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 ~~March 31,~~September 30, 2022

☐ 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

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 ~~May 2,~~October 26, 2022 was ~~179,213,310.~~179,216,436.

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 ~~March 31,~~September 30, 2022 and December 31, 2021	3

	Consolidated Statements of Operations for the Three and Nine Months Ended ~~March 31,~~September 30, 2022 and 2021	4

	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended ~~March 31,~~September 30, 2022 and 2021	5

	Consolidated Statements of Equity for the Three and Nine Months Ended ~~March 31,~~September 30, 2022 and 2021	6

	Consolidated Statements of Cash Flows for the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2022 and 2021	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2324

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4046

Item 4.	Controls and Procedures	4146

PART II.	Other Information	4247

Item 1.	Legal Proceedings	4247

Item 1A.	Risk Factors	4247

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4247

Item 3.	Defaults Upon Senior Securities	4347

Item 4.	Mine Safety Disclosures	4347

Item 5.	Other Information	4347

Item 6.	Exhibits	4548

	SIGNATURES	4649

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

STAG Industrial, Inc.

Consolidated Balance Sheets

(unaudited, in thousands, except share data)


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Assets	Assets					Assets
Rental Property:	Rental Property:					Rental Property:
Land	Land	$	626,385	$	617,297	Land	$	647,379	$	617,297
Buildings and improvements, net of accumulated depreciation of $650,370 and $611,867, respectively		4,535,725		4,435,743
Deferred leasing intangibles, net of accumulated amortization of $288,640 and $282,038, respectively		561,267		567,658
Buildings and improvements, net of accumulated depreciation of $725,035 and $611,867, respectively						Buildings and improvements, net of accumulated depreciation of $725,035 and $611,867, respectively	4,711,118		4,435,743
Deferred leasing intangibles, net of accumulated amortization of $338,070 and $282,038, respectively						Deferred leasing intangibles, net of accumulated amortization of $338,070 and $282,038, respectively	532,616		567,658
Total rental property, net	Total rental property, net	5,723,377		5,620,698		Total rental property, net	5,891,113		5,620,698
Cash and cash equivalents	Cash and cash equivalents	34,830		18,981		Cash and cash equivalents	13,369		18,981
Restricted cash	Restricted cash	3,175		4,215		Restricted cash	1,082		4,215
Tenant accounts receivable	Tenant accounts receivable	98,320		93,600		Tenant accounts receivable	103,231		93,600
Prepaid expenses and other assets	Prepaid expenses and other assets	64,308		60,953		Prepaid expenses and other assets	77,815		60,953
Interest rate swaps	Interest rate swaps	27,696		5,220		Interest rate swaps	77,508		5,220
Operating lease right-of-use assets	Operating lease right-of-use assets	29,151		29,582		Operating lease right-of-use assets	31,778		29,582

Total assets	Total assets	$	5,980,857	$	5,833,249	Total assets	$	6,195,896	$	5,833,249
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Liabilities:	Liabilities:					Liabilities:
Unsecured credit facility	Unsecured credit facility	$	384,000	$	296,000	Unsecured credit facility	$	136,000	$	296,000
Unsecured term loans, net	Unsecured term loans, net	970,925		970,577		Unsecured term loans, net	1,020,104		970,577
Unsecured notes, net	Unsecured notes, net	897,058		896,941		Unsecured notes, net	1,295,253		896,941
Mortgage notes, net	Mortgage notes, net	54,190		54,744		Mortgage notes, net	7,981		54,744
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	72,726		76,475		Accounts payable, accrued expenses and other liabilities	109,482		76,475
Interest rate swaps	Interest rate swaps	2,298		17,052		Interest rate swaps	—		17,052
Tenant prepaid rent and security deposits	Tenant prepaid rent and security deposits	36,062		37,138		Tenant prepaid rent and security deposits	38,019		37,138
Dividends and distributions payable	Dividends and distributions payable	22,282		21,906		Dividends and distributions payable	22,282		21,906
Deferred leasing intangibles, net of accumulated amortization of $22,245 and $21,136, respectively		33,712		35,721
Deferred leasing intangibles, net of accumulated amortization of $26,240 and $21,136, respectively						Deferred leasing intangibles, net of accumulated amortization of $26,240 and $21,136, respectively	34,560		35,721
Operating lease liabilities	Operating lease liabilities	32,725		33,108		Operating lease liabilities	35,501		33,108

Total liabilities	Total liabilities	2,505,978		2,439,662		Total liabilities	2,699,182		2,439,662
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 March 31, 2022 and December 31, 2021; none issued or outstanding		—		—
Common stock, par value $0.01 per share, 300,000,000 shares authorized at March 31, 2022 and December 31, 2021, 179,211,305 and 177,769,342 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		1,792		1,777
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at September 30, 2022 and December 31, 2021; none issued or outstanding						Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at September 30, 2022 and December 31, 2021; none issued or outstanding	—		—
Common stock, par value $0.01 per share, 300,000,000 shares authorized at September 30, 2022 and December 31, 2021, 179,214,795 and 177,769,342 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively						Common stock, par value $0.01 per share, 300,000,000 shares authorized at September 30, 2022 and December 31, 2021, 179,214,795 and 177,769,342 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	1,792		1,777
Additional paid-in capital	Additional paid-in capital	4,179,361		4,130,038		Additional paid-in capital	4,184,839		4,130,038
Cumulative dividends in excess of earnings	Cumulative dividends in excess of earnings	(805,400)		(792,332)		Cumulative dividends in excess of earnings	(840,521)		(792,332)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	24,652		(11,783)		Accumulated other comprehensive income (loss)	75,663		(11,783)
Total stockholders’ equity	Total stockholders’ equity	3,400,405		3,327,700		Total stockholders’ equity	3,421,773		3,327,700
Noncontrolling interest	Noncontrolling interest	74,474		65,887		Noncontrolling interest	74,941		65,887
Total equity	Total equity	3,474,879		3,393,587		Total equity	3,496,714		3,393,587
Total liabilities and equity	Total liabilities and equity	$	5,980,857	$	5,833,249	Total liabilities and equity	$	6,195,896	$	5,833,249

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 March 31,				Three months ended September 30,				Nine months ended September 30,
		2022		2021				2022		2021		2022		2021
Revenue	Revenue						Revenue
Rental income	Rental income	$	158,601	$	133,825		Rental income	$	164,683	$	140,277	$	484,341	$	411,907
Other income	Other income	608		170			Other income	1,622		1,837		2,673		2,629
Total revenue	Total revenue	159,209		133,995			Total revenue	166,305		142,114		487,014		414,536
Expenses	Expenses						Expenses
Property	Property	31,775		27,002			Property	30,087		26,742		90,736		79,100
General and administrative	General and administrative	12,313		12,790			General and administrative	10,884		12,668		35,431		38,036
Depreciation and amortization	Depreciation and amortization	67,366		58,407			Depreciation and amortization	69,456		59,246		206,101		174,985

Loss on impairment							Loss on impairment	1,783		—		1,783		—
Other expenses	Other expenses	497		852			Other expenses	578		821		1,607		2,184
Total expenses	Total expenses	111,951		99,051			Total expenses	112,788		99,477		335,658		294,305
Other income (expense)	Other income (expense)						Other income (expense)
Interest and other income	Interest and other income	34		32			Interest and other income	26		30		83		92
Interest expense	Interest expense	(17,259)		(15,358)			Interest expense	(21,155)		(15,746)		(56,310)		(46,377)
Debt extinguishment and modification expenses	Debt extinguishment and modification expenses	—		(679)			Debt extinguishment and modification expenses	(838)		—		(838)		(679)

Gain on the sales of rental property, net	Gain on the sales of rental property, net	23,955		6,409			Gain on the sales of rental property, net	33,168		22,662		57,499		35,047
Total other income (expense)	Total other income (expense)	6,730		(9,596)			Total other income (expense)	11,201		6,946		434		(11,917)
Net income	Net income	$	53,988	$	25,348		Net income	$	64,718	$	49,583	$	151,790	$	108,314
Less: income attributable to noncontrolling interest after preferred stock dividends	Less: income attributable to noncontrolling interest after preferred stock dividends	1,162		473			Less: income attributable to noncontrolling interest after preferred stock dividends	1,388		1,067		3,258		2,273
Net income attributable to STAG Industrial, Inc.	Net income attributable to STAG Industrial, Inc.	$	52,826	$	24,875		Net income attributable to STAG Industrial, Inc.	$	63,330	$	48,516	$	148,532	$	106,041
Less: preferred stock dividends	Less: preferred stock dividends	—		1,289			Less: preferred stock dividends	—		—		—		1,289
Less: redemption of preferred stock	Less: redemption of preferred stock	—		2,582			Less: redemption of preferred stock	—		—		—		2,582
Less: amount allocated to participating securities	Less: amount allocated to participating securities	62		73			Less: amount allocated to participating securities	59		72		180		219
Net income attributable to common stockholders	Net income attributable to common stockholders	$	52,764	$	20,931		Net income attributable to common stockholders	$	63,271	$	48,444	$	148,352	$	101,951
Weighted average common shares outstanding — basic	Weighted average common shares outstanding — basic	177,827		158,430			Weighted average common shares outstanding — basic	179,054		162,652		178,648		160,288
Weighted average common shares outstanding — diluted	Weighted average common shares outstanding — diluted	178,065		159,126			Weighted average common shares outstanding — diluted	179,162		163,462		178,790		160,869
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	$	0.30	$	0.13		Net income per share attributable to common stockholders — basic	$	0.35	$	0.30	$	0.83	$	0.64
Net income per share attributable to common stockholders — diluted	Net income per share attributable to common stockholders — diluted	$	0.30	$	0.13		Net income per share attributable to common stockholders — diluted	$	0.35	$	0.30	$	0.83	$	0.63

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 March 31,				Three months ended September 30,				Nine months ended September 30,
		2022		2021				2022		2021		2022		2021
Net income	Net income	$	53,988	$	25,348		Net income	$	64,718	$	49,583	$	151,790	$	108,314
Other comprehensive income:	Other comprehensive income:						Other comprehensive income:
Income on interest rate swaps	Income on interest rate swaps	37,237		12,150			Income on interest rate swaps	39,618		3,923		89,364		17,505
Other comprehensive income	Other comprehensive income	37,237		12,150			Other comprehensive income	39,618		3,923		89,364		17,505
Comprehensive income	Comprehensive income	91,225		37,498			Comprehensive income	104,336		53,506		241,154		125,819
Income attributable to noncontrolling interest after preferred stock dividends	Income attributable to noncontrolling interest after preferred stock dividends	(1,162)		(473)			Income attributable to noncontrolling interest after preferred stock dividends	(1,388)		(1,067)		(3,258)		(2,273)
Other comprehensive income attributable to noncontrolling interest	Other comprehensive income attributable to noncontrolling interest	(802)		(268)			Other comprehensive income attributable to noncontrolling interest	(850)		(82)		(1,918)		(381)
Comprehensive income attributable to STAG Industrial, Inc.	Comprehensive income attributable to STAG Industrial, Inc.	$	89,261	$	36,757		Comprehensive income attributable to STAG Industrial, Inc.	$	102,098	$	52,357	$	235,978	$	123,165

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 Income (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 Income (Loss)		Total Stockholders’ Equity		Noncontrolling Interest - Unit Holders in Operating Partnership		Total Equity
				Shares	Amount										Shares					Amount
Three months ended March 31, 2022
Balance, December 31, 2021		$	—	177,769,342	$	1,777	$	4,130,038	$	(792,332)	$	(11,783)	$	3,327,700		$	65,887	$	3,393,587
Three months ended September 30, 2022																				Three months ended September 30, 2022
Balance, June 30, 2022																				Balance, June 30, 2022	$	—	179,211,738	$	1,792	$	4,182,165	$	(838,437)	$	36,895	$	3,382,415	$	74,080	$	3,456,495
Proceeds from sales of common stock, net																				Proceeds from sales of common stock, net	—		—	—		(16)		—		—		(16)		—		(16)

Dividends and distributions, net																				Dividends and distributions, net	—		—	—		—		(65,414)		—		(65,414)		(1,436)		(66,850)
Non-cash compensation activity, net																				Non-cash compensation activity, net	—		3,057	—		2,040		—		—		2,040		709		2,749

Rebalancing of noncontrolling interest																				Rebalancing of noncontrolling interest	—		—	—		650		—		—		650		(650)		—
Other comprehensive income																				Other comprehensive income	—		—	—		—		—		38,768		38,768		850		39,618
Net income																				Net income	—		—	—		—		63,330		—		63,330		1,388		64,718
Balance, September 30, 2022																				Balance, September 30, 2022	$	—	179,214,795	$	1,792	$	4,184,839	$	(840,521)	$	75,663	$	3,421,773	$	74,941	$	3,496,714
Three months ended September 30, 2021																				Three months ended September 30, 2021
Balance, June 30, 2021																				Balance, June 30, 2021	$	—	160,315,538	$	1,603	$	3,486,942	$	(804,113)	$	(26,742)	$	2,657,690	$	59,212	$	2,716,902
Proceeds from sales of common stock, net	Proceeds from sales of common stock, net	—		1,328,335	13		54,963		—		—		54,976			—		54,976		Proceeds from sales of common stock, net	—		9,350,395	93		308,408		—		—		308,501		—		308,501

Dividends and distributions, net	Dividends and distributions, net	—		—	—		—		(65,114)		—		(65,114)			(1,474)		(66,588)		Dividends and distributions, net	—		—	—		—		(59,852)		—		(59,852)		(1,278)		(61,130)
Non-cash compensation activity, net	Non-cash compensation activity, net	—		48,628	1		(3,279)		(780)		—		(4,058)			5,737		1,679		Non-cash compensation activity, net	—		(5,646)	—		2,085		—		—		2,085		1,139		3,224
Redemption of common units to common stock	Redemption of common units to common stock	—		65,000	1		1,216		—		—		1,217			(1,217)		—		Redemption of common units to common stock	—		51,984	1		862		—		—		863		(863)		—
Rebalancing of noncontrolling interest	Rebalancing of noncontrolling interest	—		—	—		(3,577)		—		—		(3,577)			3,577		—		Rebalancing of noncontrolling interest	—		—	—		(2,022)		—		—		(2,022)		2,022		—
Other comprehensive income	Other comprehensive income	—		—	—		—		—		36,435		36,435			802		37,237		Other comprehensive income	—		—	—		—		—		3,841		3,841		82		3,923
Net income	Net income	—		—	—		—		52,826		—		52,826			1,162		53,988		Net income	—		—	—		—		48,516		—		48,516		1,067		49,583
Balance, March 31, 2022		$	—	179,211,305	$	1,792	$	4,179,361	$	(805,400)	$	24,652	$	3,400,405		$	74,474	$	3,474,879
Three months ended March 31, 2021
Balance, September 30, 2021																				Balance, September 30, 2021	$	—	169,712,271	$	1,697	$	3,796,275	$	(815,449)	$	(22,901)	$	2,959,622	$	61,381	$	3,021,003

Nine months ended September 30, 2022																				Nine months ended September 30, 2022
Balance, December 31, 2021																				Balance, December 31, 2021	$	—	177,769,342	$	1,777	$	4,130,038	$	(792,332)	$	(11,783)	$	3,327,700	$	65,887	$	3,393,587
Proceeds from sales of common stock, net																				Proceeds from sales of common stock, net	—		1,328,335	13		54,854		—		—		54,867		—		54,867

Dividends and distributions, net																				Dividends and distributions, net	—		—	—		—		(195,941)		—		(195,941)		(4,820)		(200,761)
Non-cash compensation activity, net																				Non-cash compensation activity, net	—		52,118	1		832		(780)		—		53		7,814		7,867
Redemption of common units to common stock																				Redemption of common units to common stock	—		65,000	1		1,216		—		—		1,217		(1,217)		—

Rebalancing of noncontrolling interest																				Rebalancing of noncontrolling interest	—		—	—		(2,101)		—		—		(2,101)		2,101		—
Other comprehensive income																				Other comprehensive income	—		—	—		—		—		87,446		87,446		1,918		89,364
Net income																				Net income	—		—	—		—		148,532		—		148,532		3,258		151,790
Balance, September 30, 2022																				Balance, September 30, 2022	$	—	179,214,795	$	1,792	$	4,184,839	$	(840,521)	$	75,663	$	3,421,773	$	74,941	$	3,496,714
Nine months ended September 30, 2021																				Nine months ended September 30, 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	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	—		680,276	7		21,559		—		—		21,566			—		21,566		Proceeds from sales of common stock, net	—		11,238,685	112		371,748		—		—		371,860		—		371,860
Redemption of preferred stock	Redemption of preferred stock	(75,000)		—	—		2,573		(2,582)		—		(75,009)			—		(75,009)		Redemption of preferred stock	(75,000)		—	—		2,573		(2,582)		—		(75,009)		—		(75,009)
Dividends and distributions, net	Dividends and distributions, net	—		—	—		—		(58,828)		—		(58,828)			(1,436)		(60,264)		Dividends and distributions, net	—		—	—		—		(176,716)		—		(176,716)		(7,039)		(183,755)
Non-cash compensation activity, net	Non-cash compensation activity, net	—		95,190	1		(3,214)		(121)		—		(3,334)			6,607		3,273		Non-cash compensation activity, net	—		92,445	1		1,063		(121)		—		943		10,093		11,036
Redemption of common units to common stock	Redemption of common units to common stock	—		97,159	1		1,622		—		—		1,623			(1,623)		—		Redemption of common units to common stock	—		171,318	2		2,852		—		—		2,854		(2,854)		—

Rebalancing of noncontrolling interest	Rebalancing of noncontrolling interest	—		—	—		(474)		—		—		(474)			474		—		Rebalancing of noncontrolling interest	—		—	—		(3,682)		—		—		(3,682)		3,682		—
Other comprehensive income	Other comprehensive income	—		—	—		—		—		11,882		11,882			268		12,150		Other comprehensive income	—		—	—		—		—		17,124		17,124		381		17,505
Net income	Net income	—		—	—		—		24,875		—		24,875			473		25,348		Net income	—		—	—		—		106,041		—		106,041		2,273		108,314
Balance, March 31, 2021		$	—	159,082,448	$	1,591	$	3,443,787	$	(778,727)	$	(28,143)	$	2,638,508		$	59,608	$	2,698,116

Balance, September 30, 2021																				Balance, September 30, 2021	$	—	169,712,271	$	1,697	$	3,796,275	$	(815,449)	$	(22,901)	$	2,959,622	$	61,381	$	3,021,003

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)


		Three months ended March 31,					Nine months ended September 30,
		2022		2021			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	53,988	$	25,348	Net income	$	151,790	$	108,314
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	67,366		58,407		Depreciation and amortization	206,101		174,985

Loss on impairment						Loss on impairment	1,783		—

Non-cash portion of interest expense	Non-cash portion of interest expense	864		487		Non-cash portion of interest expense	2,755		2,079
Amortization of above and below market leases, net	Amortization of above and below market leases, net	(84)		1,474		Amortization of above and below market leases, net	(208)		2,022
Straight-line rent adjustments, net	Straight-line rent adjustments, net	(4,450)		(4,676)		Straight-line rent adjustments, net	(12,440)		(13,159)

Debt extinguishment and modification expenses						Debt extinguishment and modification expenses	21		—
Gain on the sales of rental property, net	Gain on the sales of rental property, net	(23,955)		(6,409)		Gain on the sales of rental property, net	(57,499)		(35,047)
Non-cash compensation expense	Non-cash compensation expense	3,260		4,615		Non-cash compensation expense	9,426		12,377

Change in assets and liabilities:	Change in assets and liabilities:					Change in assets and liabilities:
Tenant accounts receivable	Tenant accounts receivable	(262)		3,281		Tenant accounts receivable	934		2,163

Prepaid expenses and other assets	Prepaid expenses and other assets	(3,371)		(4,132)		Prepaid expenses and other assets	(25,044)		(19,770)
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	(3,401)		(4,613)		Accounts payable, accrued expenses and other liabilities	19,369		17,109
Tenant prepaid rent and security deposits	Tenant prepaid rent and security deposits	(1,076)		(322)		Tenant prepaid rent and security deposits	881		3,540
Total adjustments	Total adjustments	34,891		48,112		Total adjustments	146,079		146,299
Net cash provided by operating activities	Net cash provided by operating activities	88,879		73,460		Net cash provided by operating activities	297,869		254,613
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	(144,600)		(81,969)		Acquisitions of land and buildings and improvements	(414,648)		(574,673)
Additions of land and building and improvements	Additions of land and building and improvements	(17,061)		(10,269)		Additions of land and building and improvements	(65,178)		(27,778)
Acquisitions of other assets	Acquisitions of other assets	(2,134)		—		Acquisitions of other assets	(2,134)		(465)

Acquisitions of tenant prepaid rent						Acquisitions of tenant prepaid rent	—		1,024
Acquisitions of operating lease right-of-use assets						Acquisitions of operating lease right-of-use assets	(3,541)		—
Proceeds from sales of rental property, net	Proceeds from sales of rental property, net	35,326		23,884		Proceeds from sales of rental property, net	130,929		77,899

Acquisition deposits, net	Acquisition deposits, net	(711)		2,008		Acquisition deposits, net	1,520		(4,482)
Acquisitions of deferred leasing intangibles	Acquisitions of deferred leasing intangibles	(19,617)		(13,156)		Acquisitions of deferred leasing intangibles	(47,810)		(74,508)

Acquisitions of operating lease liabilities						Acquisitions of operating lease liabilities	3,541		—
Net cash used in investing activities	Net cash used in investing activities	(148,797)		(79,502)		Net cash used in investing activities	(397,321)		(602,983)
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	675,000		393,000		Proceeds from unsecured credit facility	1,167,000		1,640,000
Repayment of unsecured credit facility	Repayment of unsecured credit facility	(587,000)		(267,000)		Repayment of unsecured credit facility	(1,327,000)		(1,698,000)
Proceeds from unsecured term loans	Proceeds from unsecured term loans	—		300,000		Proceeds from unsecured term loans	375,000		300,000
Repayment of unsecured term loans	Repayment of unsecured term loans	—		(300,000)		Repayment of unsecured term loans	(325,000)		(300,000)

