stag-20230630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________________________

FORM 10-Q

____________________________________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 1-34907

____________________________________________________________________________

STAG Industrial, Inc.

(Exact name of registrant as specified in its charter)

____________________________________________________________________________


Maryland		27-3099608
(State or other jurisdiction of		(IRS Employer Identification No.)
incorporation or organization)

One Federal Street
23rd Floor
Boston,	Massachusetts	02110
(Address of principal executive offices)		(Zip code)

(617) 574-4777

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value per share	STAG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock outstanding at July 25, 2023 was 179,664,319.

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STAG Industrial, Inc.

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PART I.	Financial Information	3

Item 1.	Financial Statements (unaudited)	3

	Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	3

	Consolidated Statements of Operations for the Three and Six Months Ended June 3 0 , 2023 and 2022	4

	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 3 0 , 2023 and 2022	5

	Consolidated Statements of Equity for the Three and Six Months Ended Ju ne 3 0 , 2023 and 2022	6

	Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2023 and 2022	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40

Item 4.	Controls and Procedures	40

PART II.	Other Information	42

Item 1.	Legal Proceedings	42

Item 1A.	Risk Factors	42

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

	SIGNATURES	45

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Part I. Financial Information

Item 1. Financial Statements

STAG Industrial, Inc.

Consolidated Balance Sheets

(unaudited, in thousands, except share data)


	June 30, 2023		December 31, 2022
Assets
Rental Property:
Land	$	652,173	$	647,098
Buildings and improvements, net of accumulated depreciation of $841,488 and $763,128, respectively	4,684,280		4,706,745
Deferred leasing intangibles, net of accumulated amortization of $357,435 and $328,848, respectively	463,569		508,935
Total rental property, net	5,800,022		5,862,778
Cash and cash equivalents	13,511		25,884
Restricted cash	1,023		905
Tenant accounts receivable	112,334		115,509
Prepaid expenses and other assets	76,767		71,733
Interest rate swaps	72,016		72,223
Operating lease right-of-use assets	30,513		31,313
Assets held for sale, net	—		4,643
Total assets	$	6,106,186	$	6,184,988
Liabilities and Equity
Liabilities:
Unsecured credit facility	$	216,000	$	175,000
Unsecured term loans, net	1,021,106		1,020,440
Unsecured notes, net	1,195,790		1,295,442
Mortgage notes, net	7,727		7,898
Accounts payable, accrued expenses and other liabilities	91,994		97,371

Tenant prepaid rent and security deposits	44,354		40,847
Dividends and distributions payable	22,515		22,282
Deferred leasing intangibles, net of accumulated amortization of $27,467 and $24,593, respectively	28,412		32,427
Operating lease liabilities	34,429		35,100

Total liabilities	2,662,327		2,726,807
Commitments and contingencies (Note 11)
Equity:
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at June 30, 2023 and December 31, 2022; none issued or outstanding	—		—
Common stock, par value $0.01 per share, 300,000,000 shares authorized at June 30, 2023 and December 31, 2022, 179,660,771 and 179,248,980 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	1,797		1,792
Additional paid-in capital	4,201,551		4,188,677
Cumulative dividends in excess of earnings	(907,061)		(876,145)
Accumulated other comprehensive income	70,313		70,500
Total stockholders’ equity	3,366,600		3,384,824
Noncontrolling interest	77,259		73,357
Total equity	3,443,859		3,458,181
Total liabilities and equity	$	6,106,186	$	6,184,988

The accompanying notes are an integral part of these consolidated financial statements.

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STAG Industrial, Inc.

Consolidated Statements of Operations

(unaudited, in thousands, except per share data)


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Revenue
Rental income	$	171,439	$	161,057	$	344,707	$	319,658
Other income	255		443		540		1,051
Total revenue	171,694		161,500		345,247		320,709
Expenses
Property	32,675		28,874		68,556		60,649
General and administrative	12,060		12,234		24,736		24,547
Depreciation and amortization	68,494		69,279		137,438		136,645

Other expenses	357		532		3,336		1,029
Total expenses	113,586		110,919		234,066		222,870
Other income (expense)
Interest and other income	17		23		36		57
Interest expense	(22,860)		(17,896)		(45,472)		(35,155)


Gain on the sales of rental property, net	17,532		376		37,660		24,331
Total other income (expense)	(5,311)		(17,497)		(7,776)		(10,767)
Net income	$	52,797	$	33,084	$	103,405	$	87,072
Less: income attributable to noncontrolling interest	1,191		708		2,333		1,870
Net income attributable to STAG Industrial, Inc.	$	51,606	$	32,376	$	101,072	$	85,202


Less: amount allocated to participating securities	53		59		106		121
Net income attributable to common stockholders	$	51,553	$	32,317	$	100,966	$	85,081
Weighted average common shares outstanding — basic	179,413		179,049		179,305		178,442
Weighted average common shares outstanding — diluted	179,738		179,144		179,518		178,586
Net income per share — basic and diluted


Net income per share attributable to common stockholders — basic	$	0.29	$	0.18	$	0.56	$	0.48
Net income per share attributable to common stockholders — diluted	$	0.29	$	0.18	$	0.56	$	0.48

The accompanying notes are an integral part of these consolidated financial statements.

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STAG Industrial, Inc.

Consolidated Statements of Comprehensive Income

(unaudited, in thousands)


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Net income	$	52,797	$	33,084	$	103,405	$	87,072
Other comprehensive income (loss):
Income (loss) on interest rate swaps	15,821		12,509		(191)		49,746
Other comprehensive income (loss)	15,821		12,509		(191)		49,746
Comprehensive income	68,618		45,593		103,214		136,818
Income attributable to noncontrolling interest after preferred stock dividends	(1,191)		(708)		(2,333)		(1,870)
Other comprehensive (income) loss attributable to noncontrolling interest	(357)		(266)		4		(1,068)
Comprehensive income attributable to STAG Industrial, Inc.	$	67,070	$	44,619	$	100,885	$	133,880

The accompanying notes are an integral part of these consolidated financial statements.

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STAG Industrial, Inc.

Consolidated Statements of Equity

(unaudited, in thousands, except share data)


	Preferred Stock		Common Stock				Additional Paid-in Capital		Cumulative Dividends in Excess of Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Noncontrolling Interest - Unit Holders in Operating Partnership		Total Equity
			Shares		Amount
Three months ended June 30, 2023
Balance, March 31, 2023	$	—	179,372,871		$	1,794	$	4,188,960	$	(892,676)	$	54,849	$	3,352,927	$	77,893	$	3,430,820
Proceeds from sales of common stock, net	—		249,016		3		8,644		—		—		8,647		—		8,647

Dividends and distributions, net ($0.37 per share/unit)	—		—		—		—		(65,991)		—		(65,991)		(1,564)		(67,555)
Non-cash compensation activity, net	—		3,884		—		1,896		—		—		1,896		1,433		3,329
Redemption of common units to common stock	—		35,000		—		654		—		—		654		(654)		—
Rebalancing of noncontrolling interest	—		—		—		1,397		—		—		1,397		(1,397)		—
Other comprehensive income	—		—		—		—		—		15,464		15,464		357		15,821
Net income	—		—		—		—		51,606		—		51,606		1,191		52,797
Balance, June 30, 2023	$	—	179,660,771		$	1,797	$	4,201,551	$	(907,061)	$	70,313	$	3,366,600	$	77,259	$	3,443,859
Three months ended June 30, 2022
Balance, March 31, 2022	$	—	179,211,305		$	1,792	$	4,179,361	$	(805,400)	$	24,652	$	3,400,405	$	74,474	$	3,474,879
Proceeds from sales of common stock, net	—		—		—		(93)		—		—		(93)		—		(93)

Dividends and distributions, net ($0.37 per share/unit)	—		—		—		—		(65,413)		—		(65,413)		(1,910)		(67,323)
Non-cash compensation activity, net	—		433		—		2,071		—		—		2,071		1,368		3,439

Rebalancing of noncontrolling interest	—		—		—		826		—		—		826		(826)		—
Other comprehensive income	—		—		—		—		—		12,243		12,243		266		12,509
Net income	—		—		—		—		32,376		—		32,376		708		33,084
Balance, June 30, 2022	$	—	179,211,738		$	1,792	$	4,182,165	$	(838,437)	$	36,895	$	3,382,415	$	74,080	$	3,456,495

Six months ended June 30, 2023
Balance, December 31, 2022	$	—	$	179,248,980	$	1,792	$	4,188,677	$	(876,145)	$	70,500	3,384,824		$	73,357	3,458,181
Proceeds from sales of common stock, net	—		249,016		3		8,492		—		—		8,495		—		8,495

Dividends and distributions, net ($0.74 per share/unit)	—		—		—		—		(131,905)		—		(131,905)		252		(131,653)
Non-cash compensation activity, net	—		83,941		1		(1,935)		(83)		—		(2,017)		7,639		5,622
Redemption of common units to common stock	—		78,834		1		1,482		—		—		1,483		(1,483)		—

Rebalancing of noncontrolling interest	—		—		—		4,835		—		—		4,835		(4,835)		—
Other comprehensive loss	—		—		—		—		—		(187)		(187)		(4)		(191)
Net income	—		—		—		—		101,072		—		101,072		2,333		103,405
Balance, June 30, 2023	$	—	179,660,771		$	1,797	$	4,201,551	$	(907,061)	$	70,313	$	3,366,600	$	77,259	$	3,443,859
Six months ended June 30, 2022
Balance, December 31, 2021	$	—	177,769,342		$	1,777	$	4,130,038	$	(792,332)	$	(11,783)	$	3,327,700	$	65,887	$	3,393,587

Proceeds from sales of common stock, net	—		1,328,335		13		54,870		—		—		54,883		—		54,883

Dividends and distributions, net ($0.73 per share/unit)	—		—		—		—		(130,527)		—		(130,527)		(3,384)		(133,911)
Non-cash compensation activity, net	—		49,061		1		(1,208)		(780)		—		(1,987)		7,105		5,118
Redemption of common units to common stock	—		65,000		1		1,216		—		—		1,217		(1,217)		—


Rebalancing of noncontrolling interest	—		—		—		(2,751)		—		—		(2,751)		2,751		—
Other comprehensive income	—		—		—		—		—		48,678		48,678		1,068		49,746
Net income	—		—		—		—		85,202		—		85,202		1,870		87,072
Balance, June 30, 2022	$	—	179,211,738		$	1,792	$	4,182,165	$	(838,437)	$	36,895	$	3,382,415	$	74,080	$	3,456,495

The accompanying notes are an integral part of these consolidated financial statements.

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STAG Industrial, Inc.

