STAG Industrial Q4 2025 Earnings Call - Leasing Momentum: 69% of 2026 Exposures Addressed, 18%-20% Cash Leasing Spreads Targeted

Conference Operator: Welcome to the STAG Industrial fourth quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Xiarhos, Vice President, Investor Relations. Thank you, sir. You may begin.

Steve Xiarhos, Vice President, Investor Relations, STAG Industrial: Thank you. Welcome to STAG Industrial’s conference call, covering the fourth quarter of 2025 results. In addition to the press release distributed yesterday, we have posted an unaudited quarterly supplemental information presentation on the company’s website at stagindustrial.com under the Investor Relations section. On today’s call, the company’s prepared remarks and answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties and may cause actual results to differ from those discussed today. Examples of forward-looking statements include forecasts or FFO, same-store NOI, G&A, acquisition and disposition volumes, retention rates and other guidance, leasing prospects, rent collections, industry and economic trends, and other matters.

I encourage all listeners to review the more detailed discussion related to these forward-looking statements contained in the company’s filings with the SEC and the definitions and reconciliations of non-GAAP measures contained in the supplemental information package available on the company’s website. As a reminder, forward-looking statements represent management’s estimates as of today. STAG Industrial assumes no obligation to update any forward-looking statements. On today’s call, you will hear from Bill Crooker, our Chief Executive Officer, and Matts Pinard, our Chief Financial Officer. Also here with us today are Mike Chase, our Chief Investment Officer, and Steve Kimball, our Chief Operating Officer, who are available to answer questions specific to their areas of focus. I’ll now turn the call over to Bill.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thank you, Steve. Good morning, everybody, and welcome to the fourth quarter earnings call for STAG Industrial. We are pleased to have you join us and look forward to discussing the fourth quarter and full year 2025 results. We will also provide our initial 2026 guidance. As I look back on 2025, it was arguably one of our more successful years. We outperformed almost all of our budgeted metrics, including occupancy, credit loss, leasing spreads, same-store cash NOI, development starts, and core FFO. We grew same-store cash NOI by 4.3% and grew core FFO per share by 6.3%. This growth was supported by an improved industrial supply backdrop, with deliveries down almost 35% versus 2024.

Most of the markets we operate in remain healthy from both a supply and demand standpoint, with positive rent growth across almost all of our markets. While many business leaders remain cautiously optimistic, we are seeing increased tenant activity across our markets. Economic growth has begun to improve and meaningful investment has followed. We expect 180 million sq ft of deliveries or less this year, much of which will be driven by build-to-suit transactions. We anticipate that net absorption will improve in 2026, contributing to another year of positive rent growth across our markets. We expect national vacancy rates to peak in the first half of this year with an inflection point in the back half of 2026. 2025 was a high watermark for leasing volume for STAG.

We expect 2026 to follow suit, driven by a record amount of square footage expiring in a calendar year for our company. I’m pleased to report that we have addressed 69% of the operating portfolio square feet we expect to lease in 2026. We project cash leasing spreads of 18%-20% for 2026. This leasing success is a testament to the quality of our portfolio and a welcome sign of tenant engagement and commitment to their space. Q4 was the most active transaction quarter of 2025. This was due in part to less macro volatility, which brought sellers to the market in the second half of the year. Acquisition volume for the fourth quarter totaled $285.9 million.

This consisted of 7 buildings, with cash and straight line cap rates of 6.4% and 7%, respectively. These buildings are 97% leased to strong credits, with weighted average rental escalators of 3.5%. Subsequent to quarter end, we acquired one building for $80.6 million with a 6.1% cash cap rate. This is a Class A building leased to a strong credit for 12 years. In terms of our development platform, we have 3.5 million sq ft of development activity or recent completions across 14 buildings as of the end of Q4. 59% of the 3.5 million sq ft are completed developments. These completed developments are 73% leased as of December 31. In the fourth quarter, we commenced a new development that was identified within our existing portfolio by our operations team.

The 186,000 sq ft project is located southwest of Kansas City in Lenexa, Kansas. The project has an estimated delivery date of Q1 2027. The building will have the flexibility to demise into suites of 60,000 sq ft or less in a market with healthy fundamentals. We are projecting a cash yield of 7.2% on this project. Subsequent to quarter end, we executed a 78,000 sq ft lease in one of our Charlotte development projects to a manufacturing and assembly company. The building is now 39% leased. We initially underwrote, fully stabilizing the building in the first quarter of 2027. Before I turn it over to Matts, I am pleased to say that after year-end, we raised our dividend 4%, which is the largest raise we have had since 2014.

This raise is a result of many years of reducing our payout ratio and retaining as much free cash flow as possible. In addition to raising our dividend, we have modified the dividend payment cadence from monthly to quarterly going forward. With that, I will turn it over to Matts, who will cover our remaining results and guidance for 2026.