Proceeds from unsecured notes						Proceeds from unsecured notes	400,000		325,000

Repayment of mortgage notes	Repayment of mortgage notes	(586)		(531)		Repayment of mortgage notes	(46,859)		(1,491)
Payment of loan fees and costs	Payment of loan fees and costs	(4)		(2,750)		Payment of loan fees and costs	(5,142)		(4,569)

Proceeds from sales of common stock, net	Proceeds from sales of common stock, net	55,126		21,639		Proceeds from sales of common stock, net	54,691		371,819
Redemption of preferred stock	Redemption of preferred stock	—		(75,000)		Redemption of preferred stock	—		(75,000)
Dividends and distributions	Dividends and distributions	(66,213)		(59,996)		Dividends and distributions	(200,387)		(182,213)
Repurchase and retirement of share-based compensation	Repurchase and retirement of share-based compensation	(1,596)		(1,342)		Repurchase and retirement of share-based compensation	(1,596)		(1,342)
Net cash provided by financing activities	Net cash provided by financing activities	74,727		8,020		Net cash provided by financing activities	90,707		374,204
Increase in cash and cash equivalents and restricted cash		14,809		1,978
Increase (decrease) in cash and cash equivalents and restricted cash						Increase (decrease) in cash and cash equivalents and restricted cash	(8,745)		25,834
Cash and cash equivalents and restricted cash—beginning of period	Cash and cash equivalents and restricted cash—beginning of period	23,196		20,339		Cash and cash equivalents and restricted cash—beginning of period	23,196		20,339
Cash and cash equivalents and restricted cash—end of period	Cash and cash equivalents and restricted cash—end of period	$	38,005	$	22,317	Cash and cash equivalents and restricted cash—end of period	$	14,451	$	46,173
Supplemental disclosure:	Supplemental disclosure:					Supplemental disclosure:
Cash paid for interest, net of capitalized interest	Cash paid for interest, net of capitalized interest	$	17,172	$	13,471	Cash paid for interest, net of capitalized interest	$	48,770	$	42,562
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

Additions to building and other capital improvements	Additions to building and other capital improvements	$	(539)	$	—	Additions to building and other capital improvements	$	(2,673)	$	—
Transfer of other assets to building and other capital improvements	Transfer of other assets to building and other capital improvements	$	539	$	—	Transfer of other assets to building and other capital improvements	$	2,673	$	—
Acquisitions of land and buildings and improvements	Acquisitions of land and buildings and improvements	$	—	$	(4,239)	Acquisitions of land and buildings and improvements	$	—	$	(4,883)
Acquisitions of deferred leasing intangibles	Acquisitions of deferred leasing intangibles	$	—	$	(703)	Acquisitions of deferred leasing intangibles	$	—	$	(791)

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	$	590	$	4,281	Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities	$	(13,752)	$	2,079
Additions to building and other capital improvements from non-cash compensation	Additions to building and other capital improvements from non-cash compensation	$	(26)	$	—	Additions to building and other capital improvements from non-cash compensation	$	(50)	$	—
Assumption of mortgage notes	Assumption of mortgage notes	$	—	$	5,103	Assumption of mortgage notes	$	—	$	5,103
Fair market value adjustment to mortgage notes acquired	Fair market value adjustment to mortgage notes acquired	$	—	$	(161)	Fair market value adjustment to mortgage notes acquired	$	—	$	(161)
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	$	(167)	$	879	Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities	$	108	$	1,032

Dividends and distributions accrued	Dividends and distributions accrued	$	22,282	$	19,657	Dividends and distributions accrued	$	22,282	$	20,932

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 ~~March 31,~~September 30, 2022 and December 31, 2021, the Company owned a 97.9% and 98.1%, 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, including the Operating Partnership, except where context otherwise requires.

As of ~~March 31,~~September 30, 2022, the Company owned ~~551~~563 industrial buildings in 4041 states with approximately ~~110.1~~111.6 million rentable square ~~feet.~~

~~COVID-19 Pandemic~~

~~The Company~~feet, consisting of 488 warehouse/distribution buildings, 73 light manufacturing buildings, and ~~the real estate industry generally continue to face risks and uncertainties related to 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. The Company did not incur significant disruptions from the COVID-19 pandemic or enter into any rent deferral agreements during the three months ended March 31, 2022 and 2021. The Company 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 flex/office buildings.

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, 2021.

Basis of Presentation

The Company’s consolidated financial statements include the accounts of the Company, the Operating Partnership, and their consolidated subsidiaries. Interests in the Operating Partnership not owned by the Company are referred to as “Noncontrolling Common Units.” These Noncontrolling Common Units are held by other limited partners in the form of common units (“Other Common Units”) and long term incentive plan units (“LTIP units”) issued pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”). All significant intercompany balances and transactions have been

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eliminated in the consolidation of entities. The financial statements of the Company are presented on a consolidated basis for all periods presented.

Restricted Cash

The following table presents a reconciliation of cash and cash equivalents and restricted cash reported on the accompanying Consolidated Balance Sheets to amounts reported on the accompanying Consolidated Statements of Cash Flows.


Reconciliation of cash and cash equivalents and restricted cash (in thousands)	Reconciliation of cash and cash equivalents and restricted cash (in thousands)	March 31, 2022		December 31, 2021		Reconciliation of cash and cash equivalents and restricted cash (in thousands)	September 30, 2022		December 31, 2021
Cash and cash equivalents	Cash and cash equivalents	$	34,830	$	18,981	Cash and cash equivalents	$	13,369	$	18,981
Restricted cash	Restricted cash	3,175		4,215		Restricted cash	1,082		4,215
Total cash and cash equivalents and restricted cash	Total cash and cash equivalents and restricted cash	$	38,005	$	23,196	Total cash and cash equivalents and restricted cash	$	14,451	$	23,196

~~Taxes~~

~~Federal Income Taxes~~

~~The Company’s taxable REIT subsidiary recognized net income of approximately $0.1 million and $0 for the three months ended March 31, 2022 and 2021, respectively.~~

~~State and Local Income, Excise, and Franchise Tax~~

State and local income, excise, and franchise taxes in the amount of approximately $0.5 million and $0.4 million have been recorded in other expenses on the accompanying Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021, respectively.

Uncertain Tax ~~Positions~~Positions

As of ~~March 31,~~September 30, 2022 and December 31, 2021, there were no liabilities for uncertain tax positions.

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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.

3. Rental Property

The following table summarizes the components of rental property as of ~~March 31,~~September 30, 2022 and December 31, 2021.


Rental Property (in thousands)	Rental Property (in thousands)	March 31, 2022		December 31, 2021		Rental Property (in thousands)	September 30, 2022		December 31, 2021
Land	Land	$	626,385	$	617,297	Land	$	647,379	$	617,297
Buildings, net of accumulated depreciation of $433,560 and $406,670, respectively		4,126,324		4,035,210
Tenant improvements, net of accumulated depreciation of $27,270 and $26,065, respectively		43,788		43,999
Building and land improvements, net of accumulated depreciation of $189,540 and $179,132, respectively		324,917		320,041
Buildings, net of accumulated depreciation of $485,260 and $406,670, respectively						Buildings, net of accumulated depreciation of $485,260 and $406,670, respectively	4,251,576		4,035,210
Tenant improvements, net of accumulated depreciation of $31,599 and $26,065, respectively						Tenant improvements, net of accumulated depreciation of $31,599 and $26,065, respectively	46,138		43,999
Building and land improvements, net of accumulated depreciation of $208,176 and $179,132, respectively						Building and land improvements, net of accumulated depreciation of $208,176 and $179,132, respectively	340,353		320,041
Construction in progress	Construction in progress	40,696		36,493		Construction in progress	73,051		36,493
Deferred leasing intangibles, net of accumulated amortization of $288,640 and $282,038, respectively		561,267		567,658
Deferred leasing intangibles, net of accumulated amortization of $338,070 and $282,038, respectively						Deferred leasing intangibles, net of accumulated amortization of $338,070 and $282,038, respectively	532,616		567,658
Total rental property, net	Total rental property, net	$	5,723,377	$	5,620,698	Total rental property, net	$	5,891,113	$	5,620,698

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Acquisitions

The following table summarizes the acquisitions of the Company during the three and nine months ended ~~March 31,~~September 30, 2022. The Company accounted for all of its acquisitions as asset acquisitions.


Market(1)	Market(1)	Date Acquired	Square Feet	Number of Buildings	Purchase Price (in thousands)		Market(1)	Date Acquired	Square Feet	Number of Buildings	Purchase Price (in thousands)
Kansas City, MO	Kansas City, MO	January 6, 2022	702,000	1	$	60,428	Kansas City, MO	January 6, 2022	702,000	1	$	60,428
Chicago, IL	Chicago, IL	January 31, 2022	72,499	1	8,128		Chicago, IL	January 31, 2022	72,499	1	8,128
Columbus, OH	Columbus, OH	February 8, 2022	138,213	1	11,492		Columbus, OH	February 8, 2022	138,213	1	11,492
Cleveland, OH	Cleveland, OH	February 8, 2022	136,800	1	13,001		Cleveland, OH	February 8, 2022	136,800	1	13,001
Nashville, TN	Nashville, TN	March 10, 2022	109,807	1	12,810		Nashville, TN	March 10, 2022	109,807	1	12,810
Greenville/Spartanburg, SC	Greenville/Spartanburg, SC	March 10, 2022	289,103	1	28,274		Greenville/Spartanburg, SC	March 10, 2022	289,103	1	28,274
Memphis, TN	Memphis, TN	March 18, 2022	195,622	1	15,828		Memphis, TN	March 18, 2022	195,622	1	15,828
Greenville/Spartanburg, SC	Greenville/Spartanburg, SC	March 18, 2022	155,717	1	16,390		Greenville/Spartanburg, SC	March 18, 2022	155,717	1	16,390
Three months ended March 31, 2022	Three months ended March 31, 2022		1,799,761	8	$	166,351	Three months ended March 31, 2022		1,799,761	8	166,351

Atlanta, GA							Atlanta, GA	April 1, 2022	210,858	1	21,119
Minneapolis/St. Paul, MN							Minneapolis/St. Paul, MN	April 4, 2022	160,000	1	13,472
West Michigan, MI							West Michigan, MI	April 14, 2022	211,125	2	12,274
Pittsburgh, PA							Pittsburgh, PA	April 19, 2022	400,000	1	50,178
Greenville/Spartanburg, SC(2)							Greenville/Spartanburg, SC(2)	April 22, 2022	—	—	5,559
Birmingham, AL							Birmingham, AL	May 5, 2022	67,168	1	7,871
South Bay/San Jose, CA							South Bay/San Jose, CA	June 7, 2022	175,325	1	29,630
Washington, DC							Washington, DC	June 29, 2022	140,555	1	20,257
Hampton Roads, VA							Hampton Roads, VA	June 29, 2022	102,512	1	10,561
Three months ended June 30, 2022							Three months ended June 30, 2022		1,467,543	9	170,921
Atlanta, GA							Atlanta, GA	July 15, 2022	159,048	1	10,062
Fresno, CA							Fresno, CA	July 25, 2022	232,072	1	30,121
El Paso, TX							El Paso, TX	July 26, 2022	326,166	4	37,792
Portland, OR							Portland, OR	September 12, 2022	78,000	1	11,281
Louisville, KY							Louisville, KY	September 21, 2022	563,032	1	38,064
Three months ended September 30, 2022							Three months ended September 30, 2022		1,358,318	8	127,320
Nine months ended September 30, 2022							Nine months ended September 30, 2022		4,625,622	25	$	464,592

(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.

(2) The Company acquired vacant land parcels.

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The following table summarizes the allocation of the total purchase price paid (on the closing dates) for the assets and liabilities acquired by the Company during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 in connection with the acquisitions identified in the table above.

Three months ended March 31, 2022
Acquired Assets and Liabilities Purchase Price (in thousands) Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land $ 10,746 N/A
Buildings 127,778 N/A
Tenant improvements 692 N/A
Building and land improvements 5,384 N/A
Other assets 2,134 N/A
Deferred leasing intangibles - In-place leases 11,512 5.3
Deferred leasing intangibles - Tenant relationships 7,319 9.0
Deferred leasing intangibles - Above market leases 959 6.9
Deferred leasing intangibles - Below market leases (173) 3.7
Total purchase price $ 166,351

The following table summarizes the results of operations for the three months ended March 31, 2022 for the buildings acquired during the three months ended March 31, 2022, which are included in the Company’s Consolidated Statements of Operations from the date of acquisition.

~~Results of Operations (in thousands)~~

~~Three months ended March 31, 2022~~

~~Total revenue~~

~~1,251~~

~~Net loss~~

~~113~~


	Nine months ended September 30, 2022
Acquired Assets and Liabilities	Purchase Price (in thousands)		Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land	$	38,186	N/A
Buildings	354,776		N/A
Tenant improvements	2,468		N/A
Building and land improvements	19,218		N/A

Other assets	2,134		N/A
Operating lease right-of-use assets	3,541		N/A
Deferred leasing intangibles - In-place leases	33,473		8.0
Deferred leasing intangibles - Tenant relationships	17,902		11.2
Deferred leasing intangibles - Above market leases	2,456		11.6
Deferred leasing intangibles - Below market leases	(6,021)		7.5




Operating lease liabilities	(3,541)		N/A
Total purchase price	$	464,592

Dispositions

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the Company sold ~~1 building~~six buildings and 1one land parcel to third parties comprised of approximately ~~0.2~~1.6 million rentable square feet with a net book value of approximately ~~$11.3~~$73.4 million. ~~This building~~These buildings contributed approximately $0.2 million, ~~and $0.4~~$1.2 million, ~~to revenue for the three months ended March 31, 2022 and 2021, respectively. This building contributed approximately $0.2~~$1.2 million, and ~~$0.3~~$3.6 million to net income (exclusive of gain on the sales of rental property, net) for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021, respectively. Net proceeds from the sales of rental property were approximately ~~$35.3~~$130.9 million and the Company recognized the full gain on the sales of rental property, net, of approximately ~~$24.0~~$57.5 million for the nine months ended September 30, 2022.

Loss on Impairment

The following table summarizes the Company’s loss on impairment for assets held and used during the nine months ended September 30, 2022.


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 Impairment
					(in thousands)
Hartford, CT	1	Change in estimated hold period	Discounted cash flows	(4)	$	834	$	1,783
Three and nine months ended September 30, 2022					$	834	$	1,783

(1)As defined by CoStar. If the building is located outside of a CoStar defined market, the city and state are 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 ~~March 31, 2022.~~

September 30, 2022: discount rate of 10.0% and exit capitalization rate of 8.5%.

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Deferred Leasing Intangibles

The following table summarizes the deferred leasing intangibles on the accompanying Consolidated Balance Sheets as of ~~March 31,~~September 30, 2022 and December 31, 2021.


		March 31, 2022						December 31, 2021							September 30, 2022						December 31, 2021
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	$	89,747	$	(31,436)	$	58,311	$	91,565	$	(32,110)	$	59,455	Above market leases	$	88,132	$	(34,919)	$	53,213	$	91,565	$	(32,110)	$	59,455
Other intangible lease assets	Other intangible lease assets	760,160		(257,204)		502,956		758,131		(249,928)		508,203		Other intangible lease assets	782,554		(303,151)		479,403		758,131		(249,928)		508,203
Total deferred leasing intangible assets	Total deferred leasing intangible assets	$	849,907	$	(288,640)	$	561,267	$	849,696	$	(282,038)	$	567,658	Total deferred leasing intangible assets	$	870,686	$	(338,070)	$	532,616	$	849,696	$	(282,038)	$	567,658

Below market leases	Below market leases	$	55,957	$	(22,245)	$	33,712	$	56,857	$	(21,136)	$	35,721	Below market leases	$	60,800	$	(26,240)	$	34,560	$	56,857	$	(21,136)	$	35,721
Total deferred leasing intangible liabilities	Total deferred leasing intangible liabilities	$	55,957	$	(22,245)	$	33,712	$	56,857	$	(21,136)	$	35,721	Total deferred leasing intangible liabilities	$	60,800	$	(26,240)	$	34,560	$	56,857	$	(21,136)	$	35,721

The following table summarizes the amortization expense and the net ~~decrease~~increase (decrease) to rental income for the amortization of deferred leasing intangibles during the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
Deferred Leasing Intangibles Amortization (in thousands)	Deferred Leasing Intangibles Amortization (in thousands)	2022		2021			Deferred Leasing Intangibles Amortization (in thousands)	2022		2021		2022		2021
Net increase (decrease) to rental income related to above and below market lease amortization	Net increase (decrease) to rental income related to above and below market lease amortization	$	79	$	(1,480)		Net increase (decrease) to rental income related to above and below market lease amortization	$	90	$	(229)	$	191	$	(2,039)
Amortization expense related to other intangible lease assets	Amortization expense related to other intangible lease assets	$	24,077	$	22,447		Amortization expense related to other intangible lease assets	$	24,069	$	21,570	$	72,851	$	65,439

~~The following table summarizes the amortization of deferred leasing intangibles over the next five calendar years (including the remainder of 2022) as of March 31, 2022.~~

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 2022 $ 67,986 $ 180
2023 $ 80,666 $ 727
2024 $ 69,720 $ 1,361
2025 $ 60,629 $ 1,185
2026 $ 52,145 $ 1,626

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4. Debt

The following table summarizes the Company’s outstanding indebtedness, including borrowings under the Company’s unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes as of ~~March 31,~~September 30, 2022 and December 31, 2021.


Loan	Loan	Principal Outstanding as of March 31, 2022 (in thousands)		Principal Outstanding as of December 31, 2021 (in thousands)		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)	Loan	Principal Outstanding as of September 30, 2022 (in thousands)		Principal Outstanding as of December 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)	$	384,000	$	296,000	L + 0.775%		October 23, 2026	i	Unsecured Credit Facility(4)	$	136,000	$	296,000	Term SOFR + 0.775%		October 23, 2026	i
Total unsecured credit facility	Total unsecured credit facility	384,000		296,000						Total unsecured credit facility	136,000		296,000

Unsecured term loans:	Unsecured term loans:									Unsecured term loans:
Unsecured Term Loan D(5)	Unsecured Term Loan D(5)	150,000		150,000		2.85	%	January 4, 2023	i	Unsecured Term Loan D(5)	—		150,000		2.85	%	January 4, 2023	i
Unsecured Term Loan E(5)	Unsecured Term Loan E(5)	175,000		175,000		3.77	%	January 15, 2024	i	Unsecured Term Loan E(5)	—		175,000		3.77	%	January 15, 2024	i
Unsecured Term Loan F	Unsecured Term Loan F	200,000		200,000		2.96	%	January 12, 2025	i	Unsecured Term Loan F	200,000		200,000		2.96	%	January 12, 2025	i
Unsecured Term Loan G	Unsecured Term Loan G	300,000		300,000		1.13	%	February 5, 2026	i	Unsecured Term Loan G	300,000		300,000		1.11	%	February 5, 2026	i
Unsecured Term Loan A	Unsecured Term Loan A	150,000		150,000		3.23	%	March 15, 2027	i	Unsecured Term Loan A	150,000		150,000		2.16	%	March 15, 2027	i
Unsecured Term Loan H										Unsecured Term Loan H	187,500		—		3.75	%	January 25, 2028	i
Unsecured Term Loan I										Unsecured Term Loan I	187,500		—		2.89	%	January 25, 2028	i
Total unsecured term loans	Total unsecured term loans	975,000		975,000						Total unsecured term loans	1,025,000		975,000
Total unamortized deferred financing fees and debt issuance costs	Total unamortized deferred financing fees and debt issuance costs	(4,075)		(4,423)						Total unamortized deferred financing fees and debt issuance costs	(4,896)		(4,423)
Total carrying value unsecured term loans, net	Total carrying value unsecured term loans, net	970,925		970,577						Total carrying value unsecured term loans, net	1,020,104		970,577

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
Series I Unsecured Notes	Series I Unsecured Notes	275,000		275,000		2.80	%	September 29, 2031	ii	Series I Unsecured Notes	275,000		275,000		2.80	%	September 29, 2031	ii
Series K Unsecured Notes										Series K Unsecured Notes	400,000		—		4.12	%	June 28, 2032	ii
Series J Unsecured Notes	Series J Unsecured Notes	50,000		50,000		2.95	%	September 28, 2033	ii	Series J Unsecured Notes	50,000		50,000		2.95	%	September 28, 2033	ii
Total unsecured notes	Total unsecured notes	900,000		900,000						Total unsecured notes	1,300,000		900,000
Total unamortized deferred financing fees and debt issuance costs	Total unamortized deferred financing fees and debt issuance costs	(2,942)		(3,059)						Total unamortized deferred financing fees and debt issuance costs	(4,747)		(3,059)
Total carrying value unsecured notes, net	Total carrying value unsecured notes, net	897,058		896,941						Total carrying value unsecured notes, net	1,295,253		896,941

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	46,106		46,610		4.31	%	December 1, 2022	iii	Wells Fargo Bank, National Association CMBS Loan	—		46,610		4.31	%	December 1, 2022	iii
Thrivent Financial for Lutherans	Thrivent Financial for Lutherans	3,397		3,430		4.78	%	December 15, 2023	iv	Thrivent Financial for Lutherans	3,330		3,430		4.78	%	December 15, 2023	iv
United of Omaha Life Insurance Company	United of Omaha Life Insurance Company	4,894		4,943		3.71	%	October 1, 2039	ii	United of Omaha Life Insurance Company	4,794		4,943		3.71	%	October 1, 2039	ii
Total mortgage notes	Total mortgage notes	54,397		54,983						Total mortgage notes	8,124		54,983
Net unamortized fair market value discount	Net unamortized fair market value discount	(136)		(136)						Net unamortized fair market value discount	(137)		(136)
Total unamortized deferred financing fees and debt issuance costs	Total unamortized deferred financing fees and debt issuance costs	(71)		(103)						Total unamortized deferred financing fees and debt issuance costs	(6)		(103)
Total carrying value mortgage notes, net	Total carrying value mortgage notes, net	54,190		54,744						Total carrying value mortgage notes, net	7,981		54,744
Total / weighted average interest rate(5)		$	2,306,173	$	2,218,262	2.87	%
Total / weighted average interest rate(6)										Total / weighted average interest rate(6)	$	2,459,338	$	2,218,262	3.29	%

(1)Interest rate as of ~~March 31,~~September 30, 2022. At ~~March 31,~~September 30, 2022, the one-month ~~LIBOR~~Term Secured Overnight Financing Rate (“L”Term SOFR”) was ~~0.452%~~3.04205%. 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 and leverage ratio, as defined in the respective loan agreements.