Consolidated Statements of Cash Flows

(unaudited, in thousands)


	Six months ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	103,405	$	87,072
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	137,438		136,645


Non-cash portion of interest expense	1,948		1,744
Amortization of above and below market leases, net	(192)		(113)
Straight-line rent adjustments, net	(9,466)		(8,089)


Gain on the sales of rental property, net	(37,660)		(24,331)
Non-cash compensation expense	6,404		6,686

Change in assets and liabilities:
Tenant accounts receivable	10,719		1,307

Prepaid expenses and other assets	(13,081)		(10,915)
Accounts payable, accrued expenses and other liabilities	(6,288)		771
Tenant prepaid rent and security deposits	2,996		411
Total adjustments	92,818		104,116
Net cash provided by operating activities	196,223		191,188
Cash flows from investing activities:
Acquisitions of land and buildings and improvements	(37,425)		(294,387)
Additions of land and buildings and improvements	(55,382)		(36,639)
Acquisitions of other assets	—		(2,134)
Acquisitions of tenant prepaid rent	511		—
Acquisitions of operating lease right-of-use assets	—		(3,541)
Proceeds from sales of rental property, net	69,320		38,409

Acquisition deposits, net	1,120		593
Acquisitions of deferred leasing intangibles	(3,750)		(40,751)
Acquisitions of operating lease liabilities	—		3,541
Net cash used in investing activities	(25,606)		(334,909)
Cash flows from financing activities:

Proceeds from unsecured credit facility	337,000		871,000
Repayment of unsecured credit facility	(296,000)		(1,051,000)


Proceeds from unsecured notes	—		400,000
Repayment of unsecured notes	(100,000)		—

Repayment of mortgage notes	(172)		(1,173)
Payment of loan fees and costs	—		(2,119)

Proceeds from sales of common stock, net	8,532		54,797

Dividends and distributions	(131,420)		(133,537)
Repurchase and retirement of share-based compensation	(812)		(1,596)
Net cash provided by (used in) financing activities	(182,872)		136,372
Decrease in cash and cash equivalents and restricted cash	(12,255)		(7,349)
Cash and cash equivalents and restricted cash—beginning of period	26,789		23,196
Cash and cash equivalents and restricted cash—end of period	$	14,534	$	15,847
Supplemental disclosure:
Cash paid for interest, net of capitalized interest	$	44,842	$	33,105
Supplemental schedule of non-cash investing and financing activities




Additions of land and buildings and improvements	$	—	$	(1,713)
Transfer of other assets to building and other capital improvements	$	—	$	1,713




Change in additions of land, building, and improvements included in accounts payable, accrued expenses and other liabilities	$	(3,018)	$	(7,064)
Additions to building and other capital improvements from non-cash compensation	$	(26)	$	(40)


Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses and other liabilities	$	(37)	$	27


Dividends and distributions accrued	$	22,515	$	22,282

The accompanying notes are an integral part of these consolidated financial statements.

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STAG Industrial, Inc.

Notes to Consolidated Financial Statements

(unaudited)

1. Organization and Description of Business

STAG Industrial, Inc. (the “Company”) is an industrial real estate operating company focused on the acquisition and operation of industrial properties throughout the United States. The Company was formed as a Maryland corporation and has elected to be treated and intends to continue to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. The Company is structured as an umbrella partnership REIT, commonly called an UPREIT, and owns all of its properties and conducts substantially all of its business through its operating partnership, STAG Industrial Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”). As of June 30, 2023 and December 31, 2022, the Company owned a 97.8% and 97.9%, respectively, of the common units of the limited partnership interests in the Operating Partnership. The Company, through its wholly owned subsidiary, is the sole general partner of the Operating Partnership. As used herein, the “Company” refers to STAG Industrial, Inc. and its consolidated subsidiaries, including the Operating Partnership, except where context otherwise requires.

As of June 30, 2023, the Company owned 558 industrial buildings in 41 states with approximately 111.1 million rentable square feet.

2. Summary of Significant Accounting Policies

Interim Financial Information

The accompanying interim financial statements have been presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements include all adjustments, consisting of normal recurring items, necessary for their fair statement in conformity with GAAP. Interim results are not necessarily indicative of results for a full year. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Basis of Presentation

The Company’s consolidated financial statements include the accounts of the Company, the Operating Partnership, and their consolidated subsidiaries. Interests in the Operating Partnership not owned by the Company are referred to as “Noncontrolling Common Units.” These Noncontrolling Common Units are held by other limited partners in the form of common units (“Other Common Units”) and long term incentive plan units (“LTIP units”) issued pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”). All significant intercompany balances and transactions have been eliminated in the consolidation of entities. The financial statements of the Company are presented on a consolidated basis for all periods presented.

Restricted Cash

The following table presents a reconciliation of cash and cash equivalents and restricted cash reported on the accompanying Consolidated Balance Sheets to amounts reported on the accompanying Consolidated Statements of Cash Flows.


Reconciliation of cash and cash equivalents and restricted cash (in thousands)	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	13,511	$	25,884
Restricted cash	1,023		905
Total cash and cash equivalents and restricted cash	$	14,534	$	26,789

Uncertain Tax Positions

As of June 30, 2023 and December 31, 2022, there were no liabilities for uncertain tax positions.

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Concentrations of Credit Risk

Management believes the current credit risk of the Company’s portfolio is reasonably well diversified and does not contain any unusual concentration of credit risk.

3. Rental Property

The following table summarizes the components of rental property, net as of June 30, 2023 and December 31, 2022.


Rental Property (in thousands)	June 30, 2023		December 31, 2022
Land	$	652,173	$	647,098
Buildings, net of accumulated depreciation of $566,695 and $513,053, respectively	4,206,049		4,232,964
Tenant improvements, net of accumulated depreciation of $34,899 and $31,578, respectively	40,944		44,526
Building and land improvements, net of accumulated depreciation of $239,894 and $218,497, respectively	347,663		339,274
Construction in progress	89,624		89,981
Deferred leasing intangibles, net of accumulated amortization of $357,435 and $328,848, respectively	463,569		508,935
Total rental property, net	$	5,800,022	$	5,862,778

Acquisitions

The following table summarizes the Company’s acquisitions during the three and six months ended June 30, 2023. The Company accounted for all of its acquisitions as asset acquisitions.


Market(1)	Date Acquired	Square Feet	Number of Buildings	Purchase Price (in thousands)
Central New Jersey, NJ	April 24, 2023	101,381	1	$	26,660
Greensboro, NC	May 5, 2023	133,622	1	14,004







Three and six months ended June 30, 2023		235,003	2	$	40,664

(1) As defined by CBRE-EA industrial market geographies. If the building is located outside of a CBRE-EA defined market, the city and state is reflected.

The following table summarizes the allocation of the total purchase price paid (on the closing dates) for the assets and liabilities acquired by the Company during the six months ended June 30, 2023 in connection with the acquisitions identified in the table above.


	Six months ended June 30, 2023
Acquired Assets and Liabilities	Purchase Price (in thousands)		Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land	$	7,933	N/A
Buildings	27,279		N/A
Tenant improvements	116		N/A
Building and land improvements	2,097		N/A



Deferred leasing intangibles - In-place leases	3,509		1.7

Deferred leasing intangibles - Above market leases	241		1.9



Tenant prepaid rent	(511)		N/A


Total purchase price	$	40,664

Dispositions

The following table summarizes the Company’s dispositions during the six months ended June 30, 2023. All of the dispositions were sold to third parties and were accounted for under the full accrual method.


Sales of rental property, net (dollars in thousands)	Six months ended June 30, 2023
Number of buildings	7

Building square feet (in millions)	1.2



Proceeds from sales of rental property, net	$	69,320
Net book value	$	31,660
Gain on the sales of rental property, net	$	37,660

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The following table summarizes the results of operations for the three and six months ended June 30, 2023 and 2022 for the buildings sold during the six months ended June 30, 2023, which are included in the Company’s Consolidated Statements of Operations prior to the date of sale.


	Three months ended June 30,				Six months ended June 30,
Sales of rental property, net (dollars in thousands)	2023		2022		2023		2022
Sold buildings contribution to net income	$	256	$	756	$	501	$	1,530

(1) Exclusive of gain on the sales of rental property, net.

Deferred Leasing Intangibles

The following table summarizes the deferred leasing intangibles, net on the accompanying Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022.


	June 30, 2023						December 31, 2022
Deferred Leasing Intangibles (in thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Above market leases	$	83,281	$	(35,657)	$	47,624	$	86,172	$	(34,954)	$	51,218
Other intangible lease assets	737,723		(321,778)		415,945		751,611		(293,894)		457,717
Total deferred leasing intangible assets	$	821,004	$	(357,435)	$	463,569	$	837,783	$	(328,848)	$	508,935

Below market leases	$	55,879	$	(27,467)	$	28,412	$	57,020	$	(24,593)	$	32,427
Total deferred leasing intangible liabilities	$	55,879	$	(27,467)	$	28,412	$	57,020	$	(24,593)	$	32,427

The following table summarizes the net increase to rental income and amortization expense for the amortization of deferred leasing intangibles during the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
Deferred Leasing Intangibles Amortization (in thousands)	2023		2022		2023		2022
Net increase to rental income related to above and below market lease amortization	$	57	$	22	$	181	$	101
Amortization expense related to other intangible lease assets	$	21,858	$	24,705	$	44,303	$	48,782

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4. Debt

The following table summarizes the Company’s outstanding indebtedness, including borrowings under the Company’s unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes as of June 30, 2023 and December 31, 2022.


Indebtedness (dollars in thousands)	June 30, 2023		December 31, 2022		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)	$	216,000	$	175,000	Term SOFR + 0.855%		October 23, 2026	i
Total unsecured credit facility	216,000		175,000

Unsecured term loans:
Unsecured Term Loan F	200,000		200,000		2.94	%	January 12, 2025	i
Unsecured Term Loan G	300,000		300,000		1.78	%	February 5, 2026	i
Unsecured Term Loan A	150,000		150,000		2.14	%	March 15, 2027	i
Unsecured Term Loan H	187,500		187,500		3.73	%	January 25, 2028	i
Unsecured Term Loan I	187,500		187,500		3.49	%	January 25, 2028	i
Total unsecured term loans	1,025,000		1,025,000
Total unamortized deferred financing fees and debt issuance costs	(3,894)		(4,560)
Total carrying value unsecured term loans, net	1,021,106		1,020,440

Unsecured notes:
Series F Unsecured Notes	—		100,000		3.98	%	January 5, 2023	ii
Series A Unsecured Notes	50,000		50,000		4.98	%	October 1, 2024	ii
Series D Unsecured Notes	100,000		100,000		4.32	%	February 20, 2025	ii
Series G Unsecured Notes	75,000		75,000		4.10	%	June 13, 2025	ii
Series B Unsecured Notes	50,000		50,000		4.98	%	July 1, 2026	ii
Series C Unsecured Notes	80,000		80,000		4.42	%	December 30, 2026	ii
Series E Unsecured Notes	20,000		20,000		4.42	%	February 20, 2027	ii
Series H Unsecured Notes	100,000		100,000		4.27	%	June 13, 2028	ii
Series I Unsecured Notes	275,000		275,000		2.80	%	September 29, 2031	ii
Series K Unsecured Notes	400,000		400,000		4.12	%	June 28, 2032	ii
Series J Unsecured Notes	50,000		50,000		2.95	%	September 28, 2033	ii
Total unsecured notes	1,200,000		1,300,000
Total unamortized deferred financing fees and debt issuance costs	(4,210)		(4,558)
Total carrying value unsecured notes, net	1,195,790		1,295,442

Mortgage notes (secured debt):
Thrivent Financial for Lutherans	3,227		3,296		4.78	%	December 15, 2023	iii
United of Omaha Life Insurance Company	4,641		4,744		3.71	%	October 1, 2039	ii
Total mortgage notes	7,868		8,040
Net unamortized fair market value discount	(139)		(137)
Total unamortized deferred financing fees and debt issuance costs	(2)		(5)
Total carrying value mortgage notes, net	7,727		7,898
Total / weighted average interest rate(5)	$	2,440,623	$	2,498,780	3.59	%

(1)Interest rate as of June 30, 2023. At June 30, 2023, the one-month Term Secured Overnight Financing Rate (“Term SOFR”) was 5.14078%. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts. The spread over the applicable rate for the Company’s unsecured credit facility and unsecured term loans is based on the Company’s debt rating and leverage ratio, as defined in the respective loan agreements.

(2)The unsecured credit facility has a stated rate of one-month Term SOFR plus a 0.10% adjustment and a spread of 0.775%, less a sustainability-related interest rate adjustment of 0.02%. The unsecured term loans have a stated interest rate of one-month Term SOFR plus a 0.10% adjustment and a spread of 0.85%, less a sustainability-related interest rate adjustment of 0.02%. As of June 30, 2023, one-month Term SOFR for the Unsecured Term Loans A, F, G, H, and I was swapped to a fixed rate of 1.31%, 2.11%, 0.95%, 2.90%, and 2.66%, respectively (which includes the 0.10% adjustment). One-month Term SOFR for the Unsecured Term Loan H will be swapped to a fixed rate of 2.50% effective January 12, 2024.