Matts Pinard, Chief Financial Officer, STAG Industrial: Thank you, Bill, and good morning, everyone. Core FFO per share was $0.66 for the quarter and $2.55 for the year, representing an increase of 6.3% as compared to 2024. Included in core FFO for the quarter are two one-time items that contributed approximately $0.01 to core FFO per share. During the quarter, we commenced 31 leases totaling 3 million sq ft, which generate cash and straight line leasing spreads of 16.3% and 27.4%, respectively. This leasing activity included 5 fixed rate renewal options totaling 882,000 sq ft, most of any quarter in 2025. Excluding these 5 fixed rate leases, fourth quarter cash leasing spreads would have been 0.2%, an increase of 570 basis points.

For the year, we achieved cash and straight-line leasing spreads of 24% and 38.2%, respectively. Same-store cash NOI growth was 5.4% for the quarter and 4.3% for the year. We incurred 22 basis points of cash credit loss in 2025. Retention was 75.8% for the quarter and 77.2% for the year. As mentioned by Bill, we’ve accomplished 69% of the square feet we currently expect to lease in 2026, achieving 20% cash leasing spreads. Moving to capital market activity, on December 8, the company settled $157.4 million of proceeds related to forward ATM sales that occurred throughout 2025. Net debt to annualized runway adjusted EBITDA was 5.0x at year-end, with liquidity of $750 million.

2026 guidance can be found on page 20 of our supplemental package, which is available in the investor relations section of our website. Same-store cash NOI growth is expected to range between 2.75% and 3.25%. The components of our same-store cash NOI guidance include the following: Retention to range between 70% and 80%. Cash leasing spreads of 18%-20%. Average same-store occupancy for 2026 is expected to be between 96% and 97%. Inconsistent with previous years, 50 basis points of credit loss is included in our initial cash same-store guidance. Acquisition volume guidance is a range of $350 million-$650 million, with a cash capitalization rate between 6.25% and 6.75%.

Acquisition timing will be more heavily weighted to the back end of the year. Disposition volume guidance is between $100 million and $200 million. G&A is expected to be between $53 million and $56 million. Finally, the increase in interest expense from our recent refinancing of our $300 million term loan G will be a $0.03 headwind to core FFO per share growth in 2026. Incorporating these components, we are initiating a core FFO per share range between $2.60 and $2.64 per share. I will now turn it back over to Bill.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thank you, Matts, and thank you to our team for their continued hard work and outperformance of our 2025 goals. We are excited about the opportunities that are in front of us here at STAG, and we look forward to building off this momentum in 2026. We will now turn it back to the operator for questions.

Conference Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that analysts limit themselves to one question and a follow-up so that other analysts have an opportunity to do so as well. One moment please while we pull for questions. Our first question comes from Craig Mailman with Citi. Please proceed with your question.

Craig Mailman, Analyst, Citi: Hey, good morning. Just kind of curious on the leasing front. You know, I know, Bill, you said you guys aren’t expecting vacancy nationally to peak until mid-middle of the year, but just from commentary from peers and brokers, it feels like the leasing environment and velocity is picking up. So I’m just kind of curious, as you guys kind of contemplated the 100 basis points of occupancy decline, which I understand you guys have 20 million sq ft rolling, and so, you know, 25% of that non-renewal is a fairly large amount.

But I’m just kind of curious how you guys thought about the pace of backfill activity in guidance and kind of what could be the upside to that if the momentum that we’re seeing coming out of 2025 kind of hold and is sustainable and maybe even picks up a bit?

Bill Crooker, Chief Executive Officer, STAG Industrial: ... Yeah, thanks, Craig. And we had a really successful year in 2025 with leasing and exceeded, as I mentioned, you know, most, if not all, of our, our budgeted metrics, including our leasing volume. If, you know, certainly if, if that continues, you know, there’s, we could lease product earlier in the year, and that would be upside. And the way we look at and prepare our budgets, and we entered the year in 2026 at, you know, close to 98% occupancy rate. And so when you have 20 million sq ft rolling at our, you know, historical retentions, you’ve got a fair number of sq ft that’s going vacant. In our budgets and contemplated, you know, a 9-12-month lease-up period for those assets.

There’s a number of examples where, you know, we outperformed that in 2025. You know, for just one example, for example, we leased an asset in Savannah, Georgia, in 2025. It went vacant in the first quarter. We anticipated releasing that in the first quarter of 2026. We found a tenant, we leased that asset with no downtime. That was in a market that at that time had 10% vacancy rates. So some other, you know, options for the tenants ultimately decided to go with our building. And that’s something when we budget, we’re going to, you know, budget that, I think, prudently to lease up in 9-12 months. But we, you know, our outcome was zero downtime.

There’s several other examples I could give you on that that happened in 2025. If those scenarios could pan out in 2026, but the way we budget, we try to be prudent and we certainly don’t budget zero downtime for our assets. But there’s, you know, those things happen some years, and it certainly happened a lot in 2025, and we hope it continues in 2026. And then just going back to, you know, our view on the overall industrial market, I mean, it’s still pretty strong, right? I mean, there we have to chew through some of this supply.

We think that happens, you know, the peaks, you know, midway through 2026, and it starts to really improve as you move through the back half of 2026 and into 2027. So, overall, you know, really happy with the way 2025 played out, really happy with the results. You’re coming into the year with some really high occupancy, some great trends, and we hope it continues as we move through 2026. But we, you know, we try to be, you know, prudent when we budget for 2026.