(2)The unsecured credit facility has a stated rate of one-month Term SOFR plus a 0.10% adjustment and a spread of 0.775%. The unsecured term loans have a stated interest rate of one-month ~~LIBOR~~Term SOFR plus a 0.10% adjustment and a spread of 0.85%~~, with the exception of Unsecured Term Loan D which has a stated interest rate of one-month LIBOR plus a spread of 1.0%~~. As of ~~March 31,~~September 30, 2022, one-month ~~LIBOR~~Term SOFR for the Unsecured Term Loans A, ~~D, E,~~ F, G, H, and GI was swapped to a fixed rate of ~~2.38%, 1.85%, 2.92%~~1.31%, 2.11%, 0.26%, 2.90%, and ~~0.28%~~2.04%, ~~respectively.~~respectively (which includes the 0.10% adjustment). One-month ~~LIBOR for the Unsecured~~ Term ~~Loan A will be swapped to a fixed rate of 1.30% effective April 1, 2022. One-month LIBOR~~SOFR for the Unsecured Term Loan G will be swapped to a fixed rate of ~~0.94%~~0.95% effective April 18, 2023. One-

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month Term SOFR for the Unsecured Term Loan I will be swapped to a fixed rate of 2.66% effective January 4, 2023. One-month Term SOFR for the Unsecured Term Loan H will be swapped to a fixed rate of 2.50% effective January 12, 2024.

(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, subject to defeasance; and (iv) pre-payable without penalty three months prior to the maturity date.

(4)The capacity of the unsecured credit facility is ~~$750.0 million.~~$1.0 billion. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately ~~$4.9~~$5.6 million and $5.2 million are included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of ~~March 31,~~September 30, 2022 and December 31, 2021, respectively. The initial maturity date is October 24, 2025, or such later date

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which may be extended pursuant to 2 ~~six-month~~two 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 D and the Unsecured Term Loan E were repaid in full on July 26, 2022 in connection with the execution of the Unsecured Term Loan H and the Unsecured Term Loan I.

(6)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of ~~$975.0~~$1,025.0 million of debt, and is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts.

The aggregate undrawn nominal commitment on the unsecured credit facility as of ~~March 31,~~September 30, 2022 was approximately ~~$362.3~~$860.4 million, including issued letters of credit. The Company’s actual borrowing capacity at any given point in time may be less or restricted to a maximum amount based on the Company’s debt covenant compliance. Total accrued interest for the Company’s indebtedness was approximately ~~$8.2~~$14.9 million and $8.6 million as of ~~March 31,~~September 30, 2022 and December 31, 2021, 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 ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
Costs Included in Interest Expense (in thousands)	Costs Included in Interest Expense (in thousands)	2022		2021			Costs Included in Interest Expense (in thousands)	2022		2021		2022		2021
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	$	864	$	487		Amortization of deferred financing fees and debt issuance costs and fair market value premiums/discounts	$	1,011	$	803	$	2,755	$	2,079
Facility, unused, and other fees	Facility, unused, and other fees	$	341	$	386		Facility, unused, and other fees	$	417	$	443	$	1,103	$	1,269

On September 1, 2022, the mortgage note associated with the Wells Fargo Bank, National Association CMBS Loan was repaid in full.

On September 1, 2022, the Company entered into separate amended and restated loan agreements for the Unsecured Term Loan A, the Unsecured Term Loan F, and the Unsecured Term Loan G (“Amended and Restated Unsecured Term Loans”), to provide that borrowings under the Amended and Restated Unsecured Term Loans bear a current annual interest rate of one-month Term SOFR, plus an adjustment of 0.10% and a spread of 0.85%, based on the Company’s debt rating and leverage ratio (as defined in the applicable loan agreement). Other than the interest rate provisions described above, the material terms of the Amended and Restated Unsecured Term Loans, including the maturity dates, remain unchanged.

On July 26, 2022, the Company entered into an amended and restated credit agreement for the unsecured credit facility (the “July 2022 Credit Agreement”), which provided for an increase in the aggregate commitments available for borrowing under the unsecured credit facility from $750.0 million to up to $1.0 billion. The July 2022 Credit Agreement also provided for the replacement of one-month LIBOR for one-month Term SOFR, plus a 0.10% adjustment. In connection with the July 2022 Credit Agreement, the Company incurred approximately $1.4 million in costs which are being deferred and amortized through the maturity date of the unsecured credit facility. The unamortized fees will continue to be deferred and amortized through the maturity date. Other than the increase in the borrowing commitments and the interest rate provisions described above, the material terms of the unsecured credit facility remain unchanged.

On July 26, 2022, the Company entered into (i) an unsecured term loan agreement with Wells Fargo Bank, National Association and the other lenders party thereto, providing for a senior unsecured term loan in the original principal amount of $187.5 million (“Unsecured Term Loan H”), and (ii) an unsecured term loan agreement with Bank of America, N.A., and the other lenders party thereto, providing for a new senior unsecured term loan in the original principal amount of $187.5 million (“Unsecured Term Loan I”). In connection with the new unsecured term loans, the $150.0 million Unsecured Term Loan D and the $175.0 million Unsecured Term Loan E were repaid in full. Each of the Unsecured Term Loan H and the Unsecured Term Loan I bears a current annual interest rate of one-month Term SOFR, plus a 0.10% adjustment and a spread of 0.85% based on the Company’s debt rating and leverage ratio (as defined in the applicable loan agreement), and matures on January 25, 2028. In connection with the new unsecured term loans, the Company incurred approximately $1.2 million in costs which are being

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deferred and amortized through the maturity dates on the unsecured term loans. The Company also recognized debt extinguishment and modification expenses of approximately $0.8 million related to unamortized deferred financing fees and debt issuance costs related to the Unsecured Term Loan D and the Unsecured Term Loan E and other third-party costs.

On April 28, 2022, the Company entered into a note purchase agreement (the “April 2022 NPA”) for the private placement by the Operating Partnership of $400.0 million senior unsecured notes (the “Series K Unsecured Notes”) maturing June 28, 2032, with a fixed annual interest rate of 4.12%. The April 2022 NPA contains a number of financial covenants substantially similar to the financial covenants contained in the Company’s unsecured credit facility and other unsecured notes, plus a financial covenant that requires the Company to maintain a minimum interest coverage ratio of not less than 1.50:1.00. The Operating Partnership issued the Series K Unsecured Notes on June 28, 2022. The Company and certain wholly owned subsidiaries of the Operating Partnership are guarantors of the Series K Unsecured Notes.

Financial Covenant Considerations

The Company was in compliance with all financial and other covenants as of ~~March 31,~~September 30, 2022 and December 31, 2021 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 ~~$87.8~~$14.6 million and $88.5 million at ~~March 31,~~September 30, 2022 and December 31, 2021, respectively, and is limited to senior, property-level secured debt financing arrangements.

Fair Value of Debt

The following table summarizes the aggregate principal amount outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of ~~March 31,~~September 30, 2022 and December 31, 2021.


		March 31, 2022				December 31, 2021					September 30, 2022				December 31, 2021
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	$	384,000	$	383,927	$	296,000	$	296,000	Unsecured credit facility	$	136,000	$	136,000	$	296,000	$	296,000
Unsecured term loans	Unsecured term loans	975,000		975,015		975,000		975,224		Unsecured term loans	1,025,000		1,025,000		975,000		975,224
Unsecured notes	Unsecured notes	900,000		880,674		900,000		937,183		Unsecured notes	1,300,000		1,145,792		900,000		937,183
Mortgage notes	Mortgage notes	54,397		54,628		54,983		56,323		Mortgage notes	8,124		7,015		54,983		56,323
Total principal amount	Total principal amount	2,313,397		$	2,294,244	2,225,983		$	2,264,730	Total principal amount	2,469,124		$	2,313,807	2,225,983		$	2,264,730
Net unamortized fair market value discount	Net unamortized fair market value discount	(136)				(136)				Net unamortized fair market value discount	(137)				(136)
Total unamortized deferred financing fees and debt issuance costs	Total unamortized deferred financing fees and debt issuance costs	(7,088)				(7,585)				Total unamortized deferred financing fees and debt issuance costs	(9,649)				(7,585)
Total carrying value	Total carrying value	$	2,306,173			$	2,218,262			Total carrying value	$	2,459,338			$	2,218,262

The applicable fair value guidance establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value of the Company’s debt is based on Level 3 inputs.

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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 ~~March 31,~~September 30, 2022. 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
Wells Fargo Bank, N.A.		Jan-08-2015	Mar-20-2015	$	25,000	$	—	1.8280	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank		Jan-08-2015	Feb-14-2020	$	25,000	$	—	2.4535	%	One-month L	Mar-31-2022
Regions Bank		Jan-08-2015	Feb-14-2020	$	50,000	$	—	2.4750	%	One-month L	Mar-31-2022
Capital One, N.A.		Jan-08-2015	Feb-14-2020	$	50,000	$	—	2.5300	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(64)	1.8485	%	One-month L	Jan-04-2023	The Toronto-Dominion Bank	Jul-20-2017	Jul-28-2022	$	25,000	$	116	1.8830	%	One-month Term SOFR	Jan-04-2023
Royal Bank of Canada	Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(63)	1.8505	%	One-month L	Jan-04-2023	Royal Bank of Canada	Jul-20-2017	Jul-28-2022	$	25,000	$	115	1.8980	%	One-month Term SOFR	Jan-04-2023
Wells Fargo Bank, N.A.	Wells Fargo Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(63)	1.8505	%	One-month L	Jan-04-2023	Wells Fargo Bank, N.A.	Jul-20-2017	Jul-28-2022	$	25,000	$	116	1.8750	%	One-month Term SOFR	Jan-04-2023
PNC Bank, N.A.	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(63)	1.8485	%	One-month L	Jan-04-2023	PNC Bank, N.A.	Jul-20-2017	Jul-28-2022	$	25,000	$	115	1.8860	%	One-month Term SOFR	Jan-04-2023
PNC Bank, N.A.	PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(126)	1.8475	%	One-month L	Jan-04-2023	PNC Bank, N.A.	Jul-20-2017	Jul-28-2022	$	50,000	$	231	1.8850	%	One-month Term SOFR	Jan-04-2023
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Apr-20-2020	Sep-29-2020	$	75,000	$	1,223	0.2750	%	One-month L	Apr-18-2023	The Toronto-Dominion Bank	Apr-20-2020	Aug-10-2022	$	75,000	$	1,556	0.2660	%	One-month Term SOFR	Apr-18-2023
Wells Fargo Bank, N.A.	Wells Fargo Bank, N.A.	Apr-20-2020	Sep-29-2020	$	75,000	$	1,219	0.2790	%	One-month L	Apr-18-2023	Wells Fargo Bank, N.A.	Apr-20-2020	Aug-10-2022	$	75,000	$	1,559	0.2520	%	One-month Term SOFR	Apr-18-2023
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Apr-20-2020	Mar-19-2021	$	75,000	$	1,223	0.2750	%	One-month L	Apr-18-2023	The Toronto-Dominion Bank	Apr-20-2020	Aug-10-2022	$	75,000	$	1,556	0.2660	%	One-month Term SOFR	Apr-18-2023
Wells Fargo Bank, N.A.	Wells Fargo Bank, N.A.	Apr-20-2020	Mar-19-2021	$	75,000	$	1,218	0.2800	%	One-month L	Apr-18-2023	Wells Fargo Bank, N.A.	Apr-20-2020	Aug-10-2022	$	75,000	$	1,559	0.2520	%	One-month Term SOFR	Apr-18-2023
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(548)	2.9180	%	One-month L	Jan-12-2024	The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2022	$	50,000	$	874	2.9080	%	One-month Term SOFR	Jan-12-2024
PNC Bank, N.A.	PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(549)	2.9190	%	One-month L	Jan-12-2024	PNC Bank, N.A.	Jul-24-2018	Jul-26-2022	$	50,000	$	866	2.9190	%	One-month Term SOFR	Jan-12-2024
Bank of Montreal	Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(548)	2.9190	%	One-month L	Jan-12-2024	Bank of Montreal	Jul-24-2018	Jul-26-2022	$	50,000	$	868	2.9160	%	One-month Term SOFR	Jan-12-2024
U.S. Bank, N.A.	U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(274)	2.9190	%	One-month L	Jan-12-2024	U.S. Bank, N.A.	Jul-24-2018	Jul-26-2022	$	25,000	$	435	2.9120	%	One-month Term SOFR	Jan-12-2024
Wells Fargo Bank, N.A.	Wells Fargo Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	280	2.2460	%	One-month L	Jan-15-2025	Wells Fargo Bank, N.A.	May-02-2019	Aug-15-2022	$	50,000	$	2,151	2.2360	%	One-month Term SOFR	Jan-15-2025
U.S. Bank, N.A.	U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	284	2.2459	%	One-month L	Jan-15-2025	U.S. Bank, N.A.	May-02-2019	Aug-15-2022	$	50,000	$	2,158	2.2380	%	One-month Term SOFR	Jan-15-2025
Regions Bank	Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	280	2.2459	%	One-month L	Jan-15-2025	Regions Bank	May-02-2019	Aug-15-2022	$	50,000	$	2,152	2.2389	%	One-month Term SOFR	Jan-15-2025
Bank of Montreal	Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	1,008	1.7165	%	One-month L	Jan-15-2025	Bank of Montreal	Jul-16-2019	Aug-15-2022	$	50,000	$	2,740	1.7100	%	One-month Term SOFR	Jan-15-2025
U.S. Bank, N.A.	U.S. Bank, N.A.	Feb-17-2021	Apr-18-2023	$	150,000	$	6,853	0.9385	%	One-month L	Feb-5-2026	U.S. Bank, N.A.	Feb-17-2021	Apr-18-2023	$	150,000	$	12,074	0.9520	%	One-month Term SOFR	Feb-5-2026
Wells Fargo Bank, N.A.	Wells Fargo Bank, N.A.	Feb-17-2021	Apr-18-2023	$	75,000	$	3,409	0.9365	%	One-month L	Feb-5-2026	Wells Fargo Bank, N.A.	Feb-17-2021	Apr-18-2023	$	75,000	$	6,007	0.9460	%	One-month Term SOFR	Feb-5-2026
The Toronto-Dominion Bank	The Toronto-Dominion Bank	Feb-17-2021	Apr-18-2023	$	75,000	$	3,419	0.9360	%	One-month L	Feb-5-2026	The Toronto-Dominion Bank	Feb-17-2021	Apr-18-2023	$	75,000	$	6,082	0.9355	%	One-month Term SOFR	Feb-5-2026
Regions Bank	Regions Bank	Oct-26-2021	Apr-01-2022	$	50,000	$	2,419	1.3045	%	One-month L	Mar-15-2027	Regions Bank	Oct-26-2021	Aug-01-2022	$	50,000	$	5,302	1.3090	%	One-month Term SOFR	Mar-15-2027
Bank of Montreal	Bank of Montreal	Oct-26-2021	Apr-01-2022	$	50,000	$	2,438	1.3045	%	One-month L	Mar-15-2027	Bank of Montreal	Oct-26-2021	Aug-01-2022	$	50,000	$	5,333	1.3090	%	One-month Term SOFR	Mar-15-2027
PNC Bank, N.A.	PNC Bank, N.A.	Oct-26-2021	Apr-01-2022	$	50,000	$	2,423	1.3045	%	One-month L	Mar-15-2027	PNC Bank, N.A.	Oct-26-2021	Aug-01-2022	$	50,000	$	5,311	1.3150	%	One-month Term SOFR	Mar-15-2027
PNC Bank, N.A.												PNC Bank, N.A.	Jul-27-2022	Jan-04-2023	$	50,000	$	2,730	2.6420	%	One-month Term SOFR	Jan-25-2028
The Toronto-Dominion Bank												The Toronto-Dominion Bank	Jul-27-2022	Jan-04-2023	$	50,000	$	2,726	2.6530	%	One-month Term SOFR	Jan-25-2028
Regions Bank												Regions Bank	Jul-27-2022	Jan-04-2023	$	50,000	$	2,681	2.6550	%	One-month Term SOFR	Jan-25-2028
U.S. Bank, N.A.												U.S. Bank, N.A.	Jul-27-2022	Jan-12-2024	$	75,000	$	3,151	2.4865	%	One-month Term SOFR	Jan-25-2028
The Toronto-Dominion Bank												The Toronto-Dominion Bank	Jul-27-2022	Jan-12-2024	$	50,000	$	2,108	2.4910	%	One-month Term SOFR	Jan-25-2028
Wells Fargo Bank, N.A.												Wells Fargo Bank, N.A.	Jul-27-2022	Jan-12-2024	$	50,000	$	2,062	2.4930	%	One-month Term SOFR	Jan-25-2028
PNC Bank, N.A.												PNC Bank, N.A.	Jul-27-2022	Jul-27-2022	$	50,000	$	2,774	2.6790	%	One-month Term SOFR	Jan-25-2028

In connection with the Amended and Restated Unsecured Term Loans that were entered into on September 1, 2022, as discussed in Note 4, the Company transitioned all of its outstanding interest rate swaps to one-month Term SOFR.

The following table summarizes the fair value of the interest rate swaps outstanding as of ~~March 31,~~September 30, 2022 and December 31, 2021.


Balance Sheet Line Item (in thousands)	Balance Sheet Line Item (in thousands)	Notional Amount March 31, 2022		Fair Value March 31, 2022		Notional Amount December 31, 2021		Fair Value December 31, 2021		Balance Sheet Line Item (in thousands)	Notional Amount September 30, 2022		Fair Value September 30, 2022		Notional Amount December 31, 2021		Fair Value December 31, 2021
Interest rate swaps-Asset	Interest rate swaps-Asset	$	950,000	$	27,696	$	600,000	$	5,220	Interest rate swaps-Asset	$	1,650,000	$	77,508	$	600,000	$	5,220
Interest rate swaps-Liability	Interest rate swaps-Liability	$	325,000	$	(2,298)	$	825,000	$	(17,052)	Interest rate swaps-Liability	$	—	$	—	$	825,000	$	(17,052)

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 to interest expense in the same periods during which the hedged transaction affects earnings.

~~Table of Contents~~

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

Table of Contents

Company estimates that approximately ~~$2.2~~$25.4 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense over the next 12 months.

The following table summarizes the effect of cash flow hedge accounting and the location of amounts related to Company’s derivatives in the consolidated financial statements for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
Effect of Cash Flow Hedge Accounting (in thousands)	Effect of Cash Flow Hedge Accounting (in thousands)	2022		2021			Effect of Cash Flow Hedge Accounting (in thousands)	2022		2021		2022		2021
Income recognized in accumulated other comprehensive income (loss) on interest rate swaps		$	33,506	$	7,750
Loss reclassified from accumulated other comprehensive income (loss) into income as interest expense		$	3,731	$	4,400
Income (loss) recognized in accumulated other comprehensive income (loss) on interest rate swaps							Income (loss) recognized in accumulated other comprehensive income (loss) on interest rate swaps	$	41,288	$	(78)	$	85,422	$	5,171
Income (loss) reclassified from accumulated other comprehensive income (loss) into income as interest expense							Income (loss) reclassified from accumulated other comprehensive income (loss) into income as interest expense	$	1,670	$	(4,001)	$	(3,942)	$	(12,334)
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	$	17,259	$	15,358		Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	21,155	$	15,746	$	56,310	$	46,377

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 ~~March 31,~~September 30, 2022, 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 March 31, 2022, it could have been required to settle its obligations under the agreements for any interest rate swaps in a net liability position by counterparty, plus accrued interest of approximately $0.1 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 the Company or its counterparties. However, as of ~~March 31,~~September 30, 2022 and December 31, 2021, 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.

~~Table of Contents~~

The following table summarizes the Company’s financial instruments that were recorded at fair value on a recurring basis as of ~~March 31,~~September 30, 2022 and December 31, 2021.


				Fair Value Measurements as of March 31, 2022 Using									Fair Value Measurements as of September 30, 2022 Using
Balance Sheet Line Item (in thousands)	Balance Sheet Line Item (in thousands)	Fair Value March 31, 2022		Level 1		Level 2		Level 3		Balance Sheet Line Item (in thousands)	Fair Value September 30, 2022		Level 1		Level 2		Level 3
Interest rate swaps-Asset	Interest rate swaps-Asset	$	27,696	$	—	$	27,696	$	—	Interest rate swaps-Asset	$	77,508	$	—	$	77,508	$	—
Interest rate swaps-Liability	Interest rate swaps-Liability	$	(2,298)	$	—	$	(2,298)	$	—	Interest rate swaps-Liability	$	—	$	—	$	—	$	—


			Fair Value Measurements as of December 31, 2021 Using
Balance Sheet Line Item (in thousands)	Fair Value December 31, 2021		Level 1		Level 2		Level 3
Interest rate swaps-Asset	$	5,220	$	—	$	5,220	$	—
Interest rate swaps-Liability	$	(17,052)	$	—	$	(17,052)	$	—

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6. Equity

Preferred Stock

The Company is authorized to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share. As of ~~March 31,~~September 30, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.

The following table summarizes the dividends declared on the Company’s outstanding shares of preferred stock during the year ended December 31, 2021.

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

Common Stock

The Company is authorized to issue up to 300,000,000 shares of common stock, par value $0.01 per share.

The following table summarizes the terms of the Company’s at-the market (“ATM”) common stock offering program as of ~~March 31,~~September 30, 2022.

ATM Common Stock Offering Program

Date

Maximum Aggregate Offering Price (in thousands)

Aggregate Available as of March 31, 2022 (in thousands)

ATM Common Stock Offering Program

Date

Maximum Aggregate Offering Price (in thousands)

Aggregate Available as of September 30, 2022 (in thousands)

2022 $750 million ATM

February 17, 2022

750,000

2022 $750 million ATM

February 17, 2022

750,000

The following tables summarize the activity under the ATM common stock offering program during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and year ended December 31, 2021.


