STAG Industrial, Inc. Announces Acquisition Activity And Leasing Activity For March And The First Quarter 2015

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Apr 01, 2015, 09:03 ET

BOSTON, April 1, 2015 /PRNewswire/ -- STAG Industrial, Inc. (the "Company") (NYSE: STAG), a real estate investment trust (REIT) focused on the acquisition and operation of single-tenant, industrial properties throughout the United States, today announced its acquisition and leasing activity for March 2015 and the first quarter of 2015.

Acquisitions

In March, the Company acquired four distribution warehouse buildings containing a total of 982,227 square feet, for $62 million. The acquired buildings are 100% occupied. Details of the buildings acquired in March are shown in the chart below:

MARCH 2015 ACQUISITIONS
Location (CBSA) ⁽¹⁾	Date Acquired	Square Feet	Buildings	Purchase Price ($MM)	Weighted Average Lease Term (Years)
Greenville-Mauldin-Easley, SC	3/09/2015	157,500	1	$4.8	2.8
New Haven-Milford, CT	3/13/2015	824,727	3	$57.4	4.5
Total/Weighted Average		982,227	4	$62.2	4.3
⁽¹⁾Core based statistical area

For the quarter ended March 31, 2015, the Company acquired five industrial buildings consisting of approximately 1.5 million square feet for $97 million. The weighted average estimated cap rate for the buildings acquired in the quarter was 8.0%. Estimated cap rates are calculated by dividing underwritten cash basis net operating income for the first twelve months by the purchase price. Actual operating results of the buildings may differ materially from the Company's underwriting. The chart below reflects the acquisition activity during the first quarter:

FIRST QUARTER 2015 ACQUISITIONS
Location (CBSA)	Date Acquired	Square Feet	Buildings	Purchase Price ($MM)	Remaining Lease Term (Years)
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	1/22/2015	503,490	1	$34.3	8.4
Greenville-Mauldin-Easley, SC	3/09/2015	157,500	1	4.8	2.8
New Haven-Milford, CT	3/13/2015	824,727	3	57.4	4.5
Total/Weighted Average		1,485,717	5	$96.5	5.7

As of April 1, 2015, the Company has entered into contracts to acquire 11 industrial buildings for $89 million. Included in the acquisitions under contract are 3 build-to-suit transactions totaling $31 million, which are scheduled to close in the second quarter of 2015. The Company has also executed non-binding letters of intent to acquire 6 additional industrial buildings for $33 million.

As of March 31, 2015, the pipeline of potential acquisitions exceeded $1.2 billion and 102 industrial buildings. The pipeline is a point in time measure that includes all of the transactions under consideration by the Company's acquisitions group that have passed the initial screening process. It also includes transactions under contract and transactions with non-binding LOIs.

The purchase and sale agreements for the properties under contract are subject to satisfaction of closing conditions, and the properties under LOI require the negotiation and execution of definitive purchase and sale agreements. There can be no assurance that any of the properties under contract or LOI will be acquired on the terms anticipated or at all.

Leasing

In March, the Company executed 347,835 square feet of leases comprised of 167,200 square feet of new leases and 180,635 of temporary leases. The leases executed in March are detailed below:

MARCH 2015 LEASING ACTIVITY
Lease Type	Count	Square Feet	Base Rent $/PSF	Lease Commissions $/PSF	Tenant Improvements $/PSF	Total Costs $/PSF	Cash Rent Change ⁽¹⁾⁽³⁾	GAAP Rent Change ⁽²⁾⁽³⁾
New Leases	2	167,200	$3.40	$0.61	$0.98	$1.59	8.3%	0.0%
Renewal Leases	0	0	0.00	0.00	0.00	0.00	0.0%	0.0%
Total /Weighted Avg New & Renewal	2	167,200	$3.40	$0.61	$0.98	$1.59	8.3%	0.0%
Temporary Leases	3	180,635
Total Leasing Activity	5	347,835
⁽¹⁾Cash basis rent growth is a ratio of the change in net effective rent (excluding straight-line rent adjustments as required by GAAP) of the comparable lease.
⁽²⁾GAAP basis rent growth is a ratio of the change in net effective rent (including straight-line rent adjustments as required by GAAP) of the comparable lease.
⁽³⁾Rent change for new leases where there were no prior comparable leases, due to extended downtime or materially different lease structures are excluded.

For the quarter ended March 31, 2015, the Company executed 549,133 square feet of leases comprised of 167,200 square feet of new and expansion leases, 136,653 square feet of renewal leases, and 245,280 square feet of temporary leases. The leases executed during the first quarter are detailed below:

FIRST QUARTER 2015 LEASING ACTIVITY
Lease Type	Count	Square Feet	Base Rent $/PSF	Lease Commissions $/PSF	Tenant Improvements $/PSF	Total Costs $/PSF	Cash Rent Change	GAAP Rent Change
New Leases	2	167,200	$3.40	$0.61	$0.98	$1.59	8.3%	0.0%
Renewal Leases	2	136,653	7.24	0.22	0.00	0.22	-4.5%	0.1%
Total /Weighted Avg New & Renewal	4	303,853	$5.04	$0.44	$1.75	$2.19	-2.4%	0.1%
Temporary Leases	5	245,280
Total Leasing Activity	9	549,133

Twelve leases consisting of approximately 1.5 million square feet expired in the first quarter and the tenant retention rate for these leases was 64.1%. Tenant retention for the quarter ended March 31, 2015 is detailed below:

FIRST QUARTER 2015 RETENTION
Quarter	Expiring Square Footage	Retained Square Footage	Retention Rate ⁽¹⁾	Cash Rent Change	GAAP Rent Change
Q1 Total	1,528,723	979,987	64.1%	6.7%	9.6%
⁽¹⁾Based on square feet retained in the period

The Company's occupancy rate for the first quarter decreased to 94.2% from 94.9% at the end of the fourth quarter of 2014. The occupancy rate and total square footage for the quarter ended March 31, 2015 appears below:

FIRST QUARTER 2015 OCCUPANCY
Quarter	Number of Buildings	Total Square Footage	Occupancy %
Q1	253	48,533,893	94.2%

About STAG Industrial, Inc.

STAG Industrial, Inc. is a real estate investment trust (REIT) focused on the acquisition and operation of single-tenant, industrial properties throughout the United States. The Company's portfolio consists of 253 properties in 36 states with approximately 48.5 million rentable square feet.

For additional information, please visit the Company's website at www.stagindustrial.com.

Forward-Looking Statements

This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, are generally identifiable by use of the words "believe," "will," "expect," "intend," "anticipate," "estimate," "should," "project" or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, the risk factors discussed in the Company's annual report on Form 10-K for the year ended December 31, 2014 as updated by the Company's quarterly reports on Form 10-Q. Accordingly, there is no assurance that the Company's expectations will be realized. Except as otherwise required by the federal securities laws, the Company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

SOURCE STAG Industrial, Inc.