STAG Industrial, Inc. (STAG)·Q3 2025 Earnings Summary

Executive Summary

• STAG delivered a clean quarter with modest beats vs consensus and raised full-year guidance: Q3 revenue $211.121M vs $210.258M consensus and GAAP EPS $0.26 vs $0.256 consensus; Core FFO/share was $0.65, up 8.3% YoY ; estimates marked with asterisk reflect S&P Global data.*
• Management raised FY2025 Core FFO guidance to $2.52–$2.55 (from $2.48–$2.52), lifted Cash Same-Store NOI growth to 4.0%–4.25%, cut G&A to $51–$52M, and narrowed/lowered acquisition volume to $350–$500M .
• Operating KPIs were solid: cash leasing spreads +27.2%, straight-line spreads +40.6%, Operating Portfolio occupancy 96.8%, same-store cash NOI +3.9% (YoY) .
• 2026 leasing risk is being proactively addressed—52% of 2026 SF already resolved (95% renewals); management expects national vacancy (~7%) to improve in H2’26 and guided 2026 cash leasing spreads to 18–20% .
• Near-term stock reaction catalysts: upward guidance revision, accelerating deal flow (Q3 acquisitions $101.5M at 6.6% cash cap; $49.2M subsequent; $153M under agreement), and high-return development wins (Nashville stabilized 9.3% yield; new Ohio BTS at 7% with 10-year lease) .

What Went Well and What Went Wrong

• What Went Well

  • Raised full-year outlook: Core FFO to $2.52–$2.55 (+$0.03 at midpoint), Cash Same-Store NOI to 4.0%–4.25%, and lowered G&A to $51–$52M, reflecting operating outperformance and cost control .
  • Strong leasing and proactive 2026 de-risking: Q3 cash spreads +27.2% (SL +40.6%); 99% of 2025 and 52% of 2026 expected leasing completed; management expects 18–20% 2026 cash spreads. Quote: “We have accomplished 99% of our forecasted leasing for 2025… we have addressed approximately 52% [of 2026]” .
  • High-return development and accretive acquisitions: Nashville development stabilized at 9.3% yield; new 349k sf Ohio BTS at 7% stabilized yield (10-year lease, 3.25% escalators). Q3 acquisitions $101.5M (6.6% cash cap), with $49.2M subsequent and $153M under agreement .

• What Went Wrong

  • Retention and occupancy mixed: Q3 retention 63.4% (vs 75.3% in Q2, 85.3% in Q1); total portfolio occupancy 95.8% (down from 96.3% in Q2) .
  • Same-store NOI timing noise: Q3 same-store cash NOI +3.9% includes impact of moving one tenant to cash basis and AR write-off; CFO noted it would have been ~5% absent the write-off and should reverse in Q4 as repayments are made .
  • Acquisition guidance lowered/narrowed to $350–$500M despite improved pipeline, pointing to still-cautious transaction cadence; Q4 FFO modeled with speculative credit loss could temper sequential growth .

Financial Results

Results vs S&P Global consensus (quarterly):

• Estimates marked with asterisk were retrieved from S&P Global.*

Key Operating KPIs:

Balance Sheet and Liquidity:

Other Q3 highlights:

• Portfolio occupancy (total) 95.8%; Operating Portfolio 96.8% as of 9/30/25 .
• Q3 commenced leases 2.15M sf; cash/SL spreads +27.2%/+40.6% .
• Acquisitions: 2 buildings, 986k sf, $101.5M, 6.6% cash cap; subsequent $49.2M at 6.5% cash cap; 2025 YTD stabilized acquisitions $212M; $153M under agreement .

Guidance Changes

Management also noted Q4 credit loss is modeled conservatively; outperformance would bias results to the high end of the range .

