STAG - Earnings call transcript Q4 2021

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Operator

Greetings, and welcome to the STAG Industrial Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. pleasure your my Steve now is to host, introduce Xiarhos. It Steve. you, Thank

may You begin.

Steve Xiarhos

to call Industrial's quarter you. STAG Thank Welcome conference XXXX covering results. fourth the

Litigation have the call, supplemental questions statements In Act an under company's to Reform the to the your section. release will Private prepared www.stagindustrial.com, yesterday, addition as On remarks Relations today's answers press website at forward-looking unaudited company's XXXX. defined presentation information we quarterly Securities Investor on the in the contain of distributed posted and

the address matters and economic other that company's G&A, Examples NOI, of matters. website. statements other leasing review guidance, those to contained more that Forward-looking informational forecast detailed risks are our collections, same-store and today. encourage and forward-looking in the may the differ acquisition with related of prospects, filings package rent subject and in non-GAAP uncertainties the and of discussed the supplemental results available company's include FFO, all statements trends and on to forward-looking disposition statements these and reconciliations cause to industry volumes, of actual definitions core discussion rates from measures the contained listeners to We SEC retention

our call answer with specific over Also today. the Butcher, forward-looking Financial Chief management's reminder, who hear today's Executive Chief On here and is will to Officer. statements update our Bill As Operating a any statements. today I Ben. now to our Ben assumes questions estimates Matts Officer, Steve Pinard, Officer; us STAG is to available operations. our turn as represent no Mecke, Chief of Industrial forward-looking to will President; obligation call, from Crooker, you

Benjamin Butcher

and STAG results. Quarter forward to to you us morning, our Steve. you, Call to about pleased telling you have for We're everybody, Good Thank join fourth the Industrial. quarter look welcome Fourth and Earnings

a started, touch made get Before on I over ago. announcement little succession we month a we to wanted the

of had will exceed title markets. making transition the will the leave taking is grow. hesitation to successful concern. X, we this move markets. and Executive the to our our company experience CEO be July this to will Executive CEO operational equity been Almost genuinely on expectations role the private announced, that ago, the our be Bill My my become I built. great platform over opportunity company pride all as great the validated Board slightest have will without President, changing. reasons previously made or take compelling July to CEO. from As in Directors. A the the a Crooker, I fund XX position we continues by of years public my for work move in Chairman be to The and public have Chair place

development from team provided that can a our growing now on us to commitment focused rely have of employee colleagues and deep with We and has we This the within. future. in talented on bet

since the the STAG for XXXX I we year. received level confident the facets was ago. the to we been for company. the job of I'm for all immense the great of STAG across company CEO of be years to guidance thank XX easier XXXX, across of Strong opportunity you many for new I founded STAG the us by public My another allowed or highly I'm levels all want As meet all to our a excited my Industrial. goals support journey stakeholders in enter from team your role made company for phase STAG. as and execution organization. next the exceed of year over the has

some all of The start and strong quarter was we our of We are a quarter highest for supply maintaining growth ever our high history. all this we the in we fourth Our healthy was level accomplished exceeded Based while to in strong remain no portfolio market have in remain on continued XXXX produced fundamentals investment-grade volume seen we to throughout current balance Industrial and drove our sheet. time. NOI the market the in XXXX. throughout acquisition Demand as different. performance projected projections, strongest almost rent strong XXXX. in U.S. our This growth. same-store rent growth operating see markets our expect

results these and guidance. strong XXXX dynamics both Bill shortly, contributed discuss will XXXX our very market Matts to and As positive our

Finally, context to social profile an tool results report. pride inaugural and outlook this our encumbrance our ESG report represents for great December. continue provide and for communicate be an report we take published and best-in-class turn the With it that, to ESG will fully acquisition comprehensively Bill, company's expect to sustainability additional for proud considerable discuss I who report disposition progress us environmental, that in make. over and to our efforts I'll to We This am was the in annual XXXX.

William Crooker

Good Ben. everyone. Thank you, morning,

want team fourth our ongoing I First, for months, record straight-line XX STAG team. properties We for and the over X% including This project. $XXX.X development stabilized million tremendous is and and the year. effort totaled of $XXX buildings the platform X.X%, rates quarter respectively. the during best-in-class to cap in thank across STAG with and its million acquired cash place of span the processes the the Acquisition built, an hard to of fourth in a record X talented entire testament has quarter work of volume

of These estate. elevated. exposure to totaled dynamics challenges and to attracted have drive properties acquisition straight-line levels. historical stabilized traditional The the real for inventory $X.X new demand cap and and from reevaluation For to billion rates capital cash with continued X.X%, infrastructures to looking industrial and associated volume of chain X.X% industrial with Competition supply investors year, remain respectively. increase