(3)Prepayment terms consist of (i) pre-payable with no penalty; (ii) pre-payable with penalty; (iii) pre-payable without penalty three months prior to the maturity date.

(4)The capacity of the unsecured credit facility is $1.0 billion. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately $4.2 million and $5.2 million are included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022, respectively. The initial maturity date is October 24, 2025, or such later date which may be extended pursuant to two six-month extension options exercisable by the Company in its discretion upon advance written notice. Exercise of each six-month option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving

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effect to the extension; (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions. The Company is required to pay a facility fee on the aggregate commitment amount (currently $1.0 billion) at a rate per annum of 0.1% to 0.3%, depending on our debt rating, as defined in the credit agreement. The facility fee is due and payable quarterly.

(5)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $1,025.0 million of debt and is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts.

The aggregate undrawn nominal commitment on the unsecured credit facility as of June 30, 2023 was approximately $780.7 million, including issued letters of credit. The Company’s actual borrowing capacity at any given point in time may be less or restricted to a maximum amount based on the Company’s debt covenant compliance. Total accrued interest for the Company’s indebtedness was approximately $12.3 million and $13.1 million as of June 30, 2023 and December 31, 2022, respectively, and is included in accounts payable, accrued expenses and other liabilities on the accompanying Consolidated Balance Sheets.

The following table summarizes the costs included in interest expense related to the Company’s debt arrangements on the accompanying Consolidated Statement of Operations for the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
Costs Included in Interest Expense (in thousands)	2023		2022		2023		2022
Amortization of deferred financing fees and debt issuance costs and fair market value premiums/discounts	$	972	$	880	$	1,948	$	1,744
Facility, unused, and other fees	$	437	$	345	$	872	$	686

Debt Activity

On January 5, 2023, the Company redeemed in full at maturity the $100.0 million in aggregate principal amount of the Series F Unsecured Notes with a fixed interest rate of 3.98%.

On January 19, 2023, the sustainability-related interest rate adjustment for the Unsecured Term Loan H and Unsecured Term Loan I went into effect in connection with the Company's 2022 public disclosure assessment score of “A” from the Global Real Estate Sustainability Benchmark (GRESB). The interest rate adjustment, a 0.02% interest rate reduction for each instrument, will end on June 29, 2024, in accordance with the respective loan agreements.

Financial Covenant Considerations

The Company was in compliance with all such applicable restrictions and financial and other covenants as of June 30, 2023 and December 31, 2022 related to its unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes. The real estate net book value of the properties that are collateral for the Company’s debt arrangements was approximately $14.9 million and $14.8 million at June 30, 2023 and December 31, 2022, respectively, and is limited to senior, property-level secured debt financing arrangements.

Fair Value of Debt

The following table summarizes the aggregate principal amount outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of June 30, 2023 and December 31, 2022.


	June 30, 2023				December 31, 2022
Indebtedness (in thousands)	Principal Outstanding		Fair Value		Principal Outstanding		Fair Value
Unsecured credit facility	$	216,000	$	216,000	$	175,000	$	175,000
Unsecured term loans	1,025,000		1,025,000		1,025,000		1,025,000
Unsecured notes	1,200,000		1,048,519		1,300,000		1,150,283
Mortgage notes	7,868		6,707		8,040		6,855
Total principal amount	2,448,868		$	2,296,226	2,508,040		$	2,357,138
Net unamortized fair market value discount	(139)				(137)
Total unamortized deferred financing fees and debt issuance costs	(8,106)				(9,123)
Total carrying value	$	2,440,623			$	2,498,780

The applicable fair value guidance establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as

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inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value of the Company’s debt is based on Level 3 inputs.

5. Derivative Financial Instruments

Risk Management Objective of Using Derivatives

The Company’s use of derivative instruments is limited to the utilization of interest rate swaps to manage interest rate risk exposure on existing and future liabilities and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and related costs associated with the Company’s operating and financial structure.

As of June 30, 2023, the Company had 21 interest rate swaps outstanding, all of which are used to hedge the variable cash flows associated with unsecured loans. All of the Company’s interest rate swaps convert the related loans’ Term SOFR components to effectively fixed interest rates, and the Company has concluded that each of the hedging relationships are highly effective. The following table summarizes the fair value of the interest rate swaps outstanding as of June 30, 2023 and December 31, 2022.


Balance Sheet Line Item (in thousands)	Notional Amount June 30, 2023		Fair Value June 30, 2023		Notional Amount December 31, 2022		Fair Value December 31, 2022
Interest rate swaps-Asset	$	1,200,000	$	72,016	$	1,650,000	$	72,223
Interest rate swaps-Liability	$	—	$	—	$	—	$	—

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) and subsequently reclassified to interest expense in the same periods during which the hedged transaction affects earnings.

Amounts reported in accumulated other comprehensive income related to derivatives designated as qualifying cash flow hedges will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. The Company estimates that approximately $35.0 million will be reclassified from accumulated other comprehensive income as a decrease to interest expense over the next 12 months.

The following table summarizes the effect of cash flow hedge accounting and the location of amounts related to Company’s derivatives in the consolidated financial statements for the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
Effect of Cash Flow Hedge Accounting (in thousands)	2023		2022		2023		2022
Income recognized in accumulated other comprehensive income on interest rate swaps	$	24,168	$	10,628	$	15,626	$	44,134
Income (loss) reclassified from accumulated other comprehensive income into income as interest expense	$	8,347	$	(1,881)	$	15,817	$	(5,612)
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	22,860	$	17,896	$	45,472	$	35,155

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.

As of June 30, 2023, the Company had not breached the provisions of these agreements and had not posted any collateral related to these agreements.

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Fair Value of Interest Rate Swaps

The Company’s valuation of the interest rate swaps is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs including interest rate curves.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company or its counterparties. However, as of June 30, 2023 and December 31, 2022, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The following table summarizes the Company’s financial instruments that were recorded at fair value on a recurring basis as of June 30, 2023 and December 31, 2022. There were no financial instruments in a liability position at June 30, 2023 and December 31, 2022.


			Fair Value Measurements as of June 30, 2023 Using
Balance Sheet Line Item (in thousands)	Fair Value June 30, 2023		Level 1		Level 2		Level 3
Interest rate swaps-Asset	$	72,016	$	—	$	72,016	$	—


			Fair Value Measurements as of December 31, 2022 Using
Balance Sheet Line Item (in thousands)	Fair Value December 31, 2022		Level 1		Level 2		Level 3
Interest rate swaps-Asset	$	72,223	$	—	$	72,223	$	—

6. Equity

Preferred Stock

The Company is authorized to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share. As of June 30, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

Common Stock

The Company is authorized to issue up to 300,000,000 shares of common stock, par value $0.01 per share.

The following table summarizes the terms of the Company’s at-the market (“ATM”) common stock offering program as of June 30, 2023.


ATM Common Stock Offering Program	Date	Maximum Aggregate Offering Price (in thousands)		Aggregate Available as of June 30, 2023 (in thousands)
2022 $750 million ATM	February 17, 2022	$	750,000	$	679,463

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The following table summarizes the shares sold through the sales agents under the ATM common stock offering program during the six months ended June 30, 2023 and year ended December 31, 2022.


	Six months ended June 30, 2023
ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share		Net Proceeds (in thousands)

2022 $750 million ATM(1)	249,016	$	35.55	$	8,765
Total/weighted average	249,016	$	35.55	$	8,765

(1)Excludes shares sold on a forward basis under the ATM common stock offering program during the six months ended June 30, 2023, which are discussed below.


	Year ended December 31, 2022
ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share		Net Proceeds (in thousands)
2019 $600 million ATM(1)	128,335	$	45.03	$	5,721
Total/weighted average	128,335	$	45.03	$	5,721

(1)This program ended before March 31, 2022.

In addition, on May 5, 2023, the Company sold 725,698 shares on a forward basis under the ATM common stock offering program at a sale price of $35.0458 per share (an aggregate of approximately $25.4 million gross sale price), or $34.6953 per share net of commissions. The Company did not receive any proceeds from the sale of such shares on a forward basis. The Company expects to fully physically settle the applicable forward sale agreement on one or more dates prior to the scheduled maturity date of May 6, 2024; provided, however, the Company may elect to cash settle or net share settle such forward sale agreement at any time through the scheduled maturity date.

On June 16, 2023, the Company also sold 992,295 shares on a forward basis under the ATM common stock offering program at a weighted average sale price of $36.5319 per share (an aggregate of approximately $36.3 million gross sale price), or $36.1820 per share net of commissions. The Company did not initially any proceeds from the sale of such shares on a forward basis. The Company expects to fully physically settle the applicable forward sale agreement on one or more dates prior to the scheduled maturity date of June 21, 2024; provided, however, the Company may elect to cash settle or net share settle the forward sale agreement at any time through the scheduled maturity date of June 21, 2024.

Restricted Stock-Based Compensation

The Company granted restricted shares of common stock under the 2011 Plan on January 11, 2023 to certain employees of the Company, which will vest over four years in equal installments on January 1 of each year beginning on January 1, 2024, subject to the recipient’s continued employment. The following table summarizes activity related to the Company’s unvested restricted shares of common stock during the six months ended June 30, 2023 and the year ended December 31, 2022.


Unvested Restricted Shares of Common Stock	Shares	Weighted Average Grant Date Fair Value per Share
Balance at December 31, 2021	185,715	$	28.86
Granted	58,580	$	44.19
Vested(1)	(73,556)	$	28.03
Forfeited	(14,036)	$	36.16
Balance at December 31, 2022	156,703	$	34.32
Granted	55,954	$	34.73
Vested(1)	(68,625)	$	31.71
Forfeited	—	$	—
Balance at June 30, 2023	144,032	$	35.73

(1)The Company repurchased and retired 24,210 and 25,836 restricted shares of common stock that vested during the six months ended June 30, 2023 and the year ended December 31, 2022, respectively.

The unrecognized compensation expense associated with the Company’s restricted shares of common stock at June 30, 2023 was approximately $3.9 million and is expected to be recognized over a weighted average period of approximately 2.6 years.

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The following table summarizes the fair value at vesting for the restricted shares of common stock that vested during the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
Vested Restricted Shares of Common Stock	2023		2022		2023		2022
Vested restricted shares of common stock	—		—		68,625		73,556
Fair value of vested restricted shares of common stock (in thousands)	$	—	$	—	$	2,217	$	3,528

7. Noncontrolling Interest

The following table summarizes the activity for noncontrolling interest in the Company during the six months ended June 30, 2023 and the year ended December 31, 2022.


Noncontrolling Interest	LTIP Units	Other Common Units	Total Noncontrolling Common Units	Noncontrolling Interest
Balance at December 31, 2021	1,949,124	1,570,640	3,519,764	1.9	%
Granted/Issued	470,237	—	470,237	N/A
Forfeited	(6,791)	—	(6,791)	N/A
Conversions from LTIP units to Other Common Units	(98,494)	98,494	—	N/A
Redemptions from Other Common Units to common stock	—	(98,494)	(98,494)	N/A

Balance at December 31, 2022	2,314,076	1,570,640	3,884,716	2.1	%
Granted/Issued	326,215	—	326,215	N/A
Forfeited	(9,119)	—	(9,119)	N/A
Conversions from LTIP units to Other Common Units	(78,834)	78,834	—	N/A
Redemptions from Other Common Units to common stock	—	(78,834)	(78,834)	N/A

Balance at June 30, 2023	2,552,338	1,570,640	4,122,978	2.2	%

LTIP Units

The Company granted LTIP units under the 2011 Plan on January 11, 2023 to non-employee, independent directors, which will vest on January 1, 2024, subject to the recipient’s continued service. The Company granted LTIP units under the 2011 Plan on January 11, 2023 to certain executive officers and senior employees of the Company, which will vest in equal installments on a quarterly basis over four years, with the first vesting date having been March 31, 2023, subject to the recipient’s continued employment. Refer to Note 8 for a discussion of the LTIP units granted on January 11, 2023 pursuant to the 2020 performance units.

