UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~September 30, 2020~~March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 1-34907

STAG Industrial, Inc.

(Exact name of registrant as specified in its charter)


Maryland		27-3099608
(State or other jurisdiction of		(IRS Employer Identification No.)
incorporation or organization)

One Federal Street
23rd Floor
Boston,	Massachusetts	02110
(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
Common stock, $0.01 par value per share	STAG	~~New York Stock Exchange~~
~~6.875% Series C Cumulative Redeemable Preferred Stock ($0.01 par value)~~	~~STAG-PC~~	New York Stock Exchange

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.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

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 ~~November 4, 2020~~May 3, 2021 was ~~149,230,244.~~159,688,186.

Table of Contents

STAG Industrial, Inc.

Table of Contents



PART I.	Financial Information	3

Item 1.	Financial Statements (unaudited)	3

	Consolidated Balance Sheets as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020	3

	Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	4

	Consolidated Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	5

	Consolidated Statements of Equity for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	6

	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2625

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4844

Item 4.	Controls and Procedures	4945

PART II.	Other Information	5046

Item 1.	Legal Proceedings	5046

Item 1A.	Risk Factors	5046

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5046

Item 3.	Defaults Upon Senior Securities	5147

Item 4.	Mine Safety Disclosures	5147

Item 5.	Other Information	5147

Item 6.	Exhibits	5248

	SIGNATURES	5349

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

STAG Industrial, Inc.

Consolidated Balance Sheets

(unaudited, in thousands, except share data)


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Assets	Assets					Assets
Rental Property:	Rental Property:					Rental Property:
Land	Land	$	447,356	$	435,923	Land	$	500,947	$	492,783
Buildings and improvements, net of accumulated depreciation of $473,369 and $387,633, respectively		3,164,553		3,087,435
Deferred leasing intangibles, net of accumulated amortization of $264,262 and $241,304, respectively		439,046		475,149
Buildings and improvements, net of accumulated depreciation of $524,965 and $495,348, respectively						Buildings and improvements, net of accumulated depreciation of $524,965 and $495,348, respectively	3,565,366		3,532,608
Deferred leasing intangibles, net of accumulated amortization of $264,103 and $258,005, respectively						Deferred leasing intangibles, net of accumulated amortization of $264,103 and $258,005, respectively	490,532		499,802
Total rental property, net	Total rental property, net	4,050,955		3,998,507		Total rental property, net	4,556,845		4,525,193
Cash and cash equivalents	Cash and cash equivalents	70,137		9,041		Cash and cash equivalents	18,579		15,666
Restricted cash	Restricted cash	4,623		2,823		Restricted cash	3,738		4,673
Tenant accounts receivable	Tenant accounts receivable	66,761		57,592		Tenant accounts receivable	79,956		77,796
Prepaid expenses and other assets	Prepaid expenses and other assets	49,157		38,231		Prepaid expenses and other assets	44,841		43,471
Interest rate swaps	Interest rate swaps	0		303		Interest rate swaps	3,592		0
Operating lease right-of-use assets	Operating lease right-of-use assets	24,124		15,129		Operating lease right-of-use assets	25,016		25,403
Assets held for sale, net	Assets held for sale, net	0		43,019		Assets held for sale, net	0		444
Total assets	Total assets	$	4,265,757	$	4,164,645	Total assets	$	4,732,567	$	4,692,646
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Liabilities:	Liabilities:					Liabilities:
Unsecured credit facility	Unsecured credit facility	$	0	$	146,000	Unsecured credit facility	$	233,000	$	107,000
Unsecured term loans, net	Unsecured term loans, net	970,696		871,375		Unsecured term loans, net	970,572		971,111
Unsecured notes, net	Unsecured notes, net	573,181		572,883		Unsecured notes, net	573,377		573,281
Mortgage notes, net	Mortgage notes, net	52,365		54,755		Mortgage notes, net	56,341		51,898
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	74,619		53,737		Accounts payable, accrued expenses and other liabilities	60,600		69,765
Interest rate swaps	Interest rate swaps	45,812		18,819		Interest rate swaps	32,106		40,656
Tenant prepaid rent and security deposits	Tenant prepaid rent and security deposits	23,413		21,993		Tenant prepaid rent and security deposits	27,522		27,844
Dividends and distributions payable	Dividends and distributions payable	18,302		17,465		Dividends and distributions payable	19,657		19,379
Deferred leasing intangibles, net of accumulated amortization of $14,176 and $12,064, respectively		24,991		26,738
Deferred leasing intangibles, net of accumulated amortization of $16,105 and $15,759, respectively						Deferred leasing intangibles, net of accumulated amortization of $16,105 and $15,759, respectively	33,559		32,762
Operating lease liabilities	Operating lease liabilities	26,414		16,989		Operating lease liabilities	27,717		27,898
Total liabilities	Total liabilities	1,809,793		1,800,754		Total liabilities	2,034,451		1,921,594
Commitments and contingencies (Note 11)	Commitments and contingencies (Note 11)					Commitments and contingencies (Note 11)
Equity:	Equity:					Equity:
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at September 30, 2020 and December 31, 2019,
Series C, 3,000,000 shares (liquidation preference of $25.00 per share) issued and outstanding at September 30, 2020 and December 31, 2019		75,000		75,000
Common stock, par value $0.01 per share, 300,000,000 shares authorized at September 30, 2020 and December 31, 2019, respectively, 149,227,013 and 142,815,593 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		1,492		1,428
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at March 31, 2021 and December 31, 2020,						Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at March 31, 2021 and December 31, 2020,
Series C, -0- and 3,000,000 shares (liquidation preference of $25.00 per share) issued and outstanding at March 31, 2021 and December 31, 2020, respectively						Series C, -0- and 3,000,000 shares (liquidation preference of $25.00 per share) issued and outstanding at March 31, 2021 and December 31, 2020, respectively	0		75,000
Common stock, par value $0.01 per share, 300,000,000 shares authorized at March 31, 2021 and December 31, 2020, respectively, 159,082,448 and 158,209,823 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively						Common stock, par value $0.01 per share, 300,000,000 shares authorized at March 31, 2021 and December 31, 2020, respectively, 159,082,448 and 158,209,823 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	1,591		1,582
Additional paid-in capital	Additional paid-in capital	3,155,271		2,970,553		Additional paid-in capital	3,443,787		3,421,721
Cumulative dividends in excess of earnings	Cumulative dividends in excess of earnings	(782,037)		(723,027)		Cumulative dividends in excess of earnings	(778,727)		(742,071)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(45,055)		(18,426)		Accumulated other comprehensive loss	(28,143)		(40,025)
Total stockholders’ equity	Total stockholders’ equity	2,404,671		2,305,528		Total stockholders’ equity	2,638,508		2,716,207
Noncontrolling interest	Noncontrolling interest	51,293		58,363		Noncontrolling interest	59,608		54,845
Total equity	Total equity	2,455,964		2,363,891		Total equity	2,698,116		2,771,052
Total liabilities and equity	Total liabilities and equity	$	4,265,757	$	4,164,645	Total liabilities and equity	$	4,732,567	$	4,692,646

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

STAG Industrial, Inc.

Consolidated Statements of Operations

(unaudited, in thousands, except per share data)


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
		2020		2019		2020		2019			2021		2020
Revenue	Revenue									Revenue
Rental income	Rental income	$	117,247	$	102,294	$	353,057	$	294,271	Rental income	$	133,825	$	118,339
Other income	Other income	48		127		403		498		Other income	170		209
Total revenue	Total revenue	117,295		102,421		353,460		294,769		Total revenue	133,995		118,548
Expenses	Expenses									Expenses
Property	Property	20,817		18,157		63,156		54,623		Property	27,002		21,947
General and administrative	General and administrative	9,537		8,924		29,316		26,723		General and administrative	12,790		10,373

Depreciation and amortization	Depreciation and amortization	53,921		46,908		160,215		133,844		Depreciation and amortization	58,407		52,688
Loss on impairments		3,172		4,413		3,172		9,757

Other expenses	Other expenses	436		458		1,500		1,284		Other expenses	852		476
Total expenses	Total expenses	87,883		78,860		257,359		226,231		Total expenses	99,051		85,484
Other income (expense)	Other income (expense)									Other income (expense)
Interest and other income	Interest and other income	165		12		400		30		Interest and other income	32		79
Interest expense	Interest expense	(15,928)		(14,053)		(46,125)		(39,080)		Interest expense	(15,358)		(14,864)
Loss on extinguishment of debt		0		0		(834)		0
Gain on involuntary conversion		1,500		0		2,157		0
Debt extinguishment and modification expenses										Debt extinguishment and modification expenses	(679)		0

Gain on the sales of rental property, net	Gain on the sales of rental property, net	9,060		1,670		56,864		3,261		Gain on the sales of rental property, net	6,409		46,759
Total other income (expense)	Total other income (expense)	(5,203)		(12,371)		12,462		(35,789)		Total other income (expense)	(9,596)		31,974
Net income	Net income	$	24,209	$	11,190	$	108,563	$	32,749	Net income	$	25,348	$	65,038
Less: income attributable to noncontrolling interest after preferred stock dividends	Less: income attributable to noncontrolling interest after preferred stock dividends	466		290		2,471		912		Less: income attributable to noncontrolling interest after preferred stock dividends	473		1,598
Net income attributable to STAG Industrial, Inc.	Net income attributable to STAG Industrial, Inc.	$	23,743	$	10,900	$	106,092	$	31,837	Net income attributable to STAG Industrial, Inc.	$	24,875	$	63,440
Less: preferred stock dividends	Less: preferred stock dividends	1,289		1,289		3,867		3,867		Less: preferred stock dividends	1,289		1,289

Less: redemption of preferred stock										Less: redemption of preferred stock	2,582		0
Less: amount allocated to participating securities	Less: amount allocated to participating securities	68		78		204		236		Less: amount allocated to participating securities	73		79
Net income attributable to common stockholders	Net income attributable to common stockholders	$	22,386	$	9,533	$	102,021	$	27,734	Net income attributable to common stockholders	$	20,931	$	62,072
Weighted average common shares outstanding — basic	Weighted average common shares outstanding — basic	148,997		127,272		148,412		122,460		Weighted average common shares outstanding — basic	158,430		147,570
Weighted average common shares outstanding — diluted	Weighted average common shares outstanding — diluted	149,905		127,469		148,865		122,720		Weighted average common shares outstanding — diluted	159,126		147,656
Net income per share — basic and diluted	Net income per share — basic and 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 — basic	$	0.15	$	0.07	$	0.69	$	0.23	Net income per share attributable to common stockholders — basic	$	0.13	$	0.42
Net income per share attributable to common stockholders — diluted	Net income per share attributable to common stockholders — diluted	$	0.15	$	0.07	$	0.69	$	0.23	Net income per share attributable to common stockholders — diluted	$	0.13	$	0.42

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

STAG Industrial, Inc.

Consolidated Statements of Comprehensive Income

(unaudited, in thousands)


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
		2020		2019		2020		2019			2021		2020
Net income	Net income	$	24,209	$	11,190	$	108,563	$	32,749	Net income	$	25,348	$	65,038
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Income (loss) on interest rate swaps	Income (loss) on interest rate swaps	4,927		(6,435)		(27,273)		(29,441)		Income (loss) on interest rate swaps	12,150		(30,191)
Other comprehensive income (loss)	Other comprehensive income (loss)	4,927		(6,435)		(27,273)		(29,441)		Other comprehensive income (loss)	12,150		(30,191)
Comprehensive income	Comprehensive income	29,136		4,755		81,290		3,308		Comprehensive income	37,498		34,847
Income attributable to noncontrolling interest after preferred stock dividends	Income attributable to noncontrolling interest after preferred stock dividends	(466)		(290)		(2,471)		(912)		Income attributable to noncontrolling interest after preferred stock dividends	(473)		(1,598)
Other comprehensive (income) loss attributable to noncontrolling interest	Other comprehensive (income) loss attributable to noncontrolling interest	(145)		176		644		930		Other comprehensive (income) loss attributable to noncontrolling interest	(268)		757
Comprehensive income attributable to STAG Industrial, Inc.	Comprehensive income attributable to STAG Industrial, Inc.	$	28,525	$	4,641	$	79,463	$	3,326	Comprehensive income attributable to STAG Industrial, Inc.	$	36,757	$	34,006

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

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 Loss		Total Stockholders’ Equity			Noncontrolling Interest - Unit Holders in Operating Partnership		Total Equity			Preferred Stock		Common Stock			Additional Paid-in Capital		Cumulative Dividends in Excess of Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Noncontrolling Interest - Unit Holders in Operating Partnership		Total Equity
				Shares	Amount										Shares					Amount
Three months ended September 30, 2020
Balance, June 30, 2020		$	75,000	148,941,121	$	1,489	$	3,148,163	$	(750,770)	$	(49,837)	$	2,424,045		$	56,272	$	2,480,317
Three months ended March 31, 2021																				Three months ended March 31, 2021
Balance, December 31, 2020																				Balance, December 31, 2020	$	75,000	158,209,823	$	1,582	$	3,421,721	$	(742,071)	$	(40,025)	$	2,716,207	$	54,845	$	2,771,052
Proceeds from sales of common stock, net	Proceeds from sales of common stock, net	—		0	0		(21)		—		—		(21)			—		(21)		Proceeds from sales of common stock, net	—		680,276	7		21,559		—		—		21,566		—		21,566

Redemption of preferred stock																				Redemption of preferred stock	(75,000)		—	—		2,573		(2,582)		—		(75,009)		—		(75,009)
Dividends and distributions, net	Dividends and distributions, net	—		—	—		—		(55,010)		—		(55,010)			(1,411)		(56,421)		Dividends and distributions, net	—		—	—		—		(58,828)		—		(58,828)		(1,436)		(60,264)
Non-cash compensation activity, net	Non-cash compensation activity, net	—		3,518	0		1,972		0		—		1,972			981		2,953		Non-cash compensation activity, net	—		95,190	1		(3,214)		(121)		—		(3,334)		6,607		3,273
Redemption of common units to common stock	Redemption of common units to common stock	—		282,374	3		4,453		—		—		4,456			(4,456)		—		Redemption of common units to common stock	—		97,159	1		1,622		—		—		1,623		(1,623)		—
Rebalancing of noncontrolling interest	Rebalancing of noncontrolling interest	—		—	—		704		—		—		704			(704)		—		Rebalancing of noncontrolling interest	—		—	—		(474)		—		—		(474)		474		—
Other comprehensive income	Other comprehensive income	—		—	—		—		—		4,782		4,782			145		4,927		Other comprehensive income	—		—	—		—		—		11,882		11,882		268		12,150
Net income	Net income	—		—	—		—		23,743		—		23,743			466		24,209		Net income	—		—	—		—		24,875		—		24,875		473		25,348
Balance, September 30, 2020		$	75,000	149,227,013	$	1,492	$	3,155,271	$	(782,037)	$	(45,055)	$	2,404,671		$	51,293	$	2,455,964
Three months ended September 30, 2019
Balance, June 30, 2019		$	75,000	126,372,945	$	1,264	$	2,501,013	$	(653,759)	$	(17,771)	$	1,905,747		$	57,505	$	1,963,252
Balance, March 31, 2021																				Balance, March 31, 2021	$	0	159,082,448	$	1,591	$	3,443,787	$	(778,727)	$	(28,143)	$	2,638,508	$	59,608	$	2,698,116
Three months ended March 31, 2020																				Three months ended March 31, 2020
Balance, December 31, 2019																				Balance, December 31, 2019	$	75,000	142,815,593	$	1,428	$	2,970,553	$	(723,027)	$	(18,426)	$	2,305,528	$	58,363	$	2,363,891
Proceeds from sales of common stock, net	Proceeds from sales of common stock, net	—		6,375,129	64		183,148		—		—		183,212			—		183,212		Proceeds from sales of common stock, net	—		5,600,000	56		172,667		—		—		172,723		—		172,723

Dividends and distributions, net	Dividends and distributions, net	—		—	—		—		(47,465)		—		(47,465)			(1,375)		(48,840)		Dividends and distributions, net	—		—	—		—		(54,822)		—		(54,822)		(896)		(55,718)
Non-cash compensation activity, net	Non-cash compensation activity, net	—		3,162	0		1,675		0		—		1,675			901		2,576		Non-cash compensation activity, net	—		73,048	1		(858)		(390)		—		(1,247)		2,618		1,371
Redemption of common units to common stock	Redemption of common units to common stock	—		207,152	2		3,001		—		—		3,003			(3,003)		—		Redemption of common units to common stock	—		219,390	2		3,426		—		—		3,428		(3,428)		—
Rebalancing of noncontrolling interest	Rebalancing of noncontrolling interest	—		—	—		(1,719)		—		—		(1,719)			1,719		—		Rebalancing of noncontrolling interest	—		—	—		(3,293)		—		—		(3,293)		3,293		—
Other comprehensive loss	Other comprehensive loss	—		—	—		—		—		(6,259)		(6,259)			(176)		(6,435)		Other comprehensive loss	—		—	—		—		—		(29,434)		(29,434)		(757)		(30,191)
Net income	Net income	—		—	—		—		10,900		—		10,900			290		11,190		Net income	—		—	—		—		63,440		—		63,440		1,598		65,038
Balance, September 30, 2019		$	75,000	132,958,388	$	1,330	$	2,687,118	$	(690,324)	$	(24,030)	$	2,049,094		$	55,861	$	2,104,955

Nine months ended September 30, 2020
Balance, December 31, 2019		$	75,000	142,815,593	$	1,428	$	2,970,553	$	(723,027)	$	(18,426)	$	2,305,528		$	58,363	$	2,363,891
Proceeds from sales of common stock, net		—		5,600,000	56		172,579		—		—		172,635			—		172,635

Dividends and distributions, net		—		—	—		—		(164,712)		—		(164,712)			(4,412)		(169,124)
Non-cash compensation activity, net		—		81,316	1		3,084		(390)		—		2,695			4,577		7,272
Redemption of common units to common stock		—		730,104	7		11,535		—		—		11,542			(11,542)		—

Rebalancing of noncontrolling interest		—		—	—		(2,480)		—		—		(2,480)			2,480		—
Other comprehensive loss		—		—	—		—		—		(26,629)		(26,629)			(644)		(27,273)
Net income		—		—	—		—		106,092		—		106,092			2,471		108,563
Balance, September 30, 2020		$	75,000	149,227,013	$	1,492	$	3,155,271	$	(782,037)	$	(45,055)	$	2,404,671		$	51,293	$	2,455,964
Nine months ended September 30, 2019
Balance, December 31, 2018		$	75,000	112,165,786	$	1,122	$	2,118,179	$	(584,979)	$	4,481	$	1,613,803		$	55,829	$	1,669,632
Leases cumulative effect adjustment		—		—	—		—		(214)		—		(214)			—		(214)
Proceeds from sales of common stock, net		—		19,997,332	201		567,876		—		—		568,077			—		568,077

Dividends and distributions, net		—		—	—		—		(136,595)		—		(136,595)			(5,247)		(141,842)
Non-cash compensation activity, net		—		134,188	1		2,198		(373)		—		1,826			4,168		5,994
Redemption of common units to common stock		—		661,082	6		9,232		—		—		9,238			(9,238)		—
Balance, March 31, 2020																				Balance, March 31, 2020	$	75,000	148,708,031	$	1,487	$	3,142,495	$	(714,799)	$	(47,860)	$	2,456,323	$	60,791	$	2,517,114

Rebalancing of noncontrolling interest		—		—	—		(10,367)		—		—		(10,367)			10,367		—
Other comprehensive loss		—		—	—		—		—		(28,511)		(28,511)			(930)		(29,441)
Net income		—		—	—		—		31,837		—		31,837			912		32,749
Balance, September 30, 2019		$	75,000	132,958,388	$	1,330	$	2,687,118	$	(690,324)	$	(24,030)	$	2,049,094		$	55,861	$	2,104,955

The accompanying notes are an integral part of these consolidated financial statements.

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STAG Industrial, Inc.

Consolidated Statements of Cash Flows

(unaudited, in thousands)


		Nine months ended September 30,					Three months ended March 31,
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	108,563	$	32,749	Net income	$	25,348	$	65,038
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	160,215		133,844		Depreciation and amortization	58,407		52,688
Loss on impairments		3,172		9,757
Gain on involuntary conversion		(2,157)		0

Non-cash portion of interest expense	Non-cash portion of interest expense	2,172		1,909		Non-cash portion of interest expense	487		676
Amortization of above and below market leases, net	Amortization of above and below market leases, net	3,629		3,344		Amortization of above and below market leases, net	1,474		984
Straight-line rent adjustments, net	Straight-line rent adjustments, net	(8,170)		(8,586)		Straight-line rent adjustments, net	(4,676)		(3,849)
Dividends on forfeited equity compensation		0		7

Loss on extinguishment of debt		834		0

Gain on the sales of rental property, net	Gain on the sales of rental property, net	(56,864)		(3,261)		Gain on the sales of rental property, net	(6,409)		(46,759)
Non-cash compensation expense	Non-cash compensation expense	8,736		7,371		Non-cash compensation expense	4,615		2,852

Change in assets and liabilities:	Change in assets and liabilities:					Change in assets and liabilities:
Tenant accounts receivable	Tenant accounts receivable	1,181		509		Tenant accounts receivable	3,281		(509)

Prepaid expenses and other assets	Prepaid expenses and other assets	(13,638)		(10,525)		Prepaid expenses and other assets	(4,132)		(490)
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	15,038		8,834		Accounts payable, accrued expenses and other liabilities	(4,613)		390
Tenant prepaid rent and security deposits	Tenant prepaid rent and security deposits	1,420		(1,022)		Tenant prepaid rent and security deposits	(322)		(441)
Total adjustments	Total adjustments	115,568		142,181		Total adjustments	48,112		5,542
Net cash provided by operating activities	Net cash provided by operating activities	224,131		174,930		Net cash provided by operating activities	73,460		70,580
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Acquisitions of land and buildings and improvements	Acquisitions of land and buildings and improvements	(162,086)		(616,647)		Acquisitions of land and buildings and improvements	(81,969)		(100,187)
Additions of land and building and improvements	Additions of land and building and improvements	(39,687)		(40,193)		Additions of land and building and improvements	(10,269)		(16,815)
Acquisitions of other assets	Acquisitions of other assets	(450)		(2,513)		Acquisitions of other assets	0		(450)

Acquisitions of operating lease right-of-use assets		(2,321)		0

Proceeds from sales of rental property, net	Proceeds from sales of rental property, net	121,339		23,700		Proceeds from sales of rental property, net	23,884		99,678
Proceeds from involuntary conversion		782		0

Acquisition deposits, net	Acquisition deposits, net	(1,124)		(1,190)		Acquisition deposits, net	2,008		500
Acquisitions of deferred leasing intangibles	Acquisitions of deferred leasing intangibles	(32,815)		(128,832)		Acquisitions of deferred leasing intangibles	(13,156)		(18,706)
Acquisitions of operating lease liabilities		2,321		0

Net cash used in investing activities	Net cash used in investing activities	(114,041)		(765,675)		Net cash used in investing activities	(79,502)		(35,980)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Proceeds from unsecured credit facility	Proceeds from unsecured credit facility	387,000		768,000		Proceeds from unsecured credit facility	393,000		387,000
Repayment of unsecured credit facility	Repayment of unsecured credit facility	(533,000)		(790,500)		Repayment of unsecured credit facility	(267,000)		(308,000)
Proceeds from unsecured term loans	Proceeds from unsecured term loans	400,000		175,000		Proceeds from unsecured term loans	300,000		100,000
Repayment of unsecured term loans	Repayment of unsecured term loans	(300,000)		0		Repayment of unsecured term loans	(300,000)		0

Repayment of mortgage notes	Repayment of mortgage notes	(2,485)		(1,441)		Repayment of mortgage notes	(531)		(497)
Payment of loan fees and costs	Payment of loan fees and costs	(1,129)		(1,226)		Payment of loan fees and costs	(2,750)		0
Payment of defeasance fees and other costs		(425)		0

Proceeds from sales of common stock, net	Proceeds from sales of common stock, net	172,605		568,390		Proceeds from sales of common stock, net	21,639		172,771

Redemption of preferred stock						Redemption of preferred stock	(75,000)		0
Dividends and distributions	Dividends and distributions	(168,288)		(139,303)		Dividends and distributions	(59,996)		(54,883)
Repurchase and retirement of share-based compensation	Repurchase and retirement of share-based compensation	(1,472)		(1,444)		Repurchase and retirement of share-based compensation	(1,342)		(1,472)

Net cash provided by (used in) financing activities		(47,194)		577,476
Increase (decrease) in cash and cash equivalents and restricted cash		62,896		(13,269)
Net cash provided by financing activities						Net cash provided by financing activities	8,020		294,919
Increase in cash and cash equivalents and restricted cash						Increase in cash and cash equivalents and restricted cash	1,978		329,519
Cash and cash equivalents and restricted cash—beginning of period	Cash and cash equivalents and restricted cash—beginning of period	11,864		22,542		Cash and cash equivalents and restricted cash—beginning of period	20,339		11,864
Cash and cash equivalents and restricted cash—end of period	Cash and cash equivalents and restricted cash—end of period	$	74,760	$	9,273	Cash and cash equivalents and restricted cash—end of period	$	22,317	$	341,383
Supplemental disclosure:	Supplemental disclosure:					Supplemental disclosure:
Cash paid for interest, net of capitalized interest	Cash paid for interest, net of capitalized interest	$	41,797	$	35,372	Cash paid for interest, net of capitalized interest	$	13,471	$	12,544
Supplemental schedule of non-cash investing and financing activities	Supplemental schedule of non-cash investing and financing activities					Supplemental schedule of non-cash investing and financing activities

Acquisitions of land and buildings and improvements	Acquisitions of land and buildings and improvements	$	(482)	$	(72)	Acquisitions of land and buildings and improvements	$	(4,239)	$	0
Acquisitions of deferred leasing intangibles	Acquisitions of deferred leasing intangibles	$	(106)	$	(24)	Acquisitions of deferred leasing intangibles	$	(703)	$	0

Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities	Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities	$	(3,970)	$	(10,824)	Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities	$	4,281	$	(1,080)
Additions to building and other capital improvements from non-cash compensation	Additions to building and other capital improvements from non-cash compensation	$	(24)	$	(59)	Additions to building and other capital improvements from non-cash compensation	$	0	$	(8)
Assumption of mortgage notes						Assumption of mortgage notes	$	5,103	$	0
Fair market value adjustment to mortgage notes acquired						Fair market value adjustment to mortgage notes acquired	$	(161)	$	0
Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities						Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities	$	879	$	(62)

Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities		$	(1,020)	$	(314)

Leases cumulative effect adjustment		$	0	$	(214)
Dividends and distributions accrued	Dividends and distributions accrued	$	18,302	$	16,293	Dividends and distributions accrued	$	19,657	$	18,301

The accompanying notes are an integral part of these consolidated financial statements.