Craig Mailman, Analyst, Citi: That, that’s helpful. And then just on the acquisition front, you know, you guys are, came out of the gates with, with $81 million, but, you know, Matt had mentioned it’s more heavily weighted to the back end. Could, could you just talk a little bit more about what you have visibility on today, and kind of anticipated timing versus what is speculative in the, in the guidance for acquisitions?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, I mean, right now all we’ve disclosed is the $81 million. We typically don’t disclose any, you know, LOI acquisitions or under contract acquisitions. You know, things do fall out of LOI. They do fall out of contract. We have been underwriting more deals, you know, frankly, this first quarter than we did last first quarter. The momentum from Q4 has continued into the first quarter. A typical transaction year, though, is usually slower in the first quarter, and then it starts to build as you move through the year. So we do expect the first quarter to be slower, but we’re underwriting more transactions now than we did in the first quarter of 2025. Our pipeline is strong. It stands at $3.6 billion.

You know, Mike can certainly dive into the details of that if you’d like. But overall, the transaction market is really healthy. We’re seeing some portfolios come to the market. There’s just, it seems to be, you know, pretty healthy. There’s, you call it pent-up, you know, seller demand that came to the market at the back half of 2025, and that has continued as we moved into 2026.

Craig Mailman, Analyst, Citi: Great. Thank you.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thanks, Craig.

Conference Operator: Our next question comes from Michael Griffin with Evercore ISI. Please proceed with your question.

Michael Griffin, Analyst, Evercore ISI: Great, thanks. Bill, I appreciated the comments in your prepared remarks around sort of increased tenant activity. I was wondering if you could unpack that a little bit. Are these, you know, customers or potential tenants you’ve been monitoring that are, you know, looking around for a deal, or are they really, I guess, you know, closer to, you know, signing on the dotted line? And have you seen maybe more newer prospects come into the market that might have been holding off last year?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, that’s a good question. Interesting question. In the beginning of last year, certainly, you know, after, you know, quote, unquote, "Liberation Day," there was the tenants hanging around the hoop, looking into space, but it didn’t feel like real demand. This tenant activity is real demand. We’re seeing, you know, tenants make decisions, lease space. We obviously had, you know, a lot of successes in 2025. I’d say the demand’s pretty broad-based. We’re seeing it from 3PL, we’re seeing it from food and beverage. I would say something that’s a little newer, a little more nuanced, is we’re seeing a fair bit of demand from data center tenants. So those are tenants that are either supplying generators to data centers or even some light manufacturing of data centers, storing other things for data centers, to data center developments.

You know, we looked in our portfolio. We’ve got 3 million sq ft leased to data center tenants for. And these are 5+ year leases to good credits. In addition, we’ve got some prospects at some of our buildings for data center demand. So that’s a newer demand, but with respect to overall tenant demand, it feels real. It doesn’t feel like they’re just kicking tires. These are tenants that need space and are looking for space. You know, I think the caveat to all of that is there’s some supply that we need to chew through. So these tenants have options. Our portfolio, where I say this a lot, is, you know, we buy buildings, we add buildings to our portfolio.

We make sure those buildings fit the submarkets that they operate in and fit them well. And because of that, we have historically and continue to maintain occupancy levels well above market occupancy levels. We expect that to continue. You know, we have been fortunate in 2025 to win deals when there were other options that tenants could have gone to. But we proved to be a very good landlord, and we proved to have very good product in our respective submarkets. So, we hope that continues and you know, we just need to get through some of the supply. But the demand out there is real, and we expect you know, absorption to increase as we move through the year.

Michael Griffin, Analyst, Evercore ISI: Great. That’s certainly some helpful context. And then maybe just going back to sort of the outlook for supply, maybe to unpack that a little bit more. I mean, look, it seems like if trends are improving into 2026, if you expect vacancies to decline in the back half of the year, if, you know, others in the industry are seeing this as well, I guess, is there a worry that we could see a ramp back up in supply if the fundamental picture continues to improve? Or are there more governors or barriers to entry, whether it’s elevated development costs, that might, you know, preclude a, you know, overbuilding problem that we might have had a couple of years ago?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, I mean, I think the developers in industrial are generally, you know, prudent. We had a little bit of excess supply there, but I think really the story there was just a falloff in demand, right? So I think the supply was okay. It was just the falloff in demand. And as that picks back up and you start to, you look at your crystal ball and underwrite more market rent growth, more developments pencil out, right? But I think those developments, you know, if you’ve got a you know piece of land and you need a permit and then title it and then build it, you know, you’re looking well into 2027 before any of these things come online, right?

So there’s a window here where it’s going to flip, and when it starts to flip, I think it’s going to flip pretty quickly in the landlord’s favor here. So with respect to new supply coming online and being a concern, I’m not concerned about it, our team’s not concerned about it. And if that supply comes back on, it’s going to come back on, I think, prudently, and I think, you know, middle to late 2027 or even late, even later than that.

Michael Griffin, Analyst, Evercore ISI: Great. That’s it for me. Thanks for the time.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thank you.