near few I highlight small In in XXX,XXX transactions would at to of X.X stabilized warehouse opportunity cash leases Chicago Today, with of potential X,XXX-plus featured rate. value located to investments our cap granular per acquire a identify $XX.X to term portfolio extremely relative facilities on is million There of to weighted valuable. pipeline demonstrating today. closed larger of billion, rents $X.X a XX-plus This of an front The in in competencies evaluate a transactions an square opportunities value to years, X lease set attractive are estate be to market feet for that profile. providing approximately below November, average totaling is One the collection X.X basis our efficiently Greater core basis with this acquired across attractive a markets continues a the us real ability return STAG granular term. on create distribution industrial the year nationwide attractive ability quarter. like of

rules. The typical did to avoids too the typical we of decision to real we value-add criteria of that foot suite long One investor level ends execute this cash that has of an This term lease process for on spectrum short built opportunity vacant the meet traditional contains being is seen a a X due of buildings flow X how traditional lease have the investment high activity, investors not transaction a the for buyer. example XX,XXX and a of too seam. estate square good expect the suite and

located than Hazleton, broker at In attractive deep XXX,XXX warehouse relationships these roll for a to Our foot years, set acquired X% bring acquisition a building, basis. square under an we differentiated mix acquire located with secondary Pennsylvania December, to in and near-term weighted very just upside. average allowed a distribution square X along market to its of this X approach in lease acquire with us portfolio and are facility less attractive year. with to cash $XX.X stabilized providing attractive a market to below a leases This terms cap market. in lease in I-XX location Well leased both million fully building In this The with leases this the the I-XX suite in corridor opportunity proximity includes us X aggregate, rate. at XXX,XXX to I-XX, allowed of tenants. term multi-tenant the to X% is foot

along Finally, with facilities in PA in counterparts investment million leased are from the credits a years. for fund Central consists $XX.X includes totaling X.X stabilized Today, opportunity the and big which acquired STAG. South building feet encumbered the site. would add to the a e-commerce North deep X Hagerstown, by $X.X have million, made weighted STAG draws, with strong development project the The cost fully I X.X% Located of their to expected highlight space total cash project. rise square a an These average the is lease we to to cap of to to like to tied last of potential to acquired million buildings X significantly at of project similar first the buildings speculative have end that development the The in XX% This remaining rate. $XX.X is commitment Maryland for is This box to the projected Sacramento, developer the costs million. for providing will STAG new incurred $XXX.X at XX is additional transaction who December, for acres the to total I-XX. opportunity ongoing are and transaction value in not of an additional expansion from complete tailwinds available land demand term benefited which logistics soft date. hard lease and million.

natural this was this building of Belfast, we development the by our to With of extension square would growing sale office rate. highlighted is quarter of expect business. consisted lease portfolio now We million, $XXX.X the a proposals the industrial transaction expertise flex sale, less completion. are X to capital Dispositions campus, XXX,XXX this $XX a office than today, Maine also pre-lease X.X% prior totaled of of feet. recycling. received sale at of cap facility and have our and Taunton, buildings. the As which line excited highlight fully this of million Massachusetts as our prospects cash flex X attractive see like profile Switching our about I funding for operating to to

of disposition year, volume cap industrial totaled rate For aggregate million core our disposition with X.X%. assets the $XXX.X for an

for to XXXX. Turning guidance

an our to continue We attractive see grow opportunity portfolio. to

cash has these competition are flow is While we evaluating. of increased, so the profile opportunities

billion to of $X rate volume to billion and X% $X.X acquisition cash an with expected expect X.XX%. range cap be We stabilized between

rates. be than cash We expect straight-line basis cap points rates to XX cap higher

estate, the appetite for heightened well. recycling real expectation have increased we industrial in environment this as for capital With our

million continuing $XXX similar XXXX, between rates we We in and for volume XXXX. those as was It XXXX equally million for $XXX STAG be and expect excited XXXX. to busy to year cap execution disposition to achieved are our a with in in disposition

share impact his Before want I will and I mentorship and long-lasting. thank continued to I opportunity I guidance Ben the the Ben months. Matts the like to counsel will turn to to With it for me. over as have XXXX. grateful how we for they am created that, be over over Board would and it his who to to for upcoming of leadership, also placed and extraordinary confidence their the transition Matts, Ben take turn an results has will cover remaining I company,