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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 and operation of single-tenant, 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 Company is structured as an umbrella partnership REIT, commonly called an UPREIT, and owns substantially all of its assets 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, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company owned a 97.8% and ~~97.5%~~98.0%, respectively, common equity interest 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 and partnerships, including the Operating Partnership, except where context otherwise requires.

As of ~~September 30, 2020,~~March 31, 2021, the Company owned ~~462~~494 buildings in 3839 states with approximately ~~92.3~~99.1 million rentable square feet, consisting of ~~384~~414 warehouse/distribution buildings, 7072 light manufacturing buildings, and 8 flex/office buildings.

COVID-19 Pandemic

Currently, one of the most significant risks and uncertainties facing the Company and the real estate industry generally is the potential adverse effect of the ongoing public health crisis of the novel coronavirus disease (“COVID-19”) pandemic.

The Company closely monitors the effect of the COVID-19 pandemic on all aspects of its business, including how the pandemic will affect its tenants and business partners. ~~While the~~The Company did not incur significant disruptions from the COVID-19 pandemic during the ~~nine~~three months ended ~~September 30, 2020, a number of~~March 31, 2021. In addition, the ~~Company’s tenants requested rent deferral or rent abatement as a result of the pandemic and other tenants may make requests in the future. The~~ Company ~~entered~~did 0t enter into ~~a limited number of~~any rent deferral agreements during the three ~~and nine~~ months ended ~~September 30, 2020, which resulted in the recognition of approximately $0.4 million and $1.9 million of rent deferrals during the three and nine months ended September 30, 2020, respectively.~~March 31, 2021. The Company ~~evaluates~~will continue to evaluate tenant rent relief requests on an individual basis, considering a number of factors. Not all tenant requests will ultimately result in modified agreements, nor is the Company foregoing its contractual rights under its lease agreements.

The Company remains unable to predict the ultimate impact that the pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties. The extent to which the COVID-19 pandemic affects the Company’s operations and those of its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.

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, ~~2019.~~2020.

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Basis of Presentation

The Company’s consolidated financial statements include the accounts of the Company, the Operating Partnership, and their 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 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.

~~New Accounting Standards~~

~~In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04,~~ ~~Reference Rate Reform (Topic 848)~~. ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the quarter ended March 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. We have not modified any contracts to date, however, we will evaluate any debt, derivative and lease contracts that are modified in the future to ensure they are eligible for modification relief and apply the practical expedients as needed.

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)	Reconciliation of cash and cash equivalents and restricted cash (in thousands)	September 30, 2020		December 31, 2019		Reconciliation of cash and cash equivalents and restricted cash (in thousands)	March 31, 2021		December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	70,137	$	9,041	Cash and cash equivalents	$	18,579	$	15,666
Restricted cash	Restricted cash	4,623		2,823		Restricted cash	3,738		4,673
Total cash and cash equivalents and restricted cash	Total cash and cash equivalents and restricted cash	$	74,760	$	11,864	Total cash and cash equivalents and restricted cash	$	22,317	$	20,339

Incentive and Equity-Based Employee Compensation Plans

On January 7, 2021, the Company adopted the STAG Industrial, Inc. Employee Retirement Vesting Program (the “Vesting Program”) to provide supplemental retirement benefits for eligible employees. For those employees who are retirement eligible or will become retirement eligible during the applicable vesting period under the terms of the Vesting Program, the Company accelerates equity-based compensation through the employee’s six-month retirement notification period or retirement eligibility date, respectively. The adoption of the Vesting Program resulted in an increase to general and administrative expenses of approximately $1.5 million for the three months ended March 31, 2021 due to the acceleration of equity-based compensation expense for certain eligible employees. The Company estimates that the adoption of the Vesting Program will result in an increase in general and administrative expenses of approximately $2.4 million for the year ending December 31, 2021.

Taxes

Federal Income Taxes

The Company’s taxable REIT subsidiary ~~recognized net income of approximately $0, $0, $0 and $0.3 million for~~did 0t have any activity during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019, respectively, which has been included on the accompanying Consolidated Statements of Operations.~~2020.

State and Local Income, Excise, and Franchise Tax

State and local income, excise, and franchise taxes in the amount of $0.4 million ~~$1.3 million, $0.3 million~~ and ~~$0.9~~$0.4 million have been recorded in other expenses on the accompanying Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

Uncertain Tax Positions

As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, there were 0 liabilities for uncertain tax positions.

Concentrations of Credit Risk

Management believes the current credit risk of the Company’s portfolio is reasonably well diversified and does not contain any unusual concentration of credit risk.

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3. Rental Property

The following table summarizes the components of rental property as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.


Rental Property (in thousands)	Rental Property (in thousands)	September 30, 2020		December 31, 2019		Rental Property (in thousands)	March 31, 2021		December 31, 2020
Land	Land	$	447,356	$	435,923	Land	$	500,947	$	492,783
Buildings, net of accumulated depreciation of $311,326 and $254,458, respectively		2,862,026		2,787,234
Tenant improvements, net of accumulated depreciation of $23,641 and $21,487, respectively		39,495		38,339
Building and land improvements, net of accumulated depreciation of $138,402 and $111,688, respectively		243,807		232,456
Buildings, net of accumulated depreciation of $347,390 and $327,043, respectively						Buildings, net of accumulated depreciation of $347,390 and $327,043, respectively	3,242,182		3,195,439
Tenant improvements, net of accumulated depreciation of $25,333 and $24,891, respectively						Tenant improvements, net of accumulated depreciation of $25,333 and $24,891, respectively	42,290		43,684
Building and land improvements, net of accumulated depreciation of $152,242 and $143,414, respectively						Building and land improvements, net of accumulated depreciation of $152,242 and $143,414, respectively	274,135		275,433
Construction in progress	Construction in progress	19,225		29,406		Construction in progress	6,759		18,052
Deferred leasing intangibles, net of accumulated amortization of $264,262 and $241,304, respectively		439,046		475,149
Deferred leasing intangibles, net of accumulated amortization of $264,103 and $258,005, respectively						Deferred leasing intangibles, net of accumulated amortization of $264,103 and $258,005, respectively	490,532		499,802
Total rental property, net	Total rental property, net	$	4,050,955	$	3,998,507	Total rental property, net	$	4,556,845	$	4,525,193

Acquisitions

The following table summarizes the acquisitions of the Company during the three ~~and nine~~ months ended ~~September 30, 2020.~~March 31, 2021. The Company accounted for all of its acquisitions as asset acquisitions.

Market (1)
Date Acquired Square Feet Number of Buildings Purchase Price
(in thousands)
Detroit, MI January 10, 2020 491,049 1 $ 29,543
Rochester, NY January 10, 2020 124,850 1 8,565
Minneapolis/St Paul, MN February 6, 2020 139,875 1 10,460
Sacramento, CA February 6, 2020 160,534 1 18,468
Richmond, VA February 6, 2020 78,128 1 5,481
Milwaukee/Madison, WI February 7, 2020 81,230 1 7,219
Detroit, MI February 11, 2020 311,123 1 23,141
Philadelphia, PA March 9, 2020 78,000 1 6,571
Tulsa, OK March 9, 2020 134,600 1 9,895
Three months ended March 31, 2020 1,599,389 9 119,343
Sacramento, CA June 11, 2020 54,463 1 5,730
Chicago, IL June 29, 2020 67,817 1 6,184
Three months ended June 30, 2020 122,280 2 11,914
Philadelphia, PA August 31, 2020 112,294 1 8,427
Pittsburgh, PA September 3, 2020 125,000 1 15,580
Pittsburgh, PA September 24, 2020 66,387 1 6,685
Charlotte, NC September 28, 2020 50,000 1 5,729
Cleveland, OH September 29, 2020 276,000 1 28,261
Three months ended September 30, 2020 629,681 5 64,682
Nine months ended September 30, 2020 2,351,350 16 $ 195,939



Market (1)	Date Acquired	Square Feet	Number of Buildings	Purchase Price (in thousands)
Omaha/Council Bluffs, NE-IA	January 21, 2021	370,000	1	$	24,922
Minneapolis/St Paul, MN	February 24, 2021	80,655	1	10,174
Long Island, NY	February 25, 2021	64,224	1	8,516
Sacramento, CA	February 25, 2021	267,284	1	25,917
Little Rock/N Little Rock	March 1, 2021	300,160	1	24,317
Cleveland, OH	March 18, 2021	170,000	1	6,382










Three months ended March 31, 2021		1,252,323	6	$	100,228

(1) As defined by CoStar Realty Information Inc (“CoStar”). If the building is located outside of a CoStar defined market, the city and state is reflected.

~~Table of Contents~~

The following table summarizes the allocation of the consideration paid at the date of acquisition during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 for the acquired assets and liabilities in connection with the acquisitions identified in the table above.


Acquired Assets and Liabilities	Acquired Assets and Liabilities	Purchase Price (in thousands)		Weighted Average Amortization Period (years) of Intangibles at Acquisition	Acquired Assets and Liabilities	Purchase Price (in thousands)		Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land	Land	$	15,338	N/A	Land	$	9,766	N/A
Buildings	Buildings	135,570		N/A	Buildings	71,738		N/A
Tenant improvements	Tenant improvements	2,096		N/A	Tenant improvements	757		N/A
Building and land improvements	Building and land improvements	8,895		N/A	Building and land improvements	3,947		N/A
Construction in progress		669		N/A
Other assets		450		N/A
Operating lease right-of-use assets		2,321		N/A

Deferred leasing intangibles - In-place leases	Deferred leasing intangibles - In-place leases	21,496		8.0	Deferred leasing intangibles - In-place leases	9,813		8.7
Deferred leasing intangibles - Tenant relationships	Deferred leasing intangibles - Tenant relationships	10,150		11.1	Deferred leasing intangibles - Tenant relationships	4,704		11.5
Deferred leasing intangibles - Above market leases	Deferred leasing intangibles - Above market leases	3,962		12.6	Deferred leasing intangibles - Above market leases	1,975		15.0
Deferred leasing intangibles - Below market leases	Deferred leasing intangibles - Below market leases	(2,687)		5.3	Deferred leasing intangibles - Below market leases	(2,633)		5.9

Below market assumed debt adjustment					Below market assumed debt adjustment	161		18.8

Operating lease liabilities		(2,321)		N/A
Total purchase price	Total purchase price	$	195,939		Total purchase price	$	100,228

Less: Mortgage notes assumed					Less: Mortgage notes assumed	(5,103)
Net assets acquired					Net assets acquired	$	95,125

On February 25, 2021, the Company assumed a mortgage note of approximately $5.1 million in connection with the acquisition of the property located in Long Island, NY. For a discussion of the method used to determine the fair value of the mortgage note, see Note 4.

The following table summarizes the results of operations for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 for the buildings acquired during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 included in the Company’s Consolidated Statements of Operations from the date of acquisition.

Results of Operations (in thousands) Three months ended September 30, 2020 Nine months ended September 30, 2020
Total revenue $ 3,298 $ 8,046
Net income $ 601 $ 1,462


Results of Operations (in thousands)	Three months ended March 31, 2021
Total revenue	$	1,287
Net income	$	23

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Dispositions

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company sold 54 buildings to third parties comprised of approximately ~~1.7~~0.5 million rentable square feet with a net book value of approximately ~~$64.4~~$17.5 million. These buildings contributed approximately $10,000 and $0.4 million to revenue for the three months ended March 31, 2021 and 2020, respectively. These buildings contributed approximately $0.1 million ~~$0.8 million, $1.3 million~~ and $4.5 million to revenue for the three and nine months ended September 30, 2020 and 2019, respectively. These buildings contributed approximately $(0.3) million, $(0.4) million, $(0.2) million and $0.3$0.1 million to net ~~income (loss)~~loss (exclusive of gain on the sales of rental property, ~~net and loss on extinguishment of debt)~~net) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. Net proceeds from the sales of rental property were approximately ~~$121.3~~$23.9 million and the Company recognized the full gain on the sales of rental property, net, of approximately ~~$56.9~~$6.4 million ~~for the nine months ended September 30, 2020.~~

~~Loss on Impairments~~

~~The following table summarizes the Company’s loss on impairments for assets held and used during the nine months ended September 30, 2020.~~

Market(1)
Number of Buildings
Event or Change in Circumstance Leading to Impairment Evaluation(2)
Valuation technique utilized to estimate fair value
Fair Value(3)
Loss on Impairments
(in thousands)
Williamsport, PA 1 Change in estimated hold period Discounted cash flows (4)
Three months ended September 30, 2020 $ 5,019 $ 3,172
Nine months ended September 30, 2020 $ 5,019 $ 3,172

~~(1)As defined by CoStar. If the building is located outside of a CoStar defined market, the city and state is reflected.~~

~~(2)~~The Company tested the asset group for impairment utilizing a recovery analysis, 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~~ for the three months ended ~~September 30, 2020: discount rate of 10.5% and exit capitalization rate of 10.0%.~~

~~During the three and nine months ended September 30, 2019, the Company recognized approximately $4.4 million and $9.8 million, respectively, of loss on impairments related to 6 buildings.~~

~~Table of Contents~~

~~Gain on Involuntary Conversion~~

During the three and nine months ended September 30, 2020, the Company recognized a gain on involuntary conversion of approximately $1.5 million and $2.2 million, respectively, related to an eminent domain taking of a portion of a parcel of land. During the three and nine months ended September 30, 2019, the Company did not recognize any gain on involuntary conversion.March 31, 2021.

Deferred Leasing Intangibles

The following table summarizes the deferred leasing intangibles on the accompanying Consolidated Balance Sheets as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.


		September 30, 2020						December 31, 2019							March 31, 2021						December 31, 2020
Deferred Leasing Intangibles (in thousands)	Deferred Leasing Intangibles (in thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net		Deferred Leasing Intangibles (in thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Above market leases	Above market leases	$	93,002	$	(36,711)	$	56,291	$	92,607	$	(32,115)	$	60,492	Above market leases	$	92,406	$	(35,251)	$	57,155	$	92,125	$	(33,629)	$	58,496
Other intangible lease assets	Other intangible lease assets	610,306		(227,551)		382,755		623,846		(209,189)		414,657		Other intangible lease assets	662,229		(228,852)		433,377		665,682		(224,376)		441,306
Total deferred leasing intangible assets	Total deferred leasing intangible assets	$	703,308	$	(264,262)	$	439,046	$	716,453	$	(241,304)	$	475,149	Total deferred leasing intangible assets	$	754,635	$	(264,103)	$	490,532	$	757,807	$	(258,005)	$	499,802

Below market leases	Below market leases	$	39,167	$	(14,176)	$	24,991	$	38,802	$	(12,064)	$	26,738	Below market leases	$	49,664	$	(16,105)	$	33,559	$	48,521	$	(15,759)	$	32,762
Total deferred leasing intangible liabilities	Total deferred leasing intangible liabilities	$	39,167	$	(14,176)	$	24,991	$	38,802	$	(12,064)	$	26,738	Total deferred leasing intangible liabilities	$	49,664	$	(16,105)	$	33,559	$	48,521	$	(15,759)	$	32,762

The following table summarizes the amortization expense and the net decrease to rental income for the amortization of deferred leasing intangibles during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
Deferred Leasing Intangibles Amortization (in thousands)	Deferred Leasing Intangibles Amortization (in thousands)	2020		2019		2020		2019		Deferred Leasing Intangibles Amortization (in thousands)	2021		2020
Net decrease to rental income related to above and below market lease amortization	Net decrease to rental income related to above and below market lease amortization	$	1,482	$	1,248	$	3,646	$	3,361	Net decrease to rental income related to above and below market lease amortization	$	1,480	$	990
Amortization expense related to other intangible lease assets	Amortization expense related to other intangible lease assets	$	21,780	$	18,472	$	63,158	$	53,185	Amortization expense related to other intangible lease assets	$	22,447	$	20,302

The following table summarizes the amortization of deferred leasing intangibles over the next five calendar years beginning with ~~2020~~2021 as of ~~September 30, 2020.~~March 31, 2021.


Year	Year	Amortization Expense Related to Other Intangible Lease Assets (in thousands)		Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands)		Year	Amortization Expense Related to Other Intangible Lease Assets (in thousands)		Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands)
Remainder of 2020		$	18,290	$	859
2021		$	65,614	$	2,764
Remainder of 2021						Remainder of 2021	$	56,927	$	517
2022	2022	$	56,254	$	2,298	2022	$	67,300	$	483
2023	2023	$	47,759	$	2,504	2023	$	58,725	$	983
2024	2024	$	38,947	$	2,812	2024	$	49,665	$	1,452
2025						2025	$	42,085	$	1,283

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 notes as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

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Loan	Loan	Principal Outstanding as of September 30, 2020 (in thousands)		Principal Outstanding as of December 31, 2019 (in thousands)		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)	Loan	Principal Outstanding as of March 31, 2021 (in thousands)		Principal Outstanding as of December 31, 2020 (in thousands)		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:	Unsecured credit facility:									Unsecured credit facility:
Unsecured Credit Facility(4)	Unsecured Credit Facility(4)	$	0	$	146,000	L + 0.90%		January 12, 2024	i	Unsecured Credit Facility(4)	$	233,000	$	107,000	L + 0.90%		January 12, 2024	i
Total unsecured credit facility	Total unsecured credit facility	0		146,000						Total unsecured credit facility	233,000		107,000

Unsecured term loans:	Unsecured term loans:									Unsecured term loans:
Unsecured Term Loan C(5)		0		150,000		2.39	%	September 29, 2020	i
Unsecured Term Loan B(5)		0		150,000		3.05	%	March 21, 2021	i
Unsecured Term Loan A	Unsecured Term Loan A	150,000		150,000		3.38	%	March 31, 2022	i	Unsecured Term Loan A	150,000		150,000		3.38	%	March 31, 2022	i
Unsecured Term Loan D	Unsecured Term Loan D	150,000		150,000		2.85	%	January 4, 2023	i	Unsecured Term Loan D	150,000		150,000		2.85	%	January 4, 2023	i
Unsecured Term Loan G~~(6)~~		300,000		0		2.77	%	April 18, 2023	i
Unsecured Term Loan E	Unsecured Term Loan E	175,000		175,000		3.92	%	January 15, 2024	i	Unsecured Term Loan E	175,000		175,000		3.92	%	January 15, 2024	i
Unsecured Term Loan F	Unsecured Term Loan F	200,000		100,000		3.11	%	January 12, 2025	i	Unsecured Term Loan F	200,000		200,000		3.11	%	January 12, 2025	i
Unsecured Term Loan G~~(6)~~										Unsecured Term Loan G~~(6)~~	300,000		300,000		1.28	%	February 5, 2026	i
Total unsecured term loans	Total unsecured term loans	975,000		875,000						Total unsecured term loans	975,000		975,000
Less: Total unamortized deferred financing fees and debt issuance costs		(4,304)		(3,625)
Total unamortized deferred financing fees and debt issuance costs										Total unamortized deferred financing fees and debt issuance costs	(4,428)		(3,889)
Total carrying value unsecured term loans, net	Total carrying value unsecured term loans, net	970,696		871,375						Total carrying value unsecured term loans, net	970,572		971,111

Unsecured notes:	Unsecured notes:									Unsecured notes:
Series F Unsecured Notes	Series F Unsecured Notes	100,000		100,000		3.98	%	January 5, 2023	ii	Series F Unsecured Notes	100,000		100,000		3.98	%	January 5, 2023	ii
Series A Unsecured Notes	Series A Unsecured Notes	50,000		50,000		4.98	%	October 1, 2024	ii	Series A Unsecured Notes	50,000		50,000		4.98	%	October 1, 2024	ii
Series D Unsecured Notes	Series D Unsecured Notes	100,000		100,000		4.32	%	February 20, 2025	ii	Series D Unsecured Notes	100,000		100,000		4.32	%	February 20, 2025	ii
Series G Unsecured Notes	Series G Unsecured Notes	75,000		75,000		4.10	%	June 13, 2025	ii	Series G Unsecured Notes	75,000		75,000		4.10	%	June 13, 2025	ii
Series B Unsecured Notes	Series B Unsecured Notes	50,000		50,000		4.98	%	July 1, 2026	ii	Series B Unsecured Notes	50,000		50,000		4.98	%	July 1, 2026	ii
Series C Unsecured Notes	Series C Unsecured Notes	80,000		80,000		4.42	%	December 30, 2026	ii	Series C Unsecured Notes	80,000		80,000		4.42	%	December 30, 2026	ii
Series E Unsecured Notes	Series E Unsecured Notes	20,000		20,000		4.42	%	February 20, 2027	ii	Series E Unsecured Notes	20,000		20,000		4.42	%	February 20, 2027	ii
Series H Unsecured Notes	Series H Unsecured Notes	100,000		100,000		4.27	%	June 13, 2028	ii	Series H Unsecured Notes	100,000		100,000		4.27	%	June 13, 2028	ii
Total unsecured notes	Total unsecured notes	575,000		575,000						Total unsecured notes	575,000		575,000
Less: Total unamortized deferred financing fees and debt issuance costs		(1,819)		(2,117)
Total unamortized deferred financing fees and debt issuance costs										Total unamortized deferred financing fees and debt issuance costs	(1,623)		(1,719)
Total carrying value unsecured notes, net	Total carrying value unsecured notes, net	573,181		572,883						Total carrying value unsecured notes, net	573,377		573,281

Mortgage notes (secured debt):	Mortgage notes (secured debt):									Mortgage notes (secured debt):
Wells Fargo Bank, National Association CMBS Loan	Wells Fargo Bank, National Association CMBS Loan	49,013		51,406		4.31	%	December 1, 2022	iii	Wells Fargo Bank, National Association CMBS Loan	48,063		48,546		4.31	%	December 1, 2022	iii
Thrivent Financial for Lutherans	Thrivent Financial for Lutherans	3,587		3,679		4.78	%	December 15, 2023	iv	Thrivent Financial for Lutherans	3,527		3,556		4.78	%	December 15, 2023	iv
United of Omaha Life Insurance Company										United of Omaha Life Insurance Company	5,087		0		3.71	%	October 1, 2039	ii
Total mortgage notes	Total mortgage notes	52,600		55,085						Total mortgage notes	56,677		52,102
Add: Total unamortized fair market value premiums		31		39
Less: Total unamortized deferred financing fees and debt issuance costs		(266)		(369)
Net unamortized fair market value premium (discount)										Net unamortized fair market value premium (discount)	(134)		29
Total unamortized deferred financing fees and debt issuance costs										Total unamortized deferred financing fees and debt issuance costs	(202)		(233)
Total carrying value mortgage notes, net	Total carrying value mortgage notes, net	52,365		54,755						Total carrying value mortgage notes, net	56,341		51,898
Total / weighted average interest rate(7)		$	1,596,242	$	1,645,013	3.62	%
Total / weighted average interest rate(5)										Total / weighted average interest rate(5)	$	1,833,290	$	1,703,290	3.05	%

(1)Interest rate as of ~~September 30, 2020.~~March 31, 2021. At ~~September 30, 2020,~~March 31, 2021, the one-month LIBOR (“L”) was ~~0.14825%~~0.11113%. 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. 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, as defined in the respective loan agreements.