		Three months ended March 31, 2022			Nine months ended September 30, 2022
ATM Common Stock Offering Program	ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share			Net Proceeds (in thousands)		ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share		Net Proceeds (in thousands)

2019 $600 million ATM(1)	2019 $600 million ATM(1)	128,335	$	45.03		$	5,721	2019 $600 million ATM(1)	128,335	$	45.03	$	5,721
Total/weighted average	Total/weighted average	128,335	$	45.03		$	5,721	Total/weighted average	128,335	$	45.03	$	5,721

(1)This program ended before March 31, 2022.


	Year ended December 31, 2021
ATM Common Stock Offering Program(1)	Shares Sold	Weighted Average Price Per Share		Net Proceeds (in thousands)
2019 $600 million ATM(2)	5,110,002	$	37.53	$	189,974
Total/weighted average	5,110,002	$	37.53	$	189,974

(1)Excludes shares of common stock sold under the ATM common stock offering program on a forward basis or issued upon physical settlement of the related forward sale agreements during the period.

(2)This program ended before March 31, 2022.

~~Table of Contents~~

In connection with the Company’s underwritten public offering that closed in November 2021, on December 3, 2021, the Company executed a forward sale agreement for the sale of an additional 1,200,000 shares of common stock on a forward basis at a price of $41.87 per share. The Company did not initially receive any proceeds from the sale of shares on a forward basis. On March 29, 2022, the Company physically settled in full the forward sales agreement by issuing 1,200,000 shares of common stock for net proceeds of approximately $49.7 million, , or $41.39 per share.

Table of Contents

The following tables summarize the dividends declared on the Company’s outstanding shares of common stock during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and the year ended December 31, 2021.

Month Ended 2022

Declaration Date

Record Date

Per Share

Payment Date

September 30

July 12, 2022

September 30, 2022

0.121667

October 17, 2022

August 31

July 12, 2022

August 31, 2022

0.121667

September 15, 2022

July 31

July 12, 2022

July 29, 2022

0.121667

August 15, 2022

June 30

April 14, 2022

June 30, 2022

0.121667

July 15, 2022

May 31

April 14, 2022

May 31, 2022

0.121667

June 15, 2022

April 30

April 14, 2022

April 29, 2022

0.121667

May 16, 2022

March 31

January 10, 2022

March 31, 2022

0.121667

April 18, 2022

February 28

January 10, 2022

February 28, 2022

0.121667

March 15, 2022

January 31

January 10, 2022

January 31, 2022

0.121667

February 15, 2022

Total

~~0.365001~~1.095003

Month Ended 2021

Declaration Date

Record Date

Per Share

Payment Date

December 31

October 13, 2021

December 31, 2021

0.120833

January 18, 2022

November 30

October 13, 2021

November 30, 2021

0.120833

December 15, 2021

October 31

October 13, 2021

October 29, 2021

0.120833

November 15, 2021

September 30

July 13, 2021

September 30, 2021

0.120833

October 15, 2021

August 31

July 13, 2021

August 31, 2021

0.120833

September 15, 2021

July 31

July 13, 2021

July 30, 2021

0.120833

August 16, 2021

June 30

April 12, 2021

June 30, 2021

0.120833

July 15, 2021

May 31

April 12, 2021

May 28, 2021

0.120833

June 15, 2021

April 30

April 12, 2021

April 30, 2021

0.120833

May 17, 2021

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

1.449996

On ~~April 14,~~October 12, 2022, the Company’s board of directors declared dividends of the Company’s outstanding shares of common stock for the months ending ~~April~~October 31, 2022, November 30, 2022, ~~May~~and December 31, ~~2022, and June 30,~~ 2022 at a monthly rate of $0.121667 per share.

Restricted Shares of Common Stock

The Company granted restricted shares of common stock under the 2011 Plan on January 10, 2022 to certain employees of the Company, which will vest in equal installments on an annual basis over four years (beginning on January 1, 2023), subject to the recipient’s continued employment. The following table summarizes activity related to the Company’s unvested restricted shares of common stock during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and the year ended December 31, 2021.


Unvested Restricted Shares of Common Stock	Unvested Restricted Shares of Common Stock	Shares		Weighted Average Grant Date Fair Value per Share		Unvested Restricted Shares of Common Stock	Shares		Weighted Average Grant Date Fair Value per Share
Balance at December 31, 2020	Balance at December 31, 2020	184,890		$	27.70	Balance at December 31, 2020	184,890		$	27.70
Granted	Granted	90,304		$	29.77	Granted	90,304		$	29.77
Vested	Vested	(79,140)	(1)	$	27.01	Vested	(79,140)	(1)	$	27.01
Forfeited	Forfeited	(10,339)		$	30.32	Forfeited	(10,339)		$	30.32
Balance at December 31, 2021	Balance at December 31, 2021	185,715		$	28.86	Balance at December 31, 2021	185,715		$	28.86
Granted	Granted	58,580		$	44.19	Granted	58,580		$	44.19
Vested	Vested	(73,556)	(1)	$	28.03	Vested	(73,556)	(1)	$	28.03
Forfeited	Forfeited	(6,373)		$	34.72	Forfeited	(10,157)		$	35.28
Balance at March 31, 2022		164,366		$	34.47
Balance at September 30, 2022						Balance at September 30, 2022	160,582		$	34.42

(1)The Company repurchased and retired 25,836 and 27,706 restricted shares of common stock that vested during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and the year ended December 31, 2021, respectively.

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The unrecognized compensation expense associated with the Company’s restricted shares of common stock at ~~March 31,~~September 30, 2022 was approximately ~~$4.9~~$3.7 million and is expected to be recognized over a weighted average period of approximately ~~2.8~~2.5 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 ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,				Three months ended September 30,		Nine months ended September 30,
Vested Restricted Shares of Common Stock	Vested Restricted Shares of Common Stock	2022		2021			Vested Restricted Shares of Common Stock	2022		2021		2022		2021
Vested restricted shares of common stock	Vested restricted shares of common stock	73,556		72,788			Vested restricted shares of common stock	—		—		73,556		72,788
Fair value of vested restricted shares of common stock (in thousands)	Fair value of vested restricted shares of common stock (in thousands)	$	3,528	$	2,280		Fair value of vested restricted shares of common stock (in thousands)	$	—	$	—	$	3,528	$	2,280

7. Noncontrolling Interest

The following table summarizes the activity for noncontrolling interest in the Company during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and the year ended December 31, 2021.


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, 2020	Balance at December 31, 2020	1,692,423	1,592,815	3,285,238	2.0	%	Balance at December 31, 2020	1,692,423	1,592,815	3,285,238	2.0	%
Granted/Issued	Granted/Issued	405,844	—	405,844	N/A		Granted/Issued	405,844	—	405,844	N/A
Forfeited	Forfeited	—	—	—	N/A		Forfeited	—	—	—	N/A
Conversions from LTIP units to Other Common Units	Conversions from LTIP units to Other Common Units	(149,143)	149,143	—	N/A		Conversions from LTIP units to Other Common Units	(149,143)	149,143	—	N/A
Redemptions from Other Common Units to common stock	Redemptions from Other Common Units to common stock	—	(171,318)	(171,318)	N/A		Redemptions from Other Common Units to common stock	—	(171,318)	(171,318)	N/A

Balance at December 31, 2021	Balance at December 31, 2021	1,949,124	1,570,640	3,519,764	1.9	%	Balance at December 31, 2021	1,949,124	1,570,640	3,519,764	1.9	%
Granted/Issued	Granted/Issued	470,237	—	470,237	N/A		Granted/Issued	470,237	—	470,237	N/A
Forfeited	Forfeited	—	—	—	N/A		Forfeited	—	—	—	N/A
Conversions from LTIP units to Other Common Units	Conversions from LTIP units to Other Common Units	(65,000)	65,000	—	N/A		Conversions from LTIP units to Other Common Units	(65,000)	65,000	—	N/A
Redemptions from Other Common Units to common stock	Redemptions from Other Common Units to common stock	—	(65,000)	(65,000)	N/A		Redemptions from Other Common Units to common stock	—	(65,000)	(65,000)	N/A

Balance at March 31, 2022		2,354,361	1,570,640	3,925,001	2.1	%
Balance at September 30, 2022							Balance at September 30, 2022	2,354,361	1,570,640	3,925,001	2.1	%

LTIP Units

The Company granted LTIP units under the 2011 Plan on January 10, 2022 to non-employee, independent directors, which will vest on January 1, 2023, subject to the recipient’s continued service. The Company granted LTIP units under the 2011 Plan on January 10, 2022 to certain executive officers and senior employees of the Company, which will vest in equal installments on a quarterly basis over four years (beginning on March 31, 2022), subject to the recipient’s continued employment. Refer to Note 8 for a discussion of the LTIP units granted on January 10, 2022 pursuant to the 2019 performance units.

The fair value of the LTIP units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the LTIP units are based on Level 3 inputs and non-recurring fair value measurements. The following table summarizes the assumptions used in valuing the LTIP units granted during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 (excluding the LTIP units granted pursuant to the 2019 performance units discussed in Note 8 below).


LTIP Units	Assumptions
Grant date	January 10, 2022
Expected term (years)	10
Expected stock price volatility	34.0		%
Expected dividend yield	4.0		%
Risk-free interest rate	1.204		%
Fair value of LTIP units at issuance (in thousands)	$	4,385
LTIP units at issuance	104,241
Fair value unit price per LTIP unit at issuance	$	42.07

Table of Contents

The expected stock price volatility is based on a mix of the historical and implied volatilities of the Company and certain peer group companies. The expected dividend yield is based on the Company’s average historical dividend yield and the dividend yield as of the valuation date for each award. The risk-free interest rate is based on U.S. Treasury note yields matching a three-year time period.

~~Table of Contents~~

The following table summarizes activity related to the Company’s unvested LTIP units during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and the year ended December 31, 2021.


Unvested LTIP Units	Unvested LTIP Units	LTIP Units	Weighted Average Grant Date Fair Value per Unit		Unvested LTIP Units	LTIP Units	Weighted Average Grant Date Fair Value per Unit
Balance at December 31, 2020	Balance at December 31, 2020	211,448	$	26.54	Balance at December 31, 2020	211,448	$	26.54
Granted	Granted	405,844	$	28.13	Granted	405,844	$	28.13
Vested	Vested	(427,184)	$	27.47	Vested	(427,184)	$	27.47
Forfeited	Forfeited	—	$	—	Forfeited	—	$	—
Balance at December 31, 2021	Balance at December 31, 2021	190,108	$	27.84	Balance at December 31, 2021	190,108	$	27.84
Granted	Granted	470,237	$	42.07	Granted	470,237	$	42.07
Vested	Vested	(414,348)	$	40.39	Vested	(469,799)	$	39.31
Forfeited	Forfeited	—	$	—	Forfeited	—	$	—
Balance at March 31, 2022		245,997	$	33.90
Balance at September 30, 2022					Balance at September 30, 2022	190,546	$	34.67

The unrecognized compensation expense associated with the Company’s LTIP units at ~~March 31,~~September 30, 2022 was approximately ~~$5.5~~$3.5 million and is expected to be recognized over a weighted average period of approximately ~~2.3~~2.4 years.

The following table summarizes the fair value at vesting for the LTIP units that vested during the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
Vested LTIP units	Vested LTIP units	2022		2021			Vested LTIP units	2022		2021		2022		2021
Vested LTIP units	Vested LTIP units	414,348		183,486			Vested LTIP units	25,124		59,406		469,799		288,227
Fair value of vested LTIP units (in thousands)	Fair value of vested LTIP units (in thousands)	$	18,593	$	5,683		Fair value of vested LTIP units (in thousands)	$	708	$	2,424	$	20,252	$	9,793

8. Equity Incentive Plan

On January 10, 2022, the compensation committee of the board of directors approved and the Company granted performance units under the 2011 Plan to the executive officers and certain key employees of the Company. The terms of the performance units granted on January 10, 2022 are substantially the same as the terms of the performance units granted in January 2021, 2020, and 2019, except that the measuring period commenced on January 1, 2022 and ends on December 31, 2024.

The fair value of the performance units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units is based on Level 3 inputs and non-recurring fair value measurements. The performance unit equity compensation expense is recognized ratably from the grant date into earnings over the vesting period. The following table summarizes the assumptions used in valuing the performance units granted during the ~~three~~nine months ended ~~March 31,~~September 30, 2022.


Performance Units	Assumptions
Grant date	January 10, 2022
Expected stock price volatility	34.1		%
Expected dividend yield	4.0		%
Risk-free interest rate	1.1979		%
Fair value of performance units grant (in thousands)	$	6,289

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On December 31, 2021, the measuring period for the 2019 performance units concluded. The compensation committee of the board of directors determined that the Company’s total stockholder return exceeded the threshold percentage and return hurdle and approved the issuance of an aggregate of 365,996 vested LTIP units and 27,934 vested shares of common stock to the participants (of which 8,257 shares of common stock were repurchased and retired), which were issued on January 10, 2022.

The unrecognized compensation expense associated with the Company’s performance units at ~~March 31,~~September 30, 2022 was approximately ~~$10.0~~$7.3 million and is expected to be recognized over a weighted average period of approximately ~~2.2~~1.8 years.

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Non-cash Compensation Expense

The following table summarizes the amount recorded in general and administrative expenses in the accompanying Consolidated Statements of Operations for the amortization of restricted shares of common stock, LTIP units, performance units, and the Company’s director compensation for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
Non-Cash Compensation Expense (in thousands)	Non-Cash Compensation Expense (in thousands)	2022		2021			Non-Cash Compensation Expense (in thousands)	2022		2021			2022		2021
Restricted shares of common stock	Restricted shares of common stock	$	548	$	651		Restricted shares of common stock	$	527	$	491		$	1,640	$	1,728
LTIP units	LTIP units	1,284		2,408			LTIP units	709		1,163		(1)	3,360		5,917		(1)
Performance units	Performance units	1,296		1,438			Performance units	1,378		1,434			4,038		4,356
Director compensation~~(1)~~(2)	Director compensation~~(1)~~(2)	121		118			Director compensation~~(1)~~(2)	124		122			370		363
Total non-cash compensation expense	Total non-cash compensation expense	$	3,249	$	4,615		Total non-cash compensation expense	$	2,738	$	3,210		$	9,408	$	12,364

(1)Inclusive of approximately $0.5 million non-cash compensation expense during the three and nine months ended September 30, 2021 associated with the severance cost of an executive officer, as discussed in our Annual Report on Form 10-K for the year ended December 31, 2021.

(2)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 ~~March 31,~~September 30, 2022 and 2021. The number of shares of common stock granted was calculated based on the trailing ten day average common stock price on the third business day preceding the grant date.

9. Leases

Lessor Leases

The Company has operating leases in which it is the lessor for its rental property. Certain leases contain variable lease payments based upon changes in the Consumer Price Index (“CPI”). Billings for real estate taxes and other expenses are also considered to be variable lease payments. Certain leases contain options to renew or terminate the lease, and options for the lessee to purchase the rental property, all of which are predominately at the sole discretion of the lessee.

The following table summarizes the components of rental income included in the accompanying Consolidated Statements of Operations for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
Rental Income (in thousands)	Rental Income (in thousands)	2022		2021			Rental Income (in thousands)	2022		2021		2022		2021
Fixed lease payments	Fixed lease payments	$	120,240	$	101,179		Fixed lease payments	$	127,132	$	106,846	$	371,965	$	311,803
Variable lease payments	Variable lease payments	33,778		29,244			Variable lease payments	33,039		29,107		99,531		87,990
Straight-line rental income	Straight-line rental income	4,504		4,882			Straight-line rental income	4,422		4,553		12,654		14,153
Net increase (decrease) to rental income related to above and below market lease amortization	Net increase (decrease) to rental income related to above and below market lease amortization	79		(1,480)			Net increase (decrease) to rental income related to above and below market lease amortization	90		(229)		191		(2,039)
Total rental income	Total rental income	$	158,601	$	133,825		Total rental income	$	164,683	$	140,277	$	484,341	$	411,907

The Company evaluates its operating leases 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 are not probable of collection, the Company converts to the cash basis of 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 the amount related to the period when the lease was accounted for on a cash basis.

As of ~~March 31,~~September 30, 2022 and December 31, 2021, the Company had accrued rental income of approximately ~~$80.2~~$86.3 million and $75.8 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.

As of ~~March 31,~~September 30, 2022 and December 31, 2021, the Company had approximately ~~$28.9~~$31.5 million and $32.9 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 ~~March 31,~~September 30, 2022 and December 31, 2021, the Company had

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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 ~~March 31,~~September 30, 2022 and December 31, 2021, the Company’s total liability associated with these lease security deposits was approximately ~~$15.9~~$18.5 million and $15.2 million, respectively, which is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.

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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 $5.4 million, $16.4 million $4.9 million and ~~$5.1~~$15.3 million for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021, 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 ~~March 31,~~September 30, 2022.


Year	Year	Maturity of Fixed Lease Payments (in thousands)		Year	Maturity of Fixed Lease Payments (in thousands)
Remainder of 2022	Remainder of 2022	$	368,223	Remainder of 2022	$	128,838
2023	2023	$	464,868	2023	$	509,699
2024	2024	$	413,356	2024	$	467,321
2025	2025	$	355,130	2025	$	407,061
2026	2026	$	298,475	2026	$	336,429
Thereafter	Thereafter	$	979,172	Thereafter	$	1,090,499

Lessee Leases

The Company has operating leases in which it is the lessee for its ground leases and corporate office leases. These leases have remaining lease terms of approximately ~~1.2~~0.7 years to ~~47.6~~48.0 years. Certain ground leases contain options to extend the leases for ten years to 20 years, all of which are reasonably certain to be exercised, and are included in the computation of the Company’s right-of-use assets and operating lease liabilities.

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 ~~March 31,~~September 30, 2022 and December 31, 2021.


Operating Lease Term and Discount Rate	Operating Lease Term and Discount Rate	March 31, 2022		December 31, 2021		Operating Lease Term and Discount Rate	September 30, 2022		December 31, 2021
Weighted average remaining lease term (years)	Weighted average remaining lease term (years)	29.0		29.0		Weighted average remaining lease term (years)	31.1		29.0
Weighted average discount rate	Weighted average discount rate	6.6	%	6.6	%	Weighted average discount rate	6.7	%	6.6	%

The following table summarizes the operating lease cost included in the Company’s Consolidated Statements of Operations for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
Operating Lease Cost (in thousands)	Operating Lease Cost (in thousands)	2022		2021			Operating Lease Cost (in thousands)	2022		2021		2022		2021
Operating lease cost included in property expense attributable to ground leases	Operating lease cost included in property expense attributable to ground leases	$	533	$	417		Operating lease cost included in property expense attributable to ground leases	$	616	$	417	$	1,754	$	1,251
Operating lease cost included in general and administrative expense attributable to corporate office leases	Operating lease cost included in general and administrative expense attributable to corporate office leases	437		429			Operating lease cost included in general and administrative expense attributable to corporate office leases	437		440		1,310		1,298
Total operating lease cost	Total operating lease cost	$	970	$	846		Total operating lease cost	$	1,053	$	857	$	3,064	$	2,549

The following table summarizes supplemental cash flow information related to operating leases in the Company’s Consolidated Statements of Cash Flows for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,					Nine months ended September 30,
Operating Leases (in thousands)	Operating Leases (in thousands)	2022		2021		Operating Leases (in thousands)	2022		2021
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)	$	900	$	627	Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	2,815	$	1,525

Right-of-use assets obtained in exchange for new lease liabilities						Right-of-use assets obtained in exchange for new lease liabilities	$	—	$	146

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The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office leases as of ~~March 31,~~September 30, 2022.


Year	Year	Maturity of Operating Lease Liabilities(1) (in thousands)		Year	Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2022	Remainder of 2022	$	2,727	Remainder of 2022	$	969
2023	2023	3,660		2023	3,875
2024	2024	3,699		2024	3,914
2025	2025	3,744		2025	3,959
2026	2026	2,778		2026	2,993
Thereafter	Thereafter	68,807		Thereafter	83,985
Total lease payments	Total lease payments	85,415		Total lease payments	99,695
Less: Imputed interest	Less: Imputed interest	(52,690)		Less: Imputed interest	(64,194)
Present value of operating lease liabilities	Present value of operating lease liabilities	$	32,725	Present value of operating lease liabilities	$	35,501

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

10. Earnings Per Share

During the three and nine months ended ~~March 31,~~September 30, 2022 and 2021, there were ~~165,259~~161,216, 163,107, 199,585 and ~~198,812~~200,192 unvested restricted shares of common stock (on a weighted average basis), respectively, that were considered participating securities for the purposes of computing earnings per share.

The following table reconciles the numerators and denominators in the computation of basic and diluted earnings per share of common stock for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.


		Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
Earnings Per Share (in thousands, except per share data)	Earnings Per Share (in thousands, except per share data)	2022		2021			Earnings Per Share (in thousands, except per share data)	2022		2021		2022		2021
Numerator	Numerator						Numerator
Net income attributable to common stockholders	Net income attributable to common stockholders	$	52,764	$	20,931		Net income attributable to common stockholders	$	63,271	$	48,444	$	148,352	$	101,951
Denominator	Denominator						Denominator
Weighted average common shares outstanding — basic	Weighted average common shares outstanding — basic	177,827		158,430			Weighted average common shares outstanding — basic	179,054		162,652		178,648		160,288
Effect of dilutive securities(1)	Effect of dilutive securities(1)						Effect of dilutive securities(1)
Share-based compensation	Share-based compensation	238		350			Share-based compensation	108		810		142		581
Shares issuable under forward sales agreements		—		346

Weighted average common shares outstanding — diluted	Weighted average common shares outstanding — diluted	178,065		159,126			Weighted average common shares outstanding — diluted	179,162		163,462		178,790		160,869
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	$	0.30	$	0.13		Net income per share attributable to common stockholders — basic	$	0.35	$	0.30	$	0.83	$	0.64
Net income per share attributable to common stockholders — diluted	Net income per share attributable to common stockholders — diluted	$	0.30	$	0.13		Net income per share attributable to common stockholders — diluted	$	0.35	$	0.30	$	0.83	$	0.63

(1)During the three and nine months ended ~~March 31,~~September 30, 2022 and 2021, there were approximately ~~165~~161, 163, 200 and ~~199,~~200, unvested restricted shares of common stock (on a weighted average basis), respectively, 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 ~~$3.7~~$3.6 million as of ~~March 31,~~September 30, 2022 related to construction projects and certain other agreements.

