Stag Industrial, Inc. · NYSE:STAG
Stag Industrial — Investor Presentation (2020)
29 slides from Stag Industrial's investor presentation, May 18, 2020
Slide 1: 2020 – Winter / Spring
2020 – WINTER / SPRING
Slide 2: Forward-Looking Statements & Definitions
FORWARD-LOOKING STATEMENTS & DEFINITIONS Forward-Looking Statements This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. STAG Industrial, Inc. (ST
Slide 3: Thoughtful Approach to Industrial Real Estate
THOUGHTFUL APPROACH TO INDUSTRIAL REAL ESTATE STAG Industrial is an owner and operator of industrial real estate Platform able to address a large opportunity in an attractive Only pure-play industrial asset class REIT active across the Relative value investment strategy driven by a robust entire dom
Slide 4: Significant Transformation Since IPO
SIGNIFICANT TRANSFORMATION SINCE IPO Portfolio strengthened and diversified Investment grade balance sheet achieved PORTFOLIO TRANSFORMATION IPO 1 Q4 2019 Square feet (millions) 14.2 91.4 Properties 93 450 Primary and secondary markets (% ABR) 70.5% 94.3% Flex / Office (% ABR) 21.1% 0.9% BALANCE SHE
Slide 5: Building Blocks of Growth
BUILDING BLOCKS OF GROWTH NORMALIZED EXPECTATIONS OVER NEXT HISTORICAL TREND 2020 GUIDANCE NOTES FIVE YEARS Average cash same store NOI Cash same store NOI growth of 1.0% - 2.0% Cash same store NOI growth of 2.0% - 3.0% Driven by increased growth of ~1.0% over past five • Includes bad debt assumptio
Slide 6: Operational Expertise Focused on Maximizing Cash Flow
OPERATIONAL EXPERTISE FOCUSED ON MAXIMIZING CASH FLOW Regional asset management supported by local brokers on all new and renewal leasing transactions Customer Solutions Group with corporate and portfolio wide context to execute on opportunities within portfolio Capital Projects Group oversees all p
Slide 7: Multi-Faceted Approach to Creating Value
MULTI-FACETED APPROACH TO CREATING VALUE CASE STUDIES: VALUE ADDED THROUGH OPERATIONS Uncertain Tenancy - Lansing, PA Uncertain Tenancy - Savannah, GA Below Market Lease - Bedford Heights, OH Less than two years of remaining lease term Acquired building in 2011 subject to a ten-year lease Original t
Slide 8: Value Creation Through Development
VALUE CREATION THROUGH DEVELOPMENT Property Location 8 Campus Drive Burlington, NJ Exit 6A of NJ Turnpike Opportunity Acquired 500,000 SF building with 25 acres of excess land in 2015 Development Plan Subdivided the excess 25 acres for the development project Construction began in April 2019 and was
Slide 9: Demonstration of Portfolio Premium
DEMONSTRATION OF PORTFOLIO PREMIUM PORTFOLIO 2016 2018 2016 PORTFOLIO 2018 PORTFOLIO DISPOSITIONS PORTFOLIO PORTFOLIO CHARACTERISTICS Number of buildings 6 7 Square feet 1.6 million 1.8 million Average building size 261,593 SF 250,494 SF WA lease term 4.2 years 6.5 years RETURN PROFILE Acquisition c
Slide 10: Industrial Real Estate Offers Attractive Opportunity
INDUSTRIAL REAL ESTATE OFFERS ATTRACTIVE OPPORTUNITY Large and highly Stable cash flow due to E-commerce and supply fragmented asset class GDP growth and high tenant retention and chain reconfiguration The 20 largest owners of U.S. industrial personal consumption drive low capital expenditure provid
Slide 11: Large Target Market
BROAD BASED OPPORTUNITY SET LARGE TARGET MARKET U.S. industrial market is more than $1 trillion in total size1 $1 Trillion Total Industrial Market1 0.5% STAG’s opportunity set spans the top 60 markets in the U.S. Relative value investment strategy across all fungible industrial markets enhances valu
Slide 12: Process Driven Approach to Address Attractive Opportunity
PROCESS DRIVEN APPROACH TO ADDRESS ATTRACTIVE OPPORTUNITY Value created via granular approach to acquisitions across a broad opportunity set – relative value investment strategy employed with portfolio premium value created upon acquisition Perceived risk of single-tenant assets frequently creates r
Slide 13: Emphasis on Diversification
EMPHASIS ON DIVERSIFICATION PORTFOLIO WIDELY DIVERSIFIED ACROSS ATTENTION TO DIVERSIFICATION GEOGRAPHY, TENANT, INDUSTRY, LEASE REDUCES RISK AND ENHANCES VALUE TERM Portfolio spans Largest market exposure is Portfolio includes 60+ markets less than 10% of ABR exposure to 45+ industries Largest tenan
Slide 14: Sophisticated and Diverse Tenant Base
SOPHISTICATED AND DIVERSE TENANT BASE In-depth tenant credit analysis and ongoing credit monitoring TENANT REVENUE EXPOSURE BY ABR 35.0% 29.4% 30.0% 25.8% Dedicated credit analysis team of four professionals (three CFA charter holders) 25.0% 20.0% Focus on single-tenant industrial real estate result