Matts Pinard

and from to our declining in Leverage year-end moderate equal end X% as and of Thank the previous increase was morning, of million near the messaging, adjusted FFO XX.X%. the year-end at $X.XX XXXX. at to you, $XXX.X to with compared distribution to XXXX, run EBITDA available dividend Bill, everyone. range of Core $X.XX remains Consistent for payout year, a with our net XXXX totaled XX.X% debt for for ratio the Cash lower in to increase year-over-year continues quarter Xx. rate an good XXXX. XX%

highest million quarter, XX.X% X.X% grew straight-line respectively. we of the feet, benefit exist X and not and and on and the point XX.X%, for Cash commenced XX.X% included XXXX facilities. spend. same-store was XX% for in which associated NOI This and quarter totaling Retention Tennessee X.X% X.X large from year, for leases our level for the Memphis, the Hampstead, year. During basis for XXXX. benefit with the spreads an at record leases rent generated XX XX leasing the square free quarter Maryland cash does

guidance leasing incurred to Our teens the tailwinds approximately in spreads range escalators free large the in weighted initial our and average included midpoint be year. XXXX known to at guidance rent of low range. of X% rental no the is our XX% guidance X% retention cash X.XX%, store cash by same There move-outs or are range for for expected of material

of used million on of in an to which we we fund received the Net Moving in $XXX.X proceeds transaction were at market million received equity with the million equity. In be a and equity portion proceeds, fourth with we $XXX.X the to net proceeds resulted offering quarter, which December of share, received per acquisitions. component forward $XXX completed activity capital November. partially net in basis. and XX, of approximately to $XX.XX fourth aggregate beginning proceeds settled this a forward On quarter

million proceeds have to fund available additional year-end, at acquisitions. of $XX.X we of forward option an As our net future

credit in refinanced plus discussed, extension facility revolver we an bears LIBOR current October million our options $XXX As The XX.X of points previously facility. with company's in October, two leverage based interest debt at basis of rating. our XXXX unsecured This matures X-month and revolving the spread a level on option. rate

X.XX%. refinanced loan. The million the matures addition, all-in XXXX loan term In company a and with $XXX interest is March unsecured now swapped in rate of fully term an

no in improved million LIBOR The term G. now rate change the term loans of F and of with specifically a loan of plus Finally, on basis term $XXX company loans interest the maturities. pricing spread current points bear XX debt, E,

Page is our on website. range supplemental found in Components per with are guidance our to XXXX of Investor initial the the XX core $X.XX initial a on of FFO guidance our available Relations guidance Our $X.XX. midpoint section can which $X.XX as follows: of of XXXX is package, be our share

XXXX expected second the is expected cash for for both year. year $XX the of to to quarters. NOI the expense range retirement be between expect and pools This now and million the to XX% with same-store includes XX%. X% related the We to range a to be $XX is that Note and plan. X% between G&A retention first annual in $XXX,XXX be this expense million growth

and EBITDA X.Xx expect to over year. the to X.XXx between run Ben. We rate will it adjusted back for I net be turn now to debt

Benjamin Butcher

want the Matts. throughout proud support. the your have year results. back the to strategy in what a is year; our questions. this and continued more and the for it morning. achieving and company to and XXXX the I stakeholders constant closing, their Bill position I great very over I'm I'll the turn them My and for for various Thank great and our you past colleagues pandemic. you, I confidence everything also thank Thank In forward. extremely want now operator reiterate we've for our utmost thanks I in. importantly, this hard have again team to STAG of accomplished in decade. last going for the worked time

Operator

Instructions]. [Operator

question Our first from Sheila ISI. is McGrath Evercore with

Sheila McGrath

when is acquisition, that premium projects on all to and Bill. the promotions. you My Congrats about What And on are other mentioned, pipeline are you're the the development? first smooth transition of question yield buying development the you similar there a kind thinking in the that?

Benjamin Butcher

That you was start question. And will hello. thank Thank answer the Bill your I saying let directed to for by you. Bill. I'll

William Crooker

There's and transaction yields will That development in We at This a yield. project development a STAG. a Sheila. looking for particular XX% with great necessarily those transaction X don't was of stabilize type Thanks, yield. various around for forma cap a pro target projects. we're

be successful about hopeful will pipeline There our happy we're very going projects So on type other some of in that. that are development forward.

Sheila McGrath

dispositions, driving mentioned how -- you Is going there What's timing opportunistic the that? in 'XX the on there is one on Amazon portfolio? then Or sales And it to that we be about And are higher. did? like that? should Okay. are think a just you

William Crooker

of cap guidance $XXX dispositions compared So which cap have weighted we see in for of now past The expect close same to is X-property small And we rate. cap as the as around beginning in the our had be I dispositions to rate, years. is QX. is noted, likely $XXX we to here, mid-Xs portfolio you million do and will year, XXXX, for a average rate million market this on that for elevated the that the

Operator

Bank with question America. of next Jamie comes Our from Feldman

James Feldman

the 'XX. just 'XX. the further? to improved back dividend thoughts are I'm what improve during ratio, will you comments payout it curious Going your that on on Do think

Benjamin Butcher

where to throughout has that the Jamie it ratio close X ours looking the continuing X pretty that level. certainly sort comfortable point we're been a or getting of of a at a been down. getting years, last we've We're is it goal payout

we'll we to go So that? something through do add year. as Matts, have to look that's something the at you

Matts Pinard

of XX.X% XX% Ben. We the at for we're XXXX. right, that's were Jamie, Sure, just at at exactly at context, end 'XX,

material decrease the ratio. a payout in So

but the we with As to continue happy made. it, progress said, we're we Ben look have at

