STAG Industrial, Inc.
) gained 0.29% during the trading session on Jul 2, following the
announcement of leasing and acquisition transactions for the second
quarter of 2014 on Jul 1. We believe the deals are aimed at
securing steady revenue growth opportunities and improving the
company's portfolio quality.
Simultaneously, this real estate investment trust (REIT)
completed its first privately placed debt offering through issuance
of 12-year Senior Guaranteed Notes worth $50 million. Also, through
a "At the Market" stock offering program, STAG Industrial issued
around 1.8 million shares that helped in reaping $41.8 million in
gross proceeds and used it for reducing debt, funding buyout and
for other corporate needs
Q2 Transactions Details
In second-quarter 2014, STAG Industrial inked lease deals for
over 1.3 million square feet of space. It comprised new leases for
around 210,000 square feet and renewal leases for about 1.1 million
square feet of spaces. Tenant retention rate for the expiring
leases was 35% in the second quarter.
Since the beginning of this year and as of Jul 1, STAG
Industrial penned lease deals for approximately 2.6 million square
feet of space. This consisted of 335,000 square feet of new and
expansion leases and 2.3 million square feet of renewal leases.
Tenant retention rate for STAG Industrial in the same time frame is
On the acquisition front, STAG Industrial bought nine industrial
assets (spanning around 2.1 million square feet) for about $82
million, in the second quarter. Since the beginning of this year
and as of Jul 1, the company has purchased 13 industrial properties
(spanning approximately 3.1 million square feet) for around $119
Moreover, in the second quarter, STAG Industrial has inked
contracts for acquiring nine industrial buildings worth $96
We remain encouraged with STAG Industrial's leasing and
acquisition activities and expect these to prove accretive to its
earnings, going forward. Moreover, the improving industrial market
fundamentals, higher consumer spending and rise in e-Commerce
application are generating greater demand for logistics
infrastructure and efficient distribution networks. Hence, we
expect STAG Industrial to leverage on limited supply, which is
expected to drive up profitability in the quarters to come.
STAG Industrial is scheduled to release its second-quarter 2014
results on Jul 30, after the closing bell. The Zacks Consensus
Estimate for FFO for the quarter is pegged at 36 cents per share,
representing a year-over-year growth of 8.59%.
STAG Industrial presently carries a Zacks Rank #3 (Hold).
However, investors interested in the REIT industry may consider
Chatham Lodging Trust
Parkway Properties Inc.
Terreno Realty Corp.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
: FFO, a widely used metric to gauge the performance of REITs,
is obtained after adding depreciation and amortization and other
non-cash expenses to net income.
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