BOSTON, — February 13, 2019 – STAG Industrial, Inc. (the “Company”) (NYSE: STAG), today announced its financial and operating results for the quarter ended December 31, 2018.
“Fourth quarter results were a fitting conclusion to another strong year for STAG” said Ben Butcher, Chief Executive Officer of the Company. “2018’s portfolio disposition, record acquisition volume, and balance sheet strength showcased the ability of our organization to drive continued bottom line per share growth moving into 2019.”
Fourth Quarter and Full Year 2018 Highlights
Please refer to the Non-GAAP Financial Measures and Other Definitions section at the end of this release for definitions of capitalized terms used in this release.
The Company will host a conference call tomorrow, February 14, 2019 at 10:00 a.m. (Eastern Time), to discuss the quarter’s results and provide information about acquisitions, operations, capital markets and corporate activities. Details of the call can be found at the end of this release.
Key Financial Measures
FOURTH QUARTER 2018 KEY FINANCIAL MEASURES |
||||||||||||||
Three months ended |
Year ended |
|||||||||||||
Metrics |
2018 |
2017 |
% Change |
2018 |
2017 |
% Change |
||||||||
(in $000s, except per share data) |
||||||||||||||
Net income attributable to common stockholders |
$44,256 |
$6,124 |
622.7 |
% |
$82,385 |
$21,131 |
289.9 |
% |
||||||
Net income per common share — basic |
$0.40 |
$0.06 |
566.7 |
% |
$0.80 |
$0.24 |
233.3 |
% |
||||||
Net income per common share — diluted |
$0.40 |
$0.06 |
566.7 |
% |
$0.79 |
$0.23 |
243.5 |
% |
||||||
Cash NOI |
$73,129 |
$63,970 |
14.3 |
% |
$275,073 |
$240,440 |
14.4 |
% |
||||||
Same Store Cash NOI (1) |
$58,601 |
$58,537 |
0.1 |
% |
$196,269 |
$195,635 |
0.3 |
% |
||||||
Adjusted EBITDAre |
$66,470 |
$57,659 |
15.3 |
% |
$248,274 |
$214,854 |
15.6 |
% |
||||||
Core FFO |
$52,604 |
$44,514 |
18.2 |
% |
$194,324 |
$160,792 |
20.9 |
% |
||||||
Core FFO per share / unit — basic |
$0.46 |
$0.45 |
2.2 |
% |
$1.80 |
$1.72 |
4.7 |
% |
||||||
Core FFO per share / unit — diluted |
$0.46 |
$0.44 |
4.5 |
% |
$1.79 |
$1.70 |
5.3 |
% |
||||||
AFFO |
$50,157 |
$42,697 |
17.5 |
% |
$186,811 |
$157,423 |
18.7 |
% |
||||||
(1) The Same Store pool accounted for 80.3% and 69.1% of the total portfolio square footage for the three and twelve months ended December 31, 2018, respectively. |
Definitions of the above-mentioned non-GAAP financial measures, together with reconciliations to net income (loss) in accordance with GAAP, appear at the end of this release. Please also see the Company’s supplemental information package for additional disclosure.
Acquisition and Disposition Activity
For the three months ended December 31, 2018, the Company acquired 17 buildings for $217.9 million with an Occupancy Rate of 99.7% upon acquisition. The chart below details the acquisition activity for the quarter:
FOURTH QUARTER 2018 ACQUISITION ACTIVITY |
||||||
Market |
Date |
Square Feet |
Buildings |
Purchase |
W.A. Lease |
Capitalization |
Greensboro/Winston-Salem, NC |
10/22/2018 |
128,287 |
1 |
$8,376 |
8.0 |
|
Minneapolis/St Paul, MN |
10/22/2018 |
109,444 |
1 |
8,064 |
4.8 |
|
Baltimore, MD |
10/23/2018 |
60,000 |
1 |
7,538 |
5.2 |
|
Greenville/Spartanburg, SC |
11/7/2018 |
210,891 |
1 |
11,289 |
10.1 |
|
Philadelphia, PA |
11/19/2018 |
101,869 |
1 |
7,074 |
4.8 |
|
Detroit, MI (1) |
11/26/2018 |
— |
— |
620 |
— |
|
Milwaukee/Madison, WI |
12/3/2018 |
162,230 |
1 |
14,132 |
14.9 |
|
Pittsburgh, PA |
12/11/2018 |
119,161 |
1 |
15,502 |
12.1 |
|
Tucson, AZ |
12/13/2018 |
129,047 |
1 |
10,075 |
4.7 |
|
Detroit, MI |
12/14/2018 |
285,306 |
2 |