(2)The unsecured term loans have a stated interest rate of one-month LIBOR plus a spread of 1.0%~~, with the exception of the Unsecured Term Loan G which has a spread of 1.5% and is subject to a minimum rate for LIBOR of 0.25%~~. As of ~~September 30, 2020,~~March 31, 2021, one-month LIBOR for the Unsecured Term Loans A, D, E, F, and G was swapped to a fixed rate of 2.38%, 1.85%, 2.92%, 2.11%, and ~~1.17%~~0.28%, respectively. One-month LIBOR for the Unsecured Term Loan G will be swapped to a fixed rate of ~~0.28%~~0.94% effective ~~March 19, 2021.~~April 18, 2023.

(3)Prepayment terms consist of (i) pre-payable with no penalty; (ii) pre-payable with penalty; (iii) pre-payable without penalty three months prior to the maturity date, however can be defeased; and (iv) pre-payable without penalty three months prior to the maturity date.

(4)The capacity of the unsecured credit facility is ~~$500.0~~$750.0 million. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately ~~$1.8~~$2.5 million and ~~$2.4~~$1.6 million is included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. The initial maturity date is January 15, 2023, which may be extended pursuant to 2 six-month extension options exercisable by the Company in its 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.

(5)The ~~Unsecured Term Loan B and the Unsecured Term Loan C were paid in full on April 17, 2020 in connection with the execution of the Unsecured Term Loan G.~~

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~~(6)~~The initial maturity date is April 16, 2021, which may be extended pursuant to two one-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.

~~(7)The~~ weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $975.0 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.~~premiums or discounts.

The aggregate undrawn nominal commitment on the unsecured credit facility as of ~~September 30, 2020~~March 31, 2021 was approximately ~~$497.0~~$514.4 million, including issued letters of credit. The Company’s actual borrowing capacity at any given point in time may be less and is restricted to a maximum amount based on the Company’s debt covenant compliance. Total accrued interest for the

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Company’s indebtedness was approximately ~~$7.8~~$7.9 million and $6.3 million as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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, 2020~~March 31, 2021 and ~~2019.~~2020.


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
Costs Included in Interest Expense (in thousands)	Costs Included in Interest Expense (in thousands)	2020		2019		2020		2019		Costs Included in Interest Expense (in thousands)	2021		2020
Amortization of deferred financing fees and debt issuance costs and fair market value premiums		$	750	$	673	$	2,172	$	1,909
Amortization of deferred financing fees and debt issuance costs and fair market value premiums/discounts										Amortization of deferred financing fees and debt issuance costs and fair market value premiums/discounts	$	487	$	676
Facility, unused, and other fees	Facility, unused, and other fees	$	315	$	348	$	995	$	1,118	Facility, unused, and other fees	$	386	$	364

On ~~April 29, 2020,~~February 25 2021, the Company assumed a mortgage note ~~associated~~ with ~~the Wells Fargo, National Association CMBS Loan was partially defeased in the amount~~United of Omaha Life Insurance Company of approximately ~~$1.0~~$5.1 million in connection with the ~~sale~~acquisition of the ~~Johnstown,~~property located in Long Island, NY, ~~property,~~ which ~~had served~~serves as ~~partial~~ collateral for the ~~mortgage note.~~debt. The ~~associated defeasance fees~~debt matures on October 1, 2039 and ~~unamortized deferred financing fees~~bears interest at 3.71% per annum. The assumed debt was recorded at fair value and ~~debt issuance costs~~a fair value discount of approximately ~~$0.1~~$0.2 million ~~were written off to loss on extinguishment~~was recorded during three months ended March 31, 2021. The fair value of debt inwas determined by discounting the ~~accompanying Consolidated Statement~~future cash flows using the current rate of ~~Operations during~~approximately 4.10% at which loans would be made to borrowers with similar credit ratings for loans with similar maturities, terms, and loan-to-value ratios. The fair value of the ~~nine months ended September 30, 2020.~~debt is based on Level 3 inputs and is a nonrecurring fair value measurement.

On ~~April 17, 2020,~~February 5, 2021, the Company entered into an amendment to the ~~$300.0 million Unsecured Term Loan G with Wells Fargo, National Association, as administrative agent on behalf of~~unsecured credit facility (the “Credit Facility Amendment”). The Credit Facility Amendment provides for an increase in the ~~various lenders~~aggregate commitments available for borrowing under the ~~agreement. In connection with the execution of the Unsecured Term Loan G, the Unsecured Term Loan B and Unsecured Term Loan C were paid in full.~~unsecured credit facility from $500 million to up to $750 million. As of ~~September 30, 2020,~~March 31, 2021, the ~~Unsecured Term Loan G~~unsecured credit facility bore an interest rate of LIBOR plus a spread of ~~1.5%~~0.90% based on the Company’s debt rating, as defined in the loan agreement, and subject to a minimum rate for LIBOR of 0.25%. The Unsecured Term Loan G matures on April 16, 2021, subject to 2 one year extension options at the Company's discretion, and subject to certain conditions (other than lender discretion) such as the absence of default and the payment of an extension fee. The Company intends to exercise both extension options. To exercise the extension options the Company is required pay a fee equal to (i) 0.15% of the outstanding amount on the effective day of the first extension period and (ii) 0.20% of the outstanding amount on the effective day of the second extension period.agreement. In connection with the ~~refinancing,~~Credit Facility Amendment, the Company incurred approximately ~~$2.1~~$1.2 million in ~~deferred financing fees, including approximately $1.1 million of accrued extension fees,~~costs which are being deferred and amortized through the ~~extended~~ maturity date of ~~April 18, 2023. In connection with~~ the ~~refinancing,~~unsecured credit facility. Other than the increase in the borrowing commitments, the material terms of the unsecured credit facility remain unchanged.

On February 5, 2021, the Company ~~also recognized a loss on extinguishment of debt of approximately $0.7 million related to associated unamortized deferred financing fees and debt issuance costs related~~entered into an amendment to the Unsecured Term Loan BG (the “Amendment to Unsecured Term Loan G”). The Amendment to Unsecured Term Loan G provides for an extension of the maturity date to February 5, 2026 and a reduced stated interest rate of one-month LIBOR plus a spread that ranges from 0.85% to 1.65% for LIBOR borrowings based on the Company’s debt ratings. The Amendment to Unsecured Term Loan G also amended the provision for a minimum interest rate, or floor, for LIBOR borrowings to 0.00% and for Base Rate borrowings to 1.00%. As of March 31, 2021, borrowings under the Unsecured Term Loan ~~C and other third-party costs. The Company is required~~G bore interest at LIBOR plus 1.00%. In connection with the Amendment to ~~pay an annual fee of $35,000. The~~ Unsecured Term Loan G, ~~has an accordion feature that allows~~ the Company ~~to increase its borrowing capacity to $600.0~~incurred approximately $1.6 million ~~subject~~in costs which are being deferred and amortized through the new maturity date of February 5, 2026. The Company also incurred approximately $0.7 million of modification expenses which were recognized in debt extinguishment and modification expenses in the accompanying Consolidated Statements of Operations. Additionally, the Company reversed the previously accrued extension fees of approximately $1.1 million from the amendment to the ~~satisfaction~~Unsecured Term Loan G that was entered into on April 17, 2020, which resulted in a decrease to interest expense of ~~certain conditions~~approximately $0.3 million. Other than the maturity and ~~lender consents. The Company and certain wholly owned subsidiaries of~~interest rate provisions described above, the ~~Operating Partnership are guarantors~~material terms of the Unsecured Term Loan ~~G. The agreement also contains financial and other covenants substantially similar to the covenants in the Company’s unsecured credit facility.~~G remain unchanged.

~~On March 25, 2020, the Company drew the remaining $100.0 million of the $200.0 million Unsecured Term Loan F that was entered into on July 12, 2019.~~

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Financial Covenant Considerations

The Company was in compliance with all financial and other covenants as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 related to its unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes. The real estate net book value of the properties that are collateral for the Company’s debt arrangements was approximately ~~$82.3~~$89.0 million and ~~$85.5~~$81.4 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, and is limited to senior, property-level secured debt financing arrangements.

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Fair Value of Debt

The following table summarizes the aggregate principal outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
Indebtedness (in thousands)	Indebtedness (in thousands)	Principal Outstanding		Fair Value		Principal Outstanding		Fair Value		Indebtedness (in thousands)	Principal Outstanding		Fair Value		Principal Outstanding		Fair Value
Unsecured credit facility	Unsecured credit facility	$	0	$	0	$	146,000	$	146,000	Unsecured credit facility	$	233,000	$	233,000	$	107,000	$	107,000
Unsecured term loans	Unsecured term loans	975,000		965,296		875,000		875,000		Unsecured term loans	975,000		975,000		975,000		978,448
Unsecured notes	Unsecured notes	575,000		628,955		575,000		614,493		Unsecured notes	575,000		628,674		575,000		628,575
Mortgage notes	Mortgage notes	52,600		55,009		55,085		56,021		Mortgage notes	56,677		58,841		52,102		54,485
Total principal amount	Total principal amount	1,602,600		$	1,649,260	1,651,085		$	1,691,514	Total principal amount	1,839,677		$	1,895,515	1,709,102		$	1,768,508
Add: Total unamortized fair market value premiums		31				39
Less: Total unamortized deferred financing fees and debt issuance costs		(6,389)				(6,111)
Net unamortized fair market value premium (discount)										Net unamortized fair market value premium (discount)	(134)				29
Total unamortized deferred financing fees and debt issuance costs										Total unamortized deferred financing fees and debt issuance costs	(6,253)				(5,841)
Total carrying value	Total carrying value	$	1,596,242			$	1,645,013			Total carrying value	$	1,833,290			$	1,703,290

The applicable fair value guidance establishes a three tier 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.

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The following table summarizes the Company’s outstanding interest rate swaps as of ~~September 30, 2020.~~March 31, 2021. All of the Company’s interest rate swaps are designated as qualifying cash flow hedges.


Interest Rate Derivative Counterparty	Interest Rate Derivative Counterparty	Trade Date	Effective Date	Notional Amount (in thousands)		Fair Value (in thousands)		Pay Fixed Interest Rate		Receive Variable Interest Rate	Maturity Date	Interest Rate Derivative Counterparty	Trade Date	Effective Date	Notional Amount (in thousands)		Fair Value (in thousands)		Pay Fixed Interest Rate		Receive Variable Interest Rate	Maturity Date
Royal Bank of Canada		Jan-08-2015	Mar-20-2015	$	25,000	$	(182)	1.7090	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank		Jan-08-2015	Mar-20-2015	$	25,000	$	(182)	1.7105	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank		Jan-08-2015	Sep-10-2017	$	100,000	$	(970)	2.2255	%	One-month L	Mar-21-2021
Wells Fargo, N.A.		Jan-08-2015	Mar-20-2015	$	25,000	$	(639)	1.8280	%	One-month L	Mar-31-2022
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Jan-08-2015	Mar-20-2015	$	25,000	$	(426)	1.8280	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Jan-08-2015	Feb-14-2020	$	25,000	$	(874)	2.4535	%	One-month L	Mar-31-2022	The Toronto-Dominion Bank	Jan-08-2015	Feb-14-2020	$	25,000	$	(584)	2.4535	%	One-month L	Mar-31-2022
Regions Bank	Regions Bank	Jan-08-2015	Feb-14-2020	$	50,000	$	(1,766)	2.4750	%	One-month L	Mar-31-2022	Regions Bank	Jan-08-2015	Feb-14-2020	$	50,000	$	(1,178)	2.4750	%	One-month L	Mar-31-2022
Capital One, N.A.	Capital One, N.A.	Jan-08-2015	Feb-14-2020	$	50,000	$	(1,808)	2.5300	%	One-month L	Mar-31-2022	Capital One, N.A.	Jan-08-2015	Feb-14-2020	$	50,000	$	(1,206)	2.5300	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(979)	1.8485	%	One-month L	Jan-04-2023	The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(739)	1.8485	%	One-month L	Jan-04-2023
Royal Bank of Canada	Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(980)	1.8505	%	One-month L	Jan-04-2023	Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(740)	1.8505	%	One-month L	Jan-04-2023
Wells Fargo, N.A.		Jul-20-2017	Oct-30-2017	$	25,000	$	(980)	1.8505	%	One-month L	Jan-04-2023
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(740)	1.8505	%	One-month L	Jan-04-2023
PNC Bank, N.A.	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(978)	1.8485	%	One-month L	Jan-04-2023	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(739)	1.8485	%	One-month L	Jan-04-2023
PNC Bank, N.A.	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(1,956)	1.8475	%	One-month L	Jan-04-2023	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(1,477)	1.8475	%	One-month L	Jan-04-2023
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Apr-20-2020	Sep-29-2020	$	75,000	$	(272)	0.2750	%	One-month L	Apr-18-2023	The Toronto-Dominion Bank	Apr-20-2020	Sep-29-2020	$	75,000	$	(83)	0.2750	%	One-month L	Apr-18-2023
Wells Fargo, N.A.		Apr-20-2020	Sep-29-2020	$	75,000	$	(279)	0.2790	%	One-month L	Apr-18-2023
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Apr-20-2020	Sep-29-2020	$	75,000	$	(90)	0.2790	%	One-month L	Apr-18-2023
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Apr-20-2020	Mar-19-2021	$	75,000	$	(230)	0.2750	%	One-month L	Apr-18-2023	The Toronto-Dominion Bank	Apr-20-2020	Mar-19-2021	$	75,000	$	(83)	0.2750	%	One-month L	Apr-18-2023
Wells Fargo, N.A.		Apr-20-2020	Mar-19-2021	$	75,000	$	(239)	0.2800	%	One-month L	Apr-18-2023
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Apr-20-2020	Mar-19-2021	$	75,000	$	(91)	0.2800	%	One-month L	Apr-18-2023
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,568)	2.9180	%	One-month L	Jan-12-2024	The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(3,585)	2.9180	%	One-month L	Jan-12-2024
PNC Bank, N.A.	PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,568)	2.9190	%	One-month L	Jan-12-2024	PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(3,582)	2.9190	%	One-month L	Jan-12-2024
Bank of Montreal	Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,568)	2.9190	%	One-month L	Jan-12-2024	Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(3,582)	2.9190	%	One-month L	Jan-12-2024
U.S. Bank, N.A.	U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(2,284)	2.9190	%	One-month L	Jan-12-2024	U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(1,793)	2.9190	%	One-month L	Jan-12-2024
Wells Fargo, N.A.		May-02-2019	Jul-15-2020	$	50,000	$	(4,412)	2.2460	%	One-month L	Jan-15-2025
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(3,100)	2.2460	%	One-month L	Jan-15-2025
U.S. Bank, N.A.	U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,411)	2.2459	%	One-month L	Jan-15-2025	U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(3,100)	2.2459	%	One-month L	Jan-15-2025
Regions Bank	Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	(4,411)	2.2459	%	One-month L	Jan-15-2025	Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	(3,096)	2.2459	%	One-month L	Jan-15-2025
Bank of Montreal	Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	(3,276)	1.7165	%	One-month L	Jan-15-2025	Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	(2,092)	1.7165	%	One-month L	Jan-15-2025
U.S. Bank, N.A.												U.S. Bank, N.A.	Feb-17-2021	Apr-18-2023	$	150,000	$	1,794	0.9385	%	One-month L	Feb-5-2026
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Feb-17-2021	Apr-18-2023	$	75,000	$	896	0.9365	%	One-month L	Feb-5-2026
The Toronto-Dominion Bank												The Toronto-Dominion Bank	Feb-17-2021	Apr-18-2023	$	75,000	$	902	0.9360	%	One-month L	Feb-5-2026

The following table summarizes the fair value of the interest rate swaps outstanding as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.


Balance Sheet Line Item (in thousands)	Balance Sheet Line Item (in thousands)	Notional Amount September 30, 2020		Fair Value September 30, 2020		Notional Amount December 31, 2019		Fair Value December 31, 2019		Balance Sheet Line Item (in thousands)	Notional Amount March 31, 2021		Fair Value March 31, 2021		Notional Amount December 31, 2020		Fair Value December 31, 2020
Interest rate swaps-Asset	Interest rate swaps-Asset	$	0	$	0	$	250,000	$	303	Interest rate swaps-Asset	$	300,000	$	3,592	$	0	$	0
Interest rate swaps-Liability	Interest rate swaps-Liability	$	1,125,000	$	(45,812)	$	850,000	$	(18,819)	Interest rate swaps-Liability	$	975,000	$	(32,106)	$	1,125,000	$	(40,656)

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 (loss) and subsequently reclassified into interest expense in the same periods during which the hedged transaction affects earnings.

Amounts reported in accumulated other comprehensive income (loss) 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 ~~$16.6~~$15.4 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the next 12 months.

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The following table summarizes the effect of cash flow hedge accounting and the location in the consolidated financial statements for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
Effect of Cash Flow Hedge Accounting (in thousands)	Effect of Cash Flow Hedge Accounting (in thousands)	2020		2019		2020		2019		Effect of Cash Flow Hedge Accounting (in thousands)	2021		2020
Income (loss) recognized in accumulated other comprehensive loss on interest rate swaps	Income (loss) recognized in accumulated other comprehensive loss on interest rate swaps	$	169	$	(5,913)	$	(36,167)	$	(26,715)	Income (loss) recognized in accumulated other comprehensive loss on interest rate swaps	$	7,750	$	(31,087)
Income (loss) reclassified from accumulated other comprehensive loss into income as interest expense		$	(4,758)	$	522	$	(8,894)	$	2,726
Loss reclassified from accumulated other comprehensive loss into income as interest expense										Loss reclassified from accumulated other comprehensive loss into income as interest expense	$	4,400	$	896
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	15,928	$	14,053	$	46,125	$	39,080	Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	15,358	$	14,864

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, 2020,~~March 31, 2021, 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 at ~~September 30, 2020,~~March 31, 2021, it could have been required to settle its obligations under the agreement of the interest rate swaps in a net liability position by counterparty plus accrued interest for approximately ~~$46.9~~$29.2 million.

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 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 itself and its counterparties. However, as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, 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 are accounted for at fair value on a recurring basis as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.


				Fair Value Measurements as of September 30, 2020 Using									Fair Value Measurements as of March 31, 2021 Using
Balance Sheet Line Item (in thousands)	Balance Sheet Line Item (in thousands)	Fair Value September 30, 2020		Level 1		Level 2		Level 3		Balance Sheet Line Item (in thousands)	Fair Value March 31, 2021		Level 1		Level 2		Level 3
Interest rate swaps-Asset	Interest rate swaps-Asset	$	0	$	0	$	0	$	0	Interest rate swaps-Asset	$	3,592	$	0	$	3,592	$	0
Interest rate swaps-Liability	Interest rate swaps-Liability	$	(45,812)	$	0	$	(45,812)	$	0	Interest rate swaps-Liability	$	(32,106)	$	0	$	(32,106)	$	0


				Fair Value Measurements as of December 31, 2019 Using									Fair Value Measurements as of December 31, 2020 Using
Balance Sheet Line Item (in thousands)	Balance Sheet Line Item (in thousands)	Fair Value December 31, 2019		Level 1		Level 2		Level 3		Balance Sheet Line Item (in thousands)	Fair Value December 31, 2020		Level 1		Level 2		Level 3
Interest rate swaps-Asset	Interest rate swaps-Asset	$	303	$	0	$	303	$	0	Interest rate swaps-Asset	$	0	$	0	$	0	$	0
Interest rate swaps-Liability	Interest rate swaps-Liability	$	(18,819)	$	0	$	(18,819)	$	0	Interest rate swaps-Liability	$	(40,656)	$	0	$	(40,656)	$	0

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6. Equity

Preferred Stock

On March 1, 2021, the Company gave notice to redeem all 3,000,000 issued and outstanding shares of the 6.875% Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock") on March 31, 2021. The ~~following table summarizes~~Company redeemed the ~~Company’s~~Series C Preferred Stock on March 31, 2021 at a cash redemption price of $25.00 per share, plus accrued and unpaid dividends to but excluding, the redemption date. The Company recognized a deemed dividend to the holders of the Series C Preferred Stock of approximately $2.6 million on the accompanying Consolidated Statements of Operations for the three months ended March 31, 2021 related to redemption costs and the original issuance costs of the Series C Preferred Stock.

The Company has 0 outstanding preferred stock issuances as of ~~September 30, 2020.~~

Preferred Stock Issuances Issuance Date Number of Shares Liquidation Value Per Share Interest Rate
6.875% Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock") March 17, 2016 3,000,000 $ 25.00 6.875 %
March 31, 2021.