Conference Operator: Our next question comes from Nick Thillman with Baird. Please proceed with your question.

Nick Thillman, Analyst, Baird: Hey, good morning. Bill, just want to make sure you and Matt are on talking terms after Sunday, but we can move on to some other things. Just overall on understand there’s a new organic growth story with STAG. And you had mentioned in our prior conversations, looking to maybe even improve on that growth rate by potentially looking to do some more strategic exits of individual markets that might cause some, like, nearer-term dilution, but enhance the longer-term growth rate. I guess, has there been any changes in that conversation or any recent developments on the thought process there? And is any of that baked into some of the disposition guidance that is included in 2026?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, I would say there’s—it’s not a material shift to what we’ve been executing on in the past five years, right? Every year there’s some non-core assets we dispose of, and every year there’s some opportunistic dispositions. Generally, we can, you know, we have a sense of the non-core dispositions to start the year. We don’t really have a sense of the opportunistic because, you know, oftentimes those are reverse inquiries that come in. And we had two of those this, in 2025. You know, two assets, one was in the first quarter, one was in the fourth quarter, where. And there were assets that went vacant and, you know, we loved the leasing prospects, and, we were planning on holding those assets and leasing them up.

We got, we sold both those assets at what a market rate would be, market cap rate would be, a market rent would be, and those were sold at a 4.9 cap rate. So just, you know, great execution from the team, but users wanted the space, and they didn’t want to lease it, so great execution. So we anticipate having some, you know, hopefully having some of those this year. But right now, the plan is, what’s in our guide is just some, some non-core dispositions, but nothing in excess of past years.

I think, you know, reflecting back on our conversation, Nick, that’s just when you look at the map of STAG’s portfolio, there might be, you know, one asset in a market, and if we don’t feel like we can grow into that market over time, that’s an asset that we’ll opportunistically dispose of just to be a little bit more efficient on the operating side. But that’s on the margin and not really that impactful to the numbers.

Nick Thillman, Analyst, Baird: Oh, very helpful. And then maybe just appetite to hold land on the balance sheet for development opportunities, understanding that that’s a growing part of the business, and the most of your development opportunities have been with JV partners, but just appetite on growing the land bank.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, certainly not part of our 2026 plan. Something that’s part of our long-term development plan. We’re going to, you know, step our way into that. Right now, we’ve got a fair amount of developments. I’m very happy with how the development initiative has progressed. The results we’re seeing, it’s great to see that lease get signed in our Concord development. There’s some good opportunities that we’re looking at now with some other potential leasings on the development side. And with respect to newer development opportunities, hopefully, there’s some things we can announce in the near future on that. And then, you know, when you start to think about, you know, longer term view of markets, you know, the land is not in our plan, as I mentioned.

Holding land right now is not in our plan for 2026, but we are looking. It’s early days, but looking into some phase developments that may be an opportunity for us to, you know, have a, call it, quasi land position. But we’re looking at a lot of those things as we grow this platform.

Blaine Heck, Analyst, Wells Fargo: Very helpful. Thank you.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thank you.

Conference Operator: Our next question comes from Blaine Heck with Wells Fargo. Please proceed with your question.

Blaine Heck, Analyst, Wells Fargo: Great, thanks. Good morning. Can you just talk about how you’re thinking about your overall cost of capital today and the spread between your cost of debt or maybe more importantly, cost of equity, and your required returns on investment?

Matts Pinard, Chief Financial Officer, STAG Industrial: Yeah. Good morning, Blaine, this is Matt. So cost of debt is pretty easy. You know, if we were to go to the private placement market, where we historically have been an issuer, spreads are anywhere between 140 and 150 basis points over. If we were to go to the public bond market, which we have been evaluating and have discussed on these calls, after our inaugural issuance, we would likely, we’ve been told, receive a 25-30 basis point pricing benefit. So if we think about today in the market in which we are currently operating in, it’s 5.5-5.75, depending on tenor. Cost to equity, you can do that many different ways, from an implied cap rate basis, using one of our sell side analysts’ rubrics.

You know, we’re in the low 6s. But what is important is we are retaining, and Bill mentioned this in prepared remarks, we’re retaining north of $100 million of cash flows after dividend as well. So different way to kind of go through the funding for 2026. If you look at the net acquisitions of $350 million, and that’s obviously gross acquisitions less dispositions, factor in the $100 million plus of retained earnings, we have the ability to operate this business plan without accessing the equity capital markets. Our leverage would be right in the midpoint of our range. Right now, we’re at 5x levered. We operate this business plan for 2026. At the midpoint, we’d be at 5.25 leverage.

Blaine Heck, Analyst, Wells Fargo: Great. That’s, that’s helpful color, Matt. Second question. You know, you guys commented on the fixed rate renewals weighing on spreads during the fourth quarter. Can you just tell us what percentage of your leases have those fixed rate renewals, incorporated in their terms, and whether there are any chunky ones that, that we should be aware of in the coming quarters?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, it’s single digits. Usually we don’t even call that out, Blaine. We just called it out in the fourth quarter because, you know, it looked like spreads were moderating in Q4, but it was really due to that. So every year there’s, you know, a few fixed renewal options, a handful, and they’re just spread out throughout the year, so it’s just part of our leasing plan. But because it was concentrated in the fourth quarter, that’s why we called it out. So, you know, it’s single digits, and they’re laddered. But the good thing is, as you get through these, you work these off. It’s not like there’s, you know, unlimited fixed renewal options. Generally, there’s one, and then you get through it, and then you’re just pushing out the mark-to-market opportunity.

