Stag Industrial (NYSE:STAG) executives on the company’s fourth-quarter earnings call said 2025 was “arguably one of our more successful years,” pointing to results that exceeded internal budgets across key operating and financial metrics and setting initial expectations for continued growth in 2026 despite a large lease expiration schedule.
2025 performance and operating backdrop
Chief Executive Officer Bill Crooker said the company outperformed “almost all” of its budgeted metrics in 2025, including occupancy, credit loss, leasing spreads, same-store cash NOI, development starts, and core FFO. For the year, management reported same-store cash NOI growth of 4.3% and core FFO per share growth of 6.3%.
Looking ahead, Crooker said STAG expects 180 million square feet of deliveries or less in 2026, “much of which will be driven by build-to-suit transactions.” He added that the company anticipates net absorption will improve in 2026, supporting another year of positive rent growth. Management expects national vacancy to peak in the first half of 2026, with an “inflection point” in the back half of 2026.
Leasing results and 2026 leasing setup
Chief Financial Officer Matts Pinard said core FFO per share was $0.66 in the fourth quarter and $2.55 for the year, with the annual result up 6.3% from 2024. He noted two one-time items contributed approximately $0.01 per share to fourth-quarter core FFO.
In the fourth quarter, STAG commenced 31 leases totaling 3.0 million square feet, producing cash and straight-line leasing spreads of 16.3% and 27.4%, respectively. Pinard said the quarter included five fixed-rate renewal options totaling 882,000 square feet; excluding those fixed-rate renewals, fourth-quarter cash leasing spreads would have been 0.2% (which he characterized as 570 basis points higher than the reported figure). For the full year, STAG reported cash and straight-line leasing spreads of 24% and 38.2%.
Same-store cash NOI grew 5.4% in the quarter and 4.3% for the year. Pinard said STAG incurred 22 basis points of cash credit loss in 2025. Retention was 75.8% for the quarter and 77.2% for the year.
Management emphasized that 2025 was a “high watermark” for leasing volume and expects 2026 leasing activity to remain elevated due to a record amount of annual expirations for the company. Crooker said STAG has already addressed 69% of the operating-portfolio square footage it expects to lease in 2026, and the company is projecting cash leasing spreads of 18% to 20% for the year. Pinard added that the addressed 2026 leasing has achieved 20% cash leasing spreads so far.
In response to analyst questions on guidance that implies a decline in average occupancy, Crooker said STAG entered 2026 at close to a 98% occupancy rate but has about 20 million square feet rolling. With historical retention assumptions, that can translate into meaningful vacancy, and the company budgets a 9- to 12-month lease-up period for non-renewals. He cited examples from 2025 where STAG re-leased space faster than budgeted, including one Savannah, Georgia property that management expected to re-lease in early 2026 but ultimately leased with “no downtime.”
Acquisitions, dispositions, and capital markets
Crooker said the fourth quarter was the most active transaction quarter of 2025, helped by reduced macro volatility in the second half of the year that brought sellers back to the market. Fourth-quarter acquisition volume totaled $285.9 million across seven buildings, with cash and straight-line cap rates of 6.4% and 7.0%, respectively. Crooker said the properties were 97% leased to strong credits and had weighted-average rental escalators of 3.5%.
Subsequent to quarter end, the company acquired one additional building for $80.6 million at a 6.1% cash cap rate. Crooker described it as a Class A building leased to a strong credit for 12 years.
On dispositions, Crooker said 2026 guidance reflects mainly non-core asset sales, consistent with prior years. He also described opportunistic sales in 2025 driven by “reverse inquiries” from users who wanted to own space rather than lease it; two such vacant assets were sold at what he called market terms and a 4.9% cap rate.
Pinard said the company settled $157.4 million of proceeds on December 8 related to forward ATM sales that occurred throughout 2025. At year-end, net debt to annualized run-rate adjusted EBITDA was 5.0x, and liquidity was $750 million.
In a discussion of funding and cost of capital, Pinard said STAG’s cost of debt in the private placement market is “anywhere between 140 and 150 basis points over,” and he said the company has been told it could receive a 25 to 30 basis point pricing benefit in the public bond market after its inaugural issuance. On cost of equity, he cited a low-6% implied cap rate framework and emphasized STAG is retaining “north of $100 million of cash flows after dividend” and expects it can operate its 2026 plan without accessing equity markets. Pinard said leverage would be around 5.25x at the midpoint of the plan, up from 5.0x at year-end.
Development activity and outlook
As of the end of the fourth quarter, Crooker said STAG had 3.5 million square feet of development activity or recent completions across 14 buildings. He said 59% of that square footage was completed and those completed developments were 73% leased as of December 31.
During the quarter, STAG commenced a new 186,000-square-foot development in Lenexa, Kansas, identified within its existing portfolio by the operations team. Crooker said the project is expected to deliver in the first quarter of 2027, can be demised into suites of 60,000 square feet or less, and is projected to generate a 7.2% cash yield.
After quarter end, STAG executed a 78,000-square-foot lease at one of its Charlotte development projects with a manufacturing and assembly company, bringing that building to 39% leased. Management said it had initially underwritten full stabilization in the first quarter of 2027. Later in the call, the company characterized the Charlotte tenant as tied to a larger manufacturing facility in the submarket, with activity described as “light manufacturing” and ancillary needs such as storage and light assembly.
In response to a question about 2026 development leasing assumptions, Chief Operating Officer Steve Kimball said guidance includes 957,000 square feet of development leasing, including a build-to-suit. After accounting for the build-to-suit and the Charlotte lease executed after quarter end, he said the remaining projected development leasing for 2026 is roughly 500,000 to 530,000 square feet.
2026 guidance and dividend changes
Pinard outlined initial 2026 guidance, including expected same-store cash NOI growth of 2.75% to 3.25%. Underlying assumptions include retention of 70% to 80%, cash leasing spreads of 18% to 20%, and average same-store occupancy of 96% to 97%. Pinard also said STAG included 50 basis points of credit loss in initial same-store cash NOI guidance, which he described as inconsistent with prior years’ approach.
For external growth, management guided to acquisitions of $350 million to $650 million at a 6.25% to 6.75% cash cap rate, with timing weighted to the back half of the year. Disposition guidance is $100 million to $200 million. G&A is expected to be $53 million to $56 million. Pinard said higher interest expense from refinancing the company’s $300 million Term Loan G will be a $0.03 headwind to 2026 core FFO per share growth. The company initiated 2026 core FFO per share guidance of $2.60 to $2.64.
Crooker also noted that after year-end STAG raised its dividend by 4%, calling it the largest increase since 2014. He said the increase reflects years of reducing the payout ratio and retaining free cash flow. The company also changed its dividend payment cadence from monthly to quarterly going forward.
About Stag Industrial (NYSE:STAG)
Stag Industrial, Inc is a real estate investment trust (REIT) that specializes in the acquisition, ownership and operation of single-tenant industrial properties throughout the United States. The company’s portfolio is focused on free-standing warehouses, distribution centers and light manufacturing facilities designed to meet the logistical needs of a diverse tenant base. By concentrating on properties with straightforward layouts and minimal common-area maintenance, Stag Industrial seeks to deliver stable rental income and attractive risk-adjusted returns for its shareholders.
Since its founding in 2010 and initial public offering in 2011, Stag Industrial has pursued a disciplined investment strategy centered on high-quality, well-located assets.