The following tables summarize the dividends attributable to the Company’s outstanding preferred stock issuances during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and the year ended December 31, ~~2019.~~2020.

Quarter Ended 2021

Declaration Date

Series C
Preferred Stock Per Share

Payment Date

March 31

January 11, 2021

0.4296875

March 31, 2021

Total

0.4296875

Quarter Ended 2020

Declaration Date

Series C
Preferred Stock Per Share

Payment Date

December 31

October 9, 2020

0.4296875

December 31, 2020

September 30

July 9, 2020

0.4296875

September 30, 2020

June 30

April 9, 2020

0.4296875

June 30, 2020

March 31

January 8, 2020

0.4296875

March 31, 2020

Total

~~1.2890625~~

~~Quarter Ended 2019~~

~~Declaration Date~~

Series C
Preferred Stock Per Share

~~Payment Date~~

~~December 31~~

~~October 15, 2019~~

~~0.4296875~~

~~December 31, 2019~~

~~September 30~~

~~July 15, 2019~~

~~0.4296875~~

~~September 30, 2019~~

~~June 30~~

~~April 9, 2019~~

~~0.4296875~~

~~July 1, 2019~~

~~March 31~~

~~January 10, 2019~~

~~0.4296875~~

~~April 1, 2019~~

~~Total~~

1.7187500

~~On October 9, 2020, the Company’s board of directors declared the Series C Preferred Stock dividends for the quarter ending December 31, 2020 at a quarterly rate of $0.4296875 per share.~~

Common Stock

The following table summarizes the terms of the Company’s at-the market (“ATM”) common stock offering program as of ~~September 30, 2020.~~March 31, 2021.

ATM Common Stock Offering Program

Date

Maximum Aggregate Offering Price (in thousands)

Aggregate Common Stock Available as of September 30, 2020 (in thousands)

ATM Common Stock Offering Program

Date

Maximum Aggregate Offering Price (in thousands)

Aggregate Common Stock Available as of March 31, 2021 (in thousands)

2019 $600 million ATM

February 14, 2019

600,000

318,248

2019 $600 million ATM

February 14, 2019

600,000

296,244

The table below summarizes the activity under the ATM common stock offering program during the ~~year~~three months ended ~~December~~March 31, ~~2019~~2021 (in thousands, except share data). There was 0 activity under the ATM common stock offering program during the ~~nine months~~year ended ~~September 30,~~December 31, 2020.


		Year ended December 31, 2019			Three months ended March 31, 2021
ATM Common Stock Offering Program	ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share			Net Proceeds		ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share		Net Proceeds
2019 $600 million ATM	2019 $600 million ATM	9,711,706	$	29.01		$	279,156	2019 $600 million ATM	680,276	$	32.35	$	21,785
Total/weighted average	Total/weighted average	9,711,706	$	29.01		$	279,156	Total/weighted average	680,276	$	32.35	$	21,785

~~On January 13, 2020,~~Subsequent to March 31, 2021, the Company ~~completed an underwritten public~~sold 602,316 shares under the ATM common stock offering ~~of an aggregate 10,062,500 shares of common stock~~program at a price ~~to the underwriters~~ of ~~$30.9022~~$34.24 per share, ~~consisting~~or $20.6 million, and $33.90 per share net of ~~(i) 5,600,000 shares offered directly by~~sales agent fees. In addition, on April 5, 2021, the Company sold 1,446,760 shares on a forward basis under the ATM common stock offering program at a price of $34.56 per share, or $50.0 million, and (ii) 4,462,500 shares offered by the forward dealer in connection with certain forward sale agreements (including 1,312,500 shares offered pursuant to the underwriters’ option to purchase additional shares, which option was exercised in full).$34.2144 per share net of sales agent fees. The ~~offering closed on January 16, 2020 and the~~ Company ~~received net~~does not initially receive any proceeds from the sale of shares ~~offered directly by the~~on a forward basis. The Company ~~of approximately $173.1 million. Subject~~may elect to ~~the Company’s right to elect~~ cash settle or net share ~~settlement, the Company has the ability to~~ settle the forward ~~sales agreements~~sale agreement at any time through the scheduled maturity date of ~~the forward sale agreements of January 13, 2021.~~April 5, 2022.

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The following tables summarize the dividends attributable to the Company’s outstanding shares of common stock that were declared during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and the year ended December 31, ~~2019.~~2020.

Month Ended 2021

Declaration Date

Record Date

Per Share

Payment Date

March 31

January 11, 2021

March 31, 2021

0.120833

April 15, 2021

February 28

January 11, 2021

February 26, 2021

0.120833

March 15, 2021

January 31

January 11, 2021

January 29, 2021

0.120833

February 16, 2021

Total

0.362499

Month Ended 2020

Declaration Date

Record Date

Per Share

Payment Date

December 31

October 9, 2020

December 31, 2020

0.12

January 15, 2021

November 30

October 9, 2020

November 30, 2020

0.12

December 15, 2020

October 31

October 9, 2020

October 30, 2020

0.12

November 16, 2020

September 30

July 9, 2020

September 30, 2020

0.12

October 15, 2020

August 31

July 9, 2020

August 31, 2020

0.12

September 15, 2020

July 31

July 9, 2020

July 31, 2020

0.12

August 17, 2020

June 30

April 9, 2020

June 30, 2020

0.12

July 15, 2020

May 31

April 9, 2020

May 29, 2020

0.12

June 15, 2020

April 30

April 9, 2020

April 30, 2020

0.12

May 15, 2020

March 31

January 8, 2020

March 31, 2020

0.12

April 15, 2020

February 29

January 8, 2020

February 28, 2020

0.12

March 16, 2020

January 31

January 8, 2020

January 31, 2020

0.12

February 18, 2020

Total

~~1.08~~

~~Month Ended 2019~~

~~Declaration Date~~

~~Record Date~~

~~Per Share~~

~~Payment Date~~

~~December 31~~

~~October 15, 2019~~

~~December 31, 2019~~

~~0.119167~~

~~January 15, 2020~~

~~November 30~~

~~October 15, 2019~~

~~November 29, 2019~~

~~0.119167~~

~~December 16, 2019~~

~~October 31~~

~~October 15, 2019~~

~~October 31, 2019~~

~~0.119167~~

~~November 15, 2019~~

~~September 30~~

~~July 15, 2019~~

~~September 30, 2019~~

~~0.119167~~

~~October 15, 2019~~

~~August 31~~

~~July 15, 2019~~

~~August 30, 2019~~

~~0.119167~~

~~September 16, 2019~~

~~July 31~~

~~July 15, 2019~~

~~July 31, 2019~~

~~0.119167~~

~~August 15, 2019~~

~~June 30~~

~~April 9, 2019~~

~~June 28, 2019~~

~~0.119167~~

~~July 15, 2019~~

~~May 31~~

~~April 9, 2019~~

~~May 31, 2019~~

~~0.119167~~

~~June 17, 2019~~

~~April 30~~

~~April 9, 2019~~

~~April 30, 2019~~

~~0.119167~~

~~May 15, 2019~~

~~March 31~~

~~January 10, 2019~~

~~March 29, 2019~~

~~0.119167~~

~~April 15, 2019~~

~~February 28~~

~~January 10, 2019~~

~~February 28, 2019~~

~~0.119167~~

~~March 15, 2019~~

~~January 31~~

~~January 10, 2019~~

~~January 31, 2019~~

~~0.119167~~

~~February 15, 2019~~

~~Total~~

~~1.430004~~1.44

On ~~October 9, 2020,~~April 12, 2021, the Company’s board of directors declared the common stock dividends for the months ending ~~October~~April 30, 2021, May 31, ~~2020, November~~2021, and June 30, ~~2020, and December 31, 2020~~2021 at a monthly rate of ~~$0.12~~$0.120833 per share of common stock.

~~Table of Contents~~

Restricted Shares of Common Stock

Restricted shares of common stock granted on ~~February 13, 2020 and~~ January ~~8, 2020~~7, 2021 to certain employees of the Company, subject to the recipient’s continued employment, will vest over four years in equal installments on January 1 of each year beginning in ~~2021.~~2022. Refer to Note 8 for a discussion of the restricted shares of common stock granted on January ~~8, 2020~~7, 2021 pursuant to the ~~January 6, 2017~~2018 performance units. The following table summarizes activity related to the Company’s unvested restricted shares of common stock for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and the year ended December 31, ~~2019.~~2020.


Unvested Restricted Shares of Common Stock	Unvested Restricted Shares of Common Stock	Shares		Unvested Restricted Shares of Common Stock	Shares
Balance at December 31, 2018		190,462
Granted		110,830	(1)
Vested		(101,109)	(2)
Forfeited		(7,138)
Balance at December 31, 2019	Balance at December 31, 2019	193,045		Balance at December 31, 2019	193,045
Granted	Granted	75,419	(1)	Granted	75,419	(1)
Vested	Vested	(78,010)	(2)	Vested	(81,408)	(2)
Forfeited	Forfeited	(1,376)		Forfeited	(2,166)
Balance at September 30, 2020		189,078
Balance at December 31, 2020				Balance at December 31, 2020	184,890
Granted				Granted	90,304	(1)
Vested				Vested	(72,788)	(2)
Forfeited				Forfeited	0
Balance at March 31, 2021				Balance at March 31, 2021	202,406

(1)The fair value per share on the grant date of January 7, 2021, February 13, 2020, January 8, 2020, was $29.77, $32.64, and ~~January 7, 2019 was $32.64,~~ $31.49, ~~and $24.85,~~ respectively.

(2)The Company repurchased and retired ~~33,119~~25,840 and ~~28,504~~34,117 restricted shares of common stock that vested during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and the year ended December 31, ~~2019,~~2020, respectively.

The weighted average grant date fair value of unvested restricted shares of common stock was ~~$24.38~~$27.70 per share at December 31, ~~2019, $31.60~~2020, $29.77 per share granted during the ~~nine~~three months ended ~~September 30, 2020, $23.11~~March 31, 2021, $26.76 per share vested during the ~~nine~~three months ended ~~September 30, 2020, $26.15 per share forfeited during the nine months ended September 30, 2020,~~March 31, 2021, and ~~$27.77~~$28.96 per share at ~~September 30, 2020.~~March 31, 2021.

The unrecognized compensation expense associated with the Company’s restricted shares of common stock at ~~September 30, 2020~~March 31, 2021 was approximately ~~$3.7~~$5.0 million and is expected to be recognized over a weighted average period of approximately ~~2.5~~2.8 years.

Table of Contents

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, 2020~~March 31, 2021 and ~~2019.~~2020.


		Three months ended September 30,				Nine months ended September 30,				Three months ended March 31,
Vested Restricted Shares of Common Stock	Vested Restricted Shares of Common Stock	2020		2019		2020		2019			Vested Restricted Shares of Common Stock	2021		2020
Vested restricted shares of common stock	Vested restricted shares of common stock	0		0		78,010		78,431			Vested restricted shares of common stock	72,788		78,010
Fair value of vested restricted shares of common stock (in thousands)	Fair value of vested restricted shares of common stock (in thousands)	$	0	$	0	$	2,463	$	1,951		Fair value of vested restricted shares of common stock (in thousands)	$	2,280	$	2,463

7. Noncontrolling Interest

The following table summarizes the activity for noncontrolling interest in the Company for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and the year ended December 31, ~~2019.~~2020.


Noncontrolling Interest	Noncontrolling Interest	LTIP Units	Other Common Units	Total Noncontrolling Common Units	Noncontrolling Interest		Noncontrolling Interest	LTIP Units	Other Common Units	Total Noncontrolling Common Units	Noncontrolling Interest
Balance at December 31, 2018		1,616,200	2,453,234	4,069,434	3.5	%
Granted/Issued		364,173	0	364,173	N/A
Forfeited		(16,618)	0	(16,618)	N/A
Conversions from LTIP units to Other Common Units		(266,397)	266,397	0	N/A
Redemptions from Other Common Units to common stock		0	(680,137)	(680,137)	N/A

Balance at December 31, 2019	Balance at December 31, 2019	1,697,358	2,039,494	3,736,852	2.5	%	Balance at December 31, 2019	1,697,358	2,039,494	3,736,852	2.5	%
Granted/Issued	Granted/Issued	278,806	0	278,806	N/A		Granted/Issued	278,806	0	278,806	N/A
Forfeited	Forfeited	0	0	0	N/A		Forfeited	0	0	0	N/A
Conversions from LTIP units to Other Common Units	Conversions from LTIP units to Other Common Units	(283,741)	283,741	0	N/A		Conversions from LTIP units to Other Common Units	(283,741)	283,741	0	N/A
Redemptions from Other Common Units to common stock	Redemptions from Other Common Units to common stock	0	(730,104)	(730,104)	N/A		Redemptions from Other Common Units to common stock	0	(730,420)	(730,420)	N/A

Balance at September 30, 2020		1,692,423	1,593,131	3,285,554	2.2	%
Balance at December 31, 2020							Balance at December 31, 2020	1,692,423	1,592,815	3,285,238	2.0	%
Granted/Issued							Granted/Issued	405,844	0	405,844	N/A
Forfeited							Forfeited	0	0	0	N/A
Conversions from LTIP units to Other Common Units							Conversions from LTIP units to Other Common Units	(97,159)	97,159	0	N/A
Redemptions from Other Common Units to common stock							Redemptions from Other Common Units to common stock	0	(97,159)	(97,159)	N/A

Balance at March 31, 2021							Balance at March 31, 2021	2,001,108	1,592,815	3,593,923	2.2	%

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The weighted average grant date fair value of outstanding LTIP units was ~~$21.64~~$23.49 per unit at December 31, ~~2019, $29.47~~2020, $28.13 per unit granted during the ~~nine~~three months ended ~~September 30, 2020, $18.27~~March 31, 2021, $21.47 per unit converted during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, and ~~$23.49~~$24.53 per unit at ~~September 30, 2020.~~March 31, 2021.

LTIP Units

LTIP units granted on January ~~8, 2020~~7, 2021 to non-employee, independent directors, subject to the recipient’s continued service, will vest ~~over one year~~ on January 1, ~~2021.~~2022. LTIP units granted on January ~~8, 2020~~7, 2021 to certain senior executive officers and senior employees, subject to the recipient’s continued employment, will vest quarterly over four years, with the first vesting date having been March 31, ~~2020.~~2021. Refer to Note 8 for a discussion of the LTIP units granted on January ~~8, 2020~~7, 2021 pursuant to the ~~January 6, 2017~~2018 performance units.

The fair value of the LTIP units at the date of grant 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 are non-recurring fair value measurements. The following table summarizes the assumptions used in valuing such LTIP units granted during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 (excluding those LTIP units granted pursuant to the ~~January 6, 2017~~2018 performance units; refer to Note 8 for details).


LTIP Units	Assumptions
Grant date	January ~~8, 2020~~7, 2021
Expected term (years)	10
Expected volatility	~~18.0~~34.0		%
Expected dividend yield	~~5.75~~5.0		%
Risk-free interest rate	~~1.61~~0.229		%
Fair value of LTIP units at issuance (in thousands)	$	~~4,030~~4,316
LTIP units at issuance	~~136,741~~153,430
Fair value unit price per LTIP unit at issuance	$	~~29.47~~28.13

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The following table summarizes activity related to the Company’s unvested LTIP units for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and the year ended December 31, ~~2019.~~2020.


Unvested LTIP Units						LTIP Units
Balance at December 31, ~~2018~~						~~251,216~~
~~Granted~~						~~364,173~~
~~Vested~~						~~(371,423)~~
~~Forfeited~~						~~(16,618)~~
~~Balance at December 31,~~ 2019						227,348
Granted						278,806
Vested						~~(201,442)~~(294,706)
Forfeited						0
Balance at ~~September 30,~~December 31, 2020						~~304,712~~211,448
Granted						405,844
Vested						(183,486)
Forfeited						0
Balance at March 31, 2021						433,806

The weighted average grant date fair value of unvested LTIP units was ~~$23.37~~$26.54 per unit at December 31, ~~2019, $29.47~~2020, $28.13 per unit granted during the ~~nine~~three months ended ~~September 30, 2020, $26.23~~March 31, 2021, $28.08 per unit vested during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, and ~~$27.06~~$27.38 per unit at ~~September 30, 2020.~~March 31, 2021.

The unrecognized compensation expense associated with the Company’s LTIP units at ~~September 30, 2020~~March 31, 2021 was approximately ~~$5.6~~$6.5 million and is expected to be recognized over a weighted average period of approximately ~~2.4~~2.0 years.

The following table summarizes the fair value at vesting for the LTIP units that vested during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
Vested LTIP units	Vested LTIP units	2020		2019		2020		2019		Vested LTIP units	2021		2020
Vested LTIP units	Vested LTIP units	27,297		29,989		201,442		234,330		Vested LTIP units	183,486		130,187
Fair value of vested LTIP units (in thousands)	Fair value of vested LTIP units (in thousands)	$	832	$	884	$	5,906	$	6,348	Fair value of vested LTIP units (in thousands)	$	5,683	$	3,861

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8. Equity Incentive Plan

On January ~~8, 2020,~~7, 2021, the Company granted performance units approved by the compensation committee of the board of directors under the 2011 Plan to certain key employees of the Company. The terms of the performance units granted on January ~~8, 2020~~7, 2021 are substantially the same as the terms of the performance units granted on January ~~7, 2019,~~8, 2020, except that the measuring period commenced on January 1, ~~2020~~2021 and ends on December 31, ~~2022.~~2023.

The fair value of the performance units at the date of grant was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units ~~are~~is based on Level 3 inputs and are 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~~three months ended ~~September 30, 2020.~~March 31, 2021.


Performance Units	Assumptions
Grant date	January ~~8, 2020~~7, 2021
Expected volatility	~~17.4~~34.4		%
Expected dividend yield	~~5.75~~5.0		%
Risk-free interest rate	~~1.59~~0.2271		%
Fair value of performance units grant (in thousands)	$	~~5,389~~5,522

On December 31, ~~2019,~~2020, the measuring period pursuant to the ~~January 6, 2017~~2018 performance units concluded, and it was determined that the Company’s total stockholder return exceeded the threshold percentage and return hurdle. The compensation committee of the board of directors approved the issuance of ~~76,096~~127,671 vested LTIP units and ~~46,376~~44,591 vested shares of common stock to the participants (of which ~~18,241~~17,731 shares of common stock were repurchased and retired), which were issued on January ~~8, 2020.~~7, 2021. The compensation committee of the board of directors also approved the issuance of ~~65,969~~124,743 LTIP units and ~~3,398~~6,352 restricted shares of common stock that will vest ~~over~~in one year on December 31, ~~2020,~~2021, which were issued on January ~~8, 2020.~~7, 2021.

The unrecognized compensation expense associated with the Company’s performance units at ~~September 30, 2020~~March 31, 2021 was approximately ~~$7.3~~$10.0 million and is expected to be recognized over a weighted average period of approximately ~~1.8~~2.1 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, 2020~~March 31, 2021 and ~~2019.~~2020.


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
Non-Cash Compensation Expense (in thousands)	Non-Cash Compensation Expense (in thousands)	2020		2019		2020		2019		Non-Cash Compensation Expense (in thousands)	2021		2020
Restricted shares of common stock	Restricted shares of common stock	$	487	$	447	$	1,435	$	1,318	Restricted shares of common stock	$	651	$	467
LTIP units	LTIP units	981		901		2,923		2,687		LTIP units	2,408		964
Performance units	Performance units	1,356		1,107		4,004		3,062		Performance units	1,438		1,307
Director compensation (1)	Director compensation (1)	122		101		374		304		Director compensation (1)	118		114
Total non-cash compensation expense	Total non-cash compensation expense	$	2,946	$	2,556	$	8,736	$	7,371	Total non-cash compensation expense	$	4,615	$	2,852

(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, 2020~~March 31, 2021 and ~~2019.~~2020. The number of shares of common stock granted is calculated based on the trailing ten days average common stock price ending 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”). 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.

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The following table summarizes the components of rental income recognized during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ included in the accompanying Consolidated Statements of Operations.


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
Rental Income (in thousands)	Rental Income (in thousands)	2020		2019		2020		2019		Rental Income (in thousands)	2021		2020
Fixed lease payments	Fixed lease payments	$	92,120	$	80,262	$	273,750	$	227,337	Fixed lease payments	$	101,179	$	90,396
Variable lease payments	Variable lease payments	23,757		20,189		74,351		61,628		Variable lease payments	29,244		25,006
Straight-line rental income	Straight-line rental income	2,852		3,091		8,602		8,667		Straight-line rental income	4,882		3,927
Net decrease to rental income related to above and below market lease amortization	Net decrease to rental income related to above and below market lease amortization	(1,482)		(1,248)		(3,646)		(3,361)		Net decrease to rental income related to above and below market lease amortization	(1,480)		(990)
Total rental income	Total rental income	$	117,247	$	102,294	$	353,057	$	294,271	Total rental income	$	133,825	$	118,339

~~During the nine months ended September 30, 2020 and 2019 the~~The Company ~~evaluated~~evaluates its operating leases ~~and determined~~to determine if it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term. For those that ~~the future collectability for 10 tenants under 11 leases was~~are not ~~reasonably assured. As a result~~probable of collection, the Company ~~converted~~converts to the cash basis of ~~accounting~~accounting. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term, the Company will reinstate the accrued rent balance adjusting for ~~these leases which~~the amount related to the period when the lease was accounted for on a cash basis. During the three months ended March 31, 2021, this resulted in a ~~reduction~~net increase of rental income of approximately ~~$0.8~~$0.1 million ~~$1.7 million, $0, and $0~~ for the three ~~and nine~~ months ended ~~September 30, 2020 and 2019, respectively,~~March 31, 2021 due to the reversal of a net accrued ~~rent.~~rent liability and tenants converting from cash basis accounting to accrual basis accounting. Additionally, there was ~~$0.9~~$1.4 million ~~$1.5 million, $0, and $0~~ of contractual rental income ~~that was not recognized for payments that were~~ not received from ~~these~~cash basis tenants ~~for~~partially offset by $1.2 million of previously unrecognized rental income payments received from tenants under the cash basis of accounting during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021. During the three months ended March 31, 2020, ~~and 2019, respectively.~~the Company did not have any tenants under the cash basis of accounting.

As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company had accrued rental income of approximately ~~$54.6~~$65.4 million and ~~$44.3~~$60.0 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.

As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company had approximately ~~$28.4~~$29.9 million and ~~$22.6~~$30.1 million, respectively, of total lease security deposits available in the form of existing letters of credit, which are not reflected on the accompanying Consolidated Balance Sheets. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company had approximately $0.7 million and $0.7 million, respectively, of lease security deposits available in cash, which are included in restricted cash on the accompanying Consolidated Balance Sheets. The Company’s remaining lease security deposits are commingled in cash and cash equivalents. These funds may be used to settle tenant accounts receivables in the event of a default under the related lease. As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the Company’s total liability associated with these lease security deposits was

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approximately ~~$10.1~~$11.4 million and ~~$9.8~~$11.0 million, respectively, and is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.

The Company estimates that billings for real estate taxes, which are the responsibility of certain tenants under the terms of their leases and are not reflected on the Company’s consolidated financial statements, was approximately ~~$5.0 million, $14.7 million,~~ $5.1 million and ~~$13.1~~$4.8 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. These amounts would have been the maximum real estate tax expense of the Company, excluding any penalties or interest, had the tenants not met their contractual obligations for these periods.

The following table summarizes the maturity of fixed lease payments under the Company’s leases as of ~~September 30, 2020.~~March 31, 2021.