Blaine Heck, Analyst, Wells Fargo: Got it. Thanks, Bill.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thanks.

Conference Operator: Our next question comes from Vince Tibone with Green Street. Please proceed with your question.

Blaine Heck, Analyst, Wells Fargo4: Hey, good morning. How should we think about potential development starts in 2026, and kind of what is your appetite to start new spec projects this year? Is it dependent on leasing current projects or just on a deal-by-deal basis? Curious how you’re thinking about that and the amount, you know, that’s maybe reasonable this year.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah. Hey, Vince. I mean, given where our development portfolio sits today, we’re, you know, very eager to start some new spec projects, right? Especially given our outlook on the industrial market in the back half of 2026 and into 2027, right? It’s just, you know, we view it as a great time to start some projects. So for us, it’s just whether we can, you know, source some more. We think we can. You know, this year we’re a little over $100 million of kind of new projects sourced. You know, I think that’s our-- that, that’s, that is what we have planned for this year. Hopefully, we can exceed that. Now, that’s not gonna come in day one, right? It’s gonna come in throughout the year.

But it’s something that is, you know, it’s an initiative that, you know, I feel strongly that we continue to build on. The team feels strongly we can continue to build on it, and we think it’s, you know, it’s something that we will be able to build on. But with respect to starting a new spec project today, very happy to do that, you know, assuming the returns pencil out.

Blaine Heck, Analyst, Wells Fargo4: No, makes sense. Helpful, helpful color. And maybe just switching gears, could you talk a little bit broadly about kind of the concession environment in your markets, like, particularly free rent? Do you feel, you know, that free rent levels or, you know, TIs have really stabilized across the market among, you know, private players with, you know, some more vacancy potentially? They don’t... You know, some of your peers have called that out as a headwind to near-term growth. Doesn’t look like that’s an, you know, an issue for your same-store guys. Just, you know, love to hear color on kind of, you know, free rent trends and concessions in your market.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, and what we think they’re very stable. They’ve been stable really since, you know, beginning of 2025. But, you know, there are instances in markets, in our markets, where you’ll have a, you know, a private landlord. I don’t see it really with the public peers, but you have a private landlord that has been sitting on an asset and just saying: You know what? I’m gonna buy this deal, and I’m gonna give them whatever they need, and I’m gonna give them a bunch of free rent. And but that, that isn’t market, right? I mean, if you’ve got five buildings that are competing against one another, and one’s willing to just, you know, give a ton of free rent and concessions. The other four are not.

So generally, what we’re seeing in a market that has vacancy rates, you know, 5%-10%, you’re seeing a half a month of free rent for a year right now, but that’s been stable since 2025. With respect to TIs, we haven’t seen a material change in TIs. What you do see sometimes is, okay, a tenant wanting additional dock doors. If there isn’t, you know, maybe LED lighting, generally, our buildings have that. But if there isn’t something like that, where it’s more of a building upgrade, they may ask for that. And in those situations, you’re seeing landlords in the market, and we would be willing to do it too, to put that capital in the building.

I don’t view that as much as a TI as it is, like, putting capital in your building, making your building more marketable and frankly, more valuable. Much different than a tenant-specific TI. So I haven’t seen a big uptick in tenant-specific TI packages, which is what we really view as concessions. Great. Thank you. Thank you.

Conference Operator: Our next question comes from Mike Mueller with JP Morgan. Please proceed with your question.

Mike Mueller, Analyst, JP Morgan: Yeah. Hi, just a quick one. What’s your 2026 guide for development leasing?

Bill Crooker, Chief Executive Officer, STAG Industrial: Sorry, I missed that, Mike. What was that again?

Mike Mueller, Analyst, JP Morgan: Yeah, sorry. What’s baked into your 2026 guide for developing?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah. Hey, Mike, it’s Steve Kimball here. We’ve guided for 957,000 sq ft of leasing. And one of those is a build-to-suit that’s in those numbers. And Bill mentioned the Charlotte lease that was done after the quarter. So we’d have, after those two, we’d be left with 530,000 sq ft of leasing, or about 500,000 sq ft of leasing that we have projected to do in 2026.

Mike Mueller, Analyst, JP Morgan: Got it. Thanks.

Bill Crooker, Chief Executive Officer, STAG Industrial: You’re welcome. Thanks, Mike.

Conference Operator: Our next question comes from Brendan Lynch with Barclays. Please proceed with your question.