Earnings Call Themes & Trends

Management Commentary

• Strategic posture: “Industrial fundamentals remain stable and are improving… we increased our core FFO guidance… Leasing demand is improving… supply pipeline continues to decrease… we anticipate [vacancy rates] will improve materially in the back half of next year.” — CEO .
• 2026 de-risking: “We have addressed approximately 52% of the operating portfolio square feet we expect to lease in 2026… We expect cash leasing spreads to be between 18% and 20% for 2026.” — CEO .
• Capital deployment: “We have seen an increase in acquisition opportunities… third quarter totaled $101.5M… Subsequent to quarter end, we acquired one building for $49.2M… $153M more under agreement…” — CEO .
• Development returns: “Nashville… 100% leased with a cash stabilized yield of 9.3%… build-to-suit… Union, Ohio… 349,000 sf… cost $34.6M… stabilized yield of 7%.” — CEO .
• Balance sheet & guidance: “Net debt to annualized run-rate adjusted EBITDA equals 5.1x, with liquidity of $904M… revised Core FFO guidance range of $2.52 to $2.55 per share” — CFO .
• Q4 modeling: “We do have some credit loss baked in on a speculative basis for the remainder of the year. To the extent we outperform that… we would be at the higher end.” — CFO .

Q&A Highlights

• 2026 leasing progress: 95% of resolved 2026 leasing is renewals; larger tenants engaged early; addressed all but one of 5–6 large (400k+ sf) expirations .
• Acquisition cadence and pricing: Sellers motivated to close by year-end; surety of close a differentiator; cap rates on $153M under agreement consistent with Q3 closes (~mid-6s cash caps) .
• Same-store NOI dynamics: Q3 depressed by AR write-off tied to cash-basis tenant; repayment agreement in Q4 could lift to high end of guidance; absent write-off, Q3 would have been ~5% and YTD ~4% .
• Development stance: Remain bullish, targeting ≥7% going-in yields; Ohio BTS (7%) to strong credit; Nashville leased up quickly; varied market readouts (Greenville/Tampa/Charlotte improving; Reno slower; Louisville strong) .
• Sequential guide math: Midpoint implies Q4 deceleration due to modeled credit loss; upside if losses don’t materialize .

Estimates Context

• Q3 2025 reported revenue $211.121M vs S&P Global consensus $210.258M (beat); GAAP EPS $0.26 vs $0.2565 consensus (beat) . Estimates from S&P Global.*
• Prior quarters: Q2 revenue $207.593M vs $205.389M est (beat); EPS $0.27 vs $0.2154 est (beat). Q1 revenue $205.574M vs $201.990M est (beat); EPS $0.49 vs $0.1954 est (beat) . Estimates from S&P Global.*

Where estimates may adjust:

• Upward bias to FY Core FFO and same-store NOI tracking given guidance raise and Q4 same-store tailwind from tenant repayments; watch acquisition timing and credit loss realization for Q4 run-rate .

Key Takeaways for Investors

• Guidance upgrade with disciplined cost control is the headline—Core FFO raised to $2.52–$2.55 and G&A trimmed to $51–$52M .
• Leasing engine remains strong (Q3 +27.2% cash spreads) and 2026 rollover is being proactively de-risked (52% addressed; 18–20% cash spreads guidance) .
• Transaction markets are thawing; expect a back-end-weighted close cadence with mid-6% cash caps; execution into year-end could add 2026 NOI momentum .
• Development is a differentiator: Nashville at 9.3% yield and Ohio BTS at 7% underscore return potential in targeted markets .
• Modeling note: Q4 could see “noise” from conservative credit loss assumptions; upside exists if losses don’t materialize, aided by tenant repayment agreements .
• Balance sheet remains supportive (5.1x net debt/Adj. EBITDAre; $904M liquidity) enabling simultaneous pursuit of acquisitions and development without leverage drift .
• Dividend maintained (monthly $0.124167), consistent with stable cash generation and guidance trajectory .

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Sources:

• Q3 2025 press release/8-K exhibits and financials .
• Q3 2025 earnings call transcript .
• Prior quarter releases/call for trend analysis: Q2 2025 press release and call ; Q1 2025 press release .
• Dividend press release .
• S&P Global consensus via tool: Revenue Consensus Mean and Primary EPS Consensus Mean for Q1–Q3 2025 (values marked with asterisk).*