Industrial Landlord Accelerated Acquisitions as Property Growth Slowed
Revenue rose 8.1% to $224.4 million as acquisition spending returned to a late-2025 pace.
STAG Industrial (STAG), the industrial real estate investment trust, accelerated second-quarter acquisition spending to $287.1 million as occupancy declined and growth in property-level earnings moderated.
The company bought seven buildings, up from one building for $80.7 million in the first quarter and roughly matching the fourth quarter’s $285.9 million pace. The acquisition cash capitalization rate held at 6.1% from the prior quarter, below the fourth quarter’s 6.4%.
Revenue rose 8.1% from a year earlier, supported by a 7.8% increase in rental income to $223.5 million. Net income attributable to common stockholders increased 5.8% to $52.9 million, while diluted earnings fell sequentially to $0.28 a share from $0.32 in the first quarter and $0.44 in the fourth quarter.
Core funds from operations were $0.65 a diluted share, unchanged from the first quarter and down one cent from the fourth quarter. Core FFO growth slowed to 3.2% from 6.6% and 8.2% in those periods, respectively. Adjusted EBITDAre rose 6.3% to $161.7 million, extending a similar deceleration even as its dollar level increased sequentially.
Same-store cash net operating income grew 3.4% to $158.8 million, easing from 4.1% growth in the first quarter and 5.4% in the fourth. Property expenses increased 11.4% to $45.0 million, outpacing rental-income growth and reducing net operating income to about 79.9% of revenue from 80.5% a year earlier.
Total-portfolio occupancy fell to 94.5% from 95.1% in the first quarter and 96.4% in the fourth. Leasing volume eased to 5.6 million square feet from 6.0 million in the prior quarter, and cash rent growth moderated to 19.8% from 20.9%. Tenant retention improved to 75.7%, returning to roughly its fourth-quarter level.
STAG’s acquisition pipeline expanded to $4.0 billion and 35.1 million square feet, while the number of buildings under consideration declined to 145. The company also began a 342,975-square-foot build-to-suit project in Dallas and signed three development-project leases totaling 152,824 square feet.
After the quarter ended, STAG refinanced and combined $350 million of term loans due in March 2027 into a loan maturing in January 2032. The debt carries a 3.53% fixed rate through March 2027 and 4.79% thereafter, and the transaction lowered pricing across the company’s term loans and unsecured credit facility by five basis points.