12. Subsequent Events

~~The following~~There were no recognized or non-recognized subsequent ~~events were noted.~~

On April 28, 2022, the Company entered into a note purchase agreement for the future private placement by the Operating Partnership of $400.0 million senior unsecured notes, maturing June 28, 2032, with a fixed annual interest rate of 4.12%. The notes are expected to be issued on or around June 28, 2022, subject to conditions.events.

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

You should read the following discussion with the financial statements and related notes included elsewhere in Item 1 of this report and the audited financial statements and related notes thereto included in our most recent Annual Report on Form 10-K.

As used herein, except where the context otherwise requires, “Company,” “we,” “our” and “us,” refer to STAG Industrial, Inc. and our consolidated subsidiaries and partnerships, including our operating partnership, STAG Industrial Operating Partnership, L.P. (the “Operating Partnership”).

Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). You can identify forward-looking statements by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. Forward-looking statements in this report include, among others, statements about our future financial condition, results of operations, capitalization rates on future acquisitions, our business strategy and objectives, including our acquisition strategy, occupancy and leasing rates and trends, and expected liquidity needs and sources (including capital expenditures and the ability to obtain financing or raise capital). Our forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by our forward-looking statements are reasonable, we can give no assurance that our plans, intentions, expectations, strategies or prospects will be attained or achieved and you should not place undue reliance on these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and may be affected by a variety of risks and factors including, without limitation:

•the factors included in our Annual Report on Form 10-K for the year ended December 31, 2021, as updated elsewhere is this report, including those set forth under the headings “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations;”

•the risk of global or national recessions and international, national, regional, and local economic conditions;

•the ongoing adverse effects of the 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;

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•potential natural disasters, epidemics, pandemics, and other potentially catastrophic events such as acts of war and/or terrorism (including the ~~escalating~~ conflict between Russia and Ukraine and the related impact on macroeconomic conditions as a result of such conflict);

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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:

“GAAP” means generally accepted accounting principles in the United States.

“Total annualized base rental revenue” means the contractual monthly base rent as of ~~March 31,~~September 30, 2022 (which differs from rent calculated in accordance with GAAP) multiplied by 12. If a tenant is in a free rent period as of ~~March 31,~~September 30, 2022, the total annualized base rental revenue is calculated based on the first contractual monthly base rent amount multiplied by 12.

“Occupancy rate” means the percentage of total leasable square footage for which either revenue recognition has commenced in accordance with GAAP or the lease term has commenced as of the close of the reporting period, whichever occurs earlier.

“Value Add Portfolio” means our properties that meet any of the following criteria: (i) less than 75% occupied as of the acquisition ~~date;~~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.

“Stabilization” for properties under development or being redeveloped means, the earlier of achieving 90% occupancy or 12 months after completion. With respect to properties acquired and immediately added to the Value Add Portfolio, (i) if acquired with less than 75% occupancy as of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy or 12 months from the acquisition date; or (ii) if acquired and will be less than 75% occupied due to known move-outs within

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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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“Operating Portfolio” means 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.

“Comparable Lease” means a lease in the same space with a similar lease structure as compared to the previous in-place lease, excluding new leases for space that was not occupied under our ownership.

“SL Rent Change” means the percentage change in the average monthly base rent over the term of the lease that commenced during the period compared to the Comparable Lease for assets included in the Operating Portfolio. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses, and this calculation excludes the impact of any holdover rent.

“Cash Rent Change” means the percentage change in the base rent of the lease commenced during the period compared to the base rent of the Comparable Lease for assets included in the Operating Portfolio. The calculation compares the first base rent payment due after the lease commencement date compared to the base rent of the last monthly payment due prior to the termination of the lease, excluding holdover rent. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses.

“New Lease” means a lease that is signed for an initial term equal to or greater than 12 months for any vacant space, including a lease signed by a new tenant or an existing tenant that is expanding into new (additional) space.

“Renewal Lease” means a lease signed by an existing tenant to extend the term for 12 months or more, including (i) a renewal of the same space as the current lease at lease expiration, (ii) a renewal of only a portion of the current space at lease expiration, or (iii) an early renewal or workout, which ultimately does extend the original term for 12 months or more.

Overview

We are a real estate operating company focused on the acquisition, ownership, and operation of 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 maintain our qualification 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.

Pursuant to our previously announced management succession plan, on July 1, 2022, our board of directors appointed William R. Crooker to the role of Chief Executive Officer of the Company, in addition to his role as President, effective July 1, 2022. In addition, on June 29, 2022, our board of directors increased the size of the board from nine to ten members and appointed Mr. Crooker to the board and the investment committee of the board, effective as of July 1, 2022, subject to re-election at the next annual meeting of stockholders to be held in 2023. As Chief Executive Officer, Mr. Crooker leads and manages our business, executes the strategies developed by management and the board and serves as the chief spokesperson to our employees, stockholders and business counterparties. In addition, pursuant to our previously announced management succession plan and in connection with Mr. Crooker’s promotion, our board of directors appointed Benjamin S. Butcher as Executive Chair of our board of directors. As Executive Chair, Mr. Butcher manages the business of the board, regularly consults with Mr. Crooker on key corporate matters and serves as a liaison between the board and the management team.

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 our acquisition activity, and (ii) internal growth, specifically our portfolio occupancy and rental rates. A variety of other factors, including those noted below, also may affect our future results of operations.

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COVID-19 Pandemic

Since March 2020, the COVID-19 pandemic has severely harmed global economic activity, caused significant volatility and negative pressure in financial markets, and negatively impacted almost every industry, including the real estate industry and the industries of our tenants, directly or indirectly.

We did not incur significant disruptions or enter into any rent deferral agreements from the COVID-19 pandemic during the three and nine months ended ~~March 31,~~September 30, 2022. 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.

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;

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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 among others, 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. 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

~~Since~~Our business is affected by the ~~economic trough from~~uncertainty regarding the COVID-19 pandemic in April 2020, the U.S. economy has rebounded and GDP increased by approximately 5.7% in 2021. However, in the first quarter of 2022, this economic growth was overshadowed by continuedcurrent high ~~inflation rates and supply chain disruptions due to many factors, including, but not limited to, Russia’s invasion of Ukraine and the ongoing COVID-19 pandemic (including periods of~~inflationary, rising COVID-19 cases from new or mutated variants). While the macro-economic conditions continue to evolve and impact our tenants, we believe we will continue to benefit from having a well-diversified portfolio across various markets, tenant industries, and lease terms. Additionally, we believe that theinterest rate environment, COVID-19 pandemic, and geopolitical tensions in Europe. These factors are ~~accelerating~~key drivers of recent financial market volatility, continued supply chain bottlenecks, and growing concerns of a ~~number~~global recession. In the first two quarters of ~~trends that positively impact~~2022, U.S. ~~industrial demand.~~GDP declined 1.6% and 0.6%, respectively, while labor conditions remained strong at 3.7% unemployment as of August. As of the third quarter, general consensus among economists is higher recession risk over the near term.

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 outlook with a series of fiscal and monetary policies to ease the economic burden of COVID-19 closures on businesses and individuals. ~~Given~~In 2022, given the historically high inflation levels and strong employment reports, ~~in the first quarter of 2022,~~ the Federal Reserve ~~has~~ shifted away from an expansionary monetary ~~policy and~~policy. In September, the Federal Reserve raised interest rates 2575 basis points to a range between ~~0.25%~~3.0% to ~~0.50% in~~3.25%. Since March 2022 ~~which was~~ the ~~first rate increase in over three years. We expect~~Federal Reserve indicates monetary policy towill continue to tighten with ~~increasing~~higher interest rates and ~~decreasing~~a shrinking of Federal Reserve balance ~~sheet; provided, that fiscal policy will likely remain accommodative, as needed, to counteract COVID-19 variants.~~sheet until inflation approaches the Federal Reserve’s target.

We believe that the current economic environment, while 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. 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 ~~among others, our~~the fact that we have minimal ~~amount of~~ floating rate debt exposure (taking into account our hedging activities) and ~~ample liquidity.~~strong liquidity and access to capital.

Due to the ~~ongoing~~ COVID-19 pandemic, geopolitical uncertainty, and recent U.S. infrastructure bill, we expect acceleration in a number of industrial specific trends ~~will continue~~ to support stronger long-term demand, ~~for industrial properties,~~ including:

•the continuing 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

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which is driving higher inventory to sales ratios and greater domestic warehouse demand over the ~~overall cost of supplying and shipping goods~~long-term (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. ~~While the~~The COVID-19 pandemic has caused both positive and negative impacts at varying levels across different industries and ~~geographies,~~geographies. Ultimately, the ~~rise of~~acceleration in e-commerce ~~actions taken~~enhanced by ~~federal and state governments~~the COVID-19 pandemic and the ~~Federal Reserve,~~growing desire for greater supply chain resilience have helped industrial space demand remain strong. The worsening global and ~~the recent~~U.S. economic ~~recovery have resulted~~trends could be a notable headwind and may result in ~~strong~~relatively less demand for ~~industrial space.~~space and higher vacancy. We believe that the diversification of our portfolio by market, tenant industry, and tenant credit will prove to be ~~a strength~~strengths in this environment. ~~Industrial development continues to be concentrated in the larger primary markets and, after a brief deceleration, it has returned to and exceeded pre-COVID-19~~

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~~pandemic levels. 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. We previously reported that our buildings located in Florida, Georgia, North Carolina and South Carolina did not suffer any material damage from Hurricane Ian (which made landfall in Florida in September 2022) and were able to continue to support normal tenant operations. As of September 30, 2022, our asset exposure in Florida and, together, North Carolina and South Carolina was 2.8% and 12.8% of total annualized base rental revenue, respectively.

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. During the three months ended March 31, 2022, the SL Rent Change and the Cash Rent Change on New Leases and Renewal Leases in the Operating Portfolio together grew approximately 25.1% and 15.2%, respectively, during the three months ended March 31, 2022.

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.

The following table summarizes the Operating Portfolio leases that commenced during the three and nine months ended ~~March 31,~~September 30, 2022. Any rental concessions in such leases 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 March 31, 2022
Three months ended September 30, 2022																Three months ended September 30, 2022
New Leases	New Leases	1,179,224	$	6.04	$	6.44	$	3.61	25.0	%	36.4	%	7.1	$	1.28	New Leases	1,135,784	$	5.38	$	5.69	$	2.67	19.4	%	29.9	%	4.8	$	0.25
Renewal Leases	Renewal Leases	1,960,672	$	4.97	$	5.32	$	0.95	8.9	%	17.9	%	5.9	$	0.10	Renewal Leases	1,685,721	$	4.52	$	4.81	$	1.74	9.5	%	21.6	%	5.0	$	0.17
Total/weighted average	Total/weighted average	3,139,896	$	5.37	$	5.74	$	1.96	15.2	%	25.1	%	6.3	$	0.54	Total/weighted average	2,821,505	$	4.87	$	5.16	$	2.11	13.6	%	25.1	%	4.9	$	0.21

Nine months ended September 30, 2022																Nine months ended September 30, 2022
New Leases																New Leases	3,627,110	$	5.28	$	5.56	$	2.60	19.9	%	29.7	%	5.4	$	0.53
Renewal Leases																Renewal Leases	5,561,539	$	4.82	$	5.11	$	1.14	10.7	%	20.3	%	5.0	$	0.16
Total/weighted average																Total/weighted average	9,188,649	$	5.00	$	5.29	$	1.72	14.3	%	24.0	%	5.2	$	0.31

(1)"Total Costs" means the costs for improvements of vacant and renewal spaces, as well as the contingent-based legal fees and commissions for leasing transactions. Total Costs per square foot represent the total costs expected to be incurred on the leases that commenced during the period and do not reflect actual expenditures for the period.

(2)~~'Weighted~~"Weighted average lease ~~term'~~term" means the contractual lease term in years, assuming that tenants do not exercise any 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 ~~March 31,~~September 30, 2022, leases related to the Value Add Portfolio and first generation leasing, with a total of ~~511,236~~60,875 and 809,234 square feet, are excluded from the Operating Portfolio statistics above.

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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, which may require us to absorb certain building related expenses of our tenants. In our modified gross leases, we are responsible for certain building related expenses during the lease term, but most of the expenses are passed through to the tenant for reimbursement to us. In our gross leases, we are responsible for all expenses related to the building and its operation during the lease term. Our overall performance will be affected by the extent to which we are able to pass-through property operating expenses to our tenants.

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Scheduled Lease Expirations

Our ability to re-lease space subject to expiring leases impacts our results of operations and will be affected by economic and competitive conditions in our markets and by the desirability of our individual buildings. Leases that comprise approximately ~~6.8%~~7.2% of our annualized base rental revenue will expire during the period from ~~April~~October 1, 2022 to ~~March 31,~~September 30, 2023, excluding month-to-month leases. We assume, based upon internal renewal probability estimates that some of our tenants will renew and others will vacate and the associated space will be re-let subject to downtime assumptions. Using the aforementioned assumptions, we expect that the rental rates on the respective new leases will be greater than the rates under existing leases expiring during the period ~~April~~October 1, 2022 to ~~March 31,~~September 30, 2023, thereby resulting in an increase in revenue from the same space.

The following table summarizes lease expirations for leases in place as of ~~March 31,~~September 30, 2022, plus available space, for each of the ten calendar years beginning with 2022 and thereafter in our portfolio. The information in the table assumes that tenants do not exercise renewal options or early termination rights.


Lease Expiration Year	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	—	3,412,002	—		—		—		Available	—	1,993,759	—		—		—
Month-to-month leases		3	123,031	0.1	%	$	477	0.1	%

Remainder of 2022	Remainder of 2022	34	3,559,398	3.3	%	16,780		3.3	%	Remainder of 2022	6	663,066	0.6	%	$	3,508	0.7	%
2023	2023	100	13,138,341	12.3	%	57,723		11.4	%	2023	80	9,911,545	9.0	%	45,591		8.6	%
2024	2024	98	13,767,694	12.9	%	63,864		12.6	%	2024	102	13,987,479	12.8	%	65,917		12.4	%
2025	2025	88	12,901,137	12.1	%	58,034		11.4	%	2025	102	14,689,924	13.4	%	66,362		12.5	%
2026	2026	97	14,658,908	13.7	%	71,460		14.1	%	2026	114	17,174,618	15.7	%	83,223		15.6	%
2027	2027	75	11,979,061	11.2	%	57,918		11.4	%	2027	92	13,997,482	12.8	%	67,915		12.8	%
2028	2028	44	6,886,711	6.6	%	31,679		6.2	%	2028	55	8,376,220	7.6	%	38,989		7.3	%
2029	2029	41	7,039,607	6.6	%	33,763		6.7	%	2029	44	7,516,081	6.9	%	37,162		7.0	%
2030	2030	27	3,763,278	3.5	%	21,576		4.3	%	2030	29	4,110,740	3.7	%	22,978		4.3	%
2031	2031	39	7,182,980	6.7	%	34,219		6.7	%	2031	41	7,312,872	6.7	%	34,750		6.5	%
Thereafter	Thereafter	47	11,710,329	11.0	%	60,082		11.8	%	Thereafter	52	11,839,791	10.8	%	65,488		12.3	%
Total	Total	693	110,122,477	100.0	%	$	507,575	100.0	%	Total	717	111,573,577	100.0	%	$	531,883	100.0	%

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Portfolio Acquisitions

The following table summarizes our acquisitions during the three and nine months ended~~March 31,~~ September 30, 2022.


Market(1)	Market(1)	Date Acquired	Square Feet	Number of Buildings	Purchase Price (in thousands)		Market(1)	Date Acquired	Square Feet	Number of Buildings	Purchase Price (in thousands)
Kansas City, MO	Kansas City, MO	January 6, 2022	702,000	1	$	60,428	Kansas City, MO	January 6, 2022	702,000	1	$	60,428
Chicago, IL	Chicago, IL	January 31, 2022	72,499	1	8,128		Chicago, IL	January 31, 2022	72,499	1	8,128
Columbus, OH	Columbus, OH	February 8, 2022	138,213	1	11,492		Columbus, OH	February 8, 2022	138,213	1	11,492
Cleveland, OH	Cleveland, OH	February 8, 2022	136,800	1	13,001		Cleveland, OH	February 8, 2022	136,800	1	13,001
Nashville, TN	Nashville, TN	March 10, 2022	109,807	1	12,810		Nashville, TN	March 10, 2022	109,807	1	12,810
Greenville/Spartanburg, SC	Greenville/Spartanburg, SC	March 10, 2022	289,103	1	28,274		Greenville/Spartanburg, SC	March 10, 2022	289,103	1	28,274
Memphis, TN	Memphis, TN	March 18, 2022	195,622	1	15,828		Memphis, TN	March 18, 2022	195,622	1	15,828
Greenville/Spartanburg, SC	Greenville/Spartanburg, SC	March 18, 2022	155,717	1	16,390		Greenville/Spartanburg, SC	March 18, 2022	155,717	1	16,390
Three months ended March 31, 2022	Three months ended March 31, 2022		1,799,761	8	$	166,351	Three months ended March 31, 2022		1,799,761	8	166,351

Atlanta, GA							Atlanta, GA	April 1, 2022	210,858	1	21,119
Minneapolis/St. Paul, MN							Minneapolis/St. Paul, MN	April 4, 2022	160,000	1	13,472
West Michigan, MI							West Michigan, MI	April 14, 2022	211,125	2	12,274
Pittsburgh, PA							Pittsburgh, PA	April 19, 2022	400,000	1	50,178
Greenville/Spartanburg, SC(2)							Greenville/Spartanburg, SC(2)	April 22, 2022	—	—	5,559
Birmingham, AL							Birmingham, AL	May 5, 2022	67,168	1	7,871
South Bay/San Jose, CA							South Bay/San Jose, CA	June 7, 2022	175,325	1	29,630
Washington, DC							Washington, DC	June 29, 2022	140,555	1	20,257
Hampton Roads, VA							Hampton Roads, VA	June 29, 2022	102,512	1	10,561
Three months ended June 30, 2022							Three months ended June 30, 2022		1,467,543	9	170,921
Atlanta, GA							Atlanta, GA	July 15, 2022	159,048	1	10,062
Fresno, CA							Fresno, CA	July 25, 2022	232,072	1	30,121
El Paso, TX							El Paso, TX	July 26, 2022	326,166	4	37,792
Portland, OR							Portland, OR	September 12, 2022	78,000	1	11,281
Louisville, KY							Louisville, KY	September 21, 2022	563,032	1	38,064
Three months ended September 30, 2022							Three months ended September 30, 2022		1,358,318	8	127,320
Nine months ended September 30, 2022							Nine months ended September 30, 2022		4,625,622	25	$	464,592

(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.

(2) We acquired vacant land parcels.

Portfolio Dispositions

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, we sold ~~one building~~six buildings and one land parcel comprised of approximately ~~0.2~~1.6 million rentable square feet with a net book value of approximately ~~$11.3~~$73.4 million to third parties. Net proceeds from the sales of rental property were approximately ~~$35.3~~$130.9 million and we recognized the full gain on the sales of rental property, net, of approximately ~~$24.0~~$57.5 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022.

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Top Markets

The following table summarizes information about the 20 largest markets in our portfolio based on total annualized base rental revenue as of ~~March 31,~~September 30, 2022.


Top 20 Markets(1)	% of Total Annualized Base Rental Revenue
Chicago, IL	~~7.8~~7.6	%
Philadelphia, PA	~~7.1~~7.3	%
Greenville/Spartanburg, SC	~~5.4~~5.5	%
Milwaukee/Madison, WI	~~4.5~~4.4	%
Detroit, MI	4.3	%
Pittsburgh, PA	4.2	%
Columbus, OH	4.1	%
Minneapolis/St Paul, MN	~~3.8~~	%
~~Pittsburgh, PA~~	~~3.8~~3.7	%
Houston, TX	~~3.0~~2.9	%
West Michigan, MI	~~2.4~~2.5	%
Charlotte, NC	~~2.3~~	%
~~Indianapolis, IN~~	~~2.3~~2.5	%
El Paso, TX	~~2.2~~	%
~~Cincinnati/Dayton, OH~~	~~2.0~~2.5	%
Cleveland, OH	1.9	%
Boston, MA	~~1.9~~1.8	%
Indianapolis, IN	1.8	%
Kansas City, MO	1.8	%
Washington, DC	1.7	%
Columbia, SC	1.6	%
Westchester/So Connecticut, CT/NY	~~1.6~~1.5	%
~~Washington, DC~~Cincinnati/Dayton, OH	1.5	%
Total	~~65.3~~65.1	%

(1) As defined by CoStar.

Top Industries

The following table summarizes information about the 20 largest tenant industries in our portfolio based on total annualized base rental revenue as of ~~March 31,~~September 30, 2022.


Top 20 Tenant Industries(1)	% of Total Annualized Base Rental Revenue
Air Freight & Logistics	~~10.8~~10.9	%
Containers & Packaging	~~8.3~~8.2	%
Auto Components	~~7.1~~	%
~~Trading Companies & Distributors (Industrial Goods)~~	~~5.3~~7.4	%
Commercial Services & Supplies	5.3	%
Machinery	5.2	%
Trading Companies & Distribution (Industrial Goods)	5.1	%
Internet & Direct ~~Mkt~~Market Retail	~~4.9~~4.8	%
~~Machinery~~Household Durables	~~4.7~~4.4	%
Distributors (Consumer Goods)	~~4.6~~	%
~~Household Durables~~	~~4.5~~4.3	%
Food & Staples Retailing	3.5	%
Media	~~3.4~~3.2	%
Building Products	~~3.2~~3.1	%
Specialty Retail	~~2.9~~2.8	%
~~Chemicals~~Food Products	2.3	%
~~Road & Rail~~Chemicals	2.2	%
Electronic Equip, Instruments	~~2.1~~2.2	%
~~Food Products~~Road & Rail	2.1	%
Beverages	2.0	%
Textiles, Apparel, Luxury ~~Good~~Goods	2.0	%
~~Household Products~~Health Care Equipment & Supplies	~~1.7~~1.8	%
Total	~~82.9~~82.8	%

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

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Top Tenants

The following table summarizes information about the 20 largest tenants in our portfolio based on total annualized base rental revenue as of ~~March 31,~~September 30, 2022.


