STAG Industrial, Inc. (
- a real estate investment trust (REIT) - recently announced its
leasing and acquisition activity in the fourth quarter of 2012.
Since its IPO in 2011, STAG Industrial has diligently acquired
individual Class B, single-tenant industrial properties
throughout the U.S. With the fourth-quarter acquisitions, the
company's year-to-date acquisition volume surged to $553 million.
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STAG INDUSTRIAL (STAG): Free Stock Analysis
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In December 2012, STAG acquired six industrial properties,
spanning 1.4 million square feet, in separate transactions for
around $55 million. Among the acquired properties, two are based
in Georgia, two in Illinois, and one each in Ohio and Missouri.
All the properties are fully occupied and have an average
remaining lease term of over five years.
During the quarter, STAG acquired a total of 40 industrial
properties, spanning 6.5 million square feet, for roughly $213
million. The acquisitions increased the company's property
base by 30% on a square-foot basis. Including this, the company
completed total acquisitions worth $427 million in 2012.
Presently, STAG's portfolio comprises 172 properties in 31 states
spanning 29.4 million square feet.
STAG also inked a couple of deals during the fourth quarter to
buy two properties for a total cost of $11 million. The
transactions are yet to be closed, subject to customary closing
During the quarter, STAG inked lease deals for properties
spanning around 856,167 square feet, which includes approximately
184,814 square feet of new or expansion deals and 671,353 square
feet of renewal deals. The tenant retention rate stood at 72% in
the fourth quarter and 84% for full year 2012.
For the fourth quarter, the company's occupancy rate decreased to
95.1% from 96.3% in the last quarter. The dip resulted from
the acquisition of 401,147 square feet of vacant space along with
the portfolio purchase made early in the fourth quarter.
We remain impressed with the STAG's acquisition spree throughout
the fourth quarter. This will likely enhance the quality of its
portfolio besides proving accretive to its earnings going
forward. Concurrently, the company focuses on portfolio
diversification through maintaining a mix of markets and tenants,
which limits its exposure to any single tenant or geographic
location. This augurs well for the company providing higher
return and protection against volatility.
STAG Industrial currently holds a Zacks #2 Rank (implying a
short-term Buy rating). One of its peers,
Franklin Street Properties Corp. (
holds a Zacks #1 Rank (Strong Buy).