James Feldman

and roles expect Okay. where Do management transitions changes. everyone management the see of or forward Congratulations looks new -- of you for any or more today? to kind the is G&A to additional fill to it creation hiring set voids going

Benjamin Butcher

Yes.

has involves of the see We -- significant transition most we don't which levels. compensation of announced. pieces, any hires So for are couple need additional been at a

James Feldman

to the really to today. your Ben, thought IPO demand and guess, cashed I company thought you picture, with role? next versus I where operating thought company in process stood for was or was about back you or and the out. company kind of I you as What out and then markets versus big today today of about the you as the career, stood cashing process then years selling XX X.X maybe And assume your what think a the and Okay. the sold vision And potentially like? what's that transitioning and then assets thought different industrial about think today conditions STAG

Benjamin Butcher

grow billion up. assets, minor portion share per a there's valuation drive continue accretively, overall at the still think depending of around lot in set is large, we landscape. is look look -- Again, front the I amount depending of us, assets. very our shareholders on Well, think of by value again, to granular important continuing we on opportunity they industrial at think a individual of buy our us I $XX what the to create we and still opportunity for of a that we very, elements can to tremendous mean, have X We're FFO we that's continue of to today

Board to amenable to is the to that inquiry that of in to Board but walk is a the dear very to priced would sell the opportunity I the that to us. always an front see get think in have company, we from listening investor be away

James Feldman

you year. And some loss? I just makes of Okay. again next of larger guess Can talk That occupancy the on then risk any sense. some focusing expirations, about

Benjamin Butcher

Yes.

So is there's less in more bumpy Steve? that question granular, big but nothing aware of I'm a granularly, answer system. the without I'll it year, less Steve let this a

William Crooker

lease Yes. there's Hey, Yes, looking no Bill. Jamie, XXXX, at it's expirations. large

XXX,XXX, above the guidance. around in nothing and is is everything size year, in lease average XXX,XXX expiring our contemplated There's range. this Our XXX,XXX

than X couple years footage of we square was a different much where it ago So expiring. had those million

like in We have that nothing XXXX.

James Feldman

Okay. Any your of move-outs? the XXX,XXX largest are what but

Stephen Mecke

I think XXX,XXX good is on point. activity our square this feet. move right out at almost of largest our right got And is all -- vacates we've known Steve, this around

pretty the we're confident year. So for

Benjamin Butcher

in parlance years of every every I the that market. demand There's seen thing is developed this demand same-store for immediate. asset backfills, as market the of NOI, that X of over the has reflective Jamie, might is significantly and our add couple we've in you've cetera, A of market levels et almost last that occupancy as lot a now. downtime dropped to is immediate in of is -- sort hallmark a the of

James Feldman

similarly, Okay. of years. kind of some on you them, at look And on in Can a those you provide acquisitions some to the low color X more pretty I X you quarter, bit of transactions? had walls little then guess if the several

Benjamin Butcher

Bill. ahead, Go

William Crooker

there. on in-place you on on comfortable be There's few, Sacramento very are reflect unlock some there's properties the able operating yes, do reflect the say, there's market that this. near-term double-digit we're would I rates current the and to to Jamie, as know, a a average, going some that cap mean, Philadelphia, was right? transaction, we'll markets those our say, some expirations below not mark-to-market there's rents. I I rents Omaha, those the And value in

James Feldman

Okay.

pretty comfortable in with already some like feel you're discussions You with backfilling of them?

William Crooker

entertain -- those not not to want over market we're usually too at discussions so because discussions. out. the quite this lease X to discussions early Generally, seeing rents comfortable. supply-demand we're X We'll just quickly, dynamics maybe lease our moving months X are we out, don't markets, we're XX given Very start months in entertaining

Benjamin Butcher

to starting And reflecting that, renewals, cetera, et to XX months XX Jamie, talk is about tenants are out.

of they in earlier. history, that are waiting they’re probably fact but been our that starting have So prior the rents the not discussions would to ones the longer reflective start moving,

Operator

Citi. next comes Our with from Manny question Korchman

Emmanuel Korchman

the of the fit sweet the of the the It too being in investors, short. you spot portage sort the buyers their some WAULT sounds that call, too or whether for Earlier isn't it like seen more or right. you long stuff otherwise? mentioned looking be just geography whether doesn't of or value of Have fact traditional changes other getting they're walls you're or at the limitations landscape in where on outside operating comfortable

Benjamin Butcher

remains granular at of own these -- case sort question transactions. no So its hotter thing to look long-term Manny, of on to the get That mix but all X for a passive great it's a ability very its strength our that the is portfolio. is deal equity on is across as individual in the the opposed is facets within the market difficult there's or involved short-term is, X to own all deal that a --

activity have And transactions do we're individual seeing the -- particularly Bill, add? remains while our generally to a looking anything across strength hallmark. at of you our markets, kind so more