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	7	3.2	%	Amazon	7	3.0	%
Eastern Metal Supply, Inc.	Eastern Metal Supply, Inc.	5	1.0	%	Eastern Metal Supply, Inc.	5	0.9	%
American Tire Distributors Inc		7	1.0	%
American Tire Distributors, Inc.					American Tire Distributors, Inc.	7	0.9	%
Tempur Sealy International, Inc.					Tempur Sealy International, Inc.	2	0.8	%
Lippert Component Manufacturing					Lippert Component Manufacturing	5	0.8	%
Kenco Logistic Services, LLC					Kenco Logistic Services, LLC	3	0.8	%
Penguin Random House, LLC					Penguin Random House, LLC	1	0.8	%
FedEx Corporation	FedEx Corporation	4	0.9	%	FedEx Corporation	3	0.8	%
Tempur Sealy International Inc		2	0.9	%
Lippert Component Manufact		5	0.8	%
Kenco Logistic Services, LLC		3	0.8	%
Penguin Random House LLC		1	0.8	%
WestRock Company					WestRock Company	7	0.7	%
DS Smith North America	DS Smith North America	2	0.7	%	DS Smith North America	2	0.7	%
Westrock Company		7	0.7	%
GXO Logistics, Inc.	GXO Logistics, Inc.	2	0.7	%	GXO Logistics, Inc.	2	0.7	%
Yanfeng US Automotive Interior					Yanfeng US Automotive Interior	2	0.7	%
DHL Supply Chain	DHL Supply Chain	4	0.7	%	DHL Supply Chain	4	0.7	%
Carolina Beverage Group					Carolina Beverage Group	3	0.7	%
LKQ Corporation	LKQ Corporation	4	0.7	%	LKQ Corporation	4	0.7	%
Berlin Packaging L.L.C.					Berlin Packaging L.L.C.	4	0.7	%
Ford Motor Company					Ford Motor Company	1	0.6	%
Iron Mountain Information Management					Iron Mountain Information Management	5	0.6	%
Hachette Book Group, Inc.	Hachette Book Group, Inc.	1	0.7	%	Hachette Book Group, Inc.	1	0.6	%
Yanfeng US Automotive Interior		2	0.7	%
Ford Motor Company		1	0.7	%
Carolina Beverage Group		3	0.7	%
Packaging Corp of America		5	0.6	%
Schneider Electric USA, Inc.	Schneider Electric USA, Inc.	3	0.6	%	Schneider Electric USA, Inc.	3	0.6	%
Costco Wholesale Corporation		1	0.6	%
Total	Total	69	17.5	%	Total	71	16.8	%

(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, 2021 for a discussion of our critical accounting policies and estimates.

Results of Operations

The following discussion of the results of our same store (as defined below) net operating income (“NOI”) should be read in conjunction with our consolidated financial statements included in this report. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below. Same store results are 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.

We define same store properties as properties that were in the Operating Portfolio for the entirety of the comparative periods presented. The results for same store properties exclude termination fees, solar income, and other income adjustments. Same store properties exclude Operating Portfolio properties with expansions placed into service after December 31, 2020. On ~~March 31,~~September 30, 2022, we owned ~~463~~458 industrial buildings consisting of approximately ~~94.6~~93.2 million square feet and representing approximately ~~85.9%~~83.5% of our total portfolio, that are considered our same store portfolio in the analysis below. Same store occupancy ~~decreased~~increased approximately ~~0.5%~~1.5% to 98.9% as of September 30, 2022 compared to 97.4% as of ~~March 31, 2022 compared to 97.9% as of March 31,~~September 30, 2021.

Comparison of the three months ended ~~March 31,~~September 30, 2022 to the three months ended ~~March 31,~~September 30, 2021

The following table summarizes selected operating information for our same store portfolio and our total portfolio for the three months ended ~~March 31,~~September 30, 2022 and 2021 (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 ~~March 31,~~September 30, 2022 and 2021 with respect to the buildings acquired and sold after December 31, 2020, Operating Portfolio buildings with expansions placed into service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2020, and our flex/office buildings, Value Add Portfolio, and buildings classified as held for sale.

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		Same Store Portfolio								Acquisitions/Dispositions				Other				Total Portfolio										Same Store Portfolio								Acquisitions/Dispositions				Other						Total Portfolio
		Three months ended March 31,				Change				Three months ended March 31,				Three months ended March 31,				Three months ended March 31,				Change						Three months ended September 30,				Change				Three months ended September 30,				Three months ended September 30,						Three months ended September 30,						Change
		2022		2021		$		%		2022		2021		2022		2021		2022		2021		$			%			2022		2021		$		%		2022		2021		2022			2021			2022			2021			$		%
Revenue	Revenue																										Revenue
Operating revenue	Operating revenue																										Operating revenue
Rental income	Rental income	$	133,168	$	128,952	$	4,216	3.3	%	$	21,043	$	3,280	$	4,390	$	1,593	$	158,601	$	133,825	$	24,776		18.5	%	Rental income	$	133,528	$	128,058	$	5,470	4.3	%	$	26,318	$	10,286	$	4,837		$	1,933		$	164,683		$	140,277		$	24,406	17.4	%
Other income	Other income	278		102		176		172.5	%	—		68		330		—		608		170		438			257.6	%	Other income	61		147		(86)		(58.5)	%	106		—		1,455			1,690			1,622			1,837			(215)		(11.7)	%
Total operating revenue	Total operating revenue	133,446		129,054		4,392		3.4	%	21,043		3,348		4,720		1,593		159,209		133,995		25,214			18.8	%	Total operating revenue	133,589		128,205		5,384		4.2	%	26,424		10,286		6,292			3,623			166,305			142,114			24,191		17.0	%
Expenses	Expenses																										Expenses
Property	Property	26,852		24,932		1,920		7.7	%	3,813		1,550		1,110		520		31,775		27,002		4,773			17.7	%	Property	24,327		24,542		(215)		(0.9)	%	4,656		1,846		1,104			354			30,087			26,742			3,345		12.5	%
Net operating income(1)	Net operating income(1)	$	106,594	$	104,122	$	2,472	2.4	%	$	17,230	$	1,798	$	3,610	$	1,073	127,434		106,993		20,441			19.1	%	Net operating income(1)	$	109,262	$	103,663	$	5,599	5.4	%	$	21,768	$	8,440	$	5,188		$	3,269		136,218			115,372			20,846		18.1	%
Other expenses	Other expenses																										Other expenses
General and administrative	General and administrative																	12,313		12,790		(477)			(3.7)	%	General and administrative																			10,884			12,668			(1,784)		(14.1)	%

Depreciation and amortization	Depreciation and amortization																	67,366		58,407		8,959			15.3	%	Depreciation and amortization																			69,456			59,246			10,210		17.2	%

Loss on impairment																								Loss on impairment																		1,783			—			1,783			100.0		%
Other expenses	Other expenses																	497		852		(355)			(41.7)	%	Other expenses																			578			821			(243)		(29.6)	%
Total other expenses	Total other expenses																	80,176		72,049		8,127			11.3	%	Total other expenses																			82,701			72,735			9,966		13.7	%
Total expenses	Total expenses																	111,951		99,051		12,900			13.0	%	Total expenses																			112,788			99,477			13,311		13.4	%
Other income (expense)	Other income (expense)																										Other income (expense)
Interest and other income	Interest and other income																	34		32		2			6.3	%	Interest and other income																			26			30			(4)		(13.3)	%
Interest expense	Interest expense																	(17,259)		(15,358)		(1,901)			12.4	%	Interest expense																			(21,155)			(15,746)			(5,409)		34.4	%
Debt extinguishment and modification expenses	Debt extinguishment and modification expenses																	—		(679)		679			(100.0)	%	Debt extinguishment and modification expenses																			(838)			—			(838)		100.0	%

Gain on the sales of rental property, net	Gain on the sales of rental property, net																	23,955		6,409		17,546			273.8	%	Gain on the sales of rental property, net																			33,168			22,662			10,506		46.4	%
Total other income (expense)	Total other income (expense)																	6,730		(9,596)		16,326			170.1	%	Total other income (expense)																			11,201			6,946			4,255		61.3	%
Net income	Net income																	$	53,988	$	25,348	$	28,640		113.0	%	Net income																			$	64,718		$	49,583		$	15,135	30.5	%

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

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Net Income

Net income for our total portfolio increased by approximately ~~$28.6~~$15.1 million, or ~~113.0%~~30.5%, to approximately ~~$54.0~~$64.7 million for the three months ended ~~March 31,~~September 30, 2022, compared to approximately ~~$25.3~~$49.6 million for the three months ended ~~March 31,~~September 30, 2021.

Same Store Total Operating Revenue

Same store total operating revenue consists primarily of rental income from (i) fixed lease payments, variable lease payments, straight-line rental income, and above and below market lease amortization from our properties (“lease income”), and (ii) other tenant billings for insurance, real estate taxes and certain other expenses (“other billings”).

For a detailed reconciliation of our same store total operating revenue to net income, see the table above.

Same store rental income, which includes lease income and other billings as discussed below, increased by approximately ~~$4.2~~$5.5 million, or ~~3.3%~~4.3%, to approximately ~~$133.2~~$133.5 million for the three months ended ~~March 31,~~September 30, 2022 compared to approximately ~~$129.0~~$128.1 million for the three months ended ~~March 31,~~September 30, 2021.

Same store lease income increased by approximately ~~$2.1~~$4.2 million, or ~~2.0%~~4.0%, to approximately ~~$109.4~~$110.3 million for the three months ended ~~March 31,~~September 30, 2022 compared to approximately ~~$107.3~~$106.1 million for the three months ended ~~March 31,~~September 30, 2021. The increase was primarily due to an increase in rental income of approximately ~~$4.3~~$5.5 million from the execution of new leases and lease renewals with existing ~~tenants and a net decrease in the amortization of net above market leases of approximately $0.2 million. These increases were~~tenants. This increase was partially offset by the reduction of base rent of approximately ~~$2.4~~$1.3 million due to tenant vacancies.

Same store other billings increased by approximately ~~$2.1~~$1.2 million, or ~~9.5%~~5.6%, to approximately ~~$23.8~~$23.2 million for the three months ended ~~March 31,~~September 30, 2022 compared to approximately ~~$21.7~~$22.0 million for the three months ended ~~March 31,~~September 30, 2021. The increase was attributable to an increase of approximately ~~$1.7~~$0.8 million ~~related to~~in other expense reimbursements from an increase in corresponding expenses, ~~and changes~~as well as an increase of approximately $0.4 million of real estate tax reimbursements due to ~~lease terms where we began paying the operating expenses on behalf of tenants that had previously paid its operating expenses directly to respective vendors. Additionally, there was~~ an increase in real estate taxes levied by the taxing authority ~~and changes to lease terms where~~for certain tenants in which we ~~began paying~~pay the real estate taxes on behalf of ~~tenants that had previously paid its taxes directly to the taxing authority of approximately $0.4 million.~~those tenants.

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~~decreased by approximately ~~$1.9~~$0.2 million, or ~~7.7%~~0.9%, to approximately ~~$26.9~~$24.3 million for the three months ended ~~March 31,~~September 30, 2022 compared to approximately ~~$24.9~~$24.5 million for the three months ended ~~March 31,~~September 30, 2021. This ~~increase~~decrease was primarily related to a decrease in utility expense of approximately $0.3 million and repairs and maintenance expense of approximately $0.2 million. These decreases were partially offset by an increase in ~~utilities expense~~insurance and other expenses of approximately ~~$0.8~~$0.1 million and real estate taxes of approximately $0.7 million 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 directly to the taxing authority. The increase was also attributable to increases of approximately $0.2 million, ~~in insurance expense and approximately $0.2 million in repairs and maintenance and other expenses.~~respectively.

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, 2020, we acquired 7489 buildings consisting of approximately ~~13.1~~15.3 million square feet (excluding ~~eight~~ten buildings that were included in the Value Add Portfolio at ~~March 31,~~September 30, 2022 or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2020), and sold 2328 buildings consisting of approximately ~~2.9~~4.3 million square feet and one land parcel. For the three months ended ~~March 31,~~September 30, 2022 and 2021, the buildings acquired after December 31, 2020 contributed approximately ~~$16.9~~$21.6 million and ~~$0.8~~$5.1 million to NOI, respectively. For the three months ended ~~March 31,~~September 30, 2022 and 2021, the buildings sold after December 31, 2020 contributed approximately ~~$0.3~~$0.2 million and ~~$1.0~~$3.3 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

Other assets include our flex/office buildings, Value Add Portfolio, buildings classified as held for sale, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2020. Other NOI also includes termination, solar, and other income adjustments from buildings in our same store portfolio.

For a detailed reconciliation of our other NOI to net income, see the table above.

These buildings contributed approximately ~~$2.7~~$3.3 million and ~~$0.8~~$1.4 million to NOI for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively. Additionally, there was approximately ~~$0.9~~$1.9 million and ~~$0.3~~$1.9 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the three months ended ~~March 31,~~September 30, 2022 and 2021, respectively.

Total Other Expenses

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

Total other expenses increased approximately ~~$8.1~~$10.0 million, or ~~11.3%~~13.7%, for the three months ended ~~March 31,~~September 30, 2022 to approximately ~~$80.2~~$82.7 million compared to approximately ~~$72.0~~$72.7 million for the three months ended ~~March 31,~~September 30, 2021. The increase was primarily a result of an increase in depreciation and amortization of approximately ~~$9.0~~$10.2 million due to an increase in the depreciable asset base from net acquisitions. Additionally, a loss on impairment of approximately $1.8 million was recognized for the three months ended September 30, 2022, as discussed in Note 3 of the accompanying Notes to Consolidated Financial Statements, that did not occur during the three months ended September 30, 2021. The increase was partially offset by a decrease in general and administrative expenses of approximately $1.8 million which was primarily due to the severance costs of a former executive officer of approximately $2.1 million during the three months ended September 30, 2021 that did not recur during the three months ended September 30, 2022.

Total Other Income (Expense)

Total other income (expense) consists of interest and other income, interest expense, debt extinguishment and modification expenses, 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 increased approximately $4.3 million, or 61.3%, for the three months ended September 30, 2022 to approximately $11.2 million compared approximately $6.9 million for the three months ended September 30, 2021. This increase was primarily a result of an increase in the gain on the sales of rental property, net of approximately $10.5 million. This increase was partially offset by an increase in interest expense of approximately $5.4 million which is primarily attributable to the issuance of $325.0 million and $400.0 million of unsecured notes on September 28, 2021 and June 28, 2022, respectively. Additionally, debt extinguishment and modification expenses of approximately $0.8 million were recognized for the three months ended September 30, 2022, as discussed in Note 4 of the accompanying Notes to Consolidated Financial Statements, that did not occur during the three months ended September 30, 2021.

Comparison of the nine months ended September 30, 2022 to the nine months ended September 30, 2021

The following table summarizes selected operating information for our same store portfolio and our total portfolio for the nine months ended September 30, 2022 and 2021 (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, 2022 and 2021 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, 2020 and our flex/office buildings, Value Add Portfolio and buildings classified as held for sale.

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	Same Store Portfolio								Acquisitions/Dispositions				Other				Total Portfolio
	Nine months ended September 30,				Change				Nine months ended September 30,				Nine months ended September 30,				Nine months ended September 30,				Change
	2022		2021		$		%		2022		2021		2022		2021		2022		2021		$		%
Revenue
Operating revenue
Rental income	$	396,401	$	384,651	$	11,750	3.1	%	$	73,572	$	22,026	$	14,368	$	5,230	$	484,341	$	411,907	$	72,434	17.6	%
Other income	286		421		(135)		(32.1)	%	212		68		2,175		2,140		2,673		2,629		44		1.7	%
Total operating revenue	396,687		385,072		11,615		3.0	%	73,784		22,094		16,543		7,370		487,014		414,536		72,478		17.5	%
Expenses
Property	74,094		72,849		1,245		1.7	%	13,241		5,081		3,401		1,170		90,736		79,100		11,636		14.7	%
Net operating income(1)	$	322,593	$	312,223	$	10,370	3.3	%	$	60,543	$	17,013	$	13,142	$	6,200	396,278		335,436		60,842		18.1	%
Other expenses
General and administrative																	35,431		38,036		(2,605)		(6.8)	%

Depreciation and amortization																	206,101		174,985		31,116		17.8	%
Loss on impairment																	1,783		—		1,783		100.0	%
Other expenses																	1,607		2,184		(577)		(26.4)	%
Total other expenses																	244,922		215,205		29,717		13.8	%
Total expenses																	335,658		294,305		41,353		14.1	%
Other income (expense)
Interest and other income																	83		92		(9)		(9.8)	%
Interest expense																	(56,310)		(46,377)		(9,933)		21.4	%
Debt extinguishment and modification expenses																	(838)		(679)		(159)		23.4	%

Gain on the sales of rental property, net																	57,499		35,047		22,452		64.1	%
Total other income (expense)																	434		(11,917)		12,351		103.6	%
Net income																	$	151,790	$	108,314	$	43,476	40.1	%

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

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Net Income

Net income for our total portfolio increased by $43.5 million, or 40.1%, to $151.8 million for the nine months ended September 30, 2022 compared to $108.3 million for the nine months ended September 30, 2021.

Same Store Total Operating Revenue

Same store total operating revenue consists primarily of rental income consisting of (i) fixed lease payments, variable lease payments, straight-line rental income, and above and below market lease amortization from our properties (“lease income”), and (ii) other tenant billings for insurance, real estate taxes and certain other expenses (“other billings”).

For a detailed reconciliation of our same store total operating revenue to net income, see the table above.

Same store rental income, which is comprised of lease income and other billings as discussed below, increased by approximately $11.8 million, or 3.1%, to approximately $396.4 million for the nine months ended September 30, 2022 compared to approximately $384.7 million for the nine months ended September 30, 2021.

Same store lease income increased by approximately $9.1 million, or 2.9%, to approximately $328.1 million for the nine months ended September 30, 2022 compared to approximately $319.0 million for the nine months ended September 30, 2021. Approximately $13.4 million of the increase was attributable to rental increases due to the execution of new leases and lease renewals with existing tenants and a net decrease in the amortization of net above market leases of approximately $0.4 million. The increase was also attributable to an increase in rental income of approximately $1.2 million at one property in which, during the nine months ended September 30, 2021, we determined that the future collectability of rental payments 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 tenant. The lease was subsequently terminated and replaced with a new tenant in September 2021, and during the nine months ended September 30, 2022, the former tenant repaid the rental amounts past due, both of which contributed to the increase in rental income during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. These increases were partially offset by the reduction of base rent of approximately $5.9 million due to tenant vacancy.

Same store other billings increased by approximately $2.6 million, or 4.0%, to approximately $68.3 million for the nine months ended September 30, 2022 compared to approximately $65.7 million for the nine months ended September 30, 2021. The increase was attributable to an increase of approximately $2.8 million related to other expense reimbursements which was primarily due to an increase in corresponding expenses. This increase was partially offset by a decrease in real estate taxes levied by the taxing authority as well as instances where the tenant began paying the real estate taxes directly to the taxing authority, whereas previously we paid those real estate taxes on behalf of tenants of approximately $0.2 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 operating expenses increased by approximately $1.2 million or 1.7% to approximately $74.1 million for the nine months ended September 30, 2022 compared to approximately $72.8 million for the nine months ended September 30, 2021. This increase was due to increases in utility expense of approximately $0.4 million, insurance expense of approximately $0.4 million, snow removal expense of approximately $0.2 million, and other expenses of approximately $0.2 million.

Acquisitionsand DispositionsNet Operating Income

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

Subsequent to December 31, 2020, 89 buildings consisting of approximately 15.3 million square feet (excluding ten buildings that were included in the Value Add Portfolio at September 30, 2022 or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2020), and sold 28 buildings consisting of approximately 4.3 million square feet and one land parcel. For the nine months ended September 30, 2022 and September 30, 2021, the buildings acquired after December 31, 2020 contributed approximately $58.1 million and $7.9 million to NOI, respectively. For the nine months ended September 30, 2022 and September 30, 2021, the buildings sold after December 31, 2020 contributed approximately $2.4

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million and $9.1 million to NOI, respectively. Refer to Note 3 in the accompanying Notes to Consolidated Financial Statements for additional discussion regarding buildings acquired or sold.

Other Net Operating Income

Our other assets include our flex/office buildings, Value Add Portfolio, buildings classified as held for sale, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2020. Other NOI also includes termination, solar, and other income adjustments from buildings in our same store portfolio.

For a detailed reconciliation of our other NOI to net income, see the table above.

These buildings contributed approximately $8.5 million and $3.2 million to NOI for the nine months ended September 30, 2022 and September 30, 2021, respectively. Additionally, there was approximately $4.6 million and $3.0 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the nine months ended September 30, 2022 and September 30, 2021, respectively.

Total Other Expenses

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

Total other expenses increased approximately $29.7 million, or 13.8%, to approximately $244.9 million for the nine months ended September 30, 2022 compared to approximately $215.2 million for the nine months ended September 30, 2021. This is primarily a result of an increase in depreciation and amortization of approximately $31.1 million as a result of net acquisitions that increased the depreciable asset base. Additionally, a loss on impairment of approximately $1.8 million was recognized for the nine months ended September 30, 2022, as discussed in Note 3 of the accompanying Notes to Consolidated Financial Statements, that did not occur during the nine months ended September 30, 2021. This increase was partially offset by a decrease in general and administrative expenses of approximately ~~$0.5~~$2.6 million which was primarily due to the severance costs of a former executive officer of approximately $2.1 million during the nine months ended September 30, 2021 that did not recur during the nine months ended September 30, 2022, as well as due to the adoption of our retirement vesting program on January 7, 2021 and related acceleration of equity-based compensation expense for certain eligible employees that did not recur during the ~~three~~nine months ended ~~March 31,~~September 30, 2022. Additionally, other expenses decreased approximately $0.6 million that was primarily due to the settlement of litigation related to a terminated acquisition contract during the COVID-19 pandemic that did not recur during the nine months ended September 30, 2022.

