground Transportation | 1.8 | % | ||||||
| Construction & Engineering | 1.7 | % | ||||||
| Total | 82.0 | % | ||||||
(1) Industry classification based on Global Industry Classification Standard methodology.
Top Tenants
The following table summarizes information about the 20 largest tenants in our portfolio based on total annualized base rental revenue as of September 30, 2025.
Top 20 Tenants(1) | Number of Leases | % of Total Annualized Base Rental Revenue | ||||||||||||
| Amazon | 7 | 2.8 | % | |||||||||||
| Schneider Electric USA, Inc. | 3 | 1.0 | % | |||||||||||
| American Tire Distributors, Inc. | 7 | 0.9 | % | |||||||||||
| Soho Studio, LLC | 1 | 0.9 | % | |||||||||||
| International Paper Company | 4 | 0.8 | % | |||||||||||
| DSV Solutions, LLC | 4 | 0.8 | % | |||||||||||
| CHEP USA | 6 | 0.8 | % | |||||||||||
| The Coca-Cola Company | 3 | 0.7 | % | |||||||||||
| Tempur Sealy International, Inc. | 2 | 0.7 | % | |||||||||||
| Iron Mountain Information Management | 6 | 0.7 | % | |||||||||||
| Hachette Book Group, Inc. | 1 | 0.7 | % | |||||||||||
| Penguin Random House, LLC | 1 | 0.7 | % | |||||||||||
| Kenco Logistic Services, LLC | 3 | 0.6 | % | |||||||||||
| Penske Truck Leasing Co. LP | 3 | 0.6 | % | |||||||||||
| WestRock Company | 6 | 0.6 | % | |||||||||||
| FedEx Corporation | 4 | 0.6 | % | |||||||||||
| DHL Supply Chain | 4 | 0.6 | % | |||||||||||
| Lippert Component Manufacturing | 4 | 0.6 | % | |||||||||||
| Carolina Beverage Group | 3 | 0.6 | % | |||||||||||
| AFL Telecommunications LLC | 2 | 0.6 | % | |||||||||||
| Total | 74 | 16.3 | % | |||||||||||
(1) Includes tenants, guarantors, and/or non-guarantor parents.
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Critical Accounting Policies
See “Critical Accounting Policies” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of our critical accounting policies and estimates.
Results of Operations
The following discussion of the results of our same store (as defined below) net operating income (“NOI”) should be read in conjunction with our consolidated financial statements included in this report. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below. Same store results are useful to investors in evaluating our performance because they provide information relating to changes in building-level operating performance without taking into account the effects of acquisitions or dispositions. We encourage the reader to not only look at our same store results, but also our total portfolio results, due to historic and future growth.
We define same store properties as properties that were in the Operating Portfolio for the entirety of the comparative periods presented. The results for same store properties exclude termination fees, solar income, and other income adjustments. Same store properties exclude Operating Portfolio properties with expansions placed into service on or after January 1, 2024. On September 30, 2025, we owned 543 industrial buildings consisting of approximately 107.6 million square feet and representing approximately 90.2% of our total portfolio, that are considered our same store portfolio in the analysis below. Same store occupancy decreased approximately 1.0% to 96.9% as of September 30, 2025 compared to 97.9% as of September 30, 2024.
Comparison of the three months ended September 30, 2025 to the three months ended September 30, 2024
The following table summarizes selected operating information for our same store portfolio and our total portfolio for the three months ended September 30, 2025 and 2024 (dollars in thousands). This table includes a reconciliation from our same store portfolio to our total portfolio by also providing information for the three months ended September 30, 2025 and 2024 with respect to the buildings acquired and sold on or after January 1, 2024, Operating Portfolio buildings with expansions placed into service or transferred from the Value Add Portfolio to the Operating Portfolio after January 1, 2024, Value Add buildings, and buildings classified as held for sale.
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| Same Store Portfolio | Acquisitions/Dispositions | Other | Total Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended September 30, | Change | Three months ended September 30, | Three months ended September 30, | Three months ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ | % | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating revenue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 186,296 | $ | 178,350 | $ | 7,946 | 4.5 | % | $ | 16,242 | $ | 7,261 | $ | 7,457 | $ | 4,675 | $ | 209,995 | $ | 190,286 | $ | 19,709 | 10.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other income | 314 | 100 | 214 | 214.0 | % | 401 | — | 411 | 353 | 1,126 | 453 | 673 | 148.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total operating revenue | 186,610 | 178,450 | 8,160 | 4.6 | % | 16,643 | 7,261 | 7,868 | 5,028 | 211,121 | 190,739 | 20,382 | 10.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property | 36,942 | 35,314 | 1,628 | 4.6 | % | 3,468 | 2,181 | 1,758 | 520 | 42,168 | 38,015 | 4,153 | 10.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net operating income(1) | $ | 149,668 | $ | 143,136 | $ | 6,532 | 4.6 | % | $ | 13,175 | $ | 5,080 | $ | 6,110 | $ | 4,508 | 168,953 | 152,724 | 16,229 | 10.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 12,173 | 11,978 | 195 | 1.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 75,963 | 72,506 | 3,457 | 4.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses | 563 | 545 | 18 | 3.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total other expenses | 88,699 | 85,029 | 3,670 | 4.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total expenses | 130,867 | 123,044 | 7,823 | 6.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest and other income | 372 | 14 | 358 | 2,557.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (31,670) | (28,705) | (2,965) | 10.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt extinguishment and modification expenses | (1,503) | (36) | (1,467) | 4,075.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on involuntary conversion | — | 3,568 | (3,568) | (100.0) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on the sales of rental property, net | 2,196 | 195 | 2,001 | 1,026.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total other income (expense) | (30,605) | (24,964) | (5,641) | 22.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 49,649 | $ | 42,731 | $ | 6,918 | 16.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below.
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Net Income
Net income for our total portfolio increased by approximately $6.9 million, or 16.2%, to approximately $49.6 million for the three months ended September 30, 2025 compared to approximately $42.7 million for the three months ended September 30, 2024.
Same Store Total Operating Revenue
Same store total operating revenue consists primarily of rental income from (i) fixed lease payments, variable lease payments, straight-line rental income, and above and below market lease amortization from our properties (“lease income”), and (ii) other tenant billings for insurance, real estate taxes and certain other expenses (“other billings”).
For a detailed reconciliation of our same store total operating revenue to net income, see the table above.