William Crooker

said or the asset types they're either the noted, that And the at. looking in I Manny, or mean Ben. those looking you as value-add buyers. traditional investors the we right, are bigger longer-term are players what lease change mean, markets generally, remarks may and cash prepared are That's it's flow for certain generally, terms I transactions. there But

leases where approach add term. value near continues in the acquire last leases. transactions, be -- to individual granular just long-term I able short-term we both as And the question some talked in can the and last So was we're call our to

look we those at aspects. all So

Emmanuel Korchman

is I rates in Bill you what cap and you talked stabilize? Matts, is cap this You your rates? And talk -- going if then going cap know just in or rates. about was stabilized spread lot can could for the a between I but wondering don't about

William Crooker

mean we're generate that for we I that's general one it's is mean I mean when -- to would our multiplied you the that's year there's it's price, St. the just mean, going at X X the acquisition -- going roll The in for have in. years stabilize, X Yes. up that transactions cash purposes, our by that that that in-place I X three of again, but what also NOI. that Louis, we're take looking modeling flows, lease able say years. we some I now -- have term. example, we're to in

say So far I stabilize, look when know you don't how you out before these. we stabilize

in for rate is -- flows, then place a everything will we vacancy. prevailing So cash the vacancies, except under if to And there's that. use for market stabilize

Emmanuel Korchman

year but point, including So vacant vacancies. leased I there of big acquisitions stabilized how of perspective? spread release be or then under between -- remember point, at vacant, guess that's and was that was X much on and there XQ cash it everything total XXXX you look your was -- your that it a flow sort guess 'XX or to your fully for I I if whether those don't

William Crooker

probably probably It's XX-ish We estimate now. know, you get exact but that's don't can I -- there. for probably difference a good the number, basis points

Benjamin Butcher

it And the fact normally be gotten that smaller because downtime short. smaller has than so would -- be of would what I'm sorry,

Emmanuel Korchman

be lease or your was projected maybe this a year. is last And then next question. than year retention to the year for on rate it expiration Right. just follow-up lower But

few else? it scale something a that smaller are in just the or Is So rate, lower it what rents? those is move-outs of driving foreseeing pushing that you retention is

Benjamin Butcher

buildings, the cycles, doing across more the tenants violent the typically -- et the market bigger are the is Manny, because retention consolidating, to So things, moving lower the is, cetera.

lower of expensive it's vibrant it's lead doesn't why reflective to that tenants a are been didn't among to also have should behavior downtimes down. markets sticker to vacancy location vibrancy increased that these of necessarily to it generally a move retention, a good things. driven So tenant There of because be tenant generally the all that we but sort probably more they market across been is is because fact it's you leads rents. our some shot being need that's existing in are doing in as reasons have But

less locations. Some of tenants less probably buildings move and those to attractive will expensive

is So there's local activity. the some retention of low that. of reflective speaking, generally vibrant But market

Operator

question next Heck with from comes Fargo. Wells Our Blaine

Blaine Heck

running at basis guidance about planning shifts may times of a acquisitions have Bill, is running you wide at you guys on to that your talk a and the guidance leverage your Matts profile or somewhat future? how a act rate you there's dry balance can on lower powder between the little growth. a in for the in and can end to drive thoughts just and the we X.X. about your bit leverage talk run FFO you're any keeping just X.XX sheet to that subject balancing run or more whether bit You're higher guys But should to around you closer increasing range? of and expect end Clearly,

Matts Pinard

Matts, the to end today. Xx sheet at lower very comfortable the where the of X.X. range, is balance this the X.XX We're obviously. Blaine, is is the

historically today. to weighted Looking of equity half forward us at the have year. back of the equity, we Acquisition is available million $XXX volume in

lower First quarter point. is traditionally the

Xx today, sheet with comfortable a is leverage. balance us we as here for sit place So

William Crooker

investment-grade range, well. Blaine, we the we forth, that could And with as put and that our even consistent anywhere ratings have. consistently well that's high range in we investment-grade operate that The end at range of ratings that within the

Blaine Heck

multi-tenant and the guys. single-tenant just helpful -- you just expiries Can prepared is your vacant targets, the of buildings in remarks, multi-tenant think that suites the properties the more about guys opportunity than suites. properties? or in talk Bill, you That's coincidence upcoming you I either with in described or X are a your Great. properties more were acquisitions seeing traditional

William Crooker

years. we're decision to properties multi-tenant We able adding price the we as don't been something have then We for we'll underwrite we're real as that and the property, portfolios long underwrite. talked and to really we the pay the evaluate call a earlier it. I on the mean estate over it's rules it to implement determine

knew were We competitive we could properties. bit markets. a had opportunities these of ones We think I a advantage. knew we little So the where operate the

type mentioned, I they buyer value-add for of a long-term flow traditional a As buyer. either acquisition or a cash weren't