Total Other Income (Expense)

Total other income (expense) increased approximately ~~$16.3~~$12.4 million, or ~~170.1%~~103.6%, for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 to a total net other income of approximately ~~$6.7~~$0.4 million compared to approximately ~~$9.6~~$11.9 million net other expense for the ~~three~~nine months ended ~~March 31,~~September 30, 2021. This increase ~~was~~is primarily a result of an increase in the gain on the sales of rental property, net of approximately ~~$17.5~~$22.5 million. This ~~increase~~ was partially offset by an increase in interest expense of approximately ~~$1.9~~$9.9 million which is primarily attributable to the issuance of $325.0 million and $400.0 million of unsecured notes on September 28, ~~2021.~~2021 and June 28, 2022, respectively.

Non-GAAP Financial Measures

In this report, we disclose funds from operations (“FFO”) and NOI, which meet the definition of “non-GAAP financial measures” as set forth in Item 10(e) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”). As a result, we are required to include in this report a statement of why management believes that presentation of these measures provides useful information to investors.

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Funds From Operations

FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, FFO should be compared with our reported net income (loss) in accordance with GAAP, as presented in our consolidated financial statements included in this report.

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“Nareit”). FFO represents GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating buildings, 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.

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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 March 31,				Three months ended September 30,				Nine months ended September 30,
Reconciliation of Net Income to FFO (in thousands)	Reconciliation of Net Income to FFO (in thousands)	2022		2021			Reconciliation of Net Income to FFO (in thousands)	2022		2021		2022		2021
Net income	Net income	$	53,988	$	25,348		Net income	$	64,718	$	49,583	$	151,790	$	108,314
Rental property depreciation and amortization	Rental property depreciation and amortization	67,313		58,339			Rental property depreciation and amortization	69,400		59,195		205,938		174,825

Loss on impairment							Loss on impairment	1,783		—		1,783		—
Gain on the sales of rental property, net	Gain on the sales of rental property, net	(23,955)		(6,409)			Gain on the sales of rental property, net	(33,168)		(22,662)		(57,499)		(35,047)
FFO	FFO	97,346		77,278			FFO	102,733		86,116		302,012		248,092
Preferred stock dividends	Preferred stock dividends	—		(1,289)			Preferred stock dividends	—		—		—		(1,289)
Redemption of preferred stock	Redemption of preferred stock	—		(2,582)			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	(157)		(237)			Amount allocated to restricted shares of common stock and unvested units	(134)		(206)		(436)		(667)
FFO attributable to common stockholders and unit holders	FFO attributable to common stockholders and unit holders	$	97,189	$	73,170		FFO attributable to common stockholders and unit holders	$	102,599	$	85,910	$	301,576	$	243,554

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.

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The following table sets forth a reconciliation of our NOI for the periods presented to net income, the nearest GAAP equivalent.


		Three months ended March 31,				Three months ended September 30,				Nine months ended September 30,
Reconciliation of Net Income to NOI (in thousands)	Reconciliation of Net Income to NOI (in thousands)	2022		2021			Reconciliation of Net Income to NOI (in thousands)	2022		2021		2022		2021
Net income	Net income	$	53,988	$	25,348		Net income	$	64,718	$	49,583	$	151,790	$	108,314
General and administrative	General and administrative	12,313		12,790			General and administrative	10,884		12,668		35,431		38,036

Depreciation and amortization	Depreciation and amortization	67,366		58,407			Depreciation and amortization	69,456		59,246		206,101		174,985
Interest and other income	Interest and other income	(34)		(32)			Interest and other income	(26)		(30)		(83)		(92)
Interest expense	Interest expense	17,259		15,358			Interest expense	21,155		15,746		56,310		46,377

Loss on impairment							Loss on impairment	1,783		—		1,783		—

Debt extinguishment and modification expenses	Debt extinguishment and modification expenses	—		679			Debt extinguishment and modification expenses	838		—		838		679
Other expenses	Other expenses	497		852			Other expenses	578		821		1,607		2,184

Gain on the sales of rental property, net	Gain on the sales of rental property, net	(23,955)		(6,409)			Gain on the sales of rental property, net	(33,168)		(22,662)		(57,499)		(35,047)
Net operating income	Net operating income	$	127,434	$	106,993		Net operating income	$	136,218	$	115,372	$	396,278	$	335,436

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Cash Flows

Comparison of the ~~three~~nine months ended ~~March 31,~~September 30, 2022 to the ~~three~~nine months ended ~~March 31,~~September 30, 2021

The following table summarizes our cash flows for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to the ~~three~~nine months ended ~~March 31,~~September 30, 2021.


		Three months ended March 31,				Change					Nine months ended September 30,				Change
Cash Flows (dollars in thousands)	Cash Flows (dollars in thousands)	2022		2021		$		%		Cash Flows (dollars in thousands)	2022		2021		$		%
Net cash provided by operating activities	Net cash provided by operating activities	$	88,879	$	73,460	$	15,419	21.0	%	Net cash provided by operating activities	$	297,869	$	254,613	$	43,256	17.0	%
Net cash used in investing activities	Net cash used in investing activities	$	148,797	$	79,502	$	69,295	87.2	%	Net cash used in investing activities	$	397,321	$	602,983	$	(205,662)	(34.1)	%
Net cash provided by financing activities	Net cash provided by financing activities	$	74,727	$	8,020	$	66,707	831.8	%	Net cash provided by financing activities	$	90,707	$	374,204	$	(283,497)	(75.8)	%

Net cash provided by operating activities increased approximately ~~$15.4~~$43.3 million to approximately ~~$88.9~~$297.9 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to approximately ~~$73.5~~$254.6 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021. The increase was primarily attributable to incremental operating cash flows from property acquisitions completed after ~~March 31,~~September 30, 2021, and operating performance at existing properties. These increases were partially offset by the loss of cash flows from property dispositions completed after ~~March 31,~~September 30, 2021 and fluctuations in working capital due to the timing of payments and rental receipts.

Net cash used in investing activities ~~increased~~decreased approximately ~~$69.3~~$205.7 million to approximately ~~$148.8~~$397.3 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to approximately ~~$79.5~~$603.0 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021. The ~~increase~~decrease was primarily attributable to the acquisition of ~~eight~~25 buildings and land parcels for a total cash consideration of approximately $464.6 million for the nine months ended September 30, 2022 compared to the acquisition of 39 buildings for a total cash consideration of approximately ~~$166.4~~$648.6 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021. Additionally, the decrease was also attributable to an increase in proceeds from sales of rental property, net of approximately $53.0 million during the nine months ended September 30, 2022 compared to the ~~acquisition of six buildings for a total cash consideration of approximately $95.1 million for the three~~nine months ended ~~March 31,~~September 30, 2021.

Net cash provided by financing activities ~~increased~~decreased approximately ~~$66.7~~$283.5 million to approximately ~~$74.7~~$90.7 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 compared to approximately ~~$8.0~~$374.2 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2021. This decrease was primarily attributable to decrease in net proceeds received from the sale of common stock of approximately $317.1 million during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The ~~increase is primarily~~decrease was also attributable to a net cash outflow of approximately $102.0 million from our unsecured credit facility and an increase of approximately $18.2 million in dividends paid during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. Additionally, we paid in full a mortgage note in the amount of approximately $46.6 million during the nine months ended September 30, 2022 that did not occur during the nine months ended September 30, 2021, as discussed in Note 4 of the accompanying Notes to Consolidated Financial Statements. These decreases were partially offset by increases in the funding of unsecured term loans and unsecured notes in the amount of $50.0 million and $75.0 million, respectively, during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. Additionally, the decrease was also partially offset by the redemption of preferred stock with an aggregate liquidation value of $75.0 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2021 that did not recur ~~as well as an increase in net proceeds received from the sale of common stock of approximately $33.5 million,~~ during the ~~three~~nine months ended ~~March 31,~~September 30, 2022. ~~These increases were partially offset by a net cash outflow~~

Table of approximately $38.0 million from our unsecured credit facility and an increase of approximately $6.2 million in dividends paid during the three months ended March 31, 2022 compared to the three months ended March 31, 2021.Contents

Liquidity and Capital Resources

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

Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our buildings, including interest expense, interest rate swap payments, scheduled principal payments on outstanding indebtedness, property acquisitions under contract, general and administrative expenses, and capital expenditures ~~for~~including tenant improvements and leasing commissions.

Our long-term liquidity needs, in addition to recurring short-term liquidity needs as discussed above, consist primarily of funds necessary to pay for property acquisitions ~~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.

~~Table of Contents~~

As of ~~March 31,~~September 30, 2022, we had total immediate liquidity of approximately ~~$397.1~~$873.8 million, comprised of ~~$34.8~~$13.4 million of cash and cash equivalents and ~~$362.3~~$860.4 million of immediate availability on our unsecured credit facility.

In addition, we require funds to pay dividends to holders of our common stock and common units in the Operating Partnership. Any future dividends on our common stock are voluntary and declared in the sole discretion of our board of directors, subject to the distribution requirements to maintain our REIT status for federal income tax purposes, and may be reduced or stopped for any reason, including to use funds for other liquidity requirements. The following table summarizes the dividends declared on our outstanding common stock during the ~~three~~nine months ended ~~March 31,~~September 30, 2022.

Month Ended 2022

Declaration Date

Record Date

Per Share

Payment Date

September 30

July 12, 2022

September 30, 2022

0.121667

October 17, 2022

August 31

July 12, 2022

August 31, 2022

0.121667

September 15, 2022

July 31

July 12, 2022

July 29, 2022

0.121667

August 15, 2022

June 30

April 14, 2022

June 30, 2022

0.121667

July 15, 2022

May 31

April 14, 2022

May 31, 2022

0.121667

June 15, 2022

April 30

April 14, 2022

April 29, 2022

0.121667

May 16, 2022

March 31

January 10, 2022

March 31, 2022

0.121667

April 18, 2022

February 28

January 10, 2022

February 28, 2022

0.121667

March 15, 2022

January 31

January 10, 2022

January 31, 2022

0.121667

February 15, 2022

Total

~~0.365001~~1.095003

On ~~April 14,~~October 12, 2022, our board of directors declared dividends on our common stock for the months ending ~~April~~October 31, 2022, November 30, 2022, ~~May~~and December 31, ~~2022, and June 30,~~ 2022 at a monthly rate of $0.121667 per share.

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Indebtedness Outstanding

The following table summarizes certain information with respect to our indebtedness outstanding as of ~~March 31,~~September 30, 2022.

Loan Principal Outstanding as of March 31, 2022 (in thousands)
Interest
Rate(1)(2)
Maturity Date
Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)
$ 384,000 L + 0.775% October 23, 2026 i
Total unsecured credit facility 384,000
Unsecured term loans:
Unsecured Term Loan D 150,000 2.85 % January 4, 2023 i
Unsecured Term Loan E 175,000 3.77 % January 15, 2024 i
Unsecured Term Loan F 200,000 2.96 % January 12, 2025 i
Unsecured Term Loan G 300,000 1.13 % February 5, 2026 i
Unsecured Term Loan A 150,000 3.23 % March 15, 2027 i
Total unsecured term loans 975,000
Total unamortized deferred financing fees and debt issuance costs (4,075)
Total carrying value unsecured term loans, net 970,925
Unsecured notes:
Series F Unsecured Notes 100,000 3.98 %

January 5, 2023 ii
Series A Unsecured Notes 50,000 4.98 % October 1, 2024 ii
Series D Unsecured Notes 100,000 4.32 % February 20, 2025 ii
Series G Unsecured Notes 75,000 4.10 % June 13, 2025 ii
Series B Unsecured Notes 50,000 4.98 % July 1, 2026 ii
Series C Unsecured Notes 80,000 4.42 % December 30, 2026 ii
Series E Unsecured Notes 20,000 4.42 % February 20, 2027 ii
Series H Unsecured Notes 100,000 4.27 % June 13, 2028 ii
Series I Unsecured Notes 275,000 2.80 % September 29, 2031 ii
Series J Unsecured Notes 50,000 2.95 % September 28, 2033 ii
Total unsecured notes 900,000

Total unamortized deferred financing fees and debt issuance costs (2,942)

Total carrying value unsecured notes, net 897,058

Mortgage notes (secured debt):

Wells Fargo Bank, National Association CMBS Loan 46,106 4.31 % December 1, 2022 iii
Thrivent Financial for Lutherans 3,397 4.78 % December 15, 2023 iv
United of Omaha Life Insurance Company 4,894 3.71 % October 1, 2039 ii
Total mortgage notes 54,397
Less: Net unamortized fair market value discount (136)
Total unamortized deferred financing fees and debt issuance costs (71)
Total carrying value mortgage notes, net 54,190
Total / weighted average interest rate(5)
$ 2,306,173 2.87 %


Loan	Principal Outstanding as of September 30, 2022 (in thousands)		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)	$	136,000	Term SOFR + 0.775%		October 23, 2026	i
Total unsecured credit facility	136,000

Unsecured term loans:
Unsecured Term Loan F	200,000		2.96	%	January 12, 2025	i
Unsecured Term Loan G	300,000		1.11	%	February 5, 2026	i
Unsecured Term Loan A	150,000		2.16	%	March 15, 2027	i
Unsecured Term Loan H	187,500		3.75	%	January 25, 2028	i
Unsecured Term Loan I	187,500		2.89	%	January 25, 2028	i
Total unsecured term loans	1,025,000
Total unamortized deferred financing fees and debt issuance costs	(4,896)
Total carrying value unsecured term loans, net	1,020,104

Unsecured notes:
Series F Unsecured Notes	100,000		3.98	%	January 5, 2023	ii
Series A Unsecured Notes	50,000		4.98	%	October 1, 2024	ii
Series D Unsecured Notes	100,000		4.32	%	February 20, 2025	ii
Series G Unsecured Notes	75,000		4.10	%	June 13, 2025	ii
Series B Unsecured Notes	50,000		4.98	%	July 1, 2026	ii
Series C Unsecured Notes	80,000		4.42	%	December 30, 2026	ii
Series E Unsecured Notes	20,000		4.42	%	February 20, 2027	ii
Series H Unsecured Notes	100,000		4.27	%	June 13, 2028	ii
Series I Unsecured Notes	275,000		2.80	%	September 29, 2031	ii
Series K Unsecured Notes	400,000		4.12	%	June 28, 2032	ii
Series J Unsecured Notes	50,000		2.95	%	September 28, 2033	ii
Total unsecured notes	1,300,000
Total unamortized deferred financing fees and debt issuance costs	(4,747)
Total carrying value unsecured notes, net	1,295,253

Mortgage notes (secured debt):
Thrivent Financial for Lutherans	3,330		4.78	%	December 15, 2023	iii
United of Omaha Life Insurance Company	4,794		3.71	%	October 1, 2039	ii
Total mortgage notes	8,124
Net unamortized fair market value discount	(137)
Total unamortized deferred financing fees and debt issuance costs	(6)
Total carrying value mortgage notes, net	7,981
Total / weighted average interest rate(5)	$	2,459,338	3.29	%

(1)Interest rate as of ~~March 31,~~September 30, 2022. At ~~March 31,~~September 30, 2022, the one-month ~~LIBOR~~Term Secured Overnight Financing Rate (“L”Term SOFR”) was ~~0.452%~~3.04205%. 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 and leverage ratio, as defined in the respective loan agreements.

(2)~~The~~Our unsecured credit facility has a stated rate of one-month Term SOFR plus a 0.10% adjustment and a spread of 0.775%. Our unsecured term loans have a stated interest rate of one-month ~~LIBOR~~Term SOFR plus a 0.10% adjustment and a spread of 0.85%~~, with the exception of Unsecured Term Loan D which has a stated interest rate of one-month LIBOR plus a spread of 1.0%~~. As of ~~March 31,~~September 30, 2022, one-month ~~LIBOR~~Term SOFR for the Unsecured Term Loans A, ~~D, E,~~ F, G, H, and GI was swapped to a fixed rate of ~~2.38%, 1.85%, 2.92%~~1.31%, 2.11%, 0.26%, 2.90%, and ~~0.28%~~2.04%,, ~~respectively.~~respectively (which includes the 0.10% adjustment). One-month ~~LIBOR for the Unsecured~~ Term ~~Loan A will be swapped to a fixed rate of 1.30% effective April 1, 2022. One-month LIBOR~~SOFR for the Unsecured Term Loan G will be swapped to a fixed rate of ~~0.94%~~0.95% effective April 18, 2023. One-month Term SOFR for the Unsecured Term Loan I will be swapped to a fixed rate of 2.66% effective January 4, 2023. One-month Term SOFR for the Unsecured Term Loan H will be swapped to a fixed rate of 2.50% effective January 12, 2024.

(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, subject to defeasance; and (iv) pre-payable without penalty three months prior to the maturity~~ date.

(4)The capacity of our unsecured credit facility is ~~$750.0 million.~~$1.0 billion. The initial maturity date is October 24, 2025, or such later date which may be extended pursuant to two six-month extension options exercisable by us in our discretion upon advance written notice. Exercise of each six-month option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension, (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date, and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions.

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(5)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of ~~$975.0~~$1,025.0 million of debt, and is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts.

The aggregate undrawn nominal commitments on our unsecured credit facility and unsecured term loans as of ~~March 31,~~September 30, 2022 was approximately ~~$362.3~~$860.4 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.

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 ~~March 31,~~September 30, 2022, we were in compliance with the applicable financial covenants.

~~Subsequent~~On September 1, 2022, we repaid in full the mortgage note associated with the Wells Fargo Bank, National Association CMBS Loan.

On September 1, 2022, we entered into separate amended and restated term loan agreements for the Unsecured Term Loan A, the Unsecured Term Loan F, and the Unsecured Term Loan G (“Amended and Restated Unsecured Term Loans”), to ~~March 31,~~provide that borrowings under the Amended and Restated Unsecured Term Loans bear a current annual interest rate of one-month Term SOFR, plus an adjustment of 0.10% and a spread of 0.85%, based on the our debt rating and leverage ratio (as defined in the applicable loan agreement). Other than the interest rate provisions described above, the material terms of the Amended and Restated Unsecured Term Loans, including the maturity dates, remain unchanged.

On July 26, 2022, we entered into an amended and restated credit agreement for our unsecured credit facility (the “July 2022 Credit Agreement”), which provided for an increase in the aggregate commitments available for borrowing under our unsecured credit facility from $750.0 million to up to $1.0 billion. The July 2022 Credit Agreement also provided for the replacement of one-month LIBOR for one-month Term SOFR, plus a 0.10% adjustment. Other than the increase in the borrowing commitments and the interest rate provisions described above, the material terms of our unsecured credit facility remain unchanged.

On July 26, 2022, we entered into (i) a term loan agreement with Wells Fargo Bank, National Association and the other lenders party thereto, providing for a new senior unsecured term loan in the original principal amount of $187.5 million (“Unsecured Term Loan H”), and (ii) a term loan agreement with Bank of America, N.A. and the other lenders party thereto, providing for a new senior unsecured term loan in the original principal amount of $187.5 million (“Unsecured Term Loan I”). Each of the Unsecured Term Loan H and the Unsecured Term Loan I bears a current annual interest rate of one-month Term SOFR, plus a 0.10% adjustment and a spread of 0.85% based on our debt rating and leverage ratio (as defined in the applicable loan agreement), and matures on January 25, 2028. In connection with the new unsecured term loans, the $150.0 million Unsecured Term Loan D and the $175.0 million Unsecured Term Loan E were repaid in full.

On April 28, 2022, we entered into a note purchase agreement (the “April 2022 NPA”) for the ~~future~~ private placement by ~~the~~our Operating Partnership of $400.0 million senior unsecured notes (the “Series K Unsecured Notes”) maturing June 28, 2032, with a fixed annual interest rate of 4.12%. The ~~unsecured notes are expected to be issued on or around June 28,~~April 2022 ~~subject to conditions. The note purchase agreement~~NPA contains a number of financial covenants substantially similar to the financial covenants contained in our unsecured credit facility and other unsecured notes, plus a financial covenant that requires us to maintain a minimum interest coverage ratio of not less than 1.50:1.00. Our Operating Partnership issued the Series K Unsecured Notes on June 28, 2022. The Company and certain wholly owned subsidiaries of ~~its subsidiaries will guarantee~~our Operating Partnership are guarantors of the ~~obligations under the unsecured notes.~~Series K Unsecured Notes.

The following table summarizes our debt capital structure as of ~~March 31,~~September 30, 2022.


Debt Capital Structure	~~March 31,~~September 30, 2022
Total principal outstanding (in thousands)	$	~~2,313,397~~2,469,124
Weighted average duration (years)	~~4.3~~5.4

% Secured debt	~~2.4~~0.3		%
% Debt maturing next 12 months	~~12.8~~4.1		%
Net Debt to Real Estate Cost Basis(1)	~~34.5~~35.6		%

(1)“Net Debt” means amounts outstanding under our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes, less cash and cash equivalents. “Real Estate Cost Basis” means the book value of rental property and deferred leasing intangibles, exclusive of the related accumulated depreciation and amortization.

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We regularly pursue new financing opportunities to ensure an appropriate balance sheet position. As a result of these dedicated efforts, we are confident in our ability to meet future debt maturities and fund acquisitions. We believe that our current balance sheet is in an adequate position at the date of this filing, despite possible volatility in the credit markets.

Our interest rate exposure on our floating rate debt is managed through the use of interest rate swaps, which fix the rate of our long term floating rate debt. For a detailed discussion on our use of interest rate swaps, see “Interest Rate Risk” below.

Equity

Preferred Stock

We are authorized to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share. As of ~~March 31,~~September 30, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.

Common Stock

We are authorized to issue up to 300,000,000 shares of common stock, par value $0.01 per share.