Same store rental income, which includes lease income and other billings as discussed below, increased by approximately $7.9 million, or 4.5%, to approximately $186.3 million for the three months ended September 30, 2025 compared to approximately $178.4 million for the three months ended September 30, 2024.
Same store lease income increased by approximately $7.0 million, or 4.8%, to approximately $152.4 million for the three months ended September 30, 2025 compared to approximately $145.4 million for the three months ended September 30, 2024. The increase was primarily due to the execution of new leases and lease renewals with existing tenants of approximately $10.5 million. This increase was partially offset by the reduction of base rent of approximately $2.0 million due to tenant vacancies. Additionally, there was a decrease in same store lease income which was primarily attributable to management’s evaluation of operating leases to determine the probability of collecting substantially all of the lessee’s remaining lease payments under the lease term. During the three months ended September 30, 2025, same store lease income decreased approximately $1.5 million due to certain tenants converting from the accrual basis of accounting to the cash basis of accounting.
Same store other billings increased by approximately $0.9 million, or 2.7%, to approximately $33.9 million for the three months ended September 30, 2025 compared to approximately $33.0 million for the three months ended September 30, 2024. The increase was attributable to an increase of approximately $0.6 million in other expense reimbursements which was primarily due to an increase in corresponding expenses. Additionally, there was an increase of approximately $0.3 million due to an increase in real estate taxes levied by the taxing authority and vacancy of previously occupied buildings.
Same Store Operating Expenses
Same store operating expenses consist primarily of property operating expenses and real estate taxes and insurance.
For a detailed reconciliation of our same store operating expenses to net income, see the table above.
Total same store property operating expenses increased by approximately $1.6 million, or 4.6%, to approximately $36.9 million for the three months ended September 30, 2025 compared to approximately $35.3 million for the three months ended September 30, 2024. This increase was primarily due to increases in repairs and maintenance, tax expense, utility expense, and other expenses of approximately $1.2 million, $0.4 million, $0.2 million, and $0.1 million, respectively. These increases were partially offset by a reduction to insurance expense of approximately $0.3 million.
Acquisitions and Dispositions Net Operating Income
For a detailed reconciliation of our acquisitions and dispositions NOI to net income, see the table above.
Subsequent to January 1, 2024, we acquired 36 buildings consisting of approximately 7.2 million square feet (excluding two buildings that were included in the Value Add Portfolio at September 30, 2025, or sold or transferred from the Value Add Portfolio to the Operating Portfolio after January 1, 2024), and sold 13 buildings consisting of approximately 2.2 million square feet. For the three months ended September 30, 2025 and 2024, the buildings acquired after January 1, 2024 contributed approximately $13.2 million and $4.6 million to NOI, respectively. For the three months ended September 30, 2025 and 2024, the buildings sold after January 1, 2024 contributed approximately $— million and $0.5 million to NOI, respectively. Refer to Note 3 in the accompanying Notes to Consolidated Financial Statements for additional discussion regarding buildings acquired or sold.
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Other Net Operating Income
Other assets include our Value Add Portfolio, buildings classified as held for sale, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after January 1, 2024. Other NOI also includes termination, solar, and other income adjustments from buildings in our same store portfolio.
For a detailed reconciliation of our other NOI to net income, see the table above.
These buildings contributed approximately $5.0 million and $3.6 million to NOI for the three months ended September 30, 2025 and 2024, respectively. Additionally, there was approximately $1.1 million and $0.9 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the three months ended September 30, 2025 and 2024, respectively.
Total Other Expenses
Total other expenses consist of general and administrative, depreciation and amortization, and other expenses.
Total other expenses increased approximately $3.7 million, or 4.3%, to approximately $88.7 million for the three months ended September 30, 2025 compared to approximately $85.0 million for the three months ended September 30, 2024. The increase was primarily attributable to an increase in depreciation and amortization of approximately $3.5 million due to an increase in the depreciable asset base from net acquisitions and completed development projects placed into service after September 30, 2024. Additionally, there was an increase in general and administrative expenses by approximately $0.2 million, primarily due to increases in compensation and other payroll costs.
Total Other Income (Expense)
Total other income (expense) consists of interest and other income, interest expense, debt extinguishment and modification expenses, gain on involuntary conversion, and gain on the sales of rental property, net. Interest expense includes interest incurred during the period as well as adjustments related to amortization of financing fees and debt issuance costs, and amortization of fair market value adjustments associated with the assumption of debt.
Total other expense increased approximately $5.6 million, or 22.6%, to approximately $30.6 million for the three months ended September 30, 2025 compared to approximately $25.0 million for the three months ended September 30, 2024. The increase was primarily attributable to an increase in interest expense of approximately $3.0 million which was primarily attributable to the issuance of $550.0 million of unsecured notes on June 25, 2025, as discussed in Note 4 of the accompanying Notes to Consolidated Financial Statements. The increase was also attributable to an increase of debt extinguishment and modification expenses of approximately $1.5 million related to the amendment to the $300.0 million Unsecured Term Loan G on September 15, 2025, as discussed in Note 4 of the accompanying Notes to Consolidated Financial Statements. Additionally, there was a decrease in gain on involuntary conversion of approximately $3.6 million, which was partially offset by an increase in the gain on the sales of rental property, net of approximately $2.0 million.
Comparison of the nine months ended September 30, 2025 to the nine months ended September 30, 2024
The following table summarizes selected operating information for our same store portfolio and our total portfolio for the nine months ended September 30, 2025 and 2024 (dollars in thousands). This table includes a reconciliation from our same store portfolio to our total portfolio by also providing information for the nine months ended September 30, 2025 and 2024 with respect to the buildings acquired and disposed of and Operating Portfolio buildings with expansions placed into service or transferred from the Value Add Portfolio to the Operating Portfolio after January 1, 2024, Operating Portfolio buildings with expansions placed into service or transferred from the Value Add Portfolio to the Operating Portfolio after January 1, 2024, Value Add buildings, and buildings classified as held for sale.
