STAG Industrial's Q4 2024: Unraveling Contradictions in Leasing Activity, Acquisitions, and Spreads

These are the key contradictions discussed in STAG Industrial's latest 2024Q4 earnings call, specifically including: Leasing Activity and Spreads, Acquisition and Development Strategies, and Leasing Spreads Expectations:



Leasing Activity and Spreads:
- STAG achieved a cash leasing spread of 23.8% for 2025, with approximately 70% of leasing already secured, similar to previous years.
- The leasing spread for Q4 2024 was lower at 19.4%, due to fixed rate renewal options, but excluding these, the spread was 34%.
- The increase in leasing activity was driven by tenants committing to space for warehousing needs, with a broad range of industries showing increased demand.

Development and Acquisitions:
- STAG completed approximately 2.5 million square feet of development activity by year-end, with 50% under construction and 16% preleased.
- Acquisition volume for Q4 2024 totaled $294 million, with a cash cap rate of 6.2%.
- The increase in development and acquisition activity is attributed to stable rental demand and favorable market conditions in strong markets, such as Chicago and Charlotte.

Same-store Cash NOI and Retention Rates:
- Same-store cash NOI grew by 4.4% for Q4 and 5.8% for the year, with retention rates of 76.9% for the quarter and 76.6% for the year.
- The retention rate of 76.9% for the quarter is consistent with past years, indicating stable tenant relationships.
- The growth in same-store cash NOI is driven by a combination of strong leasing spreads and retention rates.

Guidance for 2025:
- For 2025, STAG expects same-store cash NOI growth between 3.5% to 4%, with a retention range of 70% to 75%.
- Acquisition volume guidance ranges from $350 million to $650 million, with a cash capitalization rate between 6.25% and 6.75%.
- The guidance reflects expectations of continued leasing activity, stable retention rates, and potential acquisition opportunities.