Brendan Lynch, Analyst, Barclays: Great. Thanks for taking my questions. Bill, maybe you could just walk through your markets and highlight which ones are particularly strong right now and which ones are lagging.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah. So we’re seeing some really good demand in the Midwest markets. I mean, similar to the last couple of quarters, you know, Minneapolis remains strong, Chicago, Milwaukee. But what we’ve seen really in the past, I would say four months, is an increase in demand in some of the big bulk Midwest distribution markets, Indianapolis being one of them, and Louisville is really strong. Columbus has strengthened with a lot of bulk distribution leases getting done there. South, Southeast has been pretty strong. I’d say on the other side of it, where we’re seeing a little bit more weakness, it’s some of the Southeast port markets, frankly, it’s Jacksonville, Savannah, Charleston, seeing some weakness there.

But then when you think about, you know, going down, you know, continuing down, you go to around to Texas. Houston’s really strong, Dallas is really strong. So overall, I mean, some good fundamentals, but seeing some weakness in those southeast port markets.

Brendan Lynch, Analyst, Barclays: Okay, great. Thanks. That’s helpful. And I believe you’ve suggested in the past that market rent growth would be kind of 0%-2% throughout 2026. With that context in mind, with those markets that are particularly strong, how much are we seeing those stronger markets deviate from that 0%-2% average?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, I don’t have all the numbers right in front of me, but I would say generally it’s a pretty tight band, because you are still, you still have some vacancy in those markets, so you’re getting, you know, a couple, 3% market rent growth in some of those stronger markets. But like, for example, in Indy or Columbus, that has really strengthened lately, I don’t think you’re seeing, you know, a 3% rent growth there. But in the Minneapolis and Milwaukee and Chicago, you might be seeing it there. And then on the other side, it’s closer to that 0%-1%.

Brendan Lynch, Analyst, Barclays: Okay. So it’s the demand that you’re seeing-

Bill Crooker, Chief Executive Officer, STAG Industrial: It’s pretty tight.

Brendan Lynch, Analyst, Barclays: It’s mostly coming through as absorption rather than pushing rents more aggressively.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah. I think what you’re seeing, you’re gonna see the rent growth really start to accelerate as you move into 2027.

Brendan Lynch, Analyst, Barclays: Okay, great. Thanks for-

Bill Crooker, Chief Executive Officer, STAG Industrial: I think that dynamic is, I think, why you’re seeing some... And what we’re seeing, I think others are too, is there are larger, more sophisticated tenants, you know, coming to us well in advance to try to renew their leases, to try to get ahead of some of the market rent growth that is likely to come.

Brendan Lynch, Analyst, Barclays: Okay. Thank you. Helpful.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thank you.

Conference Operator: Our next question comes from John Kim with BMO Capital Markets. Please proceed with your question.

John Kim, Analyst, BMO Capital Markets: Thank you. You’ve had a healthy leasing activity recently. I’m wondering if you could provide the leasing executed or signed during the quarter, and in particular, the volume versus the 3.5 million sq ft average that you had last year, and the lease spreads compared to your 18%-20% guidance.

Bill Crooker, Chief Executive Officer, STAG Industrial: There’s a lot, lot there, John. I don’t have the executed leases in front of me, you know, but we’re in, you know, with respect to what we’re budgeting for this year, I think we’re budgeting almost 18 million sq ft of leasing for 2026. So it’ll be our largest, just absolute square, square footage of leasing for the year. So I don’t—when you look at our leasing spreads of 18%-20%, you know, what the stuff, even just, just from recollection, like, you know, we see these leases getting signed, and we get notified of everything. There’s nothing that, you know, I see that’s kind of a big deviation one way or the other with respect to those spreads.

You might see something a little bit lower because the lease was a little closer to market or something a little bit higher because the lease was a little bit below market, but it’s not like we’re seeing, you know, a trend one way or the other. Rent bumps are holding up, and we’re signing rent bumps in the, you know, 3%-3.5% range.

John Kim, Analyst, BMO Capital Markets: But just following up on that, I mean, if you, if you expect 18 million sq ft of leasing, that’s almost 30% more than what you did last year, yet you’re expecting occupancy to go down. So is this a lot of early renewals, or? I’m just trying to marry the leasing activity versus the occupancy guidance.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, it’s because we had so much square feet rolling. That’s the biggest, right?

John Kim, Analyst, BMO Capital Markets: Mm-hmm.

Bill Crooker, Chief Executive Officer, STAG Industrial: So we had, you know, initially a little over 20 million sq ft rolling. And so when you have that and, you’ve got your, call it, 75% retention rate, and these leases roll throughout the year. So, we budget typically a 9- to 12-month lease-up time for these. So if they roll halfway through the year and it’s a non-renewal, and just the absolute square footage is a little higher, but we’re budgeting that, that lease is going to be re-leased in 2027, right? So that’s our occupancy guide is average, so if you that, that’s what’s impacting it. Especially, you know, another example, if you have a non-renewal happening March 31, you know, that’s gonna be vacancy for 9 months of the year, right? Because we’re budgeting that to lease up in 2027.

Now, you know, maybe there’s some, you know, maybe we leased up earlier. We certainly had several of those examples in 2025. I gave one earlier on this call. But our budget is that that will lease up in 2027. So it really is, it’s a factor of having a large amount of square feet rolling in 2026, you know, offset by high occupancy coming into 2026. So if our occupancy was lower, there’s more opportunity to backfill some of that non-renewal. And it was just an interesting dynamic that happened in 2026.