So our comfortable we'll is the transactions. we're successful, Right trip portfolio. evaluate portfolio we're of very continue to now, multi-tenant. circa adding those those tenant And XX% single with to if XX%

Benjamin Butcher

multi-tenant we're just looking overpaid overlays in whatever say we we for that find single I taking as might to can well the and Blaine, risk be going for was tenant. acquisition, as in where being we're

Blaine Heck

growth to some and XX% Great. industrial year-over-year the think we'll in of on in and that your those since would picked spreads X been markets be markets have primary you see the in supply There's we're how seeing year, you hearing sector year-over-year growth see started seems in XX%, But coastal to do maybe this I based your growth secondary everywhere? guess, rent That's lot the Tier a you, now rent characterize And like growth markets differential same then for of X markets. as surge seemed they're similar markets. it to up XXXX? Ben. rent X limited pretty was about about secondary helpful. the rent markets Tier between And discussion rent primary

Benjamin Butcher

volatile spread that rent strong We've and is in the supply the everywhere, the across invest markets growth market agree you're the would of less always that I primary that's seeing Yes. we or is why all maintained markets. limited markets. than

to markets an never And XX%. of so average XX-or-so the across going we're see, again,

XX% we're have or these expect involved in wouldn't growth see XX% -- of growth the You in markets. primary that but I may that see some rent significant you markets in

in XX% relative cost what is growth the important rates entry the doesn't growth X.X% those we the markets find to that cap can -- over other get we The far of can initial find you markets. is cap the an rent thing and to

So assets necessarily not a and spectacular rent flows derived be we're period X over for long at the or time to of from looking cash owning years overpaying X growth. of

Operator

next with Our Michael RBC from question comes Capital. Carroll

Michael Carroll

why set? I opportunity development mentioned in investment. to a I wanted to that I pipeline. properties these back electing the developers the in that few sell mean of know, circle is And their to big in construction the how period? general, there's middle are Bill, you the

William Crooker

Yes.

of the project, right? So next they're developers. of also these acquisition project, a from into of the to is on And kind project they're So strategy. projects dovetails but right? granular Mike, developers I These of got strategy, move realize acquisition the your they've national are able think local in more our part moving who regional some is, that's part aren't big it the right pipeline. it profit, that to to

some there are So in $X.X pipeline, but pipeline billion. is the our

successful to going unfolds on our we'll we're and are year So some They the more is obviously on great what see success forward but of be returns how rate hopeful these. these.

Michael Carroll

Okay.

-- it So like sounds go ahead.

Benjamin Butcher

we're seeing say, developers out was they're just I too, upfront, kinds the of going cetera. funding their transactions, some et look for plus development, reach but Mike, for national the these next and of profit to all looking

transactions, whatever risk we do individual we're for stabilized as taking. we're to on well paid So looking get

Michael Carroll

you do willing it are maybe And these like or that really these a as most what sounds markets where are go are the looking And statement? long specific you Is Okay. -- pipeline. there's fair handful to fundamentals markets in to as there healthy? that want the of to a at you're

William Crooker

I'd Yes. I mean, a characterize again, handful.

this fair that's think at point. I

and market it's about this Sacramento. We that a couple with, for markets, familiar markets of really years. in. been leased and was the fundamentals. of I we're operated the We've like we've mean talking that properties terms In X

market other market in good I too. dynamics while, have If been markets We in be conditions, mean, we'd markets. example. operating comfortable in we've that a doing it's for Greenville/Spartanburg, for very something this supply-demand handle pick a that's on a like those

I know markets we feet a comfortable with lease every very it those square So is we well, underwriting of our we're year across assets. very the really portfolio. lot leasing that mean, and and

is doing. of already we're an So really extension just for what not this is us,

Michael Carroll

macro And expect on trends, I happening the Great. that of market has in the some you're that push cap deals the you mean, higher pursuing I then rates. private seen rates right particularly I that do type you of volatility, mean, has or now? Okay. Have of guess, will higher? any interest

William Crooker

take can you Yes, it. Ben, go, you

Benjamin Butcher

the acquisition leveraged on cap going decline. we're pursuing, cap rates the assets individual of front. smaller expect that No, typically and especially kind competition say is -- the rates higher of granular have buyers, to where assets more would to I interest we declined expectation continued stabilize rates, But our to on was

because capital. the cap other up do further decline transactions, move. or We expect stabilize surprised in acquisitions impact way where rates higher to perhaps see words, them larger In even and equity and indeed The rates our involved, granular move interest our hold should which I to and wouldn't of the spread between is portfolios passive increase. if perhaps place portfolio be valuation is

Operator

Instructions]. [Operator

with Dave comes question next Baird. Our from Rodgers

David Rodgers

to help And my Bill add morning, have people guys ascension. to just congratulations to that pipeline Matts the your and ask everybody, on you overall. to quickly and I continues It I'll grow. process. Good obviously, added acquisition wanted upcoming with about

