STAG Industrial's Q2 2025: Decoding Contradictions in Leasing Trends and Market Strategy

Leasing Activity and Market Trends:
- STAG Industrial reported leasing approximately 4.2 million square feet in Q2 2025, achieving cash leasing spreads of 24.6%.
- This growth is attributed to increased tenant activity in the Midwest, Houston, and other onshore manufacturing markets, with markets like El Paso showing short-term tariff uncertainty.

Acquisition and Transaction Market:
- The company closed on a 183,000 square foot building in Wisconsin, securing a nationally distributed facility with a strong credit profile.
- The transaction market is becoming more active, with an uptick in underwritten deals within the last three weeks, reflecting improved seller expectations and buyer conviction.

Credit Resolution and Financial Health:
- Moody's raised STAG's credit rating to Baa2 with a stable outlook, acknowledging the company's financial strength amidst market turmoil.
- The company resolved two credit situations, with American Tire Distributors assuming all seven leases and no credit loss incurred.

Development and Asset Leasing:
- STAG's development platform has approximately 3 million square feet under construction, with 58% delivered and 69% leased.
- The company is constructing a 500,000 square foot cross-dock facility in Louisville, Kentucky, expected to stabilize with a cash yield of 7.1%.