On March 13, 2023, the Company executed an employment agreement with Steven T. Kimball to serve as the Company's Executive Vice President of Real Estate Operations, effective March 31, 2023. On March 31, 2023, pursuant to the 2011 Plan, the Company awarded Mr. Kimball an initial LTIP unit grant equal in value to approximately $0.6 million, which equated to 19,345 LTIP units, which will vest in equal installments on a quarterly basis over four years, with the first vesting date having been March 31, 2023, subject to Mr. Kimball’s continued employment.

The fair value of the LTIP units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the LTIP units are based on Level 3 inputs and non-recurring fair value measurements. The following table summarizes the assumptions used in valuing such LTIP units granted during the six months ended June 30, 2023 (excluding the LTIP units granted pursuant to the 2020 performance units discussed in Note 8).


LTIP Units	Assumptions
Grant date	March 31, 2023			January 11, 2023
Expected term (years)	10			10
Expected stock price volatility	37.0		%	37.0		%
Expected dividend yield	4.0		%	4.0		%
Risk-free interest rate	3.81		%	3.90		%
Fair value of LTIP units at issuance (in thousands)	$	628		$	4,635
LTIP units at issuance	19,345			139,026
Fair value unit price per LTIP unit at issuance	$	32.47		$	33.34

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The expected stock price volatility is based on a mix of the historical and implied volatilities of the Company and certain peer group companies. The expected dividend yield is based on the Company’s average historical dividend yield and the dividend yield as of the valuation date for each award. The risk-free interest rate is based on U.S. Treasury note yields matching a three-year time period.

The following table summarizes activity related to the Company’s unvested LTIP units during the six months ended June 30, 2023 and the year ended December 31, 2022.


Unvested LTIP Units	LTIP Units	Weighted Average Grant Date Fair Value per Unit
Balance at December 31, 2021	190,108	$	27.84
Granted	470,237	$	42.07
Vested	(513,438)	$	38.67
Forfeited	(6,791)	$	34.02
Balance at December 31, 2022	140,116	$	35.60
Granted	326,215	$	33.29
Vested	(235,702)	$	34.01
Forfeited	(9,119)	$	34.11
Balance at June 30, 2023	221,510	$	33.96

The unrecognized compensation expense associated with the Company’s LTIP units at June 30, 2023 was approximately $4.8 million and is expected to be recognized over a weighted average period of approximately 2.6 years.

The following table summarizes the fair value at vesting for the LTIP units that vested during the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
Vested LTIP units	2023		2022		2023		2022
Vested LTIP units	23,472		30,327		235,702		444,675
Fair value of vested LTIP units (in thousands)	$	839	$	951	$	7,862	$	19,544

8. Equity Incentive Plan

On January 11, 2023, the compensation committee of the board of directors approved and the Company granted performance units under the 2011 Plan to the executive officers and certain key employees of the Company. The terms of the performance units granted on January 11, 2023 are substantially the same as the terms of the performance units granted in January 2022, 2021, and 2020, except that the measuring period commenced on January 1, 2023 and ends on December 31, 2025, and the size-based peer group was eliminated. The target amount of the performance units granted on January 11, 2023 is nominally allocated as follows: (i) 50% to the Company’s total stockholder return (“TSR”) compared to the TSR of an industry peer group; and (ii) 50% to the Company’s TSR compared to the TSR of the companies in the MSCI US REIT Index.

On March 31, 2023, in connection with the execution of the employment agreement discussed in Note 7, the Company granted Mr. Kimball performance units under the 2011 Plan with a target grant date fair value equal to approximately $0.6 million. The terms and measuring period of the performance units granted to Mr. Kimball are the same as the performance units granted on January 11, 2023.

On April 25, 2023, the Company’s stockholders approved an amendment (the “Amendment”) to the 2011 Plan which increased the total number of shares of common stock of the Company authorized and reserved for issuance under the 2011 Plan by 3,500,000 shares to an aggregate of 10,142,461 shares of common stock, subject to certain adjustments as described in the 2011 Plan. The Amendment also extended the expiration date of the 2011 Plan from April 30, 2028 to April 24, 2033.

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The fair value of the performance units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units is based on Level 3 inputs and non-recurring fair value measurements. The performance unit equity compensation expense is recognized ratably from the grant date into earnings over the vesting period. The following table summarizes the assumptions used in valuing the performance units granted during the six months ended June 30, 2023.


Performance Units	Assumptions
Grant date	March 31, 2023			January 11, 2023
Expected stock price volatility	25.4		%	37.4		%
Expected dividend yield	4.0		%	4.0		%
Risk-free interest rate	3.8725		%	3.9060		%
Fair value of performance units grant (in thousands)	$	609		$	4,517

On December 31, 2022, the measuring period for the 2020 performance units concluded, and it was determined that the Company’s TSR exceeded the threshold percentage and return hurdle. The following table summarizes the issuances of LTIP units and shares of common stock approved by the compensation committee of the board of directors and issued upon the settlement of the 2020 performance units at the conclusion of the applicable measuring period during the six months ended June 30, 2023.


Settlement of Performance Units in LTIP Units or Shares of Common Stock						2020 Performance Units
Measuring period conclusion date						December 31, 2022
Issuance date						January 11, 2023
Vested LTIP units						167,844
Vested shares of common stock						40,660
Shares of common stock repurchased and retired						875

The unrecognized compensation expense associated with the Company’s performance units at June 30, 2023 was approximately $7.5 million and is expected to be recognized over a weighted average period of approximately 2.0 years.

Non-cash Compensation Expense

The following table summarizes the amount recorded in general and administrative expenses in the accompanying Consolidated Statements of Operations for the amortization of restricted shares of common stock, LTIP units, performance units, and the Company’s director compensation for the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
Non-Cash Compensation Expense (in thousands)	2023		2022		2023		2022
Restricted shares of common stock	$	516	$	565	$	1,025	$	1,113
LTIP units	1,414		1,367		2,742		2,651
Performance units	1,235		1,364		2,354		2,660
Director compensation(1)	128		125		264		246
Total non-cash compensation expense	$	3,293	$	3,421	$	6,385	$	6,670

(1)All of the Company’s independent directors elected to receive shares of common stock in lieu of cash for their service during the three and six months ended June 30, 2023 and 2022. The number of shares of common stock granted was calculated based on the trailing 10 day average common stock price on the third business day preceding the grant date.

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9. Leases

Lessor Leases

The Company has operating leases in which it is the lessor for its rental property. Certain leases contain variable lease payments based upon changes in the Consumer Price Index (“CPI”). Billings for real estate taxes and other expenses are also considered to be variable lease payments. Certain leases contain options to renew or terminate the lease, and options for the lessee to purchase the rental property, all of which are predominately at the sole discretion of the lessee.

The following table summarizes the components of rental income included in the accompanying Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
Rental Income (in thousands)	2023		2022		2023		2022
Fixed lease payments	$	133,164	$	124,593	$	264,250	$	244,833
Variable lease payments	33,723		32,714		70,669		66,492
Straight-line rental income	4,495		3,728		9,607		8,232
Net increase to rental income related to above and below market lease amortization	57		22		181		101
Total rental income	$	171,439	$	161,057	$	344,707	$	319,658

As of June 30, 2023 and December 31, 2022, the Company had accrued rental income of approximately $98.8 million and $91.2 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.

As of June 30, 2023 and December 31, 2022, the Company’s total liability associated with lease security deposits was approximately $19.5 million and $19.1 million, respectively, which is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.

The following table summarizes the maturity of fixed lease payments under the Company’s leases as of June 30, 2023.


Year	Maturity of Fixed Lease Payments (in thousands)
Remainder of 2023	$	271,277
2024	$	521,593
2025	$	463,939
2026	$	386,524
2027	$	305,959
Thereafter	$	891,179

Lessee Leases

The Company has operating leases in which it is the lessee for its ground leases and corporate office leases. These leases have remaining lease terms of approximately 2.8 years to 47.2 years. Certain ground leases contain options to extend the leases for ten years to 20 years, all of which are reasonably certain to be exercised, and are included in the computation of the Company’s right-of-use assets and operating lease liabilities.

The following table summarizes supplemental information related to operating lease right-of-use assets and operating lease liabilities recognized in the Company’s Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022.


Operating Lease Term and Discount Rate	June 30, 2023		December 31, 2022
Weighted average remaining lease term (years)	31.3		31.2
Weighted average discount rate	6.8	%	6.7	%

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The following table summarizes the operating lease cost included in the Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
Operating Lease Cost (in thousands)	2023		2022		2023		2022
Operating lease cost included in property expense attributable to ground leases	$	618	$	605	$	1,236	$	1,138
Operating lease cost included in general and administrative expense attributable to corporate office leases	434		436		871		873
Total operating lease cost	$	1,052	$	1,041	$	2,107	$	2,011

The following table summarizes supplemental cash flow information related to operating leases in the Company’s Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022.


	Six months ended June 30,
Operating Leases (in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	1,933	$	1,850
Right-of-use assets obtained in exchange for new lease liabilities	$	141	$	—

The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office leases as of June 30, 2023.


Year	Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2023	$	1,957
2024	3,975
2025	4,022
2026	3,014
2027	2,023
Thereafter	81,962
Total lease payments	96,953
Less: Imputed interest	(62,524)
Present value of operating lease liabilities	$	34,429

(1)Operating lease liabilities do not include estimates of CPI rent changes required by certain ground lease agreements. Therefore, actual payments may differ from those presented.

10. Earnings Per Share

During the three and six months ended June 30, 2023 and 2022, there were 144,032, 162,891, 141,699 and 164,068 of unvested restricted shares of common stock (on a weighted average basis), respectively, that were considered participating securities for the purposes of computing earnings per share.

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The following table reconciles the numerators and denominators in the computation of basic and diluted earnings per share of common stock for the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
Earnings Per Share (in thousands, except per share data)	2023		2022		2023		2022
Numerator
Net income attributable to common stockholders	$	51,553	$	32,317	$	100,966	$	85,081
Denominator
Weighted average common shares outstanding — basic	179,413		179,049		179,305		178,442
Effect of dilutive securities(1)
Share-based compensation	318		95		210		144
Shares issuable under forward sales agreements	7		—		3		—
Weighted average common shares outstanding — diluted	179,738		179,144		179,518		178,586
Net income per share — basic and diluted
Net income per share attributable to common stockholders — basic	$	0.29	$	0.18	$	0.56	$	0.48
Net income per share attributable to common stockholders — diluted	$	0.29	$	0.18	$	0.56	$	0.48

(1)During the three and six months ended June 30, 2023 and 2022, there were approximately 144, 163, 142 and 164 unvested restricted shares of common stock (on a weighted average basis), respectively, that were not included in the computation of diluted earnings per share because the allocation of income under the two-class method was more dilutive.

11. Commitments and Contingencies

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance subject to deductible requirements. Management believes that the ultimate settlement of these actions will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

The Company has letters of credit of approximately $3.3 million as of June 30, 2023 related to construction projects and certain other agreements.

12. Subsequent Events

There were no recognized or non-recognized subsequent events.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion with the financial statements and related notes included elsewhere in Item 1 of this report and the audited financial statements and related notes thereto included in our most recent Annual Report on Form 10-K.

As used herein, except where the context otherwise requires, “Company,” “we,” “our” and “us,” refer to STAG Industrial, Inc. and our consolidated subsidiaries and partnerships, including our operating partnership, STAG Industrial Operating Partnership, L.P. (the “Operating Partnership”).

Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). You can identify forward-looking statements by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. Forward-looking statements in this report include, among others, statements about our future financial condition, results of operations, capitalization rates on future acquisitions, our business strategy and objectives, including our acquisition strategy, occupancy and leasing rates and trends, and expected liquidity needs and sources (including capital expenditures and the ability to obtain financing or raise capital). Our forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by our forward-looking statements are reasonable, we can give no assurance that our plans, intentions, expectations, strategies or prospects will be attained or achieved and you should not place undue reliance on these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and may be affected by a variety of risks and factors including, without limitation:

•the factors included in our Annual Report on Form 10-K for the year ended December 31, 2022, as updated elsewhere in this report, including those set forth under the headings “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations;”

•the risk of global or national recessions and international, national, regional, and local economic conditions;

•our ability to raise equity capital on attractive terms;

•the competitive environment in which we operate;

•real estate risks, including fluctuations in real estate values, the general economic climate in local markets and competition for tenants in such markets, and the repurposing or redevelopment of retail properties into industrial properties (in part or whole);

•decreased rental rates or increased vacancy rates;

•potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants;

•acquisition risks, including our ability to identify and complete accretive acquisitions and/or failure of such acquisitions to perform in accordance with projections;

•the timing of acquisitions and dispositions;

•technological developments, particularly those affecting supply chains and logistics;

•potential natural disasters, epidemics, pandemics or outbreak of infectious disease, such as the novel coronavirus disease (“COVID-19”), and other potentially catastrophic events such as acts of war and/or terrorism (including the conflict between Russia and Ukraine and the related impact on macroeconomic conditions as a result of such conflict);

•the general level of interest rates and currencies;

•potential changes in the law or governmental regulations and interpretations of those laws and regulations, including changes in real estate and zoning laws or real estate investment trust (“REIT”) or corporate income tax laws, and potential increases in real property tax rates;

•financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;

•credit risk in the event of non-performance by the counterparties to the interest rate swaps and revolving and unfunded debt;

•how and when pending forward equity sales may settle;

•lack of or insufficient amounts of insurance;

•our ability to maintain our qualification as a REIT;

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•our ability to retain key personnel;

•litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and

•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us.

Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Certain Definitions

In this report:

“Cash Rent Change” means the percentage change in the base rent of the lease commenced during the period compared to the base rent of the Comparable Lease for assets included in the Operating Portfolio. The calculation compares the first base rent payment due after the lease commencement date compared to the base rent of the last monthly payment due prior to the termination of the lease, excluding holdover rent. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses.

“Comparable Lease” means a lease in the same space with a similar lease structure as compared to the previous in-place lease, excluding new leases for space that was not occupied under our ownership.

“GAAP” means generally accepted accounting principles in the United States.

“New Lease” means a lease that is signed for an initial term equal to or greater than 12 months for any vacant space, including a lease signed by a new tenant or an existing tenant that is expanding into new (additional) space.

“Occupancy rate” means the percentage of total leasable square footage for which either revenue recognition has commenced in accordance with GAAP or the lease term has commenced as of the close of the reporting period, whichever occurs earlier.

“Operating Portfolio” means all buildings that were acquired stabilized or have achieved Stabilization. The Operating Portfolio excludes non-core flex/office buildings, buildings contained in the Value Add Portfolio, and buildings classified as held for sale.

“Renewal Lease” means a lease signed by an existing tenant to extend the term for 12 months or more, including (i) a renewal of the same space as the current lease at lease expiration, (ii) a renewal of only a portion of the current space at lease expiration, or (iii) an early renewal or workout, which ultimately does extend the original term for 12 months or more.

“SL Rent Change” means the percentage change in the average monthly base rent over the term of the lease that commenced during the period compared to the Comparable Lease for assets included in the Operating Portfolio. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses, and this calculation excludes the impact of any holdover rent.

“Stabilization” for properties under development or being redeveloped means the earlier of achieving 90% occupancy or 12 months after completion. With respect to properties acquired and immediately added to the Value Add Portfolio, (i) if acquired with less than 75% occupancy as of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy or 12 months from the acquisition date; or (ii) if acquired and will be less than 75% occupied due to known move-outs within two years of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy after the known move-outs have occurred or 12 months after the known move-outs have occurred.

“Total annualized base rental revenue” means the contractual monthly base rent as of June 30, 2023 (which differs from rent calculated in accordance with GAAP) multiplied by 12. If a tenant is in a free rent period as of June 30, 2023, the total annualized base rental revenue is calculated based on the first contractual monthly base rent amount multiplied by 12.

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“Value Add Portfolio” means our properties that meet any of the following criteria: (i) less than 75% occupied as of the acquisition date (ii) will be less than 75% occupied due to known move-outs within two years of the acquisition date; (iii) out of service with significant physical renovation of the asset; or (iv) development.

“Weighted Average Lease Term” means the contractual lease term in years, assuming that tenants exercise no renewal options, purchase options, or early termination rights, weighted by square footage.

Overview

We are a REIT focused on the acquisition, ownership, and operation of industrial properties throughout the United States. We seek to (i) identify properties that offer relative value across all locations, industrial property types, and tenants through the principled application of our proprietary risk assessment model, (ii) operate our properties in an efficient, cost-effective manner, and (iii) capitalize our business appropriately given the characteristics of our assets. We are a Maryland corporation and our common stock is publicly traded on the New York Stock Exchange under the symbol “STAG.”

We are organized and conduct our operations to maintain our qualification as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, and generally are not subject to federal income tax to the extent we currently distribute our income to our stockholders and maintain our qualification as a REIT. We remain subject to state and local taxes on our income and property and to U.S. federal income and excise taxes on our undistributed income.

Factors That May Influence Future Results of Operations

Our ability to increase revenues or cash flow will depend in part on our (i) external growth, specifically our acquisition activity, and (ii) internal growth, specifically our portfolio occupancy and rental rates. A variety of other factors, including those noted below, also may affect our future results of operations.

Outlook

The industrial real estate business is affected by the uncertainty regarding the current high inflationary, rising interest rate environment, disruption in the banking industry, and geopolitical tensions in Europe. These factors are key drivers of recent financial market volatility and growing concerns of a global recession. While U.S. gross domestic product (“GDP”) declined during the first two quarters of 2022, GDP increased more than 2% during each of the next three quarters ended March 31, 2023. Labor conditions also remained strong with a 3.7% unemployment rate as of May 2023. Going forward, the general consensus among economists is to expect an elevated risk of recession over the near term. While the macro-economic conditions continue to evolve and could result in tighter credit conditions, weakening tenant cash flows, and rising vacancy rates, we believe we will continue to benefit from having a well-diversified portfolio across various markets, tenant industries, and lease terms. Additionally, we believe that recent moves toward more regional supply chains and geopolitical tensions have accelerated a number of trends that positively impact U.S. industrial demand. However, given the current uncertainty and events discussed above, our acquisition activity slowed in 2022 and so far in 2023 has been significantly slower than our historical acquisition pace.

We believe that the current economic environment, while volatile, will provide us with an opportunity to demonstrate the diversification of our portfolio. Specifically, we believe our existing portfolio should benefit from competitive rental rates and strong occupancy. In addition to our diversified portfolio, we believe that certain characteristics of our business and capital structure should position us well in an uncertain environment, including our minimal floating rate debt exposure (taking into account our hedging activities), strong banking relationships, strong liquidity, access to capital, and the fact that many of our competitors for the assets we purchase tend to be smaller local and regional investors who may be more heavily impacted by rising interest rates and the lack of available capital.

Due to the COVID-19 pandemic, geopolitical uncertainty, and recent legislation supporting U.S. infrastructure, we expect acceleration in a number of industrial specific trends to support stronger long term demand, including:

•the rise of e-commerce (as compared to the traditional retail store distribution model) and the concomitant demand by e-commerce industry participants for well-located, functional distribution space;

•the increasing attractiveness of the United States as a manufacturing and distribution location because of the size of the U.S. consumer market, an increase in overseas labor costs, a desire for greater supply chain resilience and redundancy which is driving higher inventory to sales ratios and greater domestic warehouse demand over the long term (i.e. the shortening and fattening of the supply chain); and

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•the overall quality of the transportation infrastructure in the United States.

Our portfolio continues to benefit from historically low availability throughout the national industrial market. Demand has moderated in 2023 relative to recent peaks, but remains solid across a broad array of our markets and vacancy and availability rates remains low by historic standards. The weakening global and U.S. economic trends could be a notable headwind and may result in relatively less demand for space and higher vacancy. We believe that the diversification of our portfolio by market, tenant industry, and tenant credit will prove to be a strength in this environment.

Conditions in Our Markets

The buildings in our portfolio are located in markets throughout the United States. Positive or negative changes in economic or other conditions, new supply, adverse weather conditions, natural disasters, epidemics, and other factors in these markets may affect our overall performance.

Rental Income

We receive income primarily in the form of rental income from the tenants who occupy our buildings. The amount of rental income generated by the buildings in our portfolio depends principally on occupancy and rental rates.

Future economic downturns or regional downturns affecting our submarkets that impair our ability to renew or re-lease space and the ability of our tenants to fulfill their lease commitments, as in the case of tenant bankruptcies, could adversely affect our ability to maintain or increase rental rates at our buildings. Our ability to lease our properties and the attendant rental rate is dependent upon, among other things, (i) the overall economy, (ii) the supply/demand dynamic in our markets, (iii) the quality of our properties, including age, clear height, and configuration, and (iv) our tenants’ ability to meet their contractual obligations to us.

The following table summarizes the Operating Portfolio leases that commenced during the three and six months ended June 30, 2023. Any rental concessions in such leases are accounted for on a straight-line basis over the term of the lease.


Operating Portfolio	Square Feet	Cash Basis Rent Per Square Foot		SL Rent Per Square Foot		Total Costs Per Square Foot(1)		Cash Rent Change		SL Rent Change		Weighted Average Lease Term (years)	Rental Concessions per Square Foot(2)

Three months ended June 30, 2023
New Leases	702,961	$	5.95	$	6.21	$	2.42	27.1	%	35.8	%	4.4	$	0.43
Renewal Leases	2,852,761	$	5.43	$	5.70	$	1.11	28.3	%	44.5	%	3.8	$	0.13
Total/weighted average	3,555,722	$	5.53	$	5.80	$	1.37	28.0	%	42.6	%	3.9	$	0.19
Six months ended June 30, 2023
New Leases	1,478,285	$	6.76	$	7.04	$	2.84	38.1	%	46.7	%	4.1	$	0.47
Renewal Leases	6,878,735	$	5.13	$	5.39	$	1.01	23.5	%	36.2	%	4.2	$	0.09
Total/weighted average	8,357,020	$	5.42	$	5.68	$	1.33	26.5	%	38.4	%	4.2	$	0.15

(1)“Total Costs” means the costs for improvements of vacant and renewal spaces, as well as the contingent-based legal fees and commissions for leasing transactions. Total Costs per square foot represent the total costs expected to be incurred on the leases that commenced during the period and do not reflect actual expenditures for the period.

(2)Represents the total rental concessions for the entire lease term.

Additionally, for the three and six months ended June 30, 2023, leases commenced totaling 341,927 and 1,050,359 square feet related to Value Add assets and first generation leasing. These are excluded from the Operating Portfolio statistics above.

Property Operating Expenses

Our property operating expenses generally consist of utilities, real estate taxes, management fees, insurance, and site repair and maintenance costs. For the majority of our tenants, our property operating expenses are controlled, in part, by the triple net provisions in tenant leases. In our triple net leases, the tenant is responsible for all aspects of and costs related to the building and its operation during the lease term, including utilities, taxes, insurance, and maintenance costs, but typically excluding roof and building structure. However, we also have modified gross leases and gross leases in our building portfolio, which may require us to absorb certain building related expenses of our tenants. In our modified gross leases, we are responsible for certain building related expenses during the lease term, but most of the expenses are passed through to the tenant for reimbursement to us. In our gross leases, we are responsible for all expenses related to the building and its operation during the lease term. Our

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overall performance will be affected by the extent to which we are able to pass-through property operating expenses to our tenants.