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| Same Store Portfolio | Acquisitions/Dispositions | Other | Total Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nine months ended September 30, | Change | Nine months ended September 30, | Nine months ended September 30, | Nine months ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | $ | % | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating revenue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 555,951 | $ | 535,241 | $ | 20,710 | 3.9 | % | $ | 47,840 | $ | 13,884 | $ | 19,004 | $ | 15,030 | $ | 622,795 | $ | 564,155 | $ | 58,640 | 10.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other income | 445 | 126 | 319 | 253.2 | % | 467 | 199 | 581 | 3,579 | 1,493 | 3,904 | (2,411) | (61.8) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total operating revenue | 556,396 | 535,367 | 21,029 | 3.9 | % | 48,307 | 14,083 | 19,585 | 18,609 | 624,288 | 568,059 | 56,229 | 9.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property | 111,598 | 107,206 | 4,392 | 4.1 | % | 9,669 | 4,509 | 4,982 | 2,849 | 126,249 | 114,564 | 11,685 | 10.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net operating income(1) | $ | 444,798 | $ | 428,161 | $ | 16,637 | 3.9 | % | $ | 38,638 | $ | 9,574 | $ | 14,603 | $ | 15,760 | 498,039 | 453,495 | 44,544 | 9.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 38,380 | 36,758 | 1,622 | 4.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 224,336 | 219,213 | 5,123 | 2.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on impairment | 888 | 4,967 | (4,079) | (82.1) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses | 1,077 | 1,703 | (626) | (36.8) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total other expenses | 264,681 | 262,641 | 2,040 | 0.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total expenses | 390,930 | 377,205 | 13,725 | 3.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest and other income | 380 | 39 | 341 | 874.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (97,817) | (81,498) | (16,319) | 20.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt extinguishment and modification expenses | (1,503) | (703) | (800) | 113.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on involuntary conversion | 1,855 | 9,285 | (7,430) | (80.0) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on the sales of rental property, net | 57,801 | 23,281 | 34,520 | 148.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total other income (expense) | (39,284) | (49,596) | 10,312 | (20.8) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 194,074 | $ | 141,258 | $ | 52,816 | 37.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below.
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Net Income
Net income for our total portfolio increased by $52.8 million, or 37.4%, to $194.1 million for the nine months ended September 30, 2025 compared to $141.3 million for the nine months ended September 30, 2024.
Same Store Total Operating Revenue
Same store total operating revenue consists primarily of rental income consisting of (i) fixed lease payments, variable lease payments, straight-line rental income, and above and below market lease amortization from our properties (“lease income”), and (ii) other tenant billings for insurance, real estate taxes and certain other expenses (“other billings”).
For a detailed reconciliation of our same store total operating revenue to net income, see the table above.
Same store rental income, which is comprised of lease income and other billings as discussed below, increased by approximately $20.7 million, or 3.9%, to approximately $556.0 million for the nine months ended September 30, 2025 compared to approximately $535.2 million for the nine months ended September 30, 2024.
Same store lease income increased by approximately $19.3 million, or 4.4%, to approximately $453.2 million for the nine months ended September 30, 2025 compared to approximately $433.9 million for the nine months ended September 30, 2024. The increase was primarily due to an increase in rental income of approximately $27.1 million from the execution of new leases and lease renewals with existing tenants. This increase was partially offset by the reduction of base rent of approximately $6.5 million due to tenant vacancies, and a net increase in the amortization of net above market leases of approximately $0.3 million. Additionally, there was a decrease in same store lease income of approximately $1.0 million which was primarily attributable to management’s evaluation of operating leases to determine the probability of collecting substantially all of the lessee’s remaining lease payments under the lease term. During the nine months ended September 30, 2025, same store lease income decreased approximately $1.8 million due to certain tenants converting from the accrual basis of accounting to the cash basis of accounting. This decrease was partially offset due to converting two tenants from the cash basis of accounting back to the accrual basis of accounting during the nine months ended September 30, 2025 and converting one tenant from the accrual basis of accounting to the cash basis of accounting during the nine months ended September 30, 2024, for an increase to same store lease income of approximately $0.8 million.
Same store other billings increased by approximately $1.5 million, or 1.5%, to approximately $102.8 million for the nine months ended September 30, 2025 compared to approximately $101.3 million for the nine months ended September 30, 2024. The increase was attributable to an increase of approximately $1.6 million in expense reimbursements which was primarily due to an increase in corresponding expenses. This increase was partially offset by a reduction in real estate tax reimbursements of approximately $0.1 million due to an decrease in real estate taxes levied by the taxing authority and vacancy of previously occupied buildings.
Same Store Operating Expenses
Same store operating expenses consist primarily of property operating expenses and real estate taxes and insurance.
For a detailed reconciliation of our same store operating expenses to net income, see the table above.
Total same store operating expenses increased by approximately $4.4 million or 4.1% to approximately $111.6 million for the nine months ended September 30, 2025 compared to approximately $107.2 million for the nine months ended September 30, 2024. This increase was due to increases in repairs and maintenance, real estate tax, snow removal, utility expense, and other expenses of approximately $2.5 million, $1.0 million, $0.6 million, $0.2 million, and $0.5 million, respectively. These increases were partially offset by a reduction in insurance expense of approximately $0.4 million.
Acquisitions and Dispositions Net Operating Income
For a detailed reconciliation of our acquisitions and dispositions NOI to net income, see the table above.
Subsequent to January 1, 2024, we acquired 36 buildings consisting of approximately 7.2 million square feet (excluding two buildings that were included in the Value Add Portfolio at September 30, 2025, or sold or transferred from the Value Add Portfolio to the Operating Portfolio after January 1, 2024), and sold 13 buildings consisting of approximately 2.2 million square feet. For the nine months ended September 30, 2025 and September 30, 2024, the buildings acquired after January 1, 2024
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contributed approximately $38.1 million and $7.5 million to NOI, respectively. For the nine months ended September 30, 2025 and September 30, 2024, the buildings sold after January 1, 2024 contributed approximately $0.5 million and $2.1 million to NOI, respectively. Refer to Note 3 in the accompanying Notes to Consolidated Financial Statements for additional discussion regarding buildings acquired or sold.
Other Net Operating Income
Our other assets include our Value Add Portfolio, buildings classified as held for sale, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after January 1, 2024. Other NOI also includes termination, solar, and other income adjustments from buildings in our same store portfolio.
For a detailed reconciliation of our other NOI to net income, see the table above.
These buildings contributed approximately $11.8 million and $11.3 million to NOI for the nine months ended September 30, 2025 and September 30, 2024, respectively. Additionally, there was approximately $2.8 million and $4.5 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the nine months ended September 30, 2025 and September 30, 2024, respectively.
Total Other Expenses
Total other expenses consist of general and administrative, depreciation and amortization, loss on impairment, and other expenses.