20,095 |
3.9 |
|
Greenville/Spartanburg, SC |
12/17/2018 |
726,500 |
1 |
28,995 |
12.1 |
|
Milwaukee/Madison, WI |
12/18/2018 |
288,201 |
2 |
14,586 |
4.1 |
|
Milwaukee/Madison, WI |
12/19/2018 |
112,144 |
1 |
5,349 |
3.8 |
|
Chicago, IL |
12/19/2018 |
195,415 |
1 |
16,134 |
7.2 |
|
Indianapolis, IN |
12/20/2018 |
446,500 |
1 |
33,314 |
14.8 |
|
Pittsburgh, PA |
12/20/2018 |
179,394 |
1 |
16,725 |
4.0 |
|
Total / weighted average |
3,254,389 |
17 |
$217,868 |
9.0 |
6.6% |
|
(1) Non-cash land acquisition. |
The chart below details the 2018 acquisition activity and Pipeline through February 13, 2019:
2018 ACQUISITION ACTIVITY AND PIPELINE DETAIL |
|||||
Square |
Buildings |
Purchase |
W.A. Lease |
Capitalization |
|
Q1 |
1,091,868 |
6 |
$78,821 |
6.2 |
6.7% |
Q2 |
2,726,162 |
15 |
185,300 |
7.7 |
7.1% |
Q3 |
3,253,347 |
15 |
194,543 |
8.8 |
6.9% |
Q4 |
3,254,389 |
17 |
217,868 |
9.0 |
6.6% |
Total / weighted average |
10,325,766 |
53 |
$676,532 |
8.3 |
6.9% |
As of February 13, 2019 |
|||||
Subsequent to quarter-end acquisitions |
176,684 |
1 |
$9,965 |
||
Pipeline |
34.7 million |
144 |
$2.4 billion |
The chart below details the disposition activity for the year ended December 31, 2018:
2018 DISPOSITION ACTIVITY |
|||
Square Feet |
Buildings |
Sale Price ($000s) |
|
Q1 |
650,636 |
2 |
$50,379 |
Q2 |
1,009,021 |
5 |
31,200 |
Q3 |
339,956 |
4 |
10,495 |
Q4 |
1,854,959 |
8 |
119,461 |
Total |
3,854,572 |
19 |
$211,535 |
Operating Portfolio Leasing Activity
The chart below details the leasing activity for leases signed during the three months ended December 31, 2018:
FOURTH QUARTER 2018 LEASING ACTIVITY |
||||||||
Lease Type |
Square |
W.A. |
Cash |
SL Base Rent |
Lease |
Tenant |
Cash |
SL Rent |
New leases |
756,150 |
5.2 |
$3.42 |
$3.51 |
$1.11 |
$0.66 |
10.9% |
18.1% |
Renewal Leases |
1,874,666 |
5.4 |
$4.33 |
$4.52 |
$0.86 |
$0.48 |
6.8% |
15.7% |
Total / weighted average |
2,630,816 |
5.3 |
$4.07 |
$4.23 |
$0.93 |
$0.54 |
8.0% |
16.4% |
The chart below details the leasing activity for leases signed during the year ended December 31, 2018:
2018 LEASING ACTIVITY |
||||||||
Lease Type |
Square |
W.A. |
Cash |
SL Base |
Lease |
Tenant |
Cash |
SL Rent |
New leases |
2,513,085 |
6.3 |
$3.63 |
$3.77 |
$1.28 |
$0.84 |
10.3% |
17.8% |
Renewal Leases |
7,129,299 |
4.8 |
$4.07 |
$4.22 |
$0.51 |
$0.30 |
7.3% |
14.5% |
Total / weighted average |
9,642,384 |
5.2 |
$3.96 |
$4.10 |
$0.71 |
$0.44 |
7.9% |
15.2% |
The chart below details the Retention activity for the year ended December 31, 2018:
2018 RETENTION |
||||
Expiring Square |
Retained Square |
W.A. Lease Term |
Retention |
|
Q1 |
5,579,301 |
4,640,916 |
5.5 |
83.2% |
Q2 |
1,740,723 |
1,523,971 |
3.8 |
87.5% |
Q3 |
1,330,937 |
1,028,546 |
4.6 |
77.3% |
Q4 |
1,265,025 |
1,027,445 |
6.1 |
81.2% |
Total / weighted average |
9,915,986 |
8,220,878 |
5.2 |
82.9% |
Liquidity and Capital Market Activity
As of December 31, 2018, the net debt to annualized Run Rate Adjusted EBITDAre was 4.9x.
On December 19, 2018, the company received an investment grade rating from Moody’s Investor Services of Baa3 with a stable outlook. Subsequently, the Company reduced the credit spread on the outstanding unsecured term loans to a spread of 1.00% over LIBOR, and reduced the credit spread on the unsecured revolving credit facility to a spread of 0.90% over LIBOR.
The chart below details the ATM program activity for the year ended December 31, 2018:
2018 ATM ACTIVITY |
||||
ATM |
Shares |
Price per Share |
Gross ($000s) |
Net ($000s) |
Q1 |
– |
– |
– |
– |
Q2 |
6,819,580 |
$25.92 |
$176,762 |
$175,003 |
Q3 |
3,568,382 |
$27.94 |
$99,695 |
$98,566 |