John Kim, Analyst, BMO Capital Markets: Just to clarify, your renewal-

Bill Crooker, Chief Executive Officer, STAG Industrial: High, high occupancy numbers, good leasing spreads, you know, really great year in 2025. Some great tailwinds with respect to development. We’re seeing some good acquisition activity. I mean, I was just thrilled with how 2025 went. And, you know, 2026, other than some of this occupancy loss, is shaping up to be, you know, I’m really happy with the projections that we’re putting out.

John Kim, Analyst, BMO Capital Markets: A similar renewal rate than what you’ve achieved in prior years?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, right. Exactly. It’s not like renewals are down. I think our mixed midpoint of renewal guidance is 75%.

John Kim, Analyst, BMO Capital Markets: Right. Okay, thank you.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thanks.

Conference Operator: Our next question comes from Rich Anderson with Cantor Fitzgerald. Please proceed with your question.

Blaine Heck, Analyst, Wells Fargo1: Thanks. Good morning. So just looking back, start the year last year, your same-store guidance was 3.5%-4%. You easily beat that, at 4.3%. You’re starting this year at 3%. Not to belabor the 20 million sq ft, rolling in 2026 and the 75% retention, but if you beat that retention, obviously that’s the main driver to beating your 3% same-store guidance, I assume, and you can answer that. Yeah, let me just finish the thought. Do you have a line of sight into some clarity that 25% is not gonna renew, or is that just kind of going off of your history? Do you already have a sense of that vacancy level? Just curious if you can respond to that.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah. Yeah, so I’ll answer the second question first. We have line of sight for a lot of our renewal or a lot of our lease expirations in the first half of the year. So there’s certainly lease expirations in the back half of the year that we’re saying, "Hey, these three are going to renew, and this one’s going to vacate." Right? That’s how we build up a budget, right? The back half of the year, it’s not. We’re not certain with what’s gonna happen, but you know, our team is close to our tenants. We get. We have a sense. We’re usually, you know, within 5% of our retention guidance every year. So, but a lot, some of it’s speculative.

With respect to, you know, outperformance or potential outperformance on same-store, it’s not just retention. Retention is a factor, right? If that goes up to 80% or 83%, yeah, that will help same-store, because you’re not incurring any downtime on that additional 5%-8%. But really, it’s, you know, we have lease-up projections that are, the new leasing is really heavily weighted to the back half of the year. So I think we’ve got about $3 million budgeted for new leasing, most of which is expected to occur in the back half of the year. So if that leasing occurred sooner, that would be a benefit to same-store NOI. The other factor to same-store NOI, I mean, really the other components are leasing spreads. We have pretty good insight to that.

Acquisitions and leases, we’ve got pretty good insight to that, but the last factor is credit loss, right? We’re budgeting 50 basis points of credit loss this year in our same-store pool. Last year, we budgeted 75, and we achieved, well, I don’t know if achieved is the right word. We realized 20 basis points. So, there is an incremental 30 basis points that we are budgeting for 2026. No new tenants on the watch list. It’s more of a broad-based budget. It’s not like we’ve, you know, allocated that specifically to one tenant, like we did last year with some of our credit loss budgets. So, that’s the other factor that could move same-store one way or the other.

Blaine Heck, Analyst, Wells Fargo1: Okay, great. Great color. You mentioned early in the call, delivery’s down 35% versus 2024. And I think you mentioned 180 million sq ft in 2026 deliveries. What would that equate to in terms of a draft downward versus 2025? And where do you think this all settles next year in terms of deliveries? Because, you know, in response to an earlier question, you know, perhaps there’ll be a reignited development activity. You know, maybe, we’ll see. But I’m just curious, you know, what’s the cadence of things to 2027, as you see it right now from a delivery standpoint?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, I’ll let Steve jump in on this one to kick it off.

Blaine Heck, Analyst, Wells Fargo2: Yeah. So appreciate the question. You know, we’re looking at new deliveries in 2025 of about 225 million sq ft. Obviously, well down from previous years. And when you go forward to 2026, as you mentioned, or marks, we’re looking at about 180 million sq ft. We think of a stabilized market at more 250-300 million sq ft of delivery. So deliveries are going to be well below the average at the 180 million, and I think they start to tick back up in 2027 to some of the questions that came earlier in the call about, is there going to be a little more activity about around the development world and a little more interest in, in going back? And I think that’s probably the case.

We’ve probably moved back up into the 200-200+ million sq ft in 2027. But I don’t think there’ll be a big increase to the numbers that we saw a few years ago.

Bill Crooker, Chief Executive Officer, STAG Industrial: And then the Build-to-Suit component of that, it’s like 40% this year?

Blaine Heck, Analyst, Wells Fargo2: Yeah.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah.

Blaine Heck, Analyst, Wells Fargo2: It’s moved up, you know, from 30%-40%, but that’s not abnormal, right? Right.