Year	Year	Maturity of Fixed Lease Payments (in thousands)		Year	Maturity of Fixed Lease Payments (in thousands)
Remainder of 2020		$	92,565
2021		$	362,825
Remainder of 2021				Remainder of 2021	$	306,057
2022	2022	$	327,365	2022	$	382,216
2023	2023	$	284,041	2023	$	339,261
2024	2024	$	240,067	2024	$	289,904
2025				2025	$	240,509
Thereafter	Thereafter	$	911,977	Thereafter	$	906,866

Lessee Leases

The Company has operating leases in which it is the lessee for ground leases and its corporate office lease. These leases have remaining lease terms of approximately ~~5.8~~5.3 years to ~~49.1~~48.6 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.

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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, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.


Operating Lease Term and Discount Rate	Operating Lease Term and Discount Rate	September 30, 2020		December 31, 2019		Operating Lease Term and Discount Rate	March 31, 2021		December 31, 2020
Weighted average remaining lease term (years)	Weighted average remaining lease term (years)	28.9		36.0		Weighted average remaining lease term (years)	29.9		29.9
Weighted average discount rate	Weighted average discount rate	6.8	%	7.1	%	Weighted average discount rate	6.8	%	6.8	%

The following table summarizes the operating lease cost recognized during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ included in the Company’s Consolidated Statements of Operations.


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
Operating Lease Cost (in thousands)	Operating Lease Cost (in thousands)	2020		2019		2020		2019		Operating Lease Cost (in thousands)	2021		2020
Operating lease cost included in property expense attributable to ground leases	Operating lease cost included in property expense attributable to ground leases	$	345	$	331	$	1,007	$	993	Operating lease cost included in property expense attributable to ground leases	$	417	$	331
Operating lease cost included in general and administrative expense attributable to corporate office lease	Operating lease cost included in general and administrative expense attributable to corporate office lease	424		266		1,165		799		Operating lease cost included in general and administrative expense attributable to corporate office lease	429		318
Total operating lease cost	Total operating lease cost	$	769	$	597	$	2,172	$	1,792	Total operating lease cost	$	846	$	649

The following table summarizes supplemental cash flow information related to operating leases recognized during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ in the Company’s Consolidated Statements of Cash Flows.


		Nine months ended September 30,					Three months ended March 31,
Operating Leases (in thousands)	Operating Leases (in thousands)	2020		2019		Operating Leases (in thousands)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	1,728	$	1,711	Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	627	$	571
Right-of-use assets obtained in exchange for new lease liabilities	Right-of-use assets obtained in exchange for new lease liabilities	$	7,718	$	0	Right-of-use assets obtained in exchange for new lease liabilities	$	0	$	7,718

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The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office lease as of ~~September 30, 2020.~~March 31, 2021.


Year	Year	Maturity of Operating Lease Liabilities(1) (in thousands)		Year	Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2020		$	606
2021		2,222
Remainder of 2021				Remainder of 2021	$	1,681
2022	2022	3,100		2022	3,188
2023	2023	3,153		2023	3,248
2024	2024	3,196		2024	3,291
2025				2025	3,336
Thereafter	Thereafter	59,245		Thereafter	62,365
Total lease payments	Total lease payments	71,522		Total lease payments	77,109
Less: Imputed interest	Less: Imputed interest	(45,108)		Less: Imputed interest	(49,392)
Present value of operating lease liabilities	Present value of operating lease liabilities	$	26,414	Present value of operating lease liabilities	$	27,717

(1)Operating lease liabilities do not include estimates of CPI rent changes required by certain ground lease agreements. Therefore, actual payments may differ than those presented.

10. Earnings Per Share

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ there were ~~189,202, 186,956, 220,284~~198,812 and ~~218,231,~~181,747, respectively, of unvested restricted shares of common stock on a weighted average basis that were considered participating securities.

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The following table reconciles the numerators and denominators in the computation of basic and diluted earnings per common share for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.


		Three months ended September 30,				Nine months ended September 30,					Three months ended March 31,
Earnings Per Share (in thousands, except per share data)	Earnings Per Share (in thousands, except per share data)	2020		2019		2020		2019		Earnings Per Share (in thousands, except per share data)	2021		2020
Numerator	Numerator									Numerator
Net income attributable to common stockholders	Net income attributable to common stockholders	$	22,386	$	9,533	$	102,021	$	27,734	Net income attributable to common stockholders	$	20,931	$	62,072
Denominator	Denominator									Denominator
Weighted average common shares outstanding — basic	Weighted average common shares outstanding — basic	148,997		127,272		148,412		122,460		Weighted average common shares outstanding — basic	158,430		147,570
Effect of dilutive securities(1)	Effect of dilutive securities(1)									Effect of dilutive securities(1)
Share-based compensation	Share-based compensation	675		178		375		254		Share-based compensation	350		86
Shares issuable under forward sales agreements	Shares issuable under forward sales agreements	233		19		78		6		Shares issuable under forward sales agreements	346		0
Weighted average common shares outstanding — diluted	Weighted average common shares outstanding — diluted	149,905		127,469		148,865		122,720		Weighted average common shares outstanding — diluted	159,126		147,656
Net income per share — basic and diluted	Net income per share — basic and 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 — basic	$	0.15	$	0.07	$	0.69	$	0.23	Net income per share attributable to common stockholders — basic	$	0.13	$	0.42
Net income per share attributable to common stockholders — diluted	Net income per share attributable to common stockholders — diluted	$	0.15	$	0.07	$	0.69	$	0.23	Net income per share attributable to common stockholders — diluted	$	0.13	$	0.42

(1)During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ there were ~~189, 187, 220~~approximately 199 and ~~218,~~182, unvested shares of restricted common stock, respectively, on a weighted average basis that were not included in the computation of diluted earnings per share because the allocation of income under the two-class method was more dilutive.

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.

The Company has letters of credit of approximately ~~$3.0~~$2.6 million as of ~~September 30, 2020~~March 31, 2021 related to construction projects and certain other agreements.

12. Subsequent Events

The following non-recognized subsequent events were noted.

Subsequent to ~~September 30, 2020,~~March 31, 2021, the Company ~~acquired 9 buildings with approximately 3.7 million square feet for an aggregate contractual purchase~~sold 602,316 shares under the ATM common stock offering program at a price of ~~approximately $256.5 million.~~$34.24 per share, or $20.6 million, and $33.90 per share net of sales agent fees. In addition, on April 5, 2021, the Company sold 1,446,760 shares on a forward basis under the ATM common stock offering program at a price of $34.56 per share, or $50.0 million, and $34.2144 per share net of sales agent fees. The Company ~~has~~does not ~~finalized~~initially receive any proceeds from the ~~acquisition accounting, and therefore is not able to provide the disclosures otherwise required by GAAP, for these acquisitions.~~sale of

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shares on a forward basis. The Company may elect to cash settle or net share settle the forward sale agreement at any time through the scheduled maturity date of April 5, 2022.

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, ~~2019,~~2020, 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 ~~potential~~ongoing adverse ~~effect~~effects of the ~~ongoing~~ public health crisis of the novel coronavirus disease (“COVID-19”) pandemic, or any future pandemic, epidemic or outbreak of infectious disease, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets;

•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;

•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, and other potentially catastrophic events such as acts of war and/or terrorism;

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•international, national, regional and local economic conditions;

•the general level of interest rates and currencies;

•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;

•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. Moreover, you should interpret many of the risks identified in this report, as well as the risks set forth above, as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. 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:

We define “GAAP” as generally accepted accounting principles in the United States.

We define “total annualized base rental revenue” as the contractual monthly base rent as of ~~September 30, 2020~~March 31, 2021 (which differs from rent calculated in accordance with GAAP) multiplied by 12. If a tenant is in a free rent period as of ~~September 30, 2020,~~March 31, 2021, the total annualized base rental revenue is calculated based on the first contractual monthly base rent amount multiplied by 12.

We define “occupancy rate” as 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.

We define the “Value Add Portfolio” as 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.

We define “Stabilization” for properties under development or being redeveloped as 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.

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We define the “Operating Portfolio” as all warehouse and light manufacturing assets that were acquired stabilized or have achieved Stabilization. The Operating Portfolio excludes non-core flex/office assets, assets contained in the Value Add Portfolio, and assets classified as held for sale.

We define a “Comparable Lease” as 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.

We define “SL Rent Change” as 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.

We define “Cash Rent Change” as 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.

We define “New Lease” as any 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.

We define “Renewal Lease” as 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.

Overview

We are a REIT focused on the acquisition, ownership, and operation of single-tenant, industrial properties throughout the United States. 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 qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, 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.

COVID-19 Pandemic

Since March 2020, the COVID-19 pandemic has severely harmed global economic activity and caused significant volatility and negative pressure in financial markets. The global impact of the pandemic continues to evolve and many countries, including the United States, continue to react by instituting quarantines, mandating business and school closures and restricting travel. As a result, the COVID-19 pandemic is negatively impacting almost every industry, including the real estate industry and the industries of our tenants, directly or indirectly. The rapid development and fluidity of the COVID-19 pandemic precludes any prediction as to the ultimate adverse impact the pandemic may have on our business, financial condition, results of operations and cash flows.

~~While we~~We did not incur significant disruptions from the COVID-19 pandemic during the ~~nine~~three months ended ~~September 30, 2020, a number of our tenants requested rent deferral or rent abatement as a result of the pandemic. We entered~~March 31, 2021. In addition, we did not enter into ~~a limited number of~~any rent deferral agreements during the three ~~and nine~~ months ended ~~September 30, 2020, which resulted in approximately $0.4 million and $1.9 million of rent deferrals during the three and nine months ended September 30, 2020, respectively.~~March 31, 2021. We will continue to evaluate tenant rent relief requests on an individual basis, considering a number of factors. Not all tenant requests will ultimately result in modified agreements, nor are we foregoing our contractual rights under our lease agreements.

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The COVID-19 pandemic or a future pandemic, epidemic or outbreak of infectious disease affecting states or regions in which we or our tenants operate could have material and adverse effects on our business, financial condition, results of operations and cash flows due to, among other factors: health or other government authorities requiring the closure of offices or other businesses or instituting quarantines of personnel as the result of, or in order to avoid, exposure to a contagious disease; disruption in supply and delivery chains; a general decline in business activity and demand for real estate; reduced economic activity, general economic decline or recession, which may impact our tenants’ businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to make rent payments to us timely, or at all, or to otherwise seek modifications of lease obligations; difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions, which may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis; and the potential negative impact on the health of our personnel, particularly if a significant number of our employees are impacted, which would result in a deterioration in our ability to ensure business continuity during a disruption.

The extent to which the COVID-19 pandemic or any other pandemic, epidemic or disease impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Nevertheless, the COVID-19 pandemic (or a future pandemic, epidemic or disease) presents material uncertainty and risk with respect to our business, financial condition, results of operations and cash flows.

Outlook

Our business is affected by the uncertainty regarding the current COVID-19 pandemic, the effectiveness of policies introduced to neutralize the disease, and the impact of those policies on economic activity. In June 2020, the National Bureau of Economic Research announced that the United States entered into a recession in February 2020. ~~In the third quarter,~~More recent economic measurements ~~suggest~~show that the U.S. economy ~~may be starting to recover.~~is recovering. The ultimate shape of the recovery will depend on many factors, including the length and severity of the COVID-19 pandemic. While there has been a negative impact to our tenants, we believe we will continue to benefit from having a well-diversified portfolio across ~~industry, market,~~various markets, tenant industries, and lease ~~term.~~terms. Additionally, we ~~strongly~~ believe that the ~~current economic environment~~COVID-19 pandemic is ~~likely to curb new industrial supply in the near term and to accelerate~~accelerating a number of trends that positively impact industrial demand.

~~The~~Over the course of the COVID-19 pandemic, the U.S. federal and state governments, as well as the Federal Reserve, responded to the profoundly uncertain ~~economic~~ outlook with a series of policies to ease the economic burden of COVID-19 closures on businesses and individuals. ~~The~~In March 2021, the latest major U.S. congressional policy action known as the ~~Coronavirus, Aid, Relief and Economic Security Act, or the CARES Act,~~American Rescue Plan, allocated $2$1.9 trillion in federal aid ~~to specific industries, small businesses~~focused on individuals and ~~individuals.~~state and local governments. The Federal Reserve ~~also took major actions including the completion of~~continues to be accommodative since it completed two emergency federal funds rate cuts in March 2020 to a range between 0% to 0.25%~~, adding liquidity to~~. Additionally, since entering office in January 2021, the ~~bond market, establishing new lending facilities,~~Biden administration and ~~expanding its bond buying program to include mortgage backed securities, investment grade corporate debt,~~health organizations are heavily focused on curbing the spread of COVID-19 through vaccinations and ~~high yield corporate ETFs. While we~~have made progress toward reaching a large portion of the population. We expect supportive fiscal and monetary policy to continue ~~the timing and the magnitude of further fiscal support will be likely driven by the outcome of the 2020 elections.~~as needed.

~~The~~We believe that the current economic ~~circumstances,~~environment, while ~~challenging,~~volatile, will provide us with an opportunity to demonstrate the diversification of our portfolio. Specifically, we believe our existing portfolio should benefit from competitive rental rates and strong occupancy. ~~Furthermore,~~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 the fact that we have ~~a highly diversified portfolio,~~ minimal floating rate debt exposure (taking into account our hedging activities), and strong liquidity ~~strong~~and access to capital, and that many of our competitors for the assets we purchase tend to be smaller local and regional investors who are likely to be more heavily impacted by interest rates and availability of capital.

Due to the COVID-19 pandemic, we expect acceleration in a number of industrial specific trends to support stronger long-term demand, including:

•the rise 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, a desire for greater supply chain resilience and redundancy and the overall cost of supplying and shipping goods (i.e. the shortening and fattening of the supply chain); and

•the overall quality of the transportation infrastructure in the United States.

Our portfolio continues to benefit from historically low availability throughout the national industrial market. ~~We expect a near-term reduction in national industrial demand, in the aggregate, brought on by the pandemic. Certain~~The COVID-19 pandemic has caused both positive and negative impacts at varying levels across different industries and ~~geographies are expected to be more heavily impacted. However,~~geographies.

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Ultimately, the acceleration in e-commerce brought on by the COVID-19 pandemic,

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actions taken by federal and state governments and the ~~policy~~Federal Reserve in response to the pandemic, and the recent economic recovery has helped industrial space demand remain ~~strong as the national availability rate remains stable.~~strong. We believe that the diversification of our portfolio by market, tenant industry, and tenant credit will prove to be a strength in this environment. Industrial development continues to be concentrated in the larger primary markets, ~~but~~and after a brief deceleration it ~~is likely~~has returned to ~~decelerate in the near-term.~~pre-COVID-19 pandemic levels. We have limited exposure to many of the most active development markets. We will continue to monitor the supply and demand fundamentals for industrial real estate and assess its impact on our business.

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. As of ~~September 30, 2020,~~March 31, 2021, our Operating Portfolio was approximately ~~96.9%~~97.2% leased and our SL Rent Change on New Leases and Renewal Leases in our Operating Portfolio together grew approximately ~~4.7% and 7.4%~~18.7% during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, respectively. Our Cash Rent Change on New Leases and Renewal Leases in our Operating Portfolio together grew approximately ~~1.3% and 1.7%~~9.6% during the three ~~and nine~~ months ended ~~September 30, 2020.~~March 31, 2021.

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, including those brought on by the COVID-19 pandemic, 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.

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The following table summarizes our Operating Portfolio leases that commenced during the three ~~and nine~~ months ended ~~September 30, 2020.~~March 31, 2021. Certain leases contain rental concessions; any such rental concessions are accounted for on a straight-line basis over the term of the lease.


Operating Portfolio	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(2) (years)	Rental Concessions per Square Foot(3)		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(2) (years)	Rental Concessions per Square Foot(3)

Three months ended September 30, 2020
Three months ended March 31, 2021																Three months ended March 31, 2021
New Leases	New Leases	1,576,265	$	4.00	$	3.97	$	1.24	(4.7)	%	(5.2)	%	4.4	$	1.10	New Leases	339,688	$	3.90	$	4.26	$	3.63	8.2	%	21.3	%	7.5	$	0.43
Renewal Leases	Renewal Leases	4,006,340	$	3.86	$	4.01	$	0.60	3.1	%	7.9	%	6.2	$	0.40	Renewal Leases	2,252,393	$	4.45	$	4.65	$	1.15	9.8	%	18.4	%	5.1	$	0.15

Total/weighted average	Total/weighted average	5,582,605	$	3.90	$	4.00	$	0.79	1.3	%	4.7	%	5.7	$	0.60	Total/weighted average	2,698,281	$	4.38	$	4.60	$	1.48	9.6	%	18.7	%	5.4	$	0.19
Nine months ended September 30, 2020
New Leases		2,448,688	$	3.99	$	4.09	$	1.94	(4.9)	%	(1.2)	%	5.8	$	0.89
Renewal Leases		7,629,286	$	4.13	$	4.31	$	0.76	3.6	%	9.8	%	5.7	$	0.38

Total/weighted average		10,077,974	$	4.10	$	4.26	$	1.04	1.7	%	7.4	%	5.7	$	0.50

(1)We define Total Costs as 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)We define weighted average lease term as the contractual lease term in years, assuming that tenants exercise no renewal options, purchase options, or early termination rights, weighted by square footage.

(3)Represents the total rental concessions for the entire lease term.

Additionally, for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, leases commenced totaling ~~82,420 and 564,358~~106,200 square feet, respectively, related to the Value Add Portfolio and 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 and building structure. However, we also have modified gross leases and gross leases in our building portfolio. The terms of those leases vary and on some occasions we may absorb certain building related expenses of our tenants. In our modified gross leases, we are responsible for some building related expenses during the lease term, but the cost of most of the expenses is passed through to the tenant for reimbursement to us. In our gross leases, we are responsible for all costs 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 ~~9.3%~~9.1% of our annualized base rental revenue will expire during the period from ~~October~~April 1, ~~2020~~2021 to ~~September 30, 2021,~~March 31, 2022, 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 generally be the same as the rates under existing leases expiring during the period ~~October~~April 1, ~~2020~~2021 to ~~September 30, 2021,~~March 31, 2022, thereby resulting in approximately the same revenue from the same space.

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The following table summarizes lease expirations for leases in place as of ~~September 30, 2020,~~March 31, 2021, plus available space, for each of the ten calendar years beginning with ~~2020~~2021 and thereafter in our portfolio. The information in the table assumes that tenants exercise no renewal options and no early termination rights.


Lease Expiration Year	Lease Expiration Year	Number of Leases Expiring	Total Rentable Square Feet	% of Total Occupied Square Feet		Total Annualized Base Rental Revenue (in thousands)		% of Total Annualized Base Rental Revenue		Lease Expiration Year	Number of Leases Expiring	Total Rentable Square Feet	% of Total Occupied Square Feet		Total Annualized Base Rental Revenue (in thousands)		% of Total Annualized Base Rental Revenue
Available	Available	—	3,369,218	—		—		—		Available	—	2,997,227	—		—		—
Month-to-month leases	Month-to-month leases	6	586,591	0.7	%	$	2,725	0.7	%	Month-to-month leases	4	296,513	0.3	%	$	1,297	0.3	%
Remainder of 2020		5	1,464,980	1.6	%	8,861		2.2	%
2021		59	9,299,999	10.5	%	41,847		10.4	%
Remainder of 2021										Remainder of 2021	41	6,435,657	6.7	%	29,109		6.6	%
2022	2022	78	9,434,716	10.6	%	41,881		10.4	%	2022	81	8,965,736	9.3	%	41,276		9.4	%
2023	2023	82	12,195,437	13.7	%	49,848		12.4	%	2023	94	13,302,066	13.8	%	55,749		12.7	%
2024	2024	64	10,206,756	11.5	%	46,104		11.5	%	2024	75	11,491,656	11.9	%	51,330		11.7	%
2025	2025	57	9,293,133	10.4	%	41,176		10.3	%	2025	65	10,819,557	11.3	%	48,038		10.9	%
2026	2026	52	9,230,178	10.4	%	41,727		10.4	%	2026	62	10,454,860	10.9	%	49,936		11.4	%
2027	2027	25	3,427,788	3.9	%	17,347		4.3	%	2027	31	6,140,219	6.4	%	27,076		6.2	%
2028	2028	25	4,631,094	5.2	%	20,436		5.1	%	2028	26	4,884,994	5.1	%	21,492		4.9	%
2029	2029	23	5,190,476	5.8	%	23,347		5.8	%	2029	26	5,879,711	6.1	%	27,493		6.3	%
2030										2030	19	3,630,206	3.8	%	19,303		4.4	%
Thereafter	Thereafter	55	13,971,702	15.7	%	66,083		16.5	%	Thereafter	54	13,829,214	14.4	%	66,863		15.2	%
Total	Total	531	92,302,068	100.0	%	$	401,382	100.0	%	Total	578	99,127,616	100.0	%	$	438,962	100.0	%

Portfolio Summary

The following table summarizes information relating to diversification by building type in our portfolio as of ~~September 30, 2020.~~March 31, 2021.


			Square Footage					Annualized Base Rental Revenue						Square Footage					Annualized Base Rental Revenue
Building Type	Building Type	Number of Buildings	Amount	%		Occupancy Rate		Amount (in thousands)		%		Building Type	Number of Buildings	Amount	%		Occupancy Rate		Amount (in thousands)		%
Warehouse/Distribution	Warehouse/Distribution	382	83,645,946	90.6	%	96.8	%	$	359,659	89.6	%	Warehouse/Distribution	413	90,423,325	91.2	%	97.0	%	$	394,349	89.8	%
Light Manufacturing	Light Manufacturing	70	7,902,777	8.6	%	97.5	%	38,498		9.6	%	Light Manufacturing	72	8,196,470	8.3	%	99.1	%	41,649		9.5	%
Total Operating Portfolio/weighted average	Total Operating Portfolio/weighted average	452	91,548,723	99.2	%	96.9	%	$	398,157	99.2	%	Total Operating Portfolio/weighted average	485	98,619,795	99.5	%	97.2	%	$	435,998	99.3	%

Value Add/Other	Value Add/Other	2	321,030	0.3	%	14.0	%	345		0.1	%	Value Add/Other	1	75,506	0.1	%	100.0	%	384		0.1	%
Flex/Office	Flex/Office	8	432,315	0.5	%	48.9	%	2,880		0.7	%	Flex/Office	8	432,315	0.4	%	43.8	%	2,580		0.6	%
Total portfolio/weighted average	Total portfolio/weighted average	462	92,302,068	100.0	%	96.3	%	$	401,382	100.0	%	Total portfolio/weighted average	494	99,127,616	100.0	%	97.0	%	$	438,962	100.0	%

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Portfolio Acquisitions

The following table summarizes our acquisitions during the three ~~and nine~~ months ended ~~September 30, 2020.~~March 31, 2021.