Scheduled Lease Expirations

Our ability to re-lease space subject to expiring leases will impact our results of operations and is affected by economic and competitive conditions in our markets and by the desirability of our individual buildings. Leases that comprise approximately 7.5% of our total annualized base rental revenue will expire during the period from July 1, 2023 to June 30, 2024, excluding month-to-month leases. We assume, based upon internal renewal probability estimates, that some of our tenants will renew and others will vacate and the associated space will be re-let subject to downtime assumptions. Using the aforementioned assumptions, we expect that the rental rates on the respective new leases will be greater than the rates under existing leases expiring during the period July 1, 2023 to June 30, 2024, thereby resulting in an increase in revenue from the same space.

The following table summarizes lease expirations for leases in place as of June 30, 2023, plus available space, for each of the ten calendar years beginning with 2023 and thereafter in our portfolio. The information in the table assumes that tenants do not exercise renewal options or early termination rights.


Lease Expiration Year	Number of Leases Expiring	Total Rentable Square Feet	Percentage of Total Occupied Square Feet		Total Annualized Base Rental Revenue (in thousands)		Percentage of Total Annualized Base Rental Revenue
Available	—	2,519,415	—		—		—
Month-to-month leases(1)	—	60,000	0.1	%	$	471	0.1	%
Remainder of 2023(2)	17	2,121,767	1.9	%	9,861		1.8	%
2024	90	12,072,287	11.1	%	61,556		11.2	%
2025	103	14,295,168	13.2	%	67,366		12.2	%
2026	129	18,841,184	17.4	%	97,285		17.6	%
2027	100	15,154,427	14.0	%	75,813		13.8	%
2028	89	11,641,635	10.7	%	58,436		10.6	%
2029	55	9,336,732	8.6	%	45,093		8.2	%
2030	34	4,640,195	4.3	%	27,050		4.9	%
2031	41	7,312,872	6.7	%	35,552		6.4	%
2032	18	2,542,575	2.3	%	17,945		3.3	%
Thereafter	40	10,543,626	9.7	%	54,671		9.9	%
Total	716	111,081,883	100.0	%	$	551,099	100.0	%

(1)The number of month-to-month leases is zero. The month-to-month total rentable square footage refers to a secondary short-term lease occupied by a tenant whose lease count is included in their original long term suite.

(2)Leases previously scheduled to expire in 2023, totaling approximately 10.2 million square feet, have been executed as of June 30, 2023. These leases are excluded from 2023 expirations and are reflected in the new year of expiration.

Portfolio Acquisitions

The following table summarizes our acquisitions during the three and six months ended June 30, 2023.


Market(1)	Date Acquired	Square Feet	Number of Buildings	Purchase Price (in thousands)
Central New Jersey, NJ	April 24, 2023	101,381	1	$	26,660
Greensboro, NC	May 5, 2023	133,622	1	14,004







Three and six months ended June 30, 2023		235,003	2	$	40,664

(1) As defined by CBRE-EA industrial market geographies. If the building is located outside of a CBRE-EA defined market, the city and state is reflected.

Portfolio Dispositions

During the six months ended June 30, 2023, we sold seven buildings comprised of approximately 1.2 million rentable square feet with a net book value of approximately $31.7 million to third parties. Net proceeds from the sales of rental property were approximately $69.3 million and we recognized the full gain on the sales of rental property, net, of approximately $37.7 million for the six months ended June 30, 2023.

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Top Markets

The following table summarizes information about the 20 largest markets in our portfolio based on total annualized base rental revenue as of June 30, 2023.


Top 20 Markets(1)	% of Total Annualized Base Rental Revenue
Chicago, IL	7.0	%
Greenville, SC	5.3	%
Pittsburgh, PA	4.3	%
Detroit, MI	4.2	%
Minneapolis, MN	3.7	%
Columbus, OH	3.7	%
South Central PA	3.3	%
Houston, TX	2.7	%
El Paso, TX	2.5	%
Milwaukee, WI	2.2	%
Charlotte, NC	2.1	%
Indianapolis, IN	1.9	%
Cleveland, OH	1.9	%
Philadelphia, PA	1.9	%
Sacramento, CA	1.9	%
Kansas City, KS	1.8	%
Boston, MA	1.7	%
Columbia, SC	1.6	%
Grand Rapids, MI	1.5	%
Raleigh, NC	1.4	%
Total	56.6	%

(1) Market classification based on CBRE-EA industrial market geographies.

Top Industries

The following table summarizes information about the 20 largest tenant industries in our portfolio based on total annualized base rental revenue as of June 30, 2023.


Top 20 Tenant Industries(1)	% of Total Annualized Base Rental Revenue
Air Freight & Logistics	11.4	%
Containers & Packaging	8.3	%
Automobile Components	7.4	%
Machinery	6.1	%
Commercial Services & Supplies	5.6	%
Trading Companies & Distribution (Industrial Goods)	5.2	%
Distributors (Consumer Goods)	4.2	%
Household Durables	3.8	%
Consumer Staples Distribution	3.7	%
Building Products	3.7	%
Broadline Retail	3.6	%
Media	3.3	%
Specialty Retail	2.8	%
Beverages	2.4	%
Ground Transportation	2.4	%
Food Products	2.3	%
Electronic Equip, Instruments	2.0	%
Chemicals	2.0	%
Health Care Equipment & Supplies	1.9	%
Textiles, Apparel, Luxury Goods	1.9	%
Total	84.0	%

(1) Industry classification based on Global Industry Classification Standard methodology.

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Top Tenants

The following table summarizes information about the 20 largest tenants in our portfolio based on total annualized base rental revenue as of June 30, 2023.


Top 20 Tenants(1)	Number of Leases	% of Total Annualized Base Rental Revenue
Amazon	6	2.8	%
Eastern Metal Supply, Inc.	5	0.9	%
American Tire Distributors, Inc.	7	0.9	%
Tempur Sealy International, Inc.	2	0.8	%
Hachette Book Group, Inc.	1	0.8	%
Kenco Logistic Services, LLC	3	0.8	%
WestRock Company	7	0.8	%
FedEx Corporation	3	0.7	%
Penguin Random House, LLC	1	0.7	%
Lippert Component Manufacturing	4	0.7	%
DS Smith North America	2	0.7	%
GXO Logistics, Inc.	2	0.7	%
Yanfeng US Automotive Interior	2	0.7	%
DHL Supply Chain	4	0.7	%
AFL Telecommunications LLC	2	0.7	%
Carolina Beverage Group	3	0.7	%
Packaging Corp of America	5	0.6	%
Ford Motor Company	1	0.6	%
Berlin Packaging L.L.C.	4	0.6	%
Iron Mountain Information Management	5	0.6	%
Total	69	16.5	%

(1) Includes tenants, guarantors, and/or non-guarantor parents.

Critical Accounting Policies

See “Critical Accounting Policies” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our critical accounting policies and estimates.

Results of Operations

The following discussion of the results of our same store (as defined below) net operating income (“NOI”) should be read in conjunction with our consolidated financial statements included in this report. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below. Same store results are considered to be useful to investors in evaluating our performance because they provide information relating to changes in building-level operating performance without taking into account the effects of acquisitions or dispositions. We encourage the reader to not only look at our same store results, but also our total portfolio results, due to historic and future growth.

We define same store properties as properties that were in the Operating Portfolio for the entirety of the comparative periods presented. The results for same store properties exclude termination fees, solar income, and other income adjustments. Same store properties exclude Operating Portfolio properties with expansions placed into service after December 31, 2021. On June 30, 2023, we owned 518 industrial buildings consisting of approximately 102.9 million square feet and representing approximately 92.6% of our total portfolio, that are considered our same store portfolio in the analysis below. Same store occupancy decreased approximately 0.7% to 97.9% as of June 30, 2023 compared to 98.6% as of June 30, 2022.

Comparison of the three months ended June 30, 2023 to the three months ended June 30, 2022

The following table summarizes selected operating information for our same store portfolio and our total portfolio for the three months ended June 30, 2023 and 2022 (dollars in thousands). This table includes a reconciliation from our same store portfolio to our total portfolio by also providing information for the three months ended June 30, 2023 and 2022 with respect to the buildings acquired and sold after December 31, 2021, Operating Portfolio buildings with expansions placed into service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2021, flex/office buildings, Value Add buildings, and buildings classified as held for sale.

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	Same Store Portfolio								Acquisitions/Dispositions				Other				Total Portfolio
	Three months ended June 30,				Change				Three months ended June 30,				Three months ended June 30,				Three months ended June 30,				Change
	2023		2022		$		%		2023		2022		2023		2022		2023		2022		$		%
Revenue
Operating revenue
Rental income	$	157,034	$	149,124	$	7,910	5.3	%	$	7,987	$	6,715	$	6,418	$	5,218	$	171,439	$	161,057	$	10,382	6.4	%
Other income	62		58		4		6.9	%	13		—		180		385		255		443		(188)		(42.4)	%
Total operating revenue	157,096		149,182		7,914		5.3	%	8,000		6,715		6,598		5,603		171,694		161,500		10,194		6.3	%
Expenses
Property	29,705		26,794		2,911		10.9	%	1,584		1,094		1,386		986		32,675		28,874		3,801		13.2	%
Net operating income(1)	$	127,391	$	122,388	$	5,003	4.1	%	$	6,416	$	5,621	$	5,212	$	4,617	139,019		132,626		6,393		4.8	%
Other expenses
General and administrative																	12,060		12,234		(174)		(1.4)	%

Depreciation and amortization																	68,494		69,279		(785)		(1.1)	%

Other expenses																	357		532		(175)		(32.9)	%
Total other expenses																	80,911		82,045		(1,134)		(1.4)	%
Total expenses																	113,586		110,919		2,667		2.4	%
Other income (expense)
Interest and other income																	17		23		(6)		(26.1)	%
Interest expense																	(22,860)		(17,896)		(4,964)		27.7	%


Gain on the sales of rental property, net																	17,532		376		17,156		4,562.8	%
Total other income (expense)																	(5,311)		(17,497)		12,186		(69.6)	%
Net income																	$	52,797	$	33,084	$	19,713	59.6	%

(1)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below.

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Net Income

Net income for our total portfolio increased by approximately $19.7 million, or 59.6%, to approximately $52.8 million for the three months ended June 30, 2023 compared to approximately $33.1 million for the three months ended June 30, 2022.

Same Store Total Operating Revenue

Same store total operating revenue consists primarily of rental income from (i) fixed lease payments, variable lease payments, straight-line rental income, and above and below market lease amortization from our properties (“lease income”), and (ii) other tenant billings for insurance, real estate taxes and certain other expenses (“other billings”).

For a detailed reconciliation of our same store total operating revenue to net income, see the table above.

Same store rental income, which includes lease income and other billings as discussed below, increased by approximately $7.9 million, or 5.3%, to approximately $157.0 million for the three months ended June 30, 2023 compared to approximately $149.1 million for the three months ended June 30, 2022.

Same store lease income increased by approximately $5.4 million, or 4.3%, to approximately $129.8 million for the three months ended June 30, 2023 compared to approximately $124.4 million for the three months ended June 30, 2022. The increase was primarily due to an increase in rental income of approximately $7.1 million from the execution of new leases and lease renewals with existing tenants. This increase was partially offset by the reduction of base rent of approximately $1.4 million due to tenant vacancies, a net increase in the amortization of net above market leases of approximately $0.1 million. Additionally, there was a decrease in same store lease income of approximately $0.2 million due to certain tenants that are on the cash basis of accounting due to the future collectability not being reasonably assured.