Total other expenses increased approximately $2.0 million, or 0.8%, to approximately $264.7 million for the nine months ended September 30, 2025 compared to approximately $262.6 million for the nine months ended September 30, 2024. The increase was primarily attributable to an increase in depreciation and amortization expense of approximately $5.1 million due to an increase in the depreciable asset base from net acquisitions and completed development projects placed into service after September 30, 2024. Additionally there was an increase in general and administrative expenses by approximately $1.6 million, primarily due to increases in compensation and other payroll costs. These increases were partially offset by a decrease in loss on impairment of approximately $4.1 million.
Total Other Income (Expense)
Total other income (expense) consists of interest and other income, interest expense, debt extinguishment and modification expenses, gain on involuntary conversion, and gain on the sales of rental property, net. Interest expense includes interest incurred during the period as well as adjustments related to amortization of financing fees and debt issuance costs, and amortization of fair market value adjustments associated with the assumption of debt.
Total other expense decreased approximately $10.3 million, or 20.8%, to approximately $39.3 million for the nine months ended September 30, 2025 compared to approximately $49.6 million for the nine months ended September 30, 2024. This decrease was primarily a result of an increase in the gain on the sales of rental property, net of approximately $34.5 million. This was partially offset by an increase in interest expense of approximately $16.3 million which was primarily attributable to the issuance of $450.0 million of unsecured notes on May 28, 2024 and the issuance of $550.0 million of unsecured notes on June 25, 2025, as discussed in Note 4 of the accompanying Notes to Consolidated Financial Statements. Additionally, there was a decrease in gain on involuntary conversion of approximately $7.4 million and an increase in debt extinguishment and modification expenses of approximately $0.8 million related to the amendment to the $300.0 million Unsecured Term Loan G on September 15, 2025, as discussed in Note 4 of the accompanying Notes to Consolidated Financial Statements.
Non-GAAP Financial Measures
In this report, we disclose funds from operations (“FFO”) and NOI, which meet the definition of “non-GAAP financial measures” as set forth in Item 10(e) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”). As a result, we are required to include in this report a statement of why management believes that presentation of these measures provides useful information to investors.
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Funds From Operations
FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, FFO should be compared with our reported net income (loss) in accordance with GAAP, as presented in our consolidated financial statements included in this report.
We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“Nareit”). FFO represents GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating buildings, impairment write-downs of depreciable real estate, real estate related depreciation and amortization (excluding amortization of deferred financing costs and fair market value of debt adjustment) and after adjustments for unconsolidated partnerships and joint ventures.
Management uses FFO as a supplemental performance measure because it is a widely recognized measure of the performance of REITs. FFO may be used by investors as a basis to compare our operating performance with that of other REITs.
However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our buildings that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our buildings, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. In addition, other REITs may not calculate FFO in accordance with the Nareit definition, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. FFO should not be used as a measure of our liquidity and is not indicative of funds available for our cash needs, including our ability to pay dividends.
The following table sets forth a reconciliation of our FFO attributable to common stockholders and unit holders for the periods presented to net income, the nearest GAAP equivalent.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| Reconciliation of Net Income to FFO (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net income | $ | 49,649 | $ | 42,731 | $ | 194,074 | $ | 141,258 | ||||||||||||||||||
| Rental property depreciation and amortization | 75,876 | 72,421 | 224,076 | 219,002 | ||||||||||||||||||||||
| Loss on impairment | — | — | 888 | 4,967 | ||||||||||||||||||||||
| Gain on the sales of rental property, net | (2,196) | (195) | (57,801) | (23,281) | ||||||||||||||||||||||
| FFO | 123,329 | 114,957 | 361,237 | 341,946 | ||||||||||||||||||||||
| Amount allocated to restricted shares of common stock and unvested units | (125) | (130) | (417) | (415) | ||||||||||||||||||||||
| FFO attributable to common stockholders and unit holders | $ | 123,204 | $ | 114,827 | $ | 360,820 | $ | 341,531 | ||||||||||||||||||
Net Operating Income
We consider NOI to be an appropriate supplemental performance measure to net income (loss) because we believe it helps investors and management understand the core operations of our buildings. NOI is defined as rental income, which includes billings for common area maintenance, real estate taxes and insurance, less property expenses, real estate tax expense and insurance expense. NOI should not be viewed as an alternative measure of our financial performance since it excludes expenses which could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI.
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The following table sets forth a reconciliation of our NOI for the periods presented to net income, the nearest GAAP equivalent.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
| Reconciliation of Net Income to NOI (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net income | $ | 49,649 | $ | 42,731 | $ | 194,074 | $ | 141,258 | ||||||||||||||||||
| General and administrative | 12,173 | 11,978 | 38,380 | 36,758 | ||||||||||||||||||||||
| Depreciation and amortization | 75,963 | 72,506 | 224,336 | 219,213 | ||||||||||||||||||||||
| Interest and other income | (372) | (14) | (380) | (39) | ||||||||||||||||||||||
| Interest expense | 31,670 | 28,705 | 97,817 | 81,498 | ||||||||||||||||||||||
| Loss on impairment | — | — | 888 | 4,967 | ||||||||||||||||||||||
| Gain on involuntary conversion | — | (3,568) | (1,855) | (9,285) | ||||||||||||||||||||||
| Debt extinguishment and modification expenses | 1,503 | 36 | 1,503 | 703 | ||||||||||||||||||||||
| Other expenses | 563 | 545 | 1,077 | 1,703 | ||||||||||||||||||||||
| Gain on the sales of rental property, net | (2,196) | (195) | (57,801) | (23,281) | ||||||||||||||||||||||
| Net operating income | $ | 168,953 | $ | 152,724 | $ | 498,039 | $ | 453,495 | ||||||||||||||||||
Cash Flows
Comparison of the nine months ended September 30, 2025 to the nine months ended September 30, 2024
The following table summarizes our cash flows for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
| Nine months ended September 30, | Change | |||||||||||||||||||||||||
| Cash Flows (dollars in thousands) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Net cash provided by operating activities | $ | 358,921 | $ | 355,363 | $ | 3,558 | 1.0 | % | ||||||||||||||||||
| Net cash used in investing activities | $ | 236,857 | $ | 390,521 | $ | (153,664) | (39.3) | % | ||||||||||||||||||
| Net cash provided by (used in) financing activities | $ | (141,028) | $ | 84,434 | $ | (225,462) | (267.0) | % | ||||||||||||||||||
Net cash provided by operating activities increased approximately $3.6 million to approximately $358.9 million for the nine months ended September 30, 2025 compared to approximately $355.4 million for the nine months ended September 30, 2024. The increase was attributable to fluctuations in working capital due to timing of payments and rental receipts.