Slide 15: Balance Sheet Discipline
BALANCE SHEET DISCIPLINE CONSERVATIVE BALANCE SHEET POSITIONED TO SUPPORT GROWTH Conservative Capitalization Fixed Rate (in $ millions) Borrower - $55 $75 Secured Preferred 8.8% Debt Equity Floating (revolving credit facility only) 0.9% 1.2% $1,596 $4,627 Unsecured Common Equity at 91.2% Debt Market
Slide 16: Compelling Valuation
COMPELLING VALUATION Growing Income FFO MULTIPLE1 Internal growth with long history of success managing portfolio External growth with large opportunity set and robust investment pipeline Established built-to-suit takeout partner to developers nationwide 17.1x STAG Value Creation Attractive asset cl
Slide 17: ESG - Environmental
ESG - ENVIRONMENTAL GREEN LEASE LEADERS AWARD RECIPIENT SOLAR PANEL INSTALLATION Recognizes forward-thinking companies that utilize energy Leverage rooftop square footage to create clean energy efficient and sustainable leases Silver level awarded in 2019 Two installations completed in 2019, one und
Slide 18: ESG - Social and Governance
ESG - SOCIAL AND GOVERNANCE SOCIAL Our Charitable Action Committee is a proud supporter of Boston-based RESPONSIBILITY nonprofit organizations Support provided through donations and significant Focus on efforts benefiting children and young adults volunteering Diverse board with lead independent dir
Slide 19: Appendix
APPENDIX STAG Industrial, Inc. 19
Slide 20: Philadelphia
PHILADELPHIA MARKET #1 8.5% ABR PHILADELPHIA SUPPLY AND DEMAND PHILADELPHIA AVAILABILITY AND RENT GROWTH 30,000,000 16.0% $7.00 14.0% $6.00 25,000,000 12.0% $5.00 20,000,000 10.0% $4.00 15,000,000 8.0% $3.00 6.0% 10,000,000 4.0% $2.00 5,000,000 2.0% $1.00 - 0.0% $0.00 2012 2013 2014 2015 2016 2017 2
Slide 21: Philadelphia - Strategic Location
PHILADELPHIA MARKET #1 8.5% ABR Region encompasses Philadelphia Metro and STRATEGIC Central PA/Lehigh Valley LOCATION Central to East Coast population centers and truck routes servicing them 1 Tenant Activity in Recent Years 1. Map outline based on Costar Research market boundaries STAG Industrial,
Slide 22: Chicago
CHICAGO MARKET #2 7.6% ABR CHICAGO SUPPLY AND DEMAND CHICAGO AVAILABILITY AND RENT GROWTH 30,000,000 15.0% $7.00 25,000,000 $6.50 13.0% $6.00 20,000,000 11.0% $5.50 15,000,000 $5.00 10,000,000 9.0% $4.50 $4.00 5,000,000 7.0% $3.50 - 5.0% $3.00 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2
Slide 23: Chicago
CHICAGO MARKET #2 7.6% ABR RECENT TENANT ACTIVITY CHICAGO IS THE NATION’S PREMIER FREIGHT HUB STAG Industrial, Inc. 23
Slide 24: Greenville/Spartanburg
GREENVILLE/SPARTANBURG MARKET #3 5.5% ABR GREENVILLE SUPPLY AND DEMAND GREENVILLE AVAILABILITY AND RENT GROWTH 10,000,000 14.0% $4.00 $3.75 8,000,000 12.0% $3.50 6,000,000 10.0% $3.25 4,000,000 $3.00 8.0% $2.75 2,000,000 6.0% $2.50 - 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2
Slide 25: Greenville/Spartanburg
GREENVILLE/SPARTANBURG MARKET #3 5.5% ABR BMW has invested $10 billion in its Spartanburg plant since 1994. Products include all new X6 announced in July 2019 Inland port at Greer has significantly outperformed expectations with record volume in May 2019 of more than 204 thousand TEUs handled Strate
Slide 26: Non-GAAP Financial Measures & Other Definitions
NON-GAAP FINANCIAL MEASURES & OTHER DEFINITIONS Acquisition Capital Expenditures: We define Acquisition Capital Expenditures as Recurring and Non-Recurring Capital Expenditures identified at the time of acquisition. Acquisition Capital Expenditures also include new lease commissions and tenant impro
Slide 27: Non-GAAP Financial Measures & Other Definitions
NON-GAAP FINANCIAL MEASURES & OTHER DEFINITIONS Fixed Charge Coverage Ratio: We define the Fixed Charge Coverage Ratio as Adjusted EBITDAre divided by cash interest expense, preferred dividends paid and principal payments. Funds from Operations (FFO) and Core FFO: We define FFO in accordance with th
Slide 28: Non-GAAP Financial Measures & Other Definitions
NON-GAAP FINANCIAL MEASURES & OTHER DEFINITIONS Net operating income (NOI), Cash NOI, and Run Rate Cash NOI: We define NOI as rental income, including reimbursements, less property expenses, which excludes depreciation, amortization, loss on impairments, general and administrative expenses, interest
Slide 29: Non-GAAP Financial Measures & Other Definitions
NON-GAAP FINANCIAL MEASURES & OTHER DEFINITIONS Retention: We define Retention as the percentage determined by taking Renewal Lease square footage commencing in the period divided by square footage of leases expiring in the period for assets included in the Operating Portfolio. Same Store: We define