Market (1)
Date Acquired Square Feet Number of Buildings Purchase Price
(in thousands)
Detroit, MI January 10, 2020 491,049 1 $ 29,543
Rochester, NY January 10, 2020 124,850 1 8,565
Minneapolis/St Paul, MN February 6, 2020 139,875 1 10,460
Sacramento, CA February 6, 2020 160,534 1 18,468
Richmond, VA February 6, 2020 78,128 1 5,481
Milwaukee/Madison, WI February 7, 2020 81,230 1 7,219
Detroit, MI February 11, 2020 311,123 1 23,141
Philadelphia, PA March 9, 2020 78,000 1 6,571
Tulsa, OK March 9, 2020 134,600 1 9,895
Three months ended March 31, 2020 1,599,389 9 119,343
Sacramento, CA June 11, 2020 54,463 1 5,730
Chicago, IL June 29, 2020 67,817 1 6,184
Three months ended June 30, 2020 122,280 2 $ 11,914
Philadelphia, PA August 31, 2020 112,294 1 8,427
Pittsburgh, PA September 3, 2020 125,000 1 15,580
Pittsburgh, PA September 24, 2020 66,387 1 6,685
Charlotte, NC September 28, 2020 50,000 1 5,729
Cleveland, OH September 29, 2020 276,000 1 28,261
Three months ended September 30, 2020 629,681 5 64,682
Nine months ended September 30, 2020 2,351,350 16 $ 195,939



Market (1)	Date Acquired	Square Feet	Number of Buildings	Purchase Price (in thousands)
Omaha/Council Bluffs, NE-IA	January 21, 2021	370,000	1	$	24,922
Minneapolis/St Paul, MN	February 24, 2021	80,655	1	10,174
Long Island, NY	February 25, 2021	64,224	1	8,516
Sacramento, CA	February 25, 2021	267,284	1	25,917
Little Rock/N Little Rock	March 1, 2021	300,160	1	24,317
Cleveland, OH	March 18, 2021	170,000	1	6,382










Three months ended March 31, 2021		1,252,323	6	$	100,228

(1) As defined by CoStar Realty Information Inc (“CoStar”). If the building is located outside of a CoStar defined market, the city and state is reflected.

Portfolio Dispositions

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, we sold ~~five~~four buildings comprised of approximately ~~1.7~~0.5 million rentable square feet with a net book value of approximately ~~$64.4~~$17.5 million to third parties. Net proceeds from the sales of rental property were approximately ~~$121.3~~$23.9 million and we recognized the full gain on the sales of rental property, net, of approximately ~~$56.9~~$6.4 million for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

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Geographic Diversification

The following table summarizes information about the 20 largest markets in our portfolio based on total annualized base rental revenue as of ~~September 30, 2020.~~March 31, 2021.


Top 20 Markets (1)	% of Total Annualized Base Rental Revenue
Chicago, IL	7.2	%
Philadelphia, PA	~~9.3~~	%
~~Chicago, IL~~	~~6.8~~6.4	%
Greenville/Spartanburg, SC	~~5.8~~5.2	%
Pittsburgh, PA	4.7	%
~~Detroit, MI~~	~~4.5~~	%
Milwaukee/Madison, WI	4.3	%
Detroit, MI	4.2	%
Minneapolis/St Paul, MN	~~4.0~~4.2	%
Columbus, OH	3.8	%
Houston, TX	~~3.5~~3.4	%
Charlotte, NC	~~2.8~~	%
~~Indianapolis, IN~~	~~2.5~~	%
~~Cincinnati/Dayton, OH~~	~~2.5~~	%
~~Boston, MA~~	~~2.5~~2.9	%
West Michigan, MI	~~2.4~~2.5	%
~~Columbus, OH~~Indianapolis, IN	2.3	%
Boston, MA	2.3	%
El Paso, TX	~~2.2~~2.1	%
~~Columbia, SC~~Cincinnati/Dayton, OH	~~1.8~~	%
~~Westchester/So Connecticut, CT/NY~~	~~1.7~~2.1	%
Cleveland, OH	1.7	%
Raleigh/Durham, NC	1.7	%
Columbia, SC	1.6	%
Westchester/S. Connecticut, CT/NY	1.6	%
Kansas City, MO	1.5	%
Total	~~68.4~~65.7	%

(1) As defined by CoStar.

Industry Diversification

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, 2020.~~March 31, 2021.


Top 20 Tenant Industries (1)	% of Total Annualized Base Rental Revenue
~~Auto Components~~	~~11.9~~	%
Air Freight & Logistics	~~7.9~~10.6	%
Containers & Packaging	9.2	%
Auto Components	7.3	%
Commercial Services & Supplies	~~7.2~~	%
~~Containers & Packaging~~	~~7.2~~	%
~~Household Durables~~	~~5.0~~	%
~~Machinery~~	~~5.0~~	%
~~Building Products~~	~~4.6~~	%
~~Food Products~~	~~4.5~~5.4	%
Internet & Direct Mkt Retail	~~4.3~~5.4	%
Trading Companies & Distributors (Industrial Goods)	5.2	%
Machinery	5.2	%
Household Durables	4.2	%
Media	~~3.9~~4.2	%
Distributors (Consumer Goods)	4.0	%
Food & Staples Retailing	~~3.6~~4.0	%
~~Electrical Equipment~~Building Products	3.1	%
~~Beverages~~Food Products	2.8	%
~~Specialty Retail~~Beverages	~~2.4~~2.1	%
Electronic Equip, Instruments	~~2.2~~2.1	%
~~Chemicals~~Specialty Retail	2.0	%
Textiles, Apparel, Luxury ~~Good~~Goods	1.9	%
~~Household Products~~Chemicals	1.8	%
~~Metals & Mining~~Electrical Equipment	1.7	%
~~Oil, Gas~~Road & ~~Consumable Fuels~~Rail	~~1.4~~1.6	%
Total	~~84.4~~83.8	%

(1) Industry classification based on Global Industry Classification Standard methodology.

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Tenant Diversification

The following table summarizes information about the 20 largest tenants in our portfolio based on total annualized base rental revenue as of ~~September 30, 2020.~~March 31, 2021.


Top 20 Tenants (1)	Top 20 Tenants (1)	Number of Leases	% of Total Annualized Base Rental Revenue		Top 20 Tenants (1)	Number of Leases	% of Total Annualized Base Rental Revenue
Amazon	Amazon	5	2.9	%	Amazon	7	4.0	%
General Service Administration		1	1.8	%
XPO Logistics, Inc.	XPO Logistics, Inc.	5	1.3	%	XPO Logistics, Inc.	5	1.2	%
Eastern Metal Supply, Inc.					Eastern Metal Supply, Inc.	5	1.1	%
TriMas Corporation	TriMas Corporation	4	1.0	%	TriMas Corporation	4	1.0	%
FedEx Corporation					FedEx Corporation	4	1.0	%
American Tire Distributors Inc					American Tire Distributors Inc	6	0.9	%
Penguin Random House LLC	Penguin Random House LLC	1	0.9	%	Penguin Random House LLC	1	0.9	%
Westrock Company					Westrock Company	7	0.8	%
DS Smith North America	DS Smith North America	2	0.9	%	DS Smith North America	2	0.8	%
American Tire Distributors Inc		5	0.9	%
Hachette Book Group, Inc.					Hachette Book Group, Inc.	1	0.8	%
Ford Motor Company	Ford Motor Company	1	0.8	%	Ford Motor Company	1	0.8	%
Costco Wholesale Corporation					Costco Wholesale Corporation	2	0.8	%
Carolina Beverage Group	Carolina Beverage Group	2	0.8	%	Carolina Beverage Group	2	0.8	%
Hachette Book Group, Inc.		1	0.8	%
Packaging Corp of America					Packaging Corp of America	5	0.7	%
Yanfeng US Automotive Interior	Yanfeng US Automotive Interior	2	0.8	%	Yanfeng US Automotive Interior	2	0.7	%
Packaging Corp of America		5	0.8	%
FedEx Corporation		3	0.8	%
Schneider Electric USA, Inc.	Schneider Electric USA, Inc.	3	0.8	%	Schneider Electric USA, Inc.	3	0.7	%
Kenco Logistic Services, LLC	Kenco Logistic Services, LLC	2	0.7	%	Kenco Logistic Services, LLC	2	0.7	%
Perrigo Company	Perrigo Company	2	0.7	%	Perrigo Company	2	0.7	%
Generation Brands	Generation Brands	1	0.7	%	Generation Brands	1	0.6	%
DHL Supply Chain	DHL Supply Chain	4	0.7	%	DHL Supply Chain	4	0.6	%
R.R. Donnelley & Sons Company		5	0.7	%
WestRock Company		5	0.7	%
Total	Total	59	19.5	%	Total	66	19.6	%

(1) Includes tenants, guarantors, and/or non-guarantor parents.

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, ~~2019,~~2020, for a discussion of our critical accounting policies and estimates.

Incentive and Equity-Based Employee Compensation Plans

On January 7, 2021, we adopted the STAG Industrial, Inc. Employee Retirement Vesting Program (the “Vesting Program”) to provide supplemental retirement benefits for eligible employees. For those employees who are retirement eligible or will become retirement eligible during the applicable vesting period under the terms of the Vesting Program, we accelerate equity-based compensation through the employee’s six-month retirement notification period or retirement eligibility date, respectively. The adoption of the Vesting Program resulted in an increase to general and administrative expenses of approximately $1.5 million for the three months ended March 31, 2021 due to the acceleration of equity-based compensation expense for certain eligible employees. We estimate that the adoption of the Vesting Program will result in an increase in general and administrative expenses of approximately $2.4 million for the year ending December 31, 2021.

Results of Operations

The following discussion of our results of our same store (as defined below) net operating income (“NOI”) should be read in conjunction with our consolidated financial statements. 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 considered to be 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.

Table of Contents

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 revenue associated with one-time tenant reimbursements of capital expenditures. Same store properties exclude Operating Portfolio properties with expansions placed into service after December 31, ~~2018.~~2019. On ~~September 30, 2020,~~March 31, 2021, we owned ~~367~~424 industrial buildings consisting of ~~approximately 73.0 million~~85,539,384 square feet, which represents approximately ~~79.1%~~86.3% of our total portfolio, that are considered our same store portfolio in the analysis below. Same store occupancy decreased approximately 0.1% to ~~96.2%~~96.8% as of ~~September 30, 2020~~March 31, 2021 compared to ~~96.3%~~96.9% as of ~~September 30, 2019.~~March 31, 2020.

Comparison of the three months ended ~~September 30, 2020~~March 31, 2021 to the three months ended ~~September 30, 2019~~March 31, 2020

The following table summarizes selected operating information for our same store portfolio and our total portfolio for the three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (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,~~March 31, 2021 and 2020 ~~and 2019~~ 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 December 31, ~~2018~~2019 and our flex/office buildings and Value Add Portfolio.

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		Same Store Portfolio								Acquisitions/Dispositions				Other				Total Portfolio										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						Three months ended March 31,				Change				Three months ended March 31,				Three months ended March 31,						Three months ended March 31,						Change
		2020		2019		$		%		2020		2019		2020		2019		2020		2019		$			%			2021		2020		$		%		2021		2020		2021			2020			2021			2020			$		%
Revenue	Revenue																										Revenue
Operating revenue	Operating revenue																										Operating revenue
Rental income	Rental income	$	90,004	$	89,678	$	326	0.4	%	$	25,192	$	10,958	$	2,051	$	1,658	$	117,247	$	102,294	$	14,953		14.6	%	Rental income	$	112,824	$	110,071	$	2,753	2.5	%	$	16,961	$	5,313	$	4,040		$	2,955		$	133,825		$	118,339		$	15,486	13.1	%
Other income	Other income	33		64		(31)		(48.4)	%	15		63		—		—		48		127		(79)			(62.2)	%	Other income	57		170		(113)		(66.5)	%	113		4		—			35			170			209			(39)		(18.7)	%
Total operating revenue	Total operating revenue	90,037		89,742		295		0.3	%	25,207		11,021		2,051		1,658		117,295		102,421		14,874			14.5	%	Total operating revenue	112,881		110,241		2,640		2.4	%	17,074		5,317		4,040			2,990			133,995			118,548			15,447		13.0	%
Expenses	Expenses																										Expenses
Property	Property	15,772		15,376		396		2.6	%	3,979		1,973		1,066		808		20,817		18,157		2,660			14.6	%	Property	22,025		19,173		2,852		14.9	%	3,458		1,523		1,519			1,251			27,002			21,947			5,055		23.0	%
Net operating income (1)	Net operating income (1)	$	74,265	$	74,366	$	(101)	(0.1)	%	$	21,228	$	9,048	$	985	$	850	96,478		84,264		12,214			14.5	%	Net operating income (1)	$	90,856	$	91,068	$	(212)	(0.2)	%	$	13,616	$	3,794	$	2,521		$	1,739		106,993			96,601			10,392		10.8	%
Other expenses	Other expenses																										Other expenses
General and administrative	General and administrative																	9,537		8,924		613			6.9	%	General and administrative																			12,790			10,373			2,417		23.3	%

Depreciation and amortization	Depreciation and amortization																	53,921		46,908		7,013			15.0	%	Depreciation and amortization																			58,407			52,688			5,719		10.9	%
Loss on impairments																		3,172		4,413		(1,241)			(28.1)	%

Other expenses	Other expenses																	436		458		(22)			(4.8)	%	Other expenses																			852			476			376		79.0	%
Total other expenses	Total other expenses																	67,066		60,703		6,363			10.5	%	Total other expenses																			72,049			63,537			8,512		13.4	%
Total expenses	Total expenses																	87,883		78,860		9,023			11.4	%	Total expenses																			99,051			85,484			13,567		15.9	%
Other income (expense)	Other income (expense)																										Other income (expense)
Interest and other income	Interest and other income																	165		12		153			1,275.0	%	Interest and other income																			32			79			(47)		(59.5)	%
Interest expense	Interest expense																	(15,928)		(14,053)		(1,875)			13.3	%	Interest expense																			(15,358)			(14,864)			(494)		3.3	%

Gain on involuntary conversion																		1,500		—		1,500			100.0	%
Debt extinguishment and modification expenses																								Debt extinguishment and modification expenses																		(679)			—			(679)			100.0		%

Gain on the sales of rental property, net	Gain on the sales of rental property, net																	9,060		1,670		7,390			442.5	%	Gain on the sales of rental property, net																			6,409			46,759			(40,350)		(86.3)	%
Total other income (expense)	Total other income (expense)																	(5,203)		(12,371)		7,168			(57.9)	%	Total other income (expense)																			(9,596)			31,974			(41,570)		(130.0)	%
Net income	Net income																	$	24,209	$	11,190	$	13,019		116.3	%	Net income																			$	25,348		$	65,038		$	(39,690)	(61.0)	%

(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~~decreased by ~~$13.0~~$39.7 million, or ~~116.3%~~61.0%, to ~~$24.2~~$25.3 million for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$11.2~~$65.0 million for the three months ended ~~September 30, 2019.~~March 31, 2020.

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 ~~$0.3~~$2.8 million, or ~~0.4%~~2.5%, to ~~$90.0~~$112.8 million for the three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$89.7~~$110.1 million for the three months ended ~~September 30, 2019.~~March 31, 2020.

Same store lease income ~~decreased~~increased by $1.0 million, or ~~1.2%~~1.1%, to ~~$75.6~~$94.3 million for the three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$76.6~~$93.3 million for the three months ended ~~September 30, 2019.~~March 31, 2020. The ~~decrease~~increase is ~~partially attributable~~primarily due to an increase in rental income of approximately $2.4 million due to the execution of new leases and lease renewals with existing tenants, as well as a net decrease in the amortization of net above market leases of approximately $0.2 million. These increases were partially offset by a net reduction of rental income of approximately ~~$1.7~~$0.6 million ~~for certain leases~~at properties in which we determined that the future collectability was not reasonably assured, and accordingly, we converted to the cash basis of accounting and reversed any accounts receivable and accrued rent balances into rental income and did not recognize revenue for payments that were not received from the tenants. The decrease was also attributable to the reduction of base rent of approximately $1.5 million from tenant vacancies and downsizing, as well as a net increase in the amortization of net above market leases of approximately $0.4 million. These decreases were partially offset by an increase in rental income of approximately $2.6$1.0 million due to ~~the execution of new leases and lease renewals with existing tenants.~~tenant vacancy.

Same store other billings increased by ~~$0.8~~$1.7 million, or ~~5.9%~~10.1%, to ~~$13.9~~$18.5 million for the three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$13.1~~$16.8 million for the three months ended ~~September 30, 2019.~~March 31, 2020. The increase was attributable to an increase of approximately ~~$0.5~~$0.9 million related to other expense reimbursements due to ~~new leases and~~an increase in corresponding expenses. Additionally, there was an increase in real estate taxes levied by the taxing authority and changes to lease terms where we began paying the real estate taxes on behalf of tenants that had previously paid its taxes and operating expenses directly to respective vendors of approximately ~~$0.3~~of approximately $0.8 million.

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 ~~$0.4~~$2.9 million, or ~~2.6%~~14.9%, to ~~$15.8~~$22.0 million for the three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$15.4~~$19.2 million for the three months ended ~~September 30, 2019.~~March 31, 2020. This increase was primarily related to an increase in real estate taxes levied by the taxing authority of approximately ~~$0.9~~$1.4 million, ~~as well as~~ an increase of ~~$0.1~~$0.9 million related to snow removal expense, and an increase of $0.6 million related to insurance, ~~expense. These increases were partially offset by an decrease in repairs~~utility, and ~~maintenance expense and utilities expense of approximately $0.6 million.~~other expenses.

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 December 31, ~~2018,~~2019, we acquired 8053 buildings consisting of approximately ~~17.2~~11.1 million square feet (excluding ~~five buildings~~one building that ~~were~~was included in the Value Add Portfolio at ~~September 30, 2020~~March 31, 2021 or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, ~~2018)~~2019), and sold 1411 buildings ~~and two land parcels~~ consisting of approximately ~~3.3~~3.9 million square feet. For the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the buildings acquired after December 31, ~~2018~~2019 contributed approximately ~~$21.2~~$13.6 million and ~~$8.5~~$1.5 million to NOI, respectively. For the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the buildings sold after December 31, ~~2018~~2019 contributed approximately ~~$20,000~~$(40,000) and ~~$0.5~~$2.3 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

Our other assets include our flex/office buildings, Value Add Portfolio, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, ~~2018.~~2019. 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.

At ~~September 30, 2020,~~March 31, 2021, we owned eight flex/office buildings consisting of approximately 0.4 million square feet, ~~two buildings~~one building in our Value Add Portfolio consisting of approximately ~~0.3~~$0.1 million square feet, and ~~five~~eight buildings consisting of approximately ~~1.4~~2.0 million square feet that were Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, ~~2018.~~2019. These buildings contributed approximately ~~$1.4~~$3.0 million and ~~$0.9~~$1.6 million to NOI for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. Additionally, there was approximately ~~$(0.4)~~$(0.5) million and ~~$15,000~~$0.1 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

Total Other Expenses

Total other expenses consist of general and administrative expenses, depreciation and amortization, ~~loss on impairments,~~ and other expenses.

Total other expenses increased ~~$6.4~~$8.5 million, or ~~10.5%~~13.4%, for the three months ended ~~September 30, 2020~~March 31, 2021 to ~~$67.1~~$72.0 million compared to ~~$60.7~~$63.5 million for the three months ended ~~September 30, 2019.~~March 31, 2020. The increase is primarily a result of an increase in depreciation and amortization of approximately ~~$7.0~~$5.7 million due to an increase in the depreciable asset base as a result of net acquisitions. Additionally, general and administrative expenses increased by approximately ~~$0.6~~$2.4 million primarily due to the acceleration of equity-based compensation expense for certain eligible employees related to the adoption of the Vesting Program in the amount of approximately $1.5 million. General and administrative expenses also increased due to increases in compensation and other payroll costs. ~~These increases were partially offset by~~Additionally, other expenses increased approximately $0.4 million due to the settlement of litigation related to a ~~decrease in loss on impairments of approximately $1.2 million as discussed in Note 3 of~~terminated acquisition contract during the ~~accompanying Notes to Consolidated Financial Statements.~~COVID-19 pandemic.

Total Other Income (Expense)

Total other income (expense) consists of interest and other income, interest expense, ~~gain on involuntary conversion,~~debt extinguishment and modification expense, 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 net other expense decreased ~~$7.2~~$41.6 million, or ~~57.9%~~130.0%, for the three months ended ~~September 30, 2020~~March 31, 2021 to ~~$5.2~~$9.6 million total net other expense compared ~~$12.4~~$32.0 million total net other income for the three months ended ~~September 30, 2019.~~March 31, 2020. This decrease ~~was~~is primarily a result of ~~an increase~~a decrease in the gain on the sales of rental property, net of approximately $7.4 million and a gain on involuntary conversion of approximately $1.5 million related to an eminent domain taking of a portion of a parcel of land that occurred during the three months ended September 30, 2020. Additionally, there$40.4 million. This decrease was also attributable an increase of approximately ~~$0.2~~$0.7 million in ~~interest~~debt extinguishment and other income due to an increased cash and cash equivalents balance during the three months ended September 30, 2020 compared to the three months ended September 30, 2019. These increases in other income were partially offset by an increase in interest expense of approximately $1.9 million which was primarily attributable to the funding of unsecured term loans on March 25, 2020 and December 18, 2019.

~~Comparison of the nine months ended September 30, 2020 to the nine months ended September 30, 2019~~

The following table summarizes selected operating information for our same store portfolio and our total portfolio for the nine months ended September 30, 2020 and 2019 (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, 2020 and 2019 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 December 31, 2018 and our flex/office buildings and Value Add Portfolio.

~~Table of Contents~~

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
2020 2019 $ % 2020 2019 2020 2019 2020 2019 $ %
Revenue
Operating revenue
Rental income $ 270,324 $ 268,675 $ 1,649 0.6 % $ 74,683 $ 20,621 $ 8,050 $ 4,975 $ 353,057 $ 294,271 $ 58,786 20.0 %
Other income 304 396 (92) (23.2) % 60 102 39 — 403 498 (95) (19.1) %
Total operating revenue 270,628 269,071 1,557 0.6 % 74,743 20,723 8,089 4,975 353,460 294,769 58,691 19.9 %
Expenses
Property 47,976 47,803 173 0.4 % 11,688 4,234 3,492 2,586 63,156 54,623 8,533 15.6 %
Net operating income (1)
$ 222,652 $ 221,268 $ 1,384 0.6 % $ 63,055 $ 16,489 $ 4,597 $ 2,389 290,304 240,146 50,158 20.9 %
Other expenses
General and administrative 29,316 26,723 2,593 9.7 %
Depreciation and amortization 160,215 133,844 26,371 19.7 %
Loss on impairments 3,172 9,757 (6,585) (67.5) %
Other expenses 1,500 1,284 216 16.8 %
Total other expenses 194,203 171,608 22,595 13.2 %
Total expenses 257,359 226,231 31,128 13.8 %
Other income (expense)
Interest and other income 400 30 370 1,233.3 %
Interest expense (46,125) (39,080) (7,045) 18.0 %
Loss on extinguishment of debt (834) — (834) 100.0 %
Gain on involuntary conversion 2,157 — 2,157 100.0 %
Gain on the sales of rental property, net 56,864 3,261 53,603 1,643.8 %
Total other income (expense) 12,462 (35,789) 48,251 (134.8) %
Net income $ 108,563 $ 32,749 $ 75,814 231.5 %

~~(1)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below.~~

~~Table of Contents~~

~~Net Income~~

Net income for our total portfolio increased by $75.8 million, or 231.5%, to $108.6 million for the nine months ended September 30, 2020 compared to $32.7 million for the nine months ended September 30, 2019.

~~Same Store Total Operating Revenue~~

~~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 $1.6 million, or 0.6%, to $270.3 million for the nine months ended September 30, 2020 compared to $268.7 million for the nine months ended September 30, 2019.