Same store other billings increased by approximately $2.5 million, or 10.1%, to approximately $27.2 million for the three months ended June 30, 2023 compared to approximately $24.7 million for the three months ended June 30, 2022. The increase was attributable to an increase of approximately $1.6 million of real estate tax reimbursements due to an increase in real estate taxes levied by the taxing authority for certain tenants in which we pay the real estate taxes on behalf of those tenants, changes to lease terms where we began paying the real estate taxes on behalf of tenants that had previously paid its taxes directly to the taxing authority, and occupancy of previously vacant buildings. The increase in other billings was also attributable to an increase of approximately $0.9 million in other expense reimbursements due to changes to lease terms where we began paying the operating expenses on behalf of tenants that had previously paid its operating expenses directly to respective vendors, an increase in corresponding expenses, and occupancy of previously vacant buildings.

Same Store Operating Expenses

Same store operating expenses consist primarily of property operating expenses and real estate taxes and insurance.

For a detailed reconciliation of our same store operating expenses to net income, see the table above.

Total same store property operating expenses increased by approximately $2.9 million, or 10.9%, to approximately $29.7 million for the three months ended June 30, 2023 compared to approximately $26.8 million for the three months ended June 30, 2022. This increase was due to increases in real estate tax, insurance, repairs and maintenance, and other expenses of approximately $1.1 million, $0.7 million, $0.7 million, and $0.4 million, respectively.

Acquisitions and Dispositions Net Operating Income

For a detailed reconciliation of our acquisitions and dispositions NOI to net income, see the table above.

Subsequent to December 31, 2021, we acquired 25 buildings consisting of approximately 4.1 million square feet (excluding three buildings that were included in the Value Add Portfolio at June 30, 2023 or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2021), and sold 15 buildings consisting of approximately 3.0 million square feet. For the three months ended June 30, 2023 and 2022, the buildings acquired after December 31, 2021 contributed approximately $6.2 million and $3.5 million to NOI, respectively. For the years ended June 30, 2023 and June 30, 2022, the buildings sold after December 31, 2021 contributed approximately $0.2 million and $2.1 million to NOI, respectively. Refer to Note 3 in the accompanying Notes to consolidated Financial Statements for additional discussion regarding buildings acquired or sold.

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Other Net Operating Income

Other assets include our flex/office buildings, Value Add Portfolio, buildings classified as held for sale, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2021. Other NOI also includes termination, solar, and other income adjustments from buildings in our same store portfolio.

For a detailed reconciliation of our other NOI to net income, see the table above.

These buildings contributed approximately $4.7 million and $2.9 million to NOI for the three months ended June 30, 2023 and 2022, respectively. Additionally, there was approximately $0.5 million and $1.7 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the three months ended June 30, 2023 and 2022, respectively.

Total Other Expenses

Total other expenses consist of general and administrative expenses, depreciation and amortization, and other expenses.

Total other expenses decreased approximately $1.1 million, or 1.4%, to approximately $80.9 million for the three months ended June 30, 2023 compared to approximately $82.0 million for the three months ended June 30, 2022. The decrease was primarily attributable to decrease in depreciation and amortization expense of approximately $0.8 million, which was primarily attributable to decrease in amortization expense of approximately $2.2 million due to previously acquired deferred leasing intangibles reaching the end of their amortization periods. This increase was partially offset by an increase in depreciation expense of approximately $1.4 million due to an increase of net acquisitions after June 30, 2022 that increased the depreciable asset base and other capital expenditures, whose depreciation periods are typically longer than deferred leasing intangibles’ amortization periods.

Total Other Income (Expense)

Total other income (expense) consists of interest and other income, interest expense, and gain on the sales of rental property, net. Interest expense includes interest incurred during the period as well as adjustments related to amortization of financing fees and debt issuance costs, and amortization of fair market value adjustments associated with the assumption of debt.

Total other income (expense) decreased approximately $12.2 million, or 69.6%, to approximately $5.3 million total other expense for the three months ended June 30, 2023 compared to approximately $17.5 million total other expense for the three months ended June 30, 2022. This decrease was primarily a result of an increase in the gain on the sales of rental property, net of approximately $17.2 million. This decrease was partially offset by an increase in interest expense of approximately $5.0 million which is primarily attributable to the issuance of $400.0 million of unsecured notes on June 28, 2022 and an additional $50.0 million of unsecured term loans on July 26, 2022.

Comparison of the six months ended June 30, 2023 to the six months ended June 30, 2022

The following table summarizes selected operating information for our same store portfolio and our total portfolio for the six months ended June 30, 2023 and 2022 (dollars in thousands). This table includes a reconciliation from our same store portfolio to our total portfolio by also providing information for the six months ended June 30, 2023 and 2022 with respect to the buildings acquired and disposed of and Operating Portfolio buildings with expansions placed into service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2021 and our flex/office buildings, Value Add Portfolio and buildings classified as held for sale.

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	Same Store Portfolio								Acquisitions/Dispositions				Other				Total Portfolio
	Six months ended June 30,				Change				Six months ended June 30,				Six months ended June 30,				Six months ended June 30,				Change
	2023		2022		$		%		2023		2022		2023		2022		2023		2022		$		%
Revenue
Operating revenue
Rental income	$	314,603	$	299,158	$	15,445	5.2	%	$	16,823	$	11,057	$	13,281	$	9,443	$	344,707	$	319,658	$	25,049	7.8	%
Other income	178		221		(43)		(19.5)	%	46		110		316		720		540		1,051		(511)		(48.6)	%
Total operating revenue	314,781		299,379		15,402		5.1	%	16,869		11,167		13,597		10,163		345,247		320,709		24,538		7.7	%
Expenses
Property	61,261		56,997		4,264		7.5	%	4,102		1,788		3,193		1,864		68,556		60,649		7,907		13.0	%
Net operating income(1)	$	253,520	$	242,382	$	11,138	4.6	%	$	12,767	$	9,379	$	10,404	$	8,299	276,691		260,060		16,631		6.4	%
Other expenses
General and administrative																	24,736		24,547		189		0.8	%

Depreciation and amortization																	137,438		136,645		793		0.6	%

Other expenses																	3,336		1,029		2,307		224.2	%
Total other expenses																	165,510		162,221		3,289		2.0	%
Total expenses																	234,066		222,870		11,196		5.0	%
Other income (expense)
Interest and other income																	36		57		(21)		(36.8)	%
Interest expense																	(45,472)		(35,155)		(10,317)		29.3	%


Gain on the sales of rental property, net																	37,660		24,331		13,329		54.8	%
Total other income (expense)																	(7,776)		(10,767)		2,991		(27.8)	%
Net income																	$	103,405	$	87,072	$	16,333	18.8	%

(1)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below.

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Net Income

Net income for our total portfolio increased by $16.3 million, or 18.8%, to $103.4 million for the six months ended June 30, 2023 compared to $87.1 million for the six months ended June 30, 2022.

Same Store Total Operating Revenue

Same store total operating revenue consists primarily of rental income consisting of (i) fixed lease payments, variable lease payments, straight-line rental income, and above and below market lease amortization from our properties (“lease income”), and (ii) other tenant billings for insurance, real estate taxes and certain other expenses (“other billings”).

For a detailed reconciliation of our same store total operating revenue to net income, see the table above.

Same store rental income, which is comprised of lease income and other billings as discussed below, increased by approximately $15.4 million, or 5.2%, to approximately $314.6 million for the six months ended June 30, 2023 compared to approximately $299.2 million for the six months ended June 30, 2022.

Same store lease income increased by approximately $10.8 million, or 4.4%, to approximately $258.5 million for the six months ended June 30, 2023 compared to approximately $247.7 million for the six months ended June 30, 2022. The increase was primarily due to an increase in rental income of approximately $14.3 million from the execution of new leases and lease renewals with existing tenants. This increase was partially offset by the reduction of base rent of approximately $3.0 million due to tenant vacancies, and a net increase in the amortization of net above market leases of approximately $0.3 million. Additionally, there was a decrease in same store lease income of approximately $0.2 million due to certain tenants that are on the cash basis of accounting due to the future collectability not being reasonably assured.

Same store other billings increased by approximately $4.7 million, or 9.1%, to approximately $56.2 million for the six months ended June 30, 2023 compared to approximately $51.5 million for the six months ended June 30, 2022. The increase was attributable to an increase of approximately $3.2 million of real estate tax reimbursements due to an increase in real estate taxes levied by the taxing authority for certain tenants in which we pay the real estate taxes on behalf of those tenants, changes to lease terms where we began paying the real estate taxes on behalf of tenants that had previously paid its taxes directly to the taxing authority, and occupancy of previously vacant buildings. The increase in other billings was also attributable to an increase of approximately $1.5 million in other expense reimbursements due to changes to lease terms where we began paying the operating expenses on behalf of tenants that had previously paid its operating expenses directly to respective vendors, an increase in corresponding expenses, and occupancy of previously vacant buildings.

Same Store Operating Expenses

Same store operating expenses consist primarily of property operating expenses and real estate taxes and insurance.

For a detailed reconciliation of our same store operating expenses to net income, see the table above.

Total same store operating expenses increased by approximately $4.3 million or 7.5% to approximately $61.3 million for the six months ended June 30, 2023 compared to approximately $57.0 million for the six months ended June 30, 2022. This increase was due to increases in real estate tax, repairs and maintenance, insurance, utility, and other expenses of approximately $1.3 million, $1.2 million, $1.1 million, $0.4 million, and $0.6 million, respectively. These increases were partially offset by a reduction of snow removal expense of approximately $0.3 million.

Acquisitions and Dispositions Net Operating Income

For a detailed reconciliation of our acquisitions and dispositions NOI to net income, see the table above.

Subsequent to December 31, 2021, we acquired 25 buildings consisting of approximately 4.1 million square feet (excluding three buildings that were included in the Value Add Portfolio at June 30, 2023 or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2021), and sold 15 buildings consisting of approximately 3.0 million square feet. For the six months ended June 30, 2023 and June 30, 2022, the buildings acquired after December 31, 2021 contributed approximately $12.2 million and $4.7 million to NOI, respectively. For the six months ended June 30, 2023 and June 30, 2022, the buildings sold after December 31, 2021 contributed approximately $0.6 million and $4.7 million to NOI, respectively. Refer to Note 3 in the accompanying Notes to Consolidated Financial Statements for additional discussion regarding buildings acquired or sold.

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Other Net Operating Income

Our other assets include our flex/office buildings, Value Add Portfolio, buildings classified as held for sale, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2021. Other NOI also includes termination, solar, and other income adjustments from buildings in our same store portfolio.

For a detailed reconciliation of our other NOI to net income, see the table above.

These buildings contributed approximately $9.0 million and $5.7 million to NOI for the six months ended June 30, 2023 and June 30, 2022, respectively. Additionally, there was approximately $1.4 million and $2.6 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the six months ended June 30, 2023 and June 30, 2022, respectively.

Total Other Expenses

Total other expenses consist of general and administrative expenses, depreciation and amortization, and other expenses.

Total other expenses increased approximately $3.3 million, or 2.0%, to approximately $165.5 million for the six months ended June 30, 2023 compared to approximately $162.2 million for the six months ended June 30, 2022. The increase was attributable to an increase in other expenses of approximately $2.3 million, which was primarily attributed to the relinquishment of an acquisition deposit of approximately $2.5 million related to the termination of an acquisition contract in January 2023. Depreciation and amortization also increased approximately $0.8 million, which was primarily attributable to an increase in depreciation expense of approximately $3.8 million due to an increase of net acquisitions after June 30, 2022 that increased the depreciable asset base and other capital expenditures. The depreciation and amortization increase was partially offset by a decrease in amortization expense of approximately $3.0 million due to previously acquired deferred leasing intangibles reaching the end of their amortization periods, which are typically shorter than depreciation periods.

Total Other Income (Expense)

Total other income (expense) decreased approximately $3.0 million, or 27.8%, to a total other expense of approximately $7.8 million for the six months ended June 30, 2023 compared to approximately $10.8 million total other expense for the six months ended June 30, 2022. This decrease was primarily a result of an increase in the gain on the sales of rental property, net of approximately $13.3 million. This decrease was partially offset by an increase in interest expense of approximately $10.3 million which is primarily attributable to the issuance of $400.0 million of unsecured notes on June 28, 2022 and an additional $50.0 million of unsecured term loans on July 26, 2022.