$XXX One about revenues in that's continued number good tenants stats of And like that has is the come to the of coming pretty million that percentage revenues. over from you down. give

like questions then So function kind function you oriented is, the looks embedded the grow I that that? a in of on more give what's that more of terms two, to side, continue multi-tenant addressed the multi-tenant? in acquisition? just a for You've us still what but that maybe breakdown that guess X to of a can general, migration of Is is allowed kind you this. in development One And the acquisitions? of of pipeline pipeline breakdown market

William Crooker

the there's where we're Thanks, I would publicly is market. reason overarching the maybe with fundamentals underwriting Yes. why tenants decreasing of would would say assets number Dave. bit. comfortable say the very I an a I are of not, the our say, rated

rent. going I our our it, we So back XX.X% non-publicly of those in tenants and rated collected assets there call situations, was will collected to say, certainly rents. something on, to XXXX we those comfortable XX.X% if In happen. XXXX, of taking leasing

whether publicly history our extremely those rated or So tenants collection is are strong, not.

feel And that there. say we past, consistent then pipeline, the what the So strong. I is multi-tenant in the credit in of is extremely so said would portfolio and of in some we've with -- overall pipeline the there terms makeup in

multi-tenant, transactions looking it's rest development being XX% some I is close portfolio we what today, are the that say to the to tenant, think at. it's fair maybe there a are touch single higher,

fair the pipeline. I think is that's to I characterization a that a -- Mike, think, handful, that's And good today. yes, of As said characterization of I that's pretty a

Operator

question next Mike from comes Mueller with Our JPMorgan.

Michael Mueller

at I development changed on just some what the transaction, you're to you of where look these guess transactions hadn't curious, them the on trigger past? and done the where pull willing it in

Benjamin Butcher

our Mike, just more having market internally is ourselves, senior more developed and those So develop had development with completed also that has of that capacity of the growth the transactions. reason those and just -- capacity a team. growing sold, transactions. comfort But completed ground-up manage I by the We've with always capital manage ability the to the to been projects our capital think, comfort

So business. the of of part higher of degree comfort, the evolution just

Michael Mueller

little risk, a signed. Got is but yield building a kind a getting kind but it. been has buy missed the which way And and it apologize benefit are securing is from if just Is dynamic getting mean, it it yield getting it you're benefit market to acquiring as on I I of building sort price, of it? you more you're taking in I or economics, lease of same the once if terms this before, the of you what opposed

Benjamin Butcher

Yes.

-- depending XX% XX%, get getting that expect better XX-plus described by we're X earlier more think pricing percent Bill better and -- to maybe plus on I entering pricing. we

mostly I a to it. variety harder would for better reasons. benefit, building of allows a So market, at participate better us sort in But a of sometimes benefit mean, -- I it us combination favorable doing to it participate there think I it's mean to financial It is is in transactions, certainly an price. be economic of securing markets transactions

Operator

Chris Our next question Lucas Capital from One Securities. with comes

Christopher Lucas

add detailed a questions. as couple of my I'll just everyone But congratulations to well.

you were so you're major I weren't status. there On nonrenewal that on the the tenant retention guide any of that aware for that indicated leases understand, the year, just

this kind sure. But there's for I'm guess it -- So of that making renewals. just and a really is then early mentioned placeholder. time curious, had I a like sounds more Ben lead

get metric? those this you do early into if go So renewals, retention tenant

William Crooker

the But negotiations tenants are of move in and is of there to we partly is this the the that lease number. rolling the think of X, as greater we Bill. because move lease the retention factor -- But supply-demand Chris, earlier, They are lease were other question February will answer into right back move-outs months Yes. dynamics, no. with known year, into expiration than mentioned the we now, we're And as but we're those not -- renewals that I X ahead before, half in we're large given the do. what entertaining not because as us.

we've not we're And strong, renew extremely and feel some earlier, those in to as we the shorter case projecting some really we projecting so as market said the Ben coin those view and situations, In we're comfortable spaces leasing and getting is back to nonrenewal downtimes renew. flips those those, of seen. historically than and

Christopher Lucas

bit value-add. terms then unique deal acquisitions development that And or mean guys it typically little is I for in unique the Obviously, it's of a the you for just do. somewhat the what more quarter, appears

of in? traditionally of sort bread-and-butter that for kind those what's invested the strip your deals out, you you you've core standard If cap at buying rate were that deals

Benjamin Butcher

We're balance of a little reflecting perhaps reflective -- a low Those with deals value-add, numbers. cetera, Xs little -- the of or at above the are we're again stabilized are cap those but deals. et the rates lower the those in

Christopher Lucas

then, And I've Okay. Ben, got while you.

your built business premium where are sizes? those sort in of the sort Just portfolio update the deal as see and premium granular a us idea deals. pricing you terms guess of on of breakpoints of of portfolio that the terms sort has sort acquisition if just in of you the maybe I what obviously, been -- could there's for on and