Same store lease income increased by $0.5 million, or 0.2%, to $228.6 million for the nine months ended September 30, 2020 compared to $228.1 million for the nine months ended September 30, 2019. Approximately $7.2 million of the increase was attributable to rental increases due to the execution of new leases and lease renewals with existing tenants. This increase was partially offset by a reduction of rental income of approximately $3.4 million for certain leases in which we determined that the future collectability was not reasonably assured, and accordingly, we converted to the cash basis of accounting and reversed any accounts receivable and accrued rent balances into rental income and did not recognize revenue for payments that were not received from the tenants. Rental income also decreased due to the reduction of base rent of approximately $2.9 million from tenant vacancies and downsizing, as well as a net decrease in the amortization of net above market leases of approximately $0.4 million.

Same store other billings increased by $0.6 million, or 1.6%, to $41.2 million for the nine months ended September 30, 2020 compared to $40.6 million for the nine months ended September 30, 2019. The increase was primarily attributable to an increase in operating expense and insurance expense reimbursements of approximately $0.6 million due to new leases.

~~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 $0.2 million or 0.4% to $48.0 million for the nine months ended September 30, 2020 compared to $47.8 million for the nine months ended September 30, 2019. This increase was primarily related to an increase in real estate taxes levied by the taxing authority of approximately $1.1 million, as well as an increase in repairs and maintenance expense and insurance expense of approximately $0.3 million and $0.1 million, respectively. These increases were partially offset by a decrease in snow removal expense and utilities expense of approximately $1.0 million and $0.3 million, respectively.

~~Acquisitionsand DispositionsNet Operating Income~~

~~For a detailed reconciliation of our acquisitions and dispositions NOI~~amendment to ~~net income, see the table above.~~

Subsequent to December 31, 2018, we acquired 80 buildings consisting of approximately 17.2 million square feet (excluding five buildings that were included in the Value Add Portfolio at September 30, 2020 or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2018), and sold 14 buildings and two land parcels consisting of approximately 3.3 million square feet. For the nine months ended September 30, 2020 and September 30, 2019, the buildings acquired after December 31, 2018 contributed approximately $62.7 million and $13.4 million to NOI, respectively. For the nine months ended September 30, 2020 and September 30, 2019, the buildings sold after December 31, 2018 contributed approximately $0.4 million and $3.1 million to NOI, respectively. Refer to Note 3 in the accompanying Notes to Consolidated Financial Statements for additional discussion regarding buildings acquired or sold.

~~Table of Contents~~

~~Other Net Operating Income~~

Our other assets include our flex/office buildings, Value Add Portfolio, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2018. 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.~~

At September 30, 2020, we owned eight flex/office buildings consisting of approximately 0.4 million square feet, two buildings in our Value Add Portfolio consisting of approximately 0.3 million square feet, and five buildings consisting of approximately 1.4 million square feet that were Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2018. These buildings contributed approximately $4.2 million and $2.3 million to NOI for the nine months ended September 30, 2020 and September 30, 2019, respectively. Additionally, there was $0.4 million and $0.1 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the nine months ended September 30, 2020 and September 30, 2019, respectively.

~~Total Other Expenses~~

~~Total other expenses consist of general and administrative expenses, depreciation and amortization, loss on impairments, and other expenses.~~

Total other expenses increased $22.6 million, or 13.2%, to $194.2 million for the nine months ended September 30, 2020 compared to $171.6 million for the nine months ended September 30, 2019. This is primarily a result of an increase in depreciation and amortization of approximately $26.4 million as a result of net acquisitions that increased the depreciable asset base, as well as an increase of approximately $2.6 million in general and administrative expense primarily due to increases in compensation and other payroll costs. These increases were partially offset by a reduction in loss on impairments of approximately $6.6 million as discussed in Note 3 of the accompanying Notes to Consolidated Financial Statements.

~~Total Other Income (Expense)~~

Total other income (expense) consists of interest and other income, interest expense, loss on extinguishment of debt, 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 income (expense) increased $48.3 million, or 134.8%, to a total net other income of $12.5 million for the nine months ended September 30, 2020 compared to $35.8 million total net other expense for the nine months ended September 30, 2019. This increase is primarily the result of an increase in gain on the sales of rental property, net of approximately $53.6 million and a gain on involuntary conversion of approximately $2.2 million related to an eminent domain taking of a portion of a parcel of land that occurred during the nine months ended September 30, 2020. Additionally, there was an increase of approximately $0.4 million in interest and other income due to an increased cash and cash equivalents balance during the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019. These increases were partially offset by an increase in interest expense of approximately $7.0 million which was primarily attributable to the funding of unsecured term loans on March 25, 2020, December 18, 2019, and July 25, 2019. Additionally, we recognized a loss on extinguishment of debt of approximately $0.8 million during the nine months ended September 30, 2020 that was primarily related to the refinance of the Unsecured Term Loan ~~B and the Unsecured Term Loan C~~G entered into on ~~April 17, 2020,~~February 5, 2021, as discussed in Note 4 of the accompanying Notes to Consolidated Financial Statements. Additionally, interest expense increased approximately $0.5 million, which was primarily attributable to the funding of the Unsecured Term Loan F on March 25, 2020.

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.

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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, land sales, 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,					Three months ended March 31,
Reconciliation of Net Income to FFO (in thousands)	Reconciliation of Net Income to FFO (in thousands)	2020		2019		2020		2019		Reconciliation of Net Income to FFO (in thousands)	2021		2020
Net income	Net income	$	24,209	$	11,190	$	108,563	$	32,749	Net income	$	25,348	$	65,038
Rental property depreciation and amortization	Rental property depreciation and amortization	53,853		46,834		160,007		133,622		Rental property depreciation and amortization	58,339		52,617
Loss on impairments		3,172		4,413		3,172		9,757

Gain on the sales of rental property, net	Gain on the sales of rental property, net	(9,060)		(1,670)		(56,864)		(3,261)		Gain on the sales of rental property, net	(6,409)		(46,759)
FFO	FFO	72,174		60,767		214,878		172,867		FFO	77,278		70,896
Preferred stock dividends	Preferred stock dividends	(1,289)		(1,289)		(3,867)		(3,867)		Preferred stock dividends	(1,289)		(1,289)

Redemption of preferred stock										Redemption of preferred stock	(2,582)		—
Amount allocated to restricted shares of common stock and unvested units	Amount allocated to restricted shares of common stock and unvested units	(184)		(218)		(590)		(697)		Amount allocated to restricted shares of common stock and unvested units	(237)		(221)
FFO attributable to common stockholders and unit holders	FFO attributable to common stockholders and unit holders	$	70,701	$	59,260	$	210,421	$	168,303	FFO attributable to common stockholders and unit holders	$	73,170	$	69,386

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 and real estate taxes and insurance. 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.

~~Table of Contents~~

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,					Three months ended March 31,
Reconciliation of Net Income to NOI (in thousands)	Reconciliation of Net Income to NOI (in thousands)	2020		2019		2020		2019		Reconciliation of Net Income to NOI (in thousands)	2021		2020
Net income	Net income	$	24,209	$	11,190	$	108,563	$	32,749	Net income	$	25,348	$	65,038

General and administrative	General and administrative	9,537		8,924		29,316		26,723		General and administrative	12,790		10,373
Transaction costs	Transaction costs	23		94		82		247		Transaction costs	20		51
Depreciation and amortization	Depreciation and amortization	53,921		46,908		160,215		133,844		Depreciation and amortization	58,407		52,688
Interest and other income	Interest and other income	(165)		(12)		(400)		(30)		Interest and other income	(32)		(79)
Interest expense	Interest expense	15,928		14,053		46,125		39,080		Interest expense	15,358		14,864
Loss on impairments		3,172		4,413		3,172		9,757
Gain on involuntary conversion		(1,500)		—		(2,157)		—
Loss on extinguishment of debt		—		—		834		—

Debt extinguishment and modification expenses										Debt extinguishment and modification expenses	679		—
Other expenses	Other expenses	413		364		1,418		1,037		Other expenses	832		425

Gain on the sales of rental property, net	Gain on the sales of rental property, net	(9,060)		(1,670)		(56,864)		(3,261)		Gain on the sales of rental property, net	(6,409)		(46,759)
Net operating income	Net operating income	$	96,478	$	84,264	$	290,304	$	240,146	Net operating income	$	106,993	$	96,601

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Cash Flows

Comparison of the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 to the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020

The following table summarizes our cash flows for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020.


		Nine months ended September 30,				Change					Three months ended March 31,				Change
Cash Flows (dollars in thousands)	Cash Flows (dollars in thousands)	2020		2019		$		%		Cash Flows (dollars in thousands)	2021		2020		$		%
Net cash provided by operating activities	Net cash provided by operating activities	$	224,131	$	174,930	$	49,201	28.1	%	Net cash provided by operating activities	$	73,460	$	70,580	$	2,880	4.1	%
Net cash used in investing activities	Net cash used in investing activities	$	114,041	$	765,675	$	(651,634)	(85.1)	%	Net cash used in investing activities	$	79,502	$	35,980	$	43,522	121.0	%
Net cash provided by (used in) financing activities		$	(47,194)	$	577,476	$	(624,670)	(108.2)	%
Net cash provided by financing activities										Net cash provided by financing activities	$	8,020	$	294,919	$	(286,899)	(97.3)	%

Net cash provided by operating activities increased ~~$49.2~~$2.9 million to ~~$224.1~~$73.5 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$174.9~~$70.6 million for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The increase was primarily attributable to incremental operating cash flows from property acquisitions completed after ~~September 30, 2019,~~March 31, 2020, and operating performance at existing properties. These increases were partially offset by the loss of cash flows from property dispositions completed after ~~September 30, 2019~~March 31, 2020 and fluctuations in working capital due to timing of payments and rental receipts.

Net cash used in investing activities ~~decreased $651.6~~increased $43.5 million to ~~$114.0~~$79.5 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$765.7~~$36.0 million for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The ~~decrease~~increase was primarily attributable to ~~an increase~~a decrease in proceeds from sales of rental property, net related to the disposition of ~~five~~four buildings during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 for net proceeds of approximately ~~$121.3~~$23.9 million, compared to the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 where we sold ~~six~~three buildings ~~and two land parcels~~ for net proceeds of approximately ~~$23.7~~$99.7 million. ~~The decrease~~This was ~~also attributable to~~partially offset by the acquisition of 16six buildings for a total cash consideration of approximately ~~$195.4~~$95.1 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to the acquisition of 46nine buildings for a total cash consideration of approximately ~~$748.0~~$119.3 million for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020.

Net cash provided by ~~(used in)~~ financing activities decreased ~~$624.7~~$286.9 million to ~~$(47.2)~~$8.0 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$577.5~~$294.9 million for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The decrease ~~in net cash provided (used in) by financing activities~~ is primarily attributable to a decrease of net proceeds from the sales of common stock of approximately ~~$395.8~~$151.1 million, ~~an increase~~the redemption of ~~net cash outflow on our unsecured credit facility of approximately $123.5 million and our unsecured term loans~~the Series C Preferred Stock (as defined below) of $75.0 million, and an increase of approximately ~~$29.0~~$5.1 million in dividends paid during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to the ~~nine~~three months ended ~~September 30, 2019.~~

~~Table~~March 31, 2020. Additionally, the funding of ~~Contents~~

the Unsecured Term Loan F of $100.0 million did not recur during the three months ended March 31, 2021 compared to the three months ended March 31, 2020. These decreases were partially offset by a net cash inflow of approximately $47.0 million from our unsecured credit facility.

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 is primarily rental income, expense recoveries from tenants, and other income from operations and is our principal source of funds that we use to pay operating expenses, debt service, recurring capital expenditures and the distributions required to maintain our REIT qualification. We look to the capital markets (common equity, preferred equity, and debt) to primarily fund our acquisition activity. We seek to increase cash flows from our properties by maintaining quality standards for our buildings that promote high occupancy rates and permit increases in rental rates while reducing tenant turnover and controlling operating expenses. We believe that our revenue, together with proceeds from building sales and debt and equity financings, will continue to provide funds for our short-term and medium-term liquidity needs.

Our short-term liquidity requirements consist primarily of funds 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, funding of property acquisitions under contract, general and administrative expenses, and capital expenditures for 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 acquisitions, non-recurring capital expenditures, 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 the Operating Partnership.

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In response to the COVID-19 pandemic, we have worked to ensure that we maintain adequate liquidity. On ~~April 17, 2020~~February 5, 2021 we refinanced the Unsecured ~~Term Loan B~~Credit Facility and the Unsecured Term Loan C,G, as discussed in “Indebtedness Outstanding” below. As of ~~September 30, 2020,~~March 31, 2021, we had total immediate liquidity of approximately ~~$567.1~~$533.0 million, comprised of ~~$70.1~~$18.6 million of cash and cash equivalents and ~~$497.0~~$514.4 million of immediate availability on our unsecured credit facility. When incorporating the remaining undrawn balance available on our unsecured credit facility and the approximately ~~$132.5~~$137.3 million of forward equity proceeds available to us at our option through ~~January 13,~~November 16, 2021, our total liquidity as of ~~September 30, 2020~~March 31, 2021 was approximately ~~$699.6~~$670.3 million, with a material amount of that liquidity comprised of cash and cash equivalents.

In addition, we require funds for future dividends to be paid to our common and preferred stockholders and unit holders in the Operating Partnership. These distributions on our common stock are voluntary (at the discretion of our board of directors), to the extent we have satisfied distribution requirements in order to maintain our REIT status for federal income tax purposes, and may be reduced or stopped if needed to fund other liquidity requirements or for other reasons. The following table summarizes the dividends attributable to our outstanding common stock that had a record date during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

Month Ended ~~2020~~2021

Declaration Date

Record Date

Per Share

Payment Date

~~September 30~~

~~July 9, 2020~~

~~September 30, 2020~~

~~0.12~~

~~October 15, 2020~~

~~August 31~~

~~July 9, 2020~~

~~August 31, 2020~~

~~0.12~~

~~September 15, 2020~~

~~July 31~~

~~July 9, 2020~~

~~July 31, 2020~~

~~0.12~~

~~August 17, 2020~~

~~June 30~~

~~April 9, 2020~~

~~June 30, 2020~~

~~0.12~~

~~July 15, 2020~~

~~May 31~~

~~April 9, 2020~~

~~May 29, 2020~~

~~0.12~~

~~June 15, 2020~~

~~April 30~~

~~April 9, 2020~~

~~April 30, 2020~~

~~0.12~~

~~May 15, 2020~~

March 31

January ~~8, 2020~~11, 2021

March 31, ~~2020~~2021

~~0.12~~$

0.120833

April 15, ~~2020~~2021

February 2928

January ~~8, 2020~~11, 2021

February ~~28, 2020~~26, 2021

~~0.12~~0.120833

March ~~16, 2020~~15, 2021

January 31

January ~~8, 2020~~11, 2021

January ~~31, 2020~~29, 2021

~~0.12~~0.120833

February ~~18, 2020~~16, 2021

Total

~~1.08~~0.362499

On ~~October 9, 2020,~~April 12, 2021, our board of directors declared the common stock dividends for the months ending ~~October~~April 30, 2021, May 31, ~~2020, November~~2021, and June 30, ~~2020, and December 31, 2020~~2021 at a monthly rate of ~~$0.12~~$0.120833 per share of common stock.

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During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, we declared quarterly cumulative dividends on the 6.875% Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”) at a rate equivalent to the fixed annual rate of $1.71875 per share. The following table summarizes the dividends on the Series C Preferred Stock during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

Quarter Ended ~~2020~~2021

Declaration Date

Series C
Preferred Stock Per Share

Payment Date

~~September 30~~March 31

~~July 9, 2020~~January 11, 2021

0.4296875

~~September 30, 2020~~

~~June 30~~

~~April 9, 2020~~

~~0.4296875~~

~~June 30, 2020~~

~~March 31~~

~~January 8, 2020~~

~~0.4296875~~

March 31, ~~2020~~2021

Total

~~1.2890625~~0.4296875

On ~~October 9, 2020, our board~~March 1, 2021, we gave notice to redeem all 3,000,000 issued and outstanding shares of ~~directors declared~~ the Series C Preferred Stock ~~dividends for~~on March 31, 2021. We redeemed the ~~quarter ending December~~Series C Preferred Stock on March 31, ~~2020~~2021 at a ~~quarterly rate~~cash redemption price of ~~$0.4296875~~$25.00 per ~~share.~~share, plus accrued and unpaid dividends to, but excluding, the redemption date.

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Indebtedness Outstanding

The following table summarizes certain information with respect to our indebtedness outstanding as of ~~September 30, 2020~~March 31, 2021.


Loan	Loan	Principal Outstanding as of September 30, 2020 (in thousands)		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)	Loan	Principal Outstanding as of March 31, 2021 (in thousands)		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:	Unsecured credit facility:							Unsecured credit facility:
Unsecured Credit Facility(4)	Unsecured Credit Facility(4)	$	—	L + 0.90%		January 12, 2024	i	Unsecured Credit Facility(4)	$	233,000	L + 0.90%		January 12, 2024	i
Total unsecured credit facility	Total unsecured credit facility	—						Total unsecured credit facility	233,000

Unsecured term loans:	Unsecured term loans:							Unsecured term loans:
Unsecured Term Loan A	Unsecured Term Loan A	150,000		3.38	%	March 31, 2022	i	Unsecured Term Loan A	150,000		3.38	%	March 31, 2022	i
Unsecured Term Loan D	Unsecured Term Loan D	150,000		2.85	%	January 4, 2023	i	Unsecured Term Loan D	150,000		2.85	%	January 4, 2023	i
Unsecured Term Loan G(5)		300,000		2.77	%	April 18, 2023	i
Unsecured Term Loan E	Unsecured Term Loan E	175,000		3.92	%	January 15, 2024	i	Unsecured Term Loan E	175,000		3.92	%	January 15, 2024	i
Unsecured Term Loan F	Unsecured Term Loan F	200,000		3.11	%	January 12, 2025	i	Unsecured Term Loan F	200,000		3.11	%	January 12, 2025	i
Unsecured Term Loan G								Unsecured Term Loan G	300,000		1.28	%	February 5, 2026	i
Total unsecured term loans	Total unsecured term loans	975,000						Total unsecured term loans	975,000
Less: Total unamortized deferred financing fees and debt issuance costs		(4,304)
Total unamortized deferred financing fees and debt issuance costs								Total unamortized deferred financing fees and debt issuance costs	(4,428)
Total carrying value unsecured term loans, net	Total carrying value unsecured term loans, net	970,696						Total carrying value unsecured term loans, net	970,572

Unsecured notes:	Unsecured notes:							Unsecured notes:
Series F Unsecured Notes	Series F Unsecured Notes	100,000		3.98	%	January 5, 2023	ii	Series F Unsecured Notes	100,000		3.98	%	January 5, 2023	ii
Series A Unsecured Notes	Series A Unsecured Notes	50,000		4.98	%	October 1, 2024	ii	Series A Unsecured Notes	50,000		4.98	%	October 1, 2024	ii
Series D Unsecured Notes	Series D Unsecured Notes	100,000		4.32	%	February 20, 2025	ii	Series D Unsecured Notes	100,000		4.32	%	February 20, 2025	ii
Series G Unsecured Notes	Series G Unsecured Notes	75,000		4.10	%	June 13, 2025	ii	Series G Unsecured Notes	75,000		4.10	%	June 13, 2025	ii
Series B Unsecured Notes	Series B Unsecured Notes	50,000		4.98	%	July 1, 2026	ii	Series B Unsecured Notes	50,000		4.98	%	July 1, 2026	ii
Series C Unsecured Notes	Series C Unsecured Notes	80,000		4.42	%	December 30, 2026	ii	Series C Unsecured Notes	80,000		4.42	%	December 30, 2026	ii
Series E Unsecured Notes	Series E Unsecured Notes	20,000		4.42	%	February 20, 2027	ii	Series E Unsecured Notes	20,000		4.42	%	February 20, 2027	ii
Series H Unsecured Notes	Series H Unsecured Notes	100,000		4.27	%	June 13, 2028	ii	Series H Unsecured Notes	100,000		4.27	%	June 13, 2028	ii
Total unsecured notes	Total unsecured notes	575,000						Total unsecured notes	575,000
Less: Total unamortized deferred financing fees and debt issuance costs		(1,819)
Total unamortized deferred financing fees and debt issuance costs								Total unamortized deferred financing fees and debt issuance costs	(1,623)
Total carrying value unsecured notes, net	Total carrying value unsecured notes, net	573,181						Total carrying value unsecured notes, net	573,377

Mortgage notes (secured debt):	Mortgage notes (secured debt):							Mortgage notes (secured debt):
Wells Fargo Bank, National Association CMBS Loan	Wells Fargo Bank, National Association CMBS Loan	49,013		4.31	%	December 1, 2022	iii	Wells Fargo Bank, National Association CMBS Loan	48,063		4.31	%	December 1, 2022	iii
Thrivent Financial for Lutherans	Thrivent Financial for Lutherans	3,587		4.78	%	December 15, 2023	iv	Thrivent Financial for Lutherans	3,527		4.78	%	December 15, 2023	iv
United of Omaha Life Insurance Company								United of Omaha Life Insurance Company	5,087		3.71	%	October 1, 2039	ii
Total mortgage notes	Total mortgage notes	52,600						Total mortgage notes	56,677
Add: Total unamortized fair market value premiums		31
Less: Total unamortized deferred financing fees and debt issuance costs		(266)
Less: Net unamortized fair market value discount								Less: Net unamortized fair market value discount	(134)
Total unamortized deferred financing fees and debt issuance costs								Total unamortized deferred financing fees and debt issuance costs	(202)
Total carrying value mortgage notes, net	Total carrying value mortgage notes, net	52,365						Total carrying value mortgage notes, net	56,341
Total / weighted average interest rate(6)		$	1,596,242	3.62	%
Total / weighted average interest rate(5)								Total / weighted average interest rate(5)	$	1,833,290	3.05	%

(1)Interest rate as of ~~September 30, 2020.~~March 31, 2021. At ~~September 30, 2020,~~March 31, 2021, the one-month LIBOR (“L”) was ~~0.14825%~~0.11113%. 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. The spread over the applicable rate for our unsecured credit facility and unsecured term loans is based on the our debt rating, as defined in the respective loan agreements.

~~Table of Contents~~

A, D, E, F, and G was swapped to a fixed rate of 2.38%, 1.85%, 2.92%, 2.11%, and ~~1.17%~~0.28%, respectively. One-month LIBOR for the Unsecured Term Loan G will be swapped to a fixed rate of ~~0.28%~~0.94% effective ~~March 19, 2021.~~April 18, 2023.

(4)The capacity of the unsecured credit facility is ~~$500.0~~$750.0 million. The initial maturity date is January 15, 2023, which may be extended pursuant to two six-month extension options exercisable at 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.

(5)The initial maturity date is April 16, 2021, which may be extended pursuant to two one-year extension options exercisable at 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 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~~ weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $975.0 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.~~premiums or discounts.

The aggregate undrawn nominal commitments on the unsecured credit facility and unsecured term loans as of ~~September 30, 2020~~March 31, 2021 was approximately ~~$497.0~~$514.4 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.

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Our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes are subject to ongoing compliance with a number of financial and other covenants. As of ~~September 30, 2020,~~March 31, 2021, we were in compliance with the applicable financial covenants.

On ~~April 17, 2020,~~February 25, 2021, we assumed a mortgage note with United of Omaha Life Insurance Company of approximately $5.1 million in connection with the acquisition of the property located in Long Island, NY, which serves as collateral for the debt. The debt matures on October 1, 2039 and bears interest at 3.71% per annum. The assumed debt was recorded at fair value and a fair value discount of approximately $0.2 million was recorded. The fair value of debt was determined by discounting the future cash flows using the current rate of approximately 4.10% at which loans would be made to borrowers with similar credit ratings for loans with similar remaining maturities, terms, and loan-to-value ratios. The fair value of the debt is based on Level 3 inputs and is a nonrecurring fair value measurement.