The following table summarizes our at-the-market (“ATM”) common stock offering program as of ~~March 31,~~September 30, 2022. Pursuant to the equity distribution agreements for our ATM common stock offering program, we may from time to time sell common stock through sales agents and their affiliates, including shares sold on a forward basis under forward sale agreements.

ATM Common Stock Offering Program Date Maximum Aggregate Offering Price (in thousands) Aggregate Available as of March 31, 2022 (in thousands)
2022 $750 million ATM February 17, 2022 $ 750,000 $ 750,000

~~Table of Contents~~

~~The following table summarizes the~~ There was no activity under the ATM common stock offering ~~programs~~program during the three months ended ~~March 31,~~September 30, 2022.

Three months ended March 31, 2022
ATM Common Stock Offering Program Shares
Sold Weighted Average Price Per Share Sales Agents’ Fees (in thousands) Net Proceeds (in thousands)
2019 $600 million ATM(1)
128,335 $ 45.03 $ 58 $ 5,721
Total/weighted average 128,335 $ 45.03 $ 58 $ 5,721

~~(1)This program ended before March 31, 2022.~~


ATM Common Stock Offering Program	Date	Maximum Aggregate Offering Price (in thousands)		Aggregate Available as of September 30, 2022 (in thousands)
2022 $750 million ATM	February 17, 2022	$	750,000	$	750,000

In connection with our underwritten public offering that closed in November 2021, on December 3, 2021, we executed a forward sale agreement for the sale of an additional 1,200,000 shares of common stock on a forward basis at a price of $41.87 per share. We did not initially receive any proceeds from the sale of shares on a forward basis. On March 29, 2022, we physically settled in full the forward sales agreement by issuing 1,200,000 shares of common stock for net proceeds of approximately $49.7 million, or $41.39 per share.

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 ~~March 31,~~September 30, 2022, we owned approximately 97.9% of the common units in the Operating Partnership, and our current and former executive officers, directors, senior employees and their affiliates, and third parties that contributed properties to us in exchange for common units in the Operating Partnership owned the remaining 2.1%.

Interest Rate Risk

We use interest rate swaps to fix the rate of our variable rate debt. As of ~~March 31,~~September 30, 2022, 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 ~~March 31,~~September 30, 2022.


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
The Toronto-Dominion Bank	Jul-20-2017	Jul-28-2022	$	25,000	$	116	1.8830	%	One-month Term SOFR	Jan-04-2023
Royal Bank of Canada	Jul-20-2017	Jul-28-2022	$	25,000	$	115	1.8980	%	One-month Term SOFR	Jan-04-2023
Wells Fargo Bank, N.A.	Jul-20-2017	Jul-28-2022	$	25,000	$	116	1.8750	%	One-month Term SOFR	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Jul-28-2022	$	25,000	$	115	1.8860	%	One-month Term SOFR	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Jul-28-2022	$	50,000	$	231	1.8850	%	One-month Term SOFR	Jan-04-2023
The Toronto-Dominion Bank	Apr-20-2020	Aug-10-2022	$	75,000	$	1,556	0.2660	%	One-month Term SOFR	Apr-18-2023
Wells Fargo Bank, N.A.	Apr-20-2020	Aug-10-2022	$	75,000	$	1,559	0.2520	%	One-month Term SOFR	Apr-18-2023
The Toronto-Dominion Bank	Apr-20-2020	Aug-10-2022	$	75,000	$	1,556	0.2660	%	One-month Term SOFR	Apr-18-2023
Wells Fargo Bank, N.A.	Apr-20-2020	Aug-10-2022	$	75,000	$	1,559	0.2520	%	One-month Term SOFR	Apr-18-2023
The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2022	$	50,000	$	874	2.9080	%	One-month Term SOFR	Jan-12-2024
PNC Bank, N.A.	Jul-24-2018	Jul-26-2022	$	50,000	$	866	2.9190	%	One-month Term SOFR	Jan-12-2024
Bank of Montreal	Jul-24-2018	Jul-26-2022	$	50,000	$	868	2.9160	%	One-month Term SOFR	Jan-12-2024
U.S. Bank, N.A.	Jul-24-2018	Jul-26-2022	$	25,000	$	435	2.9120	%	One-month Term SOFR	Jan-12-2024
Wells Fargo Bank, N.A.	May-02-2019	Aug-15-2022	$	50,000	$	2,151	2.2360	%	One-month Term SOFR	Jan-15-2025
U.S. Bank, N.A.	May-02-2019	Aug-15-2022	$	50,000	$	2,158	2.2380	%	One-month Term SOFR	Jan-15-2025
Regions Bank	May-02-2019	Aug-15-2022	$	50,000	$	2,152	2.2389	%	One-month Term SOFR	Jan-15-2025
Bank of Montreal	Jul-16-2019	Aug-15-2022	$	50,000	$	2,740	1.7100	%	One-month Term SOFR	Jan-15-2025
U.S. Bank, N.A.	Feb-17-2021	Apr-18-2023	$	150,000	$	12,074	0.9520	%	One-month Term SOFR	Feb-5-2026
Wells Fargo Bank, N.A.	Feb-17-2021	Apr-18-2023	$	75,000	$	6,007	0.9460	%	One-month Term SOFR	Feb-5-2026
The Toronto-Dominion Bank	Feb-17-2021	Apr-18-2023	$	75,000	$	6,082	0.9355	%	One-month Term SOFR	Feb-5-2026
Regions Bank	Oct-26-2021	Aug-01-2022	$	50,000	$	5,302	1.3090	%	One-month Term SOFR	Mar-15-2027
Bank of Montreal	Oct-26-2021	Aug-01-2022	$	50,000	$	5,333	1.3090	%	One-month Term SOFR	Mar-15-2027
PNC Bank, N.A.	Oct-26-2021	Aug-01-2022	$	50,000	$	5,311	1.3150	%	One-month Term SOFR	Mar-15-2027
PNC Bank, N.A.	Jul-27-2022	Jan-04-2023	$	50,000	$	2,730	2.6420	%	One-month Term SOFR	Jan-25-2028
The Toronto-Dominion Bank	Jul-27-2022	Jan-04-2023	$	50,000	$	2,726	2.6530	%	One-month Term SOFR	Jan-25-2028
Regions Bank	Jul-27-2022	Jan-04-2023	$	50,000	$	2,681	2.6550	%	One-month Term SOFR	Jan-25-2028
U.S. Bank, N.A.	Jul-27-2022	Jan-12-2024	$	75,000	$	3,151	2.4865	%	One-month Term SOFR	Jan-25-2028
The Toronto-Dominion Bank	Jul-27-2022	Jan-12-2024	$	50,000	$	2,108	2.4910	%	One-month Term SOFR	Jan-25-2028
Wells Fargo Bank, N.A.	Jul-27-2022	Jan-12-2024	$	50,000	$	2,062	2.4930	%	One-month Term SOFR	Jan-25-2028
PNC Bank, N.A.	Jul-27-2022	Jul-27-2022	$	50,000	$	2,774	2.6790	%	One-month Term SOFR	Jan-25-2028

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
Wells Fargo Bank, N.A. Jan-08-2015 Mar-20-2015 $ 25,000 $ — 1.8280 % One-month L Mar-31-2022
The Toronto-Dominion Bank Jan-08-2015 Feb-14-2020 $ 25,000 $ — 2.4535 % One-month L Mar-31-2022
Regions Bank Jan-08-2015 Feb-14-2020 $ 50,000 $ — 2.4750 % One-month L Mar-31-2022
Capital One, N.A. Jan-08-2015 Feb-14-2020 $ 50,000 $ — 2.5300 % One-month L Mar-31-2022
The Toronto-Dominion Bank Jul-20-2017 Oct-30-2017 $ 25,000 $ (64) 1.8485 % One-month L Jan-04-2023
Royal Bank of Canada Jul-20-2017 Oct-30-2017 $ 25,000 $ (63) 1.8505 % One-month L Jan-04-2023
Wells Fargo Bank, N.A. Jul-20-2017 Oct-30-2017 $ 25,000 $ (63) 1.8505 % One-month L Jan-04-2023
PNC Bank, N.A. Jul-20-2017 Oct-30-2017 $ 25,000 $ (63) 1.8485 % One-month L Jan-04-2023
PNC Bank, N.A. Jul-20-2017 Oct-30-2017 $ 50,000 $ (126) 1.8475 % One-month L Jan-04-2023
The Toronto-Dominion Bank Apr-20-2020 Sep-29-2020 $ 75,000 $ 1,223 0.2750 % One-month L Apr-18-2023
Wells Fargo Bank, N.A. Apr-20-2020 Sep-29-2020 $ 75,000 $ 1,219 0.2790 % One-month L Apr-18-2023
The Toronto-Dominion Bank Apr-20-2020 Mar-19-2021 $ 75,000 $ 1,223 0.2750 % One-month L Apr-18-2023
Wells Fargo Bank, N.A. Apr-20-2020 Mar-19-2021 $ 75,000 $ 1,218 0.2800 % One-month L Apr-18-2023
The Toronto-Dominion Bank Jul-24-2018 Jul-26-2019 $ 50,000 $ (548) 2.9180 % One-month L Jan-12-2024
PNC Bank, N.A. Jul-24-2018 Jul-26-2019 $ 50,000 $ (549) 2.9190 % One-month L Jan-12-2024
Bank of Montreal Jul-24-2018 Jul-26-2019 $ 50,000 $ (548) 2.9190 % One-month L Jan-12-2024
U.S. Bank, N.A. Jul-24-2018 Jul-26-2019 $ 25,000 $ (274) 2.9190 % One-month L Jan-12-2024
Wells Fargo Bank, N.A. May-02-2019 Jul-15-2020 $ 50,000 $ 280 2.2460 % One-month L Jan-15-2025
U.S. Bank, N.A. May-02-2019 Jul-15-2020 $ 50,000 $ 284 2.2459 % One-month L Jan-15-2025
Regions Bank May-02-2019 Jul-15-2020 $ 50,000 $ 280 2.2459 % One-month L Jan-15-2025
Bank of Montreal Jul-16-2019 Jul-15-2020 $ 50,000 $ 1,008 1.7165 % One-month L Jan-15-2025
U.S. Bank, N.A. Feb-17-2021 Apr-18-2023 $ 150,000 $ 6,853 0.9385 % One-month L Feb-5-2026
Wells Fargo Bank, N.A. Feb-17-2021 Apr-18-2023 $ 75,000 $ 3,409 0.9365 % One-month L Feb-5-2026
The Toronto-Dominion Bank Feb-17-2021 Apr-18-2023 $ 75,000 $ 3,419 0.9360 % One-month L Feb-5-2026
Regions Bank Oct-26-2021 Apr-01-2022 $ 50,000 $ 2,419 1.3045 % One-month L Mar-15-2027
Bank of Montreal Oct-26-2021 Apr-01-2022 $ 50,000 $ 2,438 1.3045 % One-month L Mar-15-2027
PNC Bank, N.A. Oct-26-2021 Apr-01-2022 $ 50,000 $ 2,423 1.3045 % One-month L Mar-15-2027
In connection with the Amended and Restated Unsecured Term Loans that we entered into on September 1, 2022, as discussed in Note 4 in the accompanying Notes to Consolidated Financial Statements, we transitioned all of our outstanding interest rate swaps to one-month Term SOFR.

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 ~~March 31,~~September 30, 2022, the fair value of 14all 30 of our interest rate swaps were in an asset position of approximately ~~$27.7 million, including any adjustment for nonperformance risk related to these agreements. The remaining nine interest rate swaps were in a liability position of approximately $2.3~~$77.5 million, including any adjustment for nonperformance risk related to these agreements.

As of ~~March 31,~~September 30, 2022, we had approximately ~~$1,359.0~~$1,161.0 million of variable rate debt. As of ~~March 31,~~September 30, 2022, 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 ~~March 31,~~September 30, 2022, we had letters of credit related to development projects and certain other agreements of approximately ~~$3.7~~$3.6 million. As of ~~March 31,~~September 30, 2022, we had no other material off-balance sheet arrangements.

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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.

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As of ~~March 31,~~September 30, 2022, we had ~~$1,359.0~~$1,161.0 million of variable rate debt outstanding. As of ~~March 31,~~September 30, 2022, all of our outstanding variable rate debt, with the exception of our unsecured credit facility which had a balance of ~~$384.0~~$136.0 million, was fixed with interest rate swaps through maturity. To the extent we undertake additional variable rate indebtedness, if interest rates increase, then so will the interest costs on our unhedged variable rate debt, which could adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our security holders. Further, rising interest rates could 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 basis points and assuming we had an outstanding balance of ~~$384.0~~$136.0 million on our unsecured credit facility for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, our interest expense would have increased by approximately $1.0 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022.

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 ~~March 31,~~September 30, 2022. 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 ~~March 31,~~September 30, 2022 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~~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, 2021 filed with the SEC on February 16, 2022, as updated by our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 filed with the SEC on May 3, 2022 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed with the SEC on July 27, 2022. The information in Part II, Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2022 is incorporated by reference herein.

~~Our performance is subject to general economic conditions and risks associated with our real estate assets.~~

The investment returns available from equity investments in real estate depend on the amount of income earned and capital appreciation generated by the properties, as well as the expenses incurred in connection with the properties. If our properties do not generate income sufficient to meet operating expenses, including debt service and capital expenditures, then our ability to make distributions to stockholders could be adversely affected. In addition, there are significant expenditures associated with an investment in real estate (such as debt payments, real estate taxes and maintenance costs) that generally do not decline when circumstances reduce the income from the property. Income from and the value of our properties may be adversely affected by, among other things:

•a global economic crisis that results in increased budget deficits and weakened financial condition of international, national and local governments, which may lead to reduced governmental spending, tax increases, public sector job losses, increased interest rates, currency devaluations, defaults on debt obligations or other adverse economic events;

•~~other periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur;~~

•tenant turnover, the attractiveness of our properties to potential tenants and changes in supply of, or demand for, similar or competing properties in an area (including from general overbuilding or excess supply in the market);

•~~technological changes, such as reconfiguration of supply chains, autonomous vehicles, drones, robotics, 3D printing, online marketplaces for industrial space, or other developments;~~

•our ability to control rental rates and changes in operating costs and expenses, including costs of compliance with tax, real estate, environmental and zoning laws, rules and regulations and our potential liability thereunder;

•~~changes in the cost or availability of insurance, including coverage for mold or asbestos;~~

•~~unanticipated changes in costs associated with known adverse environmental conditions or retained liabilities for such conditions;~~

•~~periods of high interest rates and tight money supply;~~

•future terrorist attacks, which may result in declining economic activity, which could reduce the demand for, and the value of, our properties, and may adversely affect our tenants’ business and their ability to continue to honor their existing lease~~; and~~

•~~disruptions in the global supply chain caused by political, regulatory or other factors, including geopolitical developments outside the United States.~~

In addition, our investments could be materially adversely affected by changes in national and international political, environmental and socioeconomic circumstances, such as the escalating conflict between Russia and Ukraine and the significant sanctions and other restrictive actions taken against Russia by the United States and other countries in response to Russia’s invasion of Ukraine in February 2022, as well as the cessation of all business in Russia by many global companies. As further military conflicts and economic sanctions continue to evolve, it has become increasingly difficult to predict the impact of these events or how long they will last. Depending on direction and timing, the conflict between Russia and Ukraine may significantly adversely affect economic and market conditions, the level and volatility of real estate and securities prices and the liquidity of our investments, which could impair our profitability or result in losses.

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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 March 31, 2022, the Operating Partnership issued 65,000 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 (the “2011 Plan”). Subject to certain restrictions, common units in the Operating Partnership may be redeemed for cash in an amount equal to the value of a share of common stock or, at our election, for a share of common stock on a one-for-one basis.

During the quarter ended March 31, 2022, we issued 65,000 shares of common stock upon redemption of 65,000 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~~three months ended ~~March 31,~~September 30, 2022, if any, have been 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, 2022 - January 31, 2022 34,093 $ 47.19 — $ —
February 1, 2022 - February 28, 2022 — $ — — $ —
March 1, 2022 - March 31, 2022 — $ — — $ —
Total/weighted average 34,093 $ 47.19 — $ —

(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

~~As of the quarter ended March 31, 2022, all items required to be disclosed in a Current Report on Form 8-K were reported.~~

~~April 2022 Note Purchase Agreement~~

On April 28, 2022, we entered into a note purchase agreement (the “April 2022 NPA”) for the future private placement by the Operating Partnership of $400 million of senior unsecured notes, maturing June 28, 2032, with a fixed annual interest rate of 4.12%. The notes are expected to be issued on or around June 28, 2022, subject to conditions.

The April 2022 NPA contains a number of financial covenants substantially similar to the financial covenants contained in our unsecured credit facility, plus a financial covenant that requires us to maintain a minimum interest coverage ratio of not less than 1.50:1.00. Subject to the terms of the April 2022 NPA, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal, interest or the Make-Whole Amount (as defined in the April 2022 NPA), and (ii) a default in the payment of certain other indebtedness, the principal, the accrued and unpaid interest and the Make-Whole Amount on the outstanding notes will become due and payable at the option of the holders. The Company and certain of its subsidiaries will guarantee the obligations under the notes, subject to release pursuant to the terms of the April 2022 NPA.

We intend to use the net proceeds from the issuance of the notes to repay indebtedness outstanding under our unsecured credit facility and for general corporate purposes, including funding future acquisitions. The notes have not been and will not be registered under the Securities Act, and may not be offered or sold absent registration or an applicable exemption from the

~~Table of Contents~~

~~registration requirements. We offered and sold the notes in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.~~

The foregoing description of the April 2022 NPA does not purport to be complete and is qualified in its entirety by reference to the full text of the April 2022 NPA (including the form of note), a copy of which is filed as Exhibit 10.2 to this report and incorporated herein by reference.

~~Submission of Matters to a Vote of Security Holders~~

~~On May 2, 2022, STAG Industrial, Inc. (the “Company”) held its annual meeting of stockholders. The matters on which the stockholders voted, in person or by proxy, were:~~

1.~~the election of nine directors to hold office until the 2023 annual meeting of stockholders and until their successors are duly elected and qualified;~~

2.~~the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022; and~~

3.~~the approval, by non-binding vote, of the Company’s executive compensation.~~

The nine nominees were elected, the ratification of the appointment of the independent registered public accounting firm was approved and executive compensation was approved. The results of the voting were as follows:

~~Proposal 1: Election of Directors~~:

Director Votes For Votes Against Abstentions Broker Non-Votes
Benjamin S. Butcher 134,846,422 6,298,673 110,296 16,904,290
Jit Kee Chin 140,695,586 445,057 114,748 16,904,290
Virgis W. Colbert 136,624,964 4,510,114 120,313 16,904,290
Michelle S. Dilley 137,746,144 3,400,815 108,432 16,904,290
Jeffrey D. Furber 137,455,147 3,679,693 120,551 16,904,290
Larry T. Guillemette 137,728,384 3,412,704 114,303 16,904,290
Francis X. Jacoby III 134,747,665 6,390,982 116,744 16,904,290
Christopher P. Marr 135,560,139 5,256,309 438,943 16,904,290
Hans S. Weger 137,625,735 3,513,377 116,279 16,904,290

~~Proposal 2: Ratification of Appointment of Independent Registered Public Accountants:~~

Votes For Votes Against Abstentions Broker Non-Votes
154,474,009 3,555,243 130,429 -0-
None.

~~Proposal 3: Approval of Executive Compensation:~~

Votes For Votes Against Abstentions Broker Non-Votes
135,321,522 5,400,365 533,504 16,904,290

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Item 6. Exhibits


Exhibit Number						Description of Document
10.1						Amended and Restated Executive Employment Agreement with ~~Matts S. Pinard, dated January 10,~~William R. Crooker, effective as of July 1, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on ~~January 12,~~July 6, 2022)*
10.2						Amended and Restated Executive Employment Agreement with Benjamin S. Butcher, effective as of July 1, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on July 6, 2022)*
10.3						Amended and Restated Executive Employment Agreement with Michael C. Chase, effective as of July 1, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on July 6, 2022)*
10.4						Unsecured Credit Facility: Amended and Restated Credit Agreement, dated as of July 26, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on July 29, 2022)
10.2 *10.5						Unsecured Term Loan A: ~~Note Purchase~~Third Amended and Restated Term Loan Agreement, dated ~~April 28,~~as of September 1, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on September 8, 2022)
10.6						Unsecured Term Loan F: Amended and Restated Term Loan Agreement, dated as of September 1, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on September 8, 2022)
10.7						Unsecured Term Loan G: Amended and Restated Term Loan Agreement, dated as of September 1, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on September 8, 2022)
10.8						Unsecured Term Loan H: Term Loan Agreement, dated as of July 26, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on July 29, 2022)
10.9						Unsecured Term Loan I: Term Loan Agreement, dated as of July 26, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on July 29, 2022)
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: ~~May 3,~~October 27, 2022	BY:	/s/ MATTS S. PINARD
		Matts S. Pinard
		Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer)

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

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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 2022	$	67,986	$	180
2023	$	80,666	$	727
2024	$	69,720	$	1,361
2025	$	60,629	$	1,185
2026	$	52,145	$	1,626


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, 2022 - January 31, 2022	34,093	$	47.19	—	$	—
February 1, 2022 - February 28, 2022	—	$	—	—	$	—
March 1, 2022 - March 31, 2022	—	$	—	—	$	—
Total/weighted average	34,093	$	47.19	—	$	—


Director	Votes For	Votes Against	Abstentions	Broker Non-Votes
Benjamin S. Butcher	134,846,422	6,298,673	110,296	16,904,290
Jit Kee Chin	140,695,586	445,057	114,748	16,904,290
Virgis W. Colbert	136,624,964	4,510,114	120,313	16,904,290
Michelle S. Dilley	137,746,144	3,400,815	108,432	16,904,290
Jeffrey D. Furber	137,455,147	3,679,693	120,551	16,904,290
Larry T. Guillemette	137,728,384	3,412,704	114,303	16,904,290
Francis X. Jacoby III	134,747,665	6,390,982	116,744	16,904,290
Christopher P. Marr	135,560,139	5,256,309	438,943	16,904,290
Hans S. Weger	137,625,735	3,513,377	116,279	16,904,290