Net cash used in investing activities decreased approximately $153.7 million to approximately $236.9 million for the nine months ended September 30, 2025 compared to approximately $390.5 million for the nine months ended September 30, 2024. The decrease was primarily attributable to the acquisition of rental property during the nine months ended September 30, 2025 of approximately $171.3 million, compared to the acquisition of rental property during the nine months ended September 30, 2024 of approximately $404.9 million. This decrease was also attributable to a decrease in proceeds from sale of rental property, net of approximately $19.4 million during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was partially offset by an increase in cash paid for additions of land and buildings and improvements related to development and other capital expenditures of approximately $60.8 million.
Net cash provided by (used in) financing activities decreased approximately $225.5 million to approximately $141.0 million net cash used in financing activities for the nine months ended September 30, 2025 compared to approximately $84.4 million net cash provided by financing activities for the nine months ended September 30, 2024. The decrease was primarily attributable to decrease in net borrowings of approximately $153.0 million and $75.0 million under our unsecured credit facility and unsecured notes, respectively. The decrease was also attributable to an increase of approximately $6.9 million in dividends and distributions paid.
Liquidity and Capital Resources
We believe that our liquidity needs will be satisfied through cash flows generated by operations, disposition proceeds, and financing activities. Operating cash flow from rental income, expense recoveries from tenants, and other income from operations are our principal sources of funds to pay operating expenses, debt service, recurring capital expenditures, and the distributions required to maintain our REIT qualification. We primarily rely on the capital markets (equity and debt securities and bank borrowings) to fund our acquisition activity. We seek to increase cash flows from our properties by maintaining quality building standards that promote high occupancy rates and permit increases in rental rates, while reducing tenant
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turnover and controlling operating expenses. We believe that our revenue, together with proceeds from building sales and equity and debt financings, will continue to provide funds for our short-term and medium-term liquidity needs.
Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our buildings, including interest expense, interest rate swap payments, scheduled principal payments on outstanding indebtedness, property acquisitions under contract, general and administrative expenses, and capital expenditures including development projects, tenant improvements and leasing commissions.
Our long-term liquidity needs, in addition to recurring short-term liquidity needs as discussed above, consist primarily of funds necessary to pay for property acquisitions and scheduled debt maturities. We intend to satisfy our long-term liquidity needs through cash flow from operations, the issuance of equity or debt securities, other borrowings, property dispositions, or, in connection with acquisitions of certain additional buildings, the issuance of common units in our Operating Partnership.
As of September 30, 2025, we had total immediate liquidity of approximately $904.1 million, comprised of approximately $17.3 million of cash and cash equivalents and approximately $886.8 million of immediate availability on our unsecured credit facility.
In addition, we require funds to pay dividends to holders of our common stock and common units in our Operating Partnership. Any future dividends on our common stock are declared in the sole discretion of our board of directors, subject to the distribution requirements to maintain our REIT status for federal income tax purposes, and may be reduced or stopped for any reason, including to use funds for other liquidity requirements.
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Indebtedness Outstanding
The following table summarizes certain information with respect to our indebtedness outstanding as of September 30, 2025.
| Indebtedness (dollars in thousands) | September 30, 2025 | Interest Rate(1)(2) | Maturity Date | Prepayment Terms(3) | ||||||||||||||||||||||
| Unsecured credit facility: | ||||||||||||||||||||||||||
Unsecured Credit Facility(4) | $ | 110,000 | Term SOFR + 0.775% | September 7, 2029 | i | |||||||||||||||||||||
| Total unsecured credit facility | 110,000 | |||||||||||||||||||||||||
| Unsecured term loans: | ||||||||||||||||||||||||||
| Unsecured Term Loan A | 150,000 | 2.06 | % | March 15, 2027 | i | |||||||||||||||||||||
| Unsecured Term Loan H | 187,500 | 3.25 | % | January 25, 2028 | i | |||||||||||||||||||||
| Unsecured Term Loan I | 187,500 | 3.41 | % | January 25, 2028 | i | |||||||||||||||||||||
Unsecured Term Loan F(5) | 200,000 | 4.73 | % | March 23, 2029 | i | |||||||||||||||||||||
Unsecured Term Loan G(6) | 300,000 | 1.70 | % | March 14, 2031 | i | |||||||||||||||||||||
| Total unsecured term loans | 1,025,000 | |||||||||||||||||||||||||
| Total unamortized deferred financing fees and debt issuance costs | (3,955) | |||||||||||||||||||||||||
| Total carrying value unsecured term loans, net | 1,021,045 | |||||||||||||||||||||||||
| Unsecured notes: | ||||||||||||||||||||||||||
| Series B Unsecured Notes | 50,000 | 4.98 | % | July 1, 2026 | ii | |||||||||||||||||||||
| Series C Unsecured Notes | 80,000 | 4.42 | % | December 30, 2026 | ii | |||||||||||||||||||||
| Series E Unsecured Notes | 20,000 | 4.42 | % | February 20, 2027 | ii | |||||||||||||||||||||
| Series H Unsecured Notes | 100,000 | 4.27 | % | June 13, 2028 | ii | |||||||||||||||||||||
| Series L Unsecured Notes | 175,000 | 6.05 | % | May 28, 2029 | ii | |||||||||||||||||||||
| Series O Unsecured Notes | 350,000 | 5.50 | % | June 25, 2030 | ii | |||||||||||||||||||||
| Series M Unsecured Notes | 125,000 | 6.17 | % | May 28, 2031 | ii | |||||||||||||||||||||
| Series I Unsecured Notes | 275,000 | 2.80 | % | September 29, 2031 | ii | |||||||||||||||||||||
| Series K Unsecured Notes | 400,000 | 4.12 | % | June 28, 2032 | ii | |||||||||||||||||||||
| Series P Unsecured Notes | 100,000 | 5.82 | % | June 25, 2033 | ii | |||||||||||||||||||||
| Series J Unsecured Notes | 50,000 | 2.95 | % | September 28, 2033 | ii | |||||||||||||||||||||
| Series N Unsecured Notes | 150,000 | 6.30 | % | May 28, 2034 | ii | |||||||||||||||||||||
| Series Q Unsecured Notes | 100,000 | 5.99 | % | June 25, 2035 | ii | |||||||||||||||||||||
| Total unsecured notes | 1,975,000 | |||||||||||||||||||||||||
| Total unamortized deferred financing fees and debt issuance costs | (8,394) | |||||||||||||||||||||||||
| Total carrying value unsecured notes, net | 1,966,606 | |||||||||||||||||||||||||
| Mortgage note (secured debt): | ||||||||||||||||||||||||||
| United of Omaha Life Insurance Company | 4,156 | 3.71 | % | October 1, 2039 | ii | |||||||||||||||||||||
| Total mortgage note | 4,156 | |||||||||||||||||||||||||
| Unamortized fair market value discount | (121) | |||||||||||||||||||||||||
| Total carrying value mortgage note, net | 4,035 | |||||||||||||||||||||||||
Total / weighted average interest rate(7) | $ | 3,101,686 | 4.22 | % | ||||||||||||||||||||||
(1)Interest rate as of September 30, 2025. At September 30, 2025, the one-month Term Secured Overnight Financing Rate (“Term SOFR”) and Daily Secured Overnight Financing Rate (“Daily SOFR”) was 4.1292% and 4.2400%, respectively. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts. The spread over the applicable rate for our unsecured credit facility and unsecured term loans is based on our debt rating and leverage ratio, as defined in the respective loan agreements.