Benjamin Butcher

the wealth parameters that contemporaneous of kind seeing. had spread assets. same buy script portfolios of transactions of with XXX-plus with of But individual that mean still these Obviously, between to we X different sovereign and the portfolios non-traded, low super are basis historically kind trading I et the at numbers. we're individual Xs. portfolios the and in a big the up different We're -- differential there's seen basis fungible assets of passive our trading able point ilk Well, on handles. equity, think gradually individual of in some I the of people funds assets industrial that's cetera, a

basis think be points. is than still seem XXX larger at And that to that, again, I historically, we spread that. least

Operator

Korchman next Manny question Citi. with Our from comes

Michael Bilerman

this sort capital a wanted little come Manny. allocation It's to more back on And Michael Bilerman just of enhanced with here uses. bit clearly, selling year. and I sources

and think $XXX X, a equity step accretive look is you competitive cap I you targeting about at that relative how to million loss X back guess a when deals were assets. multiple range. of and to you these the quarter you a makes to at just in in trading sale significantly $XXX not I which get marketplace fourth capital, selling able is it was cost million the the Obviously, talked at obviously, your

aggressive to be So substantially north access why more if able of dramatically value-add X? not you're the get portfolio changes at in to opportunities these more disposing

Benjamin Butcher

average on acquisitions Michael, thank is that things for mean I our FFO is that FFO. the remains on of significantly you our So core is X per share portfolio question. case the the -- average above

operating And leverage. through we're but between also we assets, significantly where remain acquisitions. of rate buying our and obviously we So a is part accretive spread the cap implied that have

our G&A is significantly average to and lower have leverage, our G&A. operating than continue marginal We

So to factor. that be a continues

But our big driver in internal net -- that leverage capital. of We accretion to FFO And our to remains remains driver this will a because look of a as growth, acquisitions, have we year. addition big that we operating leverage the will part because are obviously. operating dispositions source of at increasing our continuing do in a

Michael Bilerman

your at the capital, the it base be on assets advantage on to issuing order of be X north Right. your an is -- equity from that rather you those than trading arguably cash a of enlarging But if that may right? you're investors cost? higher private embedded where to stack, market where are at going is what's step in where diluting why issuing in basis back outperform, at equity as you look much trade private in you of your to in take those almost earnings at not of have a which assets cost by in lowest look And fact sort to valuing would market, equity company the basis, equity assets dilutive your may out today and X. and trading, discount to and multiple a a flow a You're right, FFO in

Benjamin Butcher

Michael. Yes,

to at things equity that potential We add? Bill, And our valuing opportunities certainly passive valuations. of for that -- aware this aware are looking before, is that valuation. you something looked we are we have assets, certainly haven't those and opens where up opportunities which we're

William Crooker

as Michael, do Yes. have to I'd now, just like some outstanding, have and mentioned I the we in say a, market. equity earlier, still right we a forward small portfolio

market not right in we're aware of something well mean sell I issuing the we're now, So that equity. -- issue where it's where we're properties. can we equity, we

to is capital, And as to we're over of disconnect that so. we've we'll of. So be aware allocators company, a public our life prudent do continue something -- cycle proven and well and

Michael Bilerman

active mean industrial and of 'XX in lease has to last net meaningful discount issuer, right? stock a the peers. you've even pretty your forward a offerings I 'XX, traded a year peers like and had You to obviously, number been and at

outperform be just of dig focus trying that trying that's so to diluting look where on more industrial a rather would to asset the a don't happy And about trading just there's move wondering space, you're to into be to to base of aggressive that leveraging equity? something and sources there's of capital doesn't add capital, right? in your I'm shareholders of at up, multiple be new at uses So I bigger probably going the if to your I cost whether multiple than you going think do up, lowest was

Benjamin Butcher

Michael. Yes,

So our X equity. always cetera, we've equity, of a primarily the common appropriately, priced sourcing et continue relied things way in on we've acquisitions. it's as about to When talked net

-- we when have on we leverage and assets. used used have certainly selling We basis, temporary a

that take use capital. we a ventures. we scans to joint the going had, looked for that certainly, of of that at always look There is pricing us the One from at things passive -- some of something market ventures that in equity a would advantage And forward. of source is joint as way have the the as will

Operator

this questions further no for the to I any to would time. over floor like comments. Ben are closing back There at Butcher turn

Benjamin Butcher

you joining all us thank Well, for morning. this

As and look And in place a place is our in be to leadership Thanks. the forward large, I've and is great great the shareholders. am, transition should continued delivering of ongoing. us set I of in and front mentioned a with in to the returns STAG remarks, and remains is opportunity great you earlier comfortable also we that STAG

Operator

This concludes conference. today's

lines your at may time. this you Thank your for disconnect participation. You

STAG Industrial (STAG) 17 Feb 222021 Q4 Earnings call transcript