Non-GAAP Financial Measures

In this report, we disclose funds from operations (“FFO”) and NOI, which meet the definition of “non-GAAP financial measures” as set forth in Item 10(e) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”). As a result, we are required to include in this report a statement of why management believes that presentation of these measures provides useful information to investors.

Funds From Operations

FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, FFO should be compared with our reported net income (loss) in accordance with GAAP, as presented in our consolidated financial statements included in this report.

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“Nareit”). FFO represents GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating buildings, land sales, impairment write-downs of depreciable real estate, real estate related depreciation and amortization (excluding

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amortization of deferred financing costs and fair market value of debt adjustment) and after adjustments for unconsolidated partnerships and joint ventures.

Management uses FFO as a supplemental performance measure because it is a widely recognized measure of the performance of REITs. FFO may be used by investors as a basis to compare our operating performance with that of other REITs.

However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our buildings that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our buildings, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. In addition, other REITs may not calculate FFO in accordance with the Nareit definition, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. FFO should not be used as a measure of our liquidity, and is not indicative of funds available for our cash needs, including our ability to pay dividends.

The following table sets forth a reconciliation of our FFO attributable to common stockholders and unit holders for the periods presented to net income, the nearest GAAP equivalent.


	Three months ended June 30,				Six months ended June 30,
Reconciliation of Net Income to FFO (in thousands)	2023		2022		2023		2022
Net income	$	52,797	$	33,084	$	103,405	$	87,072
Rental property depreciation and amortization	68,439		69,225		137,328		136,538

Gain on the sales of rental property, net	(17,532)		(376)		(37,660)		(24,331)
FFO	103,704		101,933		203,073		199,279


Amount allocated to restricted shares of common stock and unvested units	(144)		(145)		(291)		(302)
FFO attributable to common stockholders and unit holders	$	103,560	$	101,788	$	202,782	$	198,977

Net Operating Income

We consider NOI to be an appropriate supplemental performance measure to net income (loss) because we believe it helps investors and management understand the core operations of our buildings. NOI is defined as rental income, which includes billings for common area maintenance, real estate taxes and insurance, less property expenses and real estate taxes and insurance. NOI should not be viewed as an alternative measure of our financial performance since it excludes expenses which could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI.

The following table sets forth a reconciliation of our NOI for the periods presented to net income, the nearest GAAP equivalent.


	Three months ended June 30,				Six months ended June 30,
Reconciliation of Net Income to NOI (in thousands)	2023		2022		2023		2022
Net income	$	52,797	$	33,084	$	103,405	$	87,072
General and administrative	12,060		12,234		24,736		24,547
Depreciation and amortization	68,494		69,279		137,438		136,645
Interest and other income	(17)		(23)		(36)		(57)
Interest expense	22,860		17,896		45,472		35,155



Other expenses	357		532		3,336		1,029

Gain on the sales of rental property, net	(17,532)		(376)		(37,660)		(24,331)
Net operating income	$	139,019	$	132,626	$	276,691	$	260,060

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Cash Flows

Comparison of the six months ended June 30, 2023 to the six months ended June 30, 2022

The following table summarizes our cash flows for the six months ended June 30, 2023 compared to the six months ended June 30, 2022.


	Six months ended June 30,				Change
Cash Flows (dollars in thousands)	2023		2022		$		%
Net cash provided by operating activities	$	196,223	$	191,188	$	5,035	2.6	%
Net cash used in investing activities	$	25,606	$	334,909	$	(309,303)	(92.4)	%
Net cash provided by (used in) financing activities	$	(182,872)	$	136,372	$	(319,244)	(234.1)	%

Net cash provided by operating activities increased approximately $5.0 million to approximately $196.2 million for the six months ended June 30, 2023 compared to approximately $191.2 million for the six months ended June 30, 2022. The increase was primarily attributable to incremental operating cash flows from property acquisitions completed after June 30, 2022, and operating performance at existing properties. These increases were partially offset by the loss of cash flows from property dispositions completed after June 30, 2022 and fluctuations in working capital due to timing of payments and rental receipts.

Net cash used in investing activities decreased approximately $309.3 million to approximately $25.6 million for the six months ended June 30, 2023 compared to approximately $334.9 million for the six months ended June 30, 2022. The decrease was primarily attributable the acquisition of two buildings for a total cash consideration of approximately $40.7 million during the six months ended June 30, 2023, compared to the acquisition of 17 buildings for a total cash consideration of approximately $337.3 million for the six months ended June 30, 2022. Additionally, the decrease was attributable to an increase in proceeds from sales of rental property, net of approximately $30.9 million during the six months ended June 30, 2023 compared to the six months ended June 30, 2022. These decreases were partially offset by an increase of approximately $18.7 million in cash paid for the additions of land and buildings and improvements related to development and other capital expenditures.

Net cash provided by (used in) financing activities decreased approximately $319.2 million to approximately $182.9 million net cash used in financing activities for the six months ended June 30, 2023 compared to approximately $136.4 million net cash provided by financing activities for the six months ended June 30, 2022. This decrease was primarily attributable to the funding of the $400.0 million unsecured note on June 28, 2022 that did not occur during the six months ended June 30, 2023, as well as the redemption of $100.0 million of unsecured notes on January 5, 2023 that did not occur during the six months ended June 30, 2022. This decrease was also attributable to a decrease in net proceeds received from the sale of common stock of approximately $46.3 million during the six months ended June 30, 2023 compared to the six months ended June 30, 2022. These decreases were partially offset by an increase in net borrowings of approximately $221.0 million under our unsecured credit facility during the six months ended June 30, 2022.

Liquidity and Capital Resources

We believe that our liquidity needs will be satisfied through cash flows generated by operations, disposition proceeds, and financing activities. Operating cash flow from rental income, expense recoveries from tenants, and other income from operations is our principal source of funds to pay operating expenses, debt service, recurring capital expenditures, and the distributions required to maintain our REIT qualification. We primarily rely on the capital markets (common and preferred equity and debt securities) to fund our acquisition activity. We seek to increase cash flows from our properties by maintaining quality building standards that promote high occupancy rates and permit increases in rental rates, while reducing tenant turnover and controlling operating expenses. We believe that our revenue, together with proceeds from building sales and equity and debt financings, will continue to provide funds for our short-term and medium-term liquidity needs.

Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our buildings, including interest expense, interest rate swap payments, scheduled principal payments on outstanding indebtedness, property acquisitions under contract, general and administrative expenses, and capital expenditures including development projects, tenant improvements and leasing commissions.

Our long term liquidity needs, in addition to recurring short-term liquidity needs as discussed above, consist primarily of funds necessary to pay for property acquisitions and scheduled debt maturities. We intend to satisfy our long term liquidity needs through cash flow from operations, the issuance of equity or debt securities, other borrowings, property dispositions, or, in connection with acquisitions of certain additional buildings, the issuance of common units in the Operating Partnership.

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As of June 30, 2023, we had total immediate liquidity of approximately $794.2 million, comprised of $13.5 million of cash and cash equivalents and $780.7 million of immediate availability on our unsecured credit facility. When incorporating our total immediate liquidity of approximately $794.2 million, the approximately $25.2 million and $35.8 million of forward sale proceeds available under the ATM common stock offering program (as defined below) through May 6, 2024 and June 21, 2024, respectively, our total liquidity was approximately $855.2 million as of June 30, 2023.

In addition, we require funds to pay dividends to holders of our common stock and common units in the Operating Partnership. Any future dividends on our common stock are declared in the sole discretion of our board of directors, subject to the distribution requirements to maintain our REIT status for federal income tax purposes, and may be reduced or stopped for any reason, including to use funds for other liquidity requirements.

Indebtedness Outstanding

The following table summarizes certain information with respect to our indebtedness outstanding as of June 30, 2023.


Indebtedness (dollars in thousands)	June 30, 2023		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)	$	216,000	Term SOFR + 0.855%		October 23, 2026	i
Total unsecured credit facility	216,000

Unsecured term loans:
Unsecured Term Loan F	200,000		2.94	%	January 12, 2025	i
Unsecured Term Loan G	300,000		1.78	%	February 5, 2026	i
Unsecured Term Loan A	150,000		2.14	%	March 15, 2027	i
Unsecured Term Loan H	187,500		3.73	%	January 25, 2028	i
Unsecured Term Loan I	187,500		3.49	%	January 25, 2028	i
Total unsecured term loans	1,025,000
Total unamortized deferred financing fees and debt issuance costs	(3,894)
Total carrying value unsecured term loans, net	1,021,106

Unsecured notes:
Series A Unsecured Notes	50,000		4.98	%	October 1, 2024	ii
Series D Unsecured Notes	100,000		4.32	%	February 20, 2025	ii
Series G Unsecured Notes	75,000		4.10	%	June 13, 2025	ii
Series B Unsecured Notes	50,000		4.98	%	July 1, 2026	ii
Series C Unsecured Notes	80,000		4.42	%	December 30, 2026	ii
Series E Unsecured Notes	20,000		4.42	%	February 20, 2027	ii
Series H Unsecured Notes	100,000		4.27	%	June 13, 2028	ii
Series I Unsecured Notes	275,000		2.80	%	September 29, 2031	ii
Series K Unsecured Notes	400,000		4.12	%	June 28, 2032	ii
Series J Unsecured Notes	50,000		2.95	%	September 28, 2033	ii
Total unsecured notes	1,200,000
Total unamortized deferred financing fees and debt issuance costs	(4,210)
Total carrying value unsecured notes, net	1,195,790

Mortgage notes (secured debt):
Thrivent Financial for Lutherans	3,227		4.78	%	December 15, 2023	iii
United of Omaha Life Insurance Company	4,641		3.71	%	October 1, 2039	ii
Total mortgage notes	7,868
Net unamortized fair market value discount	(139)
Total unamortized deferred financing fees and debt issuance costs	(2)
Total carrying value mortgage notes, net	7,727
Total / weighted average interest rate(5)	$	2,440,623	3.59	%

(1)Interest rate as of June 30, 2023. At June 30, 2023, the one-month Term Secured Overnight Financing Rate (“Term SOFR”) was 5.14078%. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts. The spread over the applicable rate for our unsecured credit facility and unsecured term loans is based on our debt rating and leverage ratio, as defined in the respective loan agreements.

(2)Our unsecured credit facility has a stated rate of one-month Term SOFR plus a 0.10% adjustment and a spread of 0.775%, less a sustainability-related interest rate adjustment of 0.02%. Our unsecured term loans have a stated interest rate of one-month Term SOFR plus a 0.10% adjustment and a spread of 0.85%, less a sustainability-related interest rate adjustment of 0.02%. As of June 30, 2023, one-month Term SOFR for the Unsecured Term Loans A, F,

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G, H, and I was swapped to a fixed rate of 1.31%, 2.11%, 0.95%, 2.90%, and 2.66%, respectively (which includes the 0.10% adjustment). One-month Term SOFR for the Unsecured Term Loan H will be swapped to a fixed rate of 2.50% effective January 12, 2024.

(3)Prepayment terms consist of (i) pre-payable with no penalty; (ii) pre-payable with penalty; (iii) pre-payable without penalty three months prior to the maturity date.

(4)The capacity of our unsecured credit facility is $1.0 billion. The initial maturity date is October 24, 2025, or such later date which may be extended pursuant to two six-month extension options exercisable by us in our discretion upon advance written notice. Exercise of each six-month option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension, (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date, and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions. We are required to pay a facility fee on the aggregate commitment amount (currently $1.0 billion) at a rate per annum of 0.1% to 0.3%, depending on our debt rating, as defined in the credit agreement. The facility fee is due and payable quarterly.

The aggregate undrawn nominal commitments on