(2)Our unsecured credit facility has a stated interest rate of one-month Term SOFR plus a spread of 0.775%. Our Unsecured Term Loans A, G, H, and I have a stated interest rate of one-month Term SOFR plus a spread of 0.85%. Our Unsecured Term Loan F has a stated interest rate of Daily SOFR plus a spread of 0.85%. All of our unsecured term loans have been swapped to a fixed rate, and such fixed rates inclusive of the spreads are presented in the table above. Effective February 5, 2026, our Unsecured Term Loan G will be swapped to a fixed rate inclusive of the spread of 3.94%.
(3)Prepayment terms consist of (i) pre-payable with no penalty; and (ii) pre-payable with penalty.
(4)The capacity of our unsecured credit facility is $1.0 billion. The initial maturity date is September 8, 2028, or such later date which may be extended pursuant to two six-month extension options exercisable by us in our discretion upon advance written notice. Exercise of each six-month option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension, (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date, and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions. We are required to pay a facility fee on the aggregate commitment amount (currently $1.0 billion) at a rate per annum of 0.1% to 0.3%, depending on our debt rating, as defined in the credit agreement. The facility fee is due and payable quarterly.
(5)The initial maturity date of our Unsecured Term Loan F is March 25, 2027, or such later date which may be extended pursuant to two one-year extension options exercisable by us in our discretion upon advance written notice. Exercise of each one-year option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension; (ii) accuracy of representations and warranties
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as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions.
(6)The initial maturity date of our Unsecured Term Loan G is March 15, 2030, or such later date which may be extended pursuant to a one-year extension option exercisable by us in our discretion upon advance written notice. Exercise of the option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension; (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee. The extension option is not subject to lender consent, assuming proper notice and satisfaction of the conditions.
(7)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $1,025.0 million of debt and is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts.
The aggregate undrawn nominal commitments on our unsecured credit facility as of September 30, 2025 was approximately $886.8 million, including issued letters of credit. Our actual borrowing capacity at any given point in time may be less and is restricted to a maximum amount based on our debt covenant compliance.
On September 15, 2025, we entered into a second amended and restated term loan agreement for our Unsecured Term Loan G to (i) extend the maturity date to March 15, 2030, with a one-year extension option exercisable by us in our discretion upon advance written notice, subject to certain conditions, including the payment of a fee, that would extend the maturity date to March 14, 2031 if exercised, (ii) remove the 0.10% interest rate adjustment for SOFR loans, and (iii) provide that borrowings under the Unsecured Term Loan G will, at the our election, bear interest based on a Base Rate, Term SOFR, or Daily Simple SOFR (each as defined in the loan agreement), plus an applicable spread based on our debt rating and leverage ratio (each as defined in the loan agreement). Other than the maturity date and interest rate provisions described above, the material terms of the Unsecured Term Loan G remain unchanged.
On September 15, 2025, we entered into amendments to our Unsecured Credit Facility, Unsecured Term Loan A, Unsecured Term Loan F, Unsecured Term Loan H, and Unsecured Term Loan I to remove the 0.10% interest rate adjustment for SOFR loans, and in the case of our Unsecured Term Loans A, H, and I, provide that borrowings under the respective term loans will, at our election, bear interest based on a Base Rate, Term SOFR, or Daily Simple SOFR (each as defined in the respective loan agreement). Other than the interest rate provisions described above, the material terms of our Unsecured Term Loans A, F, H, and I remain unchanged.
On June 13, 2025, we redeemed in full at maturity the $75.0 million in aggregate principal amount of the Series G Unsecured Notes with a fixed interest rate of 4.10%.
On April 15, 2025, we entered into a note purchase agreement for the private placement by the Operating Partnership of $350.0 million of senior unsecured notes (the “Series O Unsecured Notes”) maturing June 25, 2030 with a fixed annual interest rate of 5.50%, $100.0 million of senior unsecured notes (the “Series P Unsecured Notes”) maturing June 25, 2033 with a fixed annual interest rate of 5.82%, and $100.0 million of senior unsecured notes (the “Series Q Unsecured Notes”) maturing June 25, 2035 with a fixed annual interest rate of 5.99%. On June 25, 2025, Operating Partnership issued the Series O Unsecured Notes, Series P Unsecured Notes, and Series Q Unsecured Notes (collectively, the “2025 Notes”) and received the proceeds therefrom. The Company and certain wholly owned subsidiaries of the Operating Partnership are guarantors of the unsecured notes. The Operating Partnership offered and sold the 2025 Notes in reliance on the registration exemption provided by Section 4(a)(2) of the Securities Act.
On February 20, 2025, we redeemed in full at maturity the $100.0 million in aggregate principal amount of the Series D Unsecured Notes with a fixed interest rate of 4.32%.
Our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage note are subject to ongoing compliance with a number of financial and other covenants. As of September 30, 2025, we were in compliance with the applicable financial covenants.
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The following table summarizes our debt capital structure as of September 30, 2025.
| Debt Capital Structure | September 30, 2025 | |||||||
| Total principal outstanding (in thousands) | $ | 3,114,156 | ||||||
| Weighted average duration (years) | 4.9 | |||||||
| % Secured debt | 0.1 | % | ||||||
| % Debt maturing next 12 months | 1.6 | % | ||||||
Net Debt to Real Estate Cost Basis(1) | 37.9 | % | ||||||
(1)“Net Debt” means amounts outstanding under our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage note, less cash and cash equivalents. “Real Estate Cost Basis” means the book value of rental property and deferred leasing intangibles, exclusive of the related accumulated depreciation and amortization.
We regularly pursue new financing opportunities to ensure an appropriate balance sheet position. As a result of these dedicated efforts, we are confident in our ability to meet future debt maturities and fund acquisitions. We believe that our current balance sheet is in an adequate position at the date of this filing, despite possible volatility in the credit markets.
Our interest rate exposure on our floating rate debt is managed through the use of interest rate swaps, which fix the rate of our long term floating rate debt. For a detailed discussion on our use of interest rate swaps, see “Interest Rate Risk” below.
Equity
Preferred Stock
We are authorized to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share. As of September 30, 2025 and December 31, 2024, there were no shares of preferred stock issued or outstanding.
Common Stock
We are authorized to issue up to 300,000,000 shares of common stock, par value $0.01 per share.
Pursuant to the equity distribution agreements for our ATM common stock offering program, we may from time to time sell common stock through sales agents and their affiliates, including shares sold on a forward basis under forward sale agreements. The following table summarizes our ATM common stock offering program as of September 30, 2025. There was no activity for the ATM common stock offering program during the three months ended September 30, 2025, except for the shares sold on a forward basis, as discussed below.
ATM Common Stock Offering Program(1) | Date | Maximum Aggregate Offering Price (in thousands) | Aggregate Available as of September 30, 2025 (in thousands) | |||||||||||||||||
| 2025 $750 million ATM | February 13, 2025 | $ | 750,000 | $ | 702,229 | |||||||||||||||
(1)The 2022 $750 million ATM program was terminated on February 12, 2025.
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The following table summarizes the activity for shares sold on a forward basis under the ATM common stock offering program and shares settled during the three and nine months September 30, 2025. We initially do not receive any proceeds from the sales of shares on a forward basis. We may physically settle the applicable forward sale agreements on one or more dates prior to the respective scheduled maturity dates, at which point we would receive the proceeds net of certain costs; provided, however, we may elect to cash settle or net share settle such forward sale agreements at any time through the respective scheduled maturity dates, which is typically one year from the respective trade dates.
| Forward Sale Agreements | Shares | Gross Sales (in thousands) | Weighted Average Gross Sales Price Per Share | Weighted Average Net Sales Price Per Share | Sales Commissions Per Share(1) | |||||||||||||||||||||||||||
| Forward Sale Agreements Outstanding at December 31, 2024 | — | $ | — | |||||||||||||||||||||||||||||
| New forward sale agreements | 4,830 | 179 | $ | 37.02 | $ | 36.65 | $ | 0.37 | ||||||||||||||||||||||||
| Forward sale agreements settled | — | — | ||||||||||||||||||||||||||||||
| Forward Sale Agreements Outstanding at March 31, 2025 | 4,830 | 179 | ||||||||||||||||||||||||||||||
| New forward sale agreements | 7,228 | 267 | $ | 37.00 | $ | 36.63 | $ | 0.37 | ||||||||||||||||||||||||
| Forward sale agreements settled | — | — | ||||||||||||||||||||||||||||||
| Forward Sale Agreements Outstanding at June 30, 2025 | 12,058 | 446 | ||||||||||||||||||||||||||||||
| New forward sale agreements | 1,288,667 | 47,325 | $ | 36.72 | $ | 36.35 | $ | 0.37 | ||||||||||||||||||||||||
| Forward sale agreements settled | — | — | ||||||||||||||||||||||||||||||
| Forward Sale Agreements Outstanding at September 30, 2025 | 1,300,725 | $ | 47,771 | |||||||||||||||||||||||||||||
(1)Upon a forward sale, the equity distribution agent typically earns a sales commission of 1% of the gross sales price.
Noncontrolling Interest
We own our interests in all of our properties and conduct substantially all of our business through the Operating Partnership. We are the sole member of the sole general partner of the Operating Partnership. As of September 30, 2025, we owned approximately 98.0% of the common units in the Operating Partnership, and our current and former executive officers, directors, senior employees and their affiliates, and third parties that contributed properties to us in exchange for common units in the Operating Partnership owned the remaining 2.0%.
We also own joint ventures with third parties primarily engaged in the development and eventual operation of industrial real estate properties. At September 30, 2025, we held a 97.2% interest in a joint venture located in Reno, Nevada, a 93.9% interest in a joint venture located in Concord, North Carolina, and a 95.0% interest in a joint venture located in Shepherdsville, Kentucky.
Interest Rate Risk
We use interest rate swaps to fix the rate of our variable rate debt. As of September 30, 2025, all of our outstanding variable rate debt, with the exception of our unsecured credit facility, was fixed with interest rate swaps through maturity.
We recognize all derivatives on the balance sheet at fair value. If the derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income (loss), which is a component of equity. Derivatives that are not designated as hedges must be adjusted to fair value and the changes in fair value must be reflected as income or expense.
We have established criteria for suitable counterparties in relation to various specific types of risk. We only use counterparties that have a credit rating of no lower than investment grade at swap inception from Moody’s Investor Services, Standard & Poor’s, or Fitch Ratings or other nationally recognized rating agencies.
The swaps are all designated as cash flow hedges of interest rate risk, and all are valued as Level 2 financial instruments. Level 2 financial instruments are defined as significant other observable inputs. As of September 30, 2025, 17 of our interest rate swaps outstanding were in an asset position of approximately $16.9 million and four of our interest rate swaps were in a liability position of approximately $1.3 million, including any adjustment for nonperformance risk related to these agreements.
During the nine months ended September 30, 2025, we entered into four interest rate swaps with an aggregate notional value of $300.0 million which fix Daily SOFR at 3.09% effective February 5, 2026 and mature on March 15, 2030, and were designated as cash flow hedges.
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As of September 30, 2025, we had approximately $1,135.0 million of variable rate debt. As of September 30, 2025, all of our outstanding variable rate debt, with the exception of our unsecured credit facility, was fixed with interest rate swaps through initial maturity. To the extent interest rates increase, interest costs on our floating rate debt not fixed with interest rate swaps will increase, which could adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our security holders. From time to time, we may enter into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors. In addition, an increase in interest rates could decrease the amounts third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions.
Off-balance Sheet Arrangements
As of September 30, 2025, we had letters of credit related to development projects and certain other agreements of approximately $3.2 million. As of September 30, 2025, we had no other material off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The primary market risk we are exposed to is interest rate risk. We have used derivative financial instruments to manage, or hedge, interest rate risks related to our borrowings, primarily through interest rate swaps.
As of September 30, 2025, we had $1,135.0 million of variable rate debt outstanding. As of September 30, 2025, all of our outstanding variable rate debt, with the exception of our unsecured credit facility which had a balance of $110.0 million, was fixed with interest rate swaps through initial maturity. To the extent we undertake additional variable rate indebtedness, if interest rates increase, then so will the interest costs on our unhedged variable rate debt, which could adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our security holders. Further, rising interest rates could significantly increase our future interest expense. From time to time, we enter into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors. While these agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risk that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges under GAAP. In addition, an increase in interest rates could decrease the amounts third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions. If interest rates increased by 100 basis points and assuming we had an outstanding balance of $110.0 million on our unsecured credit facility for the nine months ended September 30, 2025, our interest expense would have increased by approximately $0.8 million for the nine months ended September 30, 2025.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by SEC Rule 13a-15(b), we have evaluated, under the supervision of and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of September 30, 2025. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures for the periods covered by this report were effective to provide reasonable assurance that information required to be disclosed by the Company in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Controls
There was no change to our internal control over financial reporting during the quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. Other Information
Item 1. Legal Proceedings
From time to time, we are a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently a party, as plaintiff or defendant, to any legal proceedings that, individually or in the aggregate, would be expected to have a material effect on our business, financial condition or results of operations if determined adversely to the Company.
Item 1A. Risk Factors
Other than the following, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 12, 2025.
Trade policies, tariffs and related government actions may cause a decline in economic activity and have a material adverse impact on our business.
The U.S. government has recently indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries, and has made proposals and taken actions related thereto. Most recently, the United States has imposed or sought to impose significant increases to tariffs on foreign goods imported into the United States, including from China, Canada and Mexico, such as steel and aluminum. In response to such actions, some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods. Further governmental actions related to the imposition of tariffs or other trade barriers by the United States or foreign countries or changes to international trade agreements or policies, or uncertainty related to any such actions, could further increase costs, decrease margins, reduce the competitiveness of products and services offered by our current and future tenants and adversely affect the revenues and profitability of our tenants whose businesses rely on goods imported from such impacted jurisdictions. Such action, changes or uncertainty could also increase the costs and decrease margins on our development or expansion projects. Any of these impacts could depress economic activity and have a material adverse effect on the businesses of our current and future tenants as well as on our business, financial condition and results of operations.
Our bylaws designate any state court of competent jurisdiction in the State of Maryland and the United States District Court located within the State of Maryland, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders and provide that claims relating to causes of action arising under the Securities Act may only be brought in federal district courts, which could limit our stockholders’ ability to bring a claim in a judicial forum that the stockholders believe is a more favorable judicial forum for disputes with us or our directors, officers, employees or agents.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, any state court of competent jurisdiction in the State of Maryland, or, if such state courts do not have jurisdiction, the United States District Court located within the State of Maryland will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, other than actions arising under federal securities laws, (ii) any Internal Corporate Claim, as such term is defined in the Maryland General Corporation Law (the “MGCL”), and any action or proceeding asserting any Internal Corporate Claim, including, without limitation, (a) any claim, or any action or proceeding asserting a claim, based on an alleged breach of any duty owed by any of our directors, officers, employees or agents to us or to our stockholders, or (b) any claim, or any action or proceeding asserting a claim, against us or any of our directors, officers, employees, or agents arising pursuant to any provision of the MGCL or our charter or bylaws, or (iii) any other action or proceeding asserting a claim against us or any of our directors, officers, employees, or agents that is governed by the internal affairs doctrine. These choice of forum provisions will not apply to actions or proceedings under federal securities laws, including claims arising under the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. Furthermore, our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. This provision may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is more favorable for disputes against us or our directors, officers, employees, or agents, which may discourage such lawsuits against us and our directors, officers, employees, and agents.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Equity Securities
During the quarter ended September 30, 2025, the Operating Partnership issued 50,949 common units upon exchange of outstanding long term incentive plan units issued pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”). Subject to certain restrictions, common units in the Operating Partnership may be redeemed for cash in an amount equal to the value of a share of common stock or, at our election, for a share of common stock on a one-for-one basis.
During the quarter ended September 30, 2025, we issued 50,949 shares of common stock upon redemption of 50,949 common units in the Operating Partnership held by various limited partners. The issuance of such shares of common stock was either registered under the Securities Act or effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act and the rules and regulations promulgated thereunder.
All other issuances of unregistered securities during the quarter ended September 30, 2025, if any, have previously been disclosed in filings with the SEC.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
As of the quarter ended September 30, 2025, all items required to be disclosed in a Current Report on Form 8-K were reported under Form 8-K.
Director and Officer Trading Arrangements
During the three months ended September 30, 2025, none
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Item 6. Exhibits
| Exhibit Number | Description of Document | |||||||
| 3.1 | ||||||||
| 10.1 | ||||||||
| 10.2 | ||||||||
| 10.3 | ||||||||
| 10.4 | ||||||||
| 10.5 | ||||||||
| 10.6 | ||||||||
| 10.7 | ||||||||
| 31.1 * | ||||||||
| 31.2 * | ||||||||
| 32.1 ** | ||||||||
| 101.INS * | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
| 101.SCH * | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL * | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF * | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB * | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE * | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 * | Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| STAG INDUSTRIAL, INC. | ||||||||
| Date: October 29, 2025 | BY: | /s/ MATTS S. PINARD | ||||||
| Matts S. Pinard | ||||||||
| Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | ||||||||
| BY: | /s/ JACLYN M. PAUL | |||||||
| Jaclyn M. Paul | ||||||||
| Chief Accounting Officer (Principal Accounting Officer) | ||||||||
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