Blaine Heck, Analyst, Wells Fargo1: Okay. And last for me, and this is something I’m—I think I’m trying to will to happen, but you mentioned the 78,000 sq ft manufacturing-oriented lease in the first quarter. Can you sort of describe that? You know, is that a supplier, is that a real manufacturing? Is there any kind of power issues? You know, just generally, I mean, we talk a lot about your markets and being a beneficiary of onshoring and so on. You get this question a lot, I’m sure. But I’m just wondering if there’s any glimmer of manufacturing happening in your markets to a greater degree and how that might play a role longer term for STAG. Thanks.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, I’ll let, I’ll let Steve answer. And, nice job sneaking in that third question there, Rich.

Blaine Heck, Analyst, Wells Fargo1: It’s late in the call. I figured I’m the last one.

Bill Crooker, Chief Executive Officer, STAG Industrial: You’re not the last one.

Blaine Heck, Analyst, Wells Fargo1: Oh, wow. Sorry.

Blaine Heck, Analyst, Wells Fargo2: I really appreciate the question. We do have a balance of demand, particularly in our development markets, where we have a balance between distribution and manufacturing. And we saw that in Nashville, where half our building leased up to distribution, the other half to manufacturing, and that’s boded well for the development pipeline. The lease we talked about for 78,000 sq ft in the Charlotte market that we just inked, that is. They have a larger manufacturing facility that’s in the submarket, and they need, and that manufacturing is growing. And it’s more around automotive, but specialty automotive and government uses. And so yes, it is manufacturing-related. We are seeing it grow in that market, and we are seeing it elsewhere.

Bill Crooker, Chief Executive Officer, STAG Industrial: I just want to characterize the manufacturing. It’s really just light manufacturing. Yes.

Blaine Heck, Analyst, Wells Fargo2: Yeah, so that’s a good point. So a lot of what we’re seeing is the heavy manufacturing is doing well. These are relief valves in some case, where they need to either store the raw materials or do some light assembly that is tertiary, you know, a part of their core business.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, when we develop buildings, and we develop buildings, and these ones in particular, these are developed as, you know, warehouse distribution buildings, but can also, also have some additional power that, that can, be a solution for some of these ancillary manufacturing tenants.

Blaine Heck, Analyst, Wells Fargo1: Perfect. Thanks very much.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thank you.

Conference Operator: Our next question is from Michael Carroll with RBC Capital Markets. Please proceed with your question.

Michael Carroll, Analyst, RBC Capital Markets: Yep, thanks. Bill, I wanted to turn back to some of your comments on the acquisition market. I guess throughout the call, did I hear you correctly that you’re seeing more deals that come across your desk right now? And if so, what is driving that increased activity? Are there just more sellers coming back to the market, or is STAG doing something differently going forward?

Bill Crooker, Chief Executive Officer, STAG Industrial: No, it’s really sellers, and we saw that in the back half of 2025. You know, everything just came to a halt a bit at the beginning of the year last year, really, from April to July. So saw a lot of sellers come back to the market in the back half of 2025. That was one of the reasons why we had such a successful acquisition quarter in Q4 2025. And those sellers are still in the market. And we’re seeing a lot more portfolios start to come to market, even whispers of portfolios coming to market. We’re just evaluating more transactions. So really nothing that we’re doing, just more opportunities that are in the market today.

Michael Carroll, Analyst, RBC Capital Markets: And then how competitive are these deals? I mean, I guess, who are you competing with, and has that changed? And, I mean, just looking at your acquisition cap rate guidance, I mean, 2026 is really in line with 2025, so it’s kind of those cap rates kind of holding steady, where they were last year?

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, I mean, depending on the product, I mean, you can see—you’re seeing some cap rates compress. You know, for us, and when we look at deals, you know, one of the first things, you know, first things we ask, you know, does this building, you know, fit the sub-market it operates in, right? And it checks that box, and we need to make sure these deals are accretive to our portfolio and to earnings. And so for us, our cap rate guidance is a little bit of a function of our cost of capital. So, you know, we bid to where, you know, we can buy deals accretively, and, you know, if we don’t get a deal, we’re okay with that.

So that’s a little bit, but when you think about market color, yeah, we’re seeing a little bit of cap rate compression. We’re certainly seeing, you know, portfolio premiums are out there. But I would say, yeah, probably, you know, similar to 25 pricing, maybe slightly lower with respect to market. But because we operate in the, you know, in the CBRE Tier One markets, there’s a lot of opportunities, and we can cast a pretty wide net. So we’re looking at so many opportunities, and we’re able to pick off the ones that, you know, fit the submarkets well but are also accretive to our portfolio.

Michael Carroll, Analyst, RBC Capital Markets: Okay, great. Appreciate it.

Bill Crooker, Chief Executive Officer, STAG Industrial: Thanks, Mike.

Conference Operator: We have reached the end of our question-and-answer session, which means that there are no further questions at this time. I would now like to turn the floor back over to Bill Crooker for closing comments.

Bill Crooker, Chief Executive Officer, STAG Industrial: Yeah, thanks, everybody, again, for joining the call and then asking the questions. We look forward to, you know, another great year. Certainly really proud of the results we put forth in 2025, and we’ll see you all soon at the upcoming conferences.

Conference Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.