On February 5, 2021, we entered into an amendment to the ~~$300.0 million Unsecured Term Loan G with Wells Fargo, National Association, as administrative agent on behalf of~~unsecured credit facility (the “Credit Facility Amendment”). The Credit Facility Amendment provides for an increase in the ~~various lenders~~aggregate commitments available for borrowing under the ~~agreement. In connection with execution of the Unsecured Term Loan G, the Unsecured Term Loan B and Unsecured Term Loan C were paid in full.~~unsecured credit facility from $500 million to up to $750 million. As of ~~September 30, 2020,~~March 31, 2021, the ~~Unsecured Term Loan G~~unsecured credit facility bore an interest rate of LIBOR plus a spread of ~~1.5%~~0.90% based on our debt rating, as defined in the loan ~~agreement,~~agreement. In connection with the Credit Facility Amendment, we incurred approximately $1.2 million in costs which are being deferred and ~~subject~~amortized through the maturity date of the unsecured credit facility. Other than the increase in the borrowing commitments, the material terms of the unsecured credit facility remain unchanged.

On February 5, 2021, we entered into an amendment to ~~a minimum rate for LIBOR of 0.25%. The~~the Unsecured Term Loan G ~~matures on April 16, 2021, subject~~(the “Amendment to ~~two one-year extension options at our discretion, and subject~~Unsecured Term Loan G”). The Amendment to certain conditions (other than lender discretion) such as the absence of default and the payment of an extension fee. We intend to exercise both extension options. To exercise the extension options we are required pay a fee equal to (i) 0.15% of the outstanding amount on the effective day of the first extension period and (ii) 0.20% of the outstanding amount on the effective day of the second extension period. The Unsecured Term Loan G ~~has~~provides for an ~~accordion feature~~extension of the maturity date to February 5, 2026 and a reduced stated interest rate of one-month LIBOR plus a spread that ~~allows us~~ranges from 0.85% to ~~increase its borrowing capacity~~1.65% for LIBOR borrowings based on our debt ratings. The Amendment to ~~$600.0~~Unsecured Term Loan G also amended the provision for a minimum interest rate, or floor, for LIBOR borrowings to 0.00% and for Base Rate borrowings to 1.00%. As of March 31, 2021, borrowings under the Unsecured Term Loan G bore interest at LIBOR plus 1.00%. In connection with the Amendment to Unsecured Term Loan G, we incurred approximately $1.6 million ~~subject~~in costs which are being deferred and amortized through the new maturity date of February 5, 2026. We also incurred approximately $0.7 million of modification expenses which were recognized in debt extinguishment and modification expenses in the accompanying Consolidated Statements of Operations. Additionally, we reversed the previously accrued extension fees of approximately $1.1 million from an amendment to the ~~satisfaction~~Unsecured Term Loan G that was entered into on April 17, 2020, which resulted in a decrease to interest expense of ~~certain conditions~~approximately $0.3 million. Other than the maturity and ~~lender consents. The Company and certain wholly owned subsidiaries of~~interest rate provisions described above, the ~~Operating Partnership are guarantors~~material terms of the Unsecured Term Loan ~~G. The agreement also contains financial and other covenants substantially similar to the covenants in our unsecured credit facility.~~G remain unchanged.

The following table summarizes our debt capital structure as of ~~September 30, 2020.~~March 31, 2021.


Debt Capital Structure	~~September 30, 2020~~March 31, 2021
Total principal outstanding (in thousands)	$	~~1,602,600~~1,839,677
Weighted average duration (years)	3.6

% Secured debt	~~3.3~~3.1		%
% Debt maturing next 12 months	—8.2		%
Net Debt to Real Estate Cost Basis(1)	~~32.3~~34.4		%

(1)We define Net Debt as our amounts outstanding under our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes, less cash and cash equivalents. We define Real Estate Cost Basis as 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 building acquisition funding needs. 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 as it relates to interest expense payments on our floating rate debt is managed through our 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.

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Equity

Preferred Stock

~~The following table summarizes our~~On March 1, 2021, we gave notice to redeem all 3,000,000 issued and outstanding shares of the Series C Preferred Stock on March 31, 2021. We redeemed the Series C Preferred Stock on March 31, 2021 at a cash redemption price of $25.00 per share, plus accrued and unpaid dividends to, but excluding, the redemption date. We have no outstanding preferred stock issuances as of ~~September 30, 2020.~~

Preferred Stock Issuances Issuance Date Number of Shares Liquidation Value Per Share Interest Rate
Series C Preferred Stock March 17, 2016 3,000,000 $ 25.00 6.875 %
March 31, 2021.

Common Stock

The following table summarizes our at-the-market (“ATM”) common stock offering program as of ~~September 30, 2020.~~March 31, 2021. We may from time to time sell common stock through sales agents under the program. ~~There was no~~


ATM Common Stock Offering Program	Date	Maximum Aggregate Offering Price (in thousands)		Aggregate Common Stock Available as of March 31, 2021 (in thousands)
2019 $600 million ATM	February 14, 2019	$	600,000	$	296,244

The table below sets forth the activity for the ATM common stock offering programs during the three months ended March 31, 2021 (in thousands, except share data).


	Three months ended March 31, 2021
ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share		Sales Agents’ Fees		Net Proceeds
2019 $600 million ATM	680,276	$	32.35	$	220	$	21,785
Total/weighted average	680,276	$	32.35	$	220	$	21,785

Subsequent to March 31, 2021, we sold 602,316 shares under the ATM common stock offering program ~~during the three months ended September 30, 2020.~~

ATM Common Stock Offering Program Date Maximum Aggregate Offering Price (in thousands) Aggregate Common Stock Available as of September 30, 2020 (in thousands)
2019 $600 million ATM February 14, 2019 $ 600,000 $ 318,248

~~On January 13, 2020, we completed an underwritten public offering of an aggregate 10,062,500 shares of common stock~~ at a price ~~to the underwriters~~ of ~~$30.9022~~$34.24 per share, ~~consisting~~or $20.6 million, and $33.90 per share net of ~~(i) 5,600,000~~sales agent fees. In addition, on April 5, 2021, we sold 1,446,760 shares ~~offered directly by us~~on a forward basis under the ATM common stock offering program at a price of $34.56 per share, or $50.0 million, and (ii) 4,462,500 shares offered by the forward dealer in connection with certain forward sale agreements (including 1,312,500 shares offered pursuant to the underwriters’ option to purchase additional shares, which option was exercised in full). The offering closed on January 16, 2020 and we received$34.2144 per share net of sales agent fees. We do not initially receive any proceeds from the sale of shares ~~offered directly by us of approximately $173.1 million. Subject~~on a forward basis. We may elect to ~~our right to elect~~ cash settle or net share ~~settlement, we have the ability to~~ settle the forward ~~sales agreements~~sale agreement at any time through the scheduled maturity date of ~~the forward sale agreements of January 13, 2021.~~April 5, 2022.

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, 2020,~~March 31, 2021, we owned approximately 97.8% of the Operating Partnership, and our current and former executive officers, directors, senior employees and their affiliates, and third parties who contributed properties to us in exchange for common units in our Operating Partnership, owned the remaining 2.2%.

Interest Rate Risk

We use interest rate swaps to fix the rate of our variable rate debt. As of ~~September 30, 2020,~~March 31, 2021, 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.

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The following table details our outstanding interest rate swaps as of ~~September 30, 2020.~~March 31, 2021.


Interest Rate Derivative Counterparty	Interest Rate Derivative Counterparty	Trade Date	Effective Date	Notional Amount (in thousands)		Fair Value (in thousands)		Pay Fixed Interest Rate		Receive Variable Interest Rate	Maturity Date	Interest Rate Derivative Counterparty	Trade Date	Effective Date	Notional Amount (in thousands)		Fair Value (in thousands)		Pay Fixed Interest Rate		Receive Variable Interest Rate	Maturity Date
Royal Bank of Canada		Jan-08-2015	Mar-20-2015	$	25,000	$	(182)	1.7090	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank		Jan-08-2015	Mar-20-2015	$	25,000	$	(182)	1.7105	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank		Jan-08-2015	Sep-10-2017	$	100,000	$	(970)	2.2255	%	One-month L	Mar-21-2021
Wells Fargo, N.A.		Jan-08-2015	Mar-20-2015	$	25,000	$	(639)	1.8280	%	One-month L	Mar-31-2022
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Jan-08-2015	Mar-20-2015	$	25,000	$	(426)	1.8280	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Jan-08-2015	Feb-14-2020	$	25,000	$	(874)	2.4535	%	One-month L	Mar-31-2022	The Toronto-Dominion Bank	Jan-08-2015	Feb-14-2020	$	25,000	$	(584)	2.4535	%	One-month L	Mar-31-2022
Regions Bank	Regions Bank	Jan-08-2015	Feb-14-2020	$	50,000	$	(1,766)	2.4750	%	One-month L	Mar-31-2022	Regions Bank	Jan-08-2015	Feb-14-2020	$	50,000	$	(1,178)	2.4750	%	One-month L	Mar-31-2022
Capital One, N.A.	Capital One, N.A.	Jan-08-2015	Feb-14-2020	$	50,000	$	(1,808)	2.5300	%	One-month L	Mar-31-2022	Capital One, N.A.	Jan-08-2015	Feb-14-2020	$	50,000	$	(1,206)	2.5300	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(979)	1.8485	%	One-month L	Jan-04-2023	The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(739)	1.8485	%	One-month L	Jan-04-2023
Royal Bank of Canada	Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(980)	1.8505	%	One-month L	Jan-04-2023	Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(740)	1.8505	%	One-month L	Jan-04-2023
Wells Fargo, N.A.		Jul-20-2017	Oct-30-2017	$	25,000	$	(980)	1.8505	%	One-month L	Jan-04-2023
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(740)	1.8505	%	One-month L	Jan-04-2023
PNC Bank, N.A.	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(978)	1.8485	%	One-month L	Jan-04-2023	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(739)	1.8485	%	One-month L	Jan-04-2023
PNC Bank, N.A.	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(1,956)	1.8475	%	One-month L	Jan-04-2023	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(1,477)	1.8475	%	One-month L	Jan-04-2023
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Apr-20-2020	Sep-29-2020	$	75,000	$	(272)	0.2750	%	One-month L	Apr-18-2023	The Toronto-Dominion Bank	Apr-20-2020	Sep-29-2020	$	75,000	$	(83)	0.2750	%	One-month L	Apr-18-2023
Wells Fargo, N.A.		Apr-20-2020	Sep-29-2020	$	75,000	$	(279)	0.2790	%	One-month L	Apr-18-2023
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Apr-20-2020	Sep-29-2020	$	75,000	$	(90)	0.2790	%	One-month L	Apr-18-2023
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Apr-20-2020	Mar-19-2021	$	75,000	$	(230)	0.2750	%	One-month L	Apr-18-2023	The Toronto-Dominion Bank	Apr-20-2020	Mar-19-2021	$	75,000	$	(83)	0.2750	%	One-month L	Apr-18-2023
Wells Fargo, N.A.		Apr-20-2020	Mar-19-2021	$	75,000	$	(239)	0.2800	%	One-month L	Apr-18-2023
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Apr-20-2020	Mar-19-2021	$	75,000	$	(91)	0.2800	%	One-month L	Apr-18-2023
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,568)	2.9180	%	One-month L	Jan-12-2024	The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(3,585)	2.9180	%	One-month L	Jan-12-2024
PNC Bank, N.A.	PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,568)	2.9190	%	One-month L	Jan-12-2024	PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(3,582)	2.9190	%	One-month L	Jan-12-2024
Bank of Montreal	Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,568)	2.9190	%	One-month L	Jan-12-2024	Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(3,582)	2.9190	%	One-month L	Jan-12-2024
U.S. Bank, N.A.	U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(2,284)	2.9190	%	One-month L	Jan-12-2024	U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(1,793)	2.9190	%	One-month L	Jan-12-2024
Wells Fargo, N.A.		May-02-2019	Jul-15-2020	$	50,000	$	(4,412)	2.2460	%	One-month L	Jan-15-2025
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(3,100)	2.2460	%	One-month L	Jan-15-2025
U.S. Bank, N.A.	U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,411)	2.2459	%	One-month L	Jan-15-2025	U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(3,100)	2.2459	%	One-month L	Jan-15-2025
Regions Bank	Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	(4,411)	2.2459	%	One-month L	Jan-15-2025	Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	(3,096)	2.2459	%	One-month L	Jan-15-2025
Bank of Montreal	Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	(3,276)	1.7165	%	One-month L	Jan-15-2025	Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	(2,092)	1.7165	%	One-month L	Jan-15-2025
U.S. Bank, N.A.												U.S. Bank, N.A.	Feb-17-2021	Apr-18-2023	$	150,000	$	1,794	0.9385	%	One-month L	Feb-5-2026
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Feb-17-2021	Apr-18-2023	$	75,000	$	896	0.9365	%	One-month L	Feb-5-2026
The Toronto-Dominion Bank												The Toronto-Dominion Bank	Feb-17-2021	Apr-18-2023	$	75,000	$	902	0.9360	%	One-month L	Feb-5-2026

The swaps outlined in the above table were 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, 2020,~~March 31, 2021, the fair value of ~~all~~three of our 24interest rate swaps were in a asset position of approximately $3.6 million, including any adjustment for nonperformance risk related to these agreements. The remaining 21 interest rate swaps were in a liability position of approximately ~~$45.8~~$32.1 million, including any adjustment for nonperformance risk related to these agreements.

As of ~~September 30, 2020,~~March 31, 2021, we had ~~$975.0~~$1,208.0 million of variable rate debt. As of ~~September 30, 2020,~~March 31, 2021, all of our outstanding variable rate debt, with the exception of our unsecured credit facility, was fixed with interest rate swaps through 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, 2020,~~March 31, 2021, we had letters of credit related to development projects and certain other agreements of approximately ~~$3.0~~$2.6 million. As of ~~September 30, 2020,~~March 31, 2021, 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, 2020,~~March 31, 2021, we had ~~$975.0~~$1,208.0 million of variable rate debt outstanding. As of ~~September 30, 2020,~~March 31, 2021, all of our outstanding variable rate debt, with the exception of our unsecured credit facility which had a balance of ~~zero,~~$233.0 million, was fixed with interest rate swaps through maturity. To the extent we undertake additional variable rate indebtedness, if interest rates increase,

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then so will the interest costs on our unhedged variable rate debt, which could adversely affect our cash flow and our ability to

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pay principal and interest on our debt and our ability to make distributions to our security holders. Further, rising interest rates could limit our ability to refinance existing debt when it matures or 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. 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 basispoints and assuming we had an outstanding balance of $233.0 million on our unsecured credit facility for the year ended March 31, 2021, our interest expense would have increased by approximately $0.6 million for the year ended March 31, 2021.

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, 2020.~~March 31, 2021. 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 our 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, 2020~~March 31, 2021 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 which, 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 our 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, ~~2019~~2020 filed with the SEC on February ~~12, 2020.~~10, 2021.

~~The COVID-19 pandemic~~We may be adversely affected by developments in the LIBOR market or ~~any future pandemic, epidemic or outbreak~~the use of infectious disease could have material and adverse effects on our business, financial condition, results of operations and cash flows and the markets and communities in which we and our tenants operate.alternative reference rates.

~~The COVID-19 pandemic has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The global impact~~As of March 31, 2021, approximately 65.7% or $1,208.0 million of our outstanding debt was indexed to LIBOR. On March 5, 2021, the outbreak continues to rapidly evolve and many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly. Additionally, in June, the National Bureau of Economic ResearchFinancial Conduct Authority (“FCA”) announced that U.S. dollar LIBOR will no longer be published after June 30, 2023. This announcement has several implications, including setting the ~~United States entered into a recession in February 2020. The rapid development and fluidity of the COVID-19 pandemic precludes any prediction as~~spread that may be used to automatically convert contracts from LIBOR to the ~~ultimate adverse impact of COVID-19.~~Secured Overnight Financing Rate (“SOFR”). Additionally, banking regulators are encouraging banks to discontinue new LIBOR debt issuances by December 31, 2021. While we expect LIBOR to be available in substantially its current form until June 30, 2023, it is possible that LIBOR will become unavailable prior to that date. For example, if sufficient banks decline to make submissions to the LIBOR administrator, LIBOR may become unavailable and the risks associated with the transition to an alternative reference rate will be accelerated and magnified.

Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR or the transition from LIBOR to a successor benchmark may result in, among other things, (i) a sudden or prolonged increase or decrease in reported LIBOR, (ii) a delay in the publication of LIBOR, (iii) higher interest obligations arising from such successor benchmark, (iv) changes in the rules or methodologies for determining LIBOR in the overall debt capital markets, which may discourage market participants from continuing to administer or to participate in variable rate debt tied to LIBOR or such successor benchmark, (v) the introduction of financial products and changes in market practices, which may lead to risk modeling and valuation challenges, such as adjusting interest rate accrual calculations and building a term structure for an alternative rate, (vi) additional basis risk and increased volatility as alternative rates are phased in and utilized in parallel with LIBOR, and (vii) adjustments to systems and mathematical models to properly process and account for alternative rates, which may strain the model risk management and information technology functions and result in substantial incremental costs. If LIBOR as determined in accordance with the terms of our particular debt is no longer available, whether before or after June 30, 2023, the interest rates on such debt would be determined using various alternative methods, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if LIBOR was available in its current form.

We are monitoring and evaluating the risks related to our debt indexed to LIBOR, which include interest on loans or amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to an alternative rate, including any resulting value transfer that may occur, and are likely to vary by contract. The ~~COVID-19 pandemic~~value of loans, securities, or derivative instruments tied to LIBOR, as well as interest rates on our current or future indebtedness, may also be impacted if LIBOR is limited or discontinued. For some instruments, the method of transitioning to an alternative reference rate may be challenging, especially if we cannot agree with the respective counterparty about how to make the transition.

As a result, there can be no assurance that any ~~future pandemic, epidemic~~of the aforementioned developments or ~~outbreak~~changes will not result in financial market disruptions, significant increases in benchmark interest rates, substantially higher financing costs or a shortage of ~~infectious disease affecting states or regions in~~available debt financing, any of which ~~we or our tenants operate~~ could have ~~material and~~an adverse ~~effects~~effect on ~~our business, financial condition, results of operations and cash flows due to, among other factors:~~us.

•health or other government authorities requiring the closure of offices or other businesses or instituting quarantines of personnel as the result of, or in order to avoid, exposure to a contagious disease;

•~~disruption in supply and delivery chains;~~

•~~a general decline in business activity and demand for real estate;~~

•~~the repurposing or redevelopment of retail properties made defunct by the pandemic into industrial properties;~~

•reduced economic activity, general economic decline or recession, which may impact our tenants’ businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to make rent payments to us timely, or at all, or to otherwise seek modifications of lease obligations;

•difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions, which may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis; and

•the potential negative impact on the health of our personnel, particularly if a significant number of our employees are impacted, which would result in a deterioration in our ability to ensure business continuity during a disruption.

The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential impacts on our business and operations, our tenant’s business and operations or the global economy as a whole. While the spread of COVID-19 may eventually be contained or mitigated, there is no guarantee that a future outbreak or any other widespread epidemics will not occur, or that the global economy will recover, either of which could materially harm our business.

The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. The COVID-19 pandemic presents material uncertainty and risk with respect to our financial condition, results of operations, cash flows and performance. Moreover, many risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 12, 2020, should be interpreted as heightened risks as a result of the impact of the COVID-19 pandemic.

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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, 2020,~~March 31, 2021, the Operating Partnership issued ~~85,966~~97,159 common units in the Operating Partnership upon exchange of outstanding long term incentive plan units issued pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated. 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, 2020,~~March 31, 2021, we issued ~~282,374~~97,159 shares of common stock upon redemption of ~~282,374~~97,159 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. We relied on the exemption based on representations given by the holders of the common units.

All other issuances of unregistered securities during the quarter ended ~~September 30, 2020,~~March 31, 2021, if any, have previously been disclosed in filings with the SEC.

Issuer Purchases of Equity Securities


Period	Total Number of Shares Purchased(1)		Average Price Paid per Share(1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
January 1, 2021 - January 31, 2021	$	43,571	$	30.88	$	—	$	—
February 1, 2021 - February 28, 2021	$	—	$	—	$	—	$	—
March 1, 2021 - March 31, 2021	$	—	$	—	$	—	$	—
Total/weighted average	$	43,571	$	30.88	$	—	$	—

(1)Reflects shares surrendered to the Company for payment of tax withholdings obligations in connection with the vesting of shares of common stock issued pursuant to the 2011 Plan. The average price paid reflects the average market value of shares withheld for tax purposes.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None.~~As of the quarter ended March 31, 2021, all items required to be disclosed in a Current Report on Form 8-K were reported under Form 8-K.

Appointment of Certain Officers

On May 3, 2021, our board of directors promoted William R. Crooker to the position of President, Chief Financial Officer and Treasurer, effective immediately.

Mr. Crooker has served as our Chief Financial Officer, Executive Vice President and Treasurer since 2016. Previously, Mr. Crooker served as our Chief Accounting Officer from 2011 to 2016 and Senior Vice President of Capital Markets from 2015 to 2016. Prior to the formation of the Company and its initial public offering, Mr. Crooker served as Chief Accounting Officer for a predecessor entity STAG Capital Partners, LLC from 2010 to 2011, where he was responsible for accounting, tax and financial reporting. From 2002 to 2010, Mr. Crooker worked for KPMG LLP in its real estate practice, focusing primarily on publicly-traded REITs. Mr. Crooker is a certified public accountant and received his Bachelor of Science degree from Bentley University.

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Item 6. Exhibits


Exhibit Number						Description of Document
10.1						STAG Industrial, Inc. Employee Retirement Vesting Program (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 13, 2021)
10.2 *						First Amendment to Credit Agreement, dated as of February 5, 2021, by and among STAG Industrial Operating Partnership, L.P., STAG Industrial, Inc., Wells Fargo Bank, National Association, and the other lenders party thereto
10.3 *						First Amendment to Term Loan Agreement, dated as of February 5, 2021, by and among STAG Industrial Operating Partnership, L.P., STAG Industrial, Inc., Wells Fargo Bank, National Association, and the other lenders party thereto
31.1 *						Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 *						Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 **						Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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: ~~November 5, 2020~~May 4, 2021	BY:	/s/ WILLIAM R. CROOKER
		William R. Crooker
		President, Chief Financial Officer ~~Executive Vice President~~ and Treasurer (Principal Financial Officer)

	BY:	/s/ JACLYN M. PAUL
		Jaclyn M. Paul
		Chief Accounting Officer, Senior Vice President (Principal Accounting Officer)

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Market(1)	Number of Buildings	Event or Change in Circumstance Leading to Impairment Evaluation(2)	Valuation technique utilized to estimate fair value		Fair Value(3)		Loss on Impairments
					(in thousands)
Williamsport, PA	1	Change in estimated hold period	Discounted cash flows	(4)
Three months ended September 30, 2020					$	5,019	$	3,172
Nine months ended September 30, 2020					$	5,019	$	3,172


Preferred Stock Issuances	Issuance Date	Number of Shares	Liquidation Value Per Share		Interest Rate

6.875% Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock")	March 17, 2016	3,000,000	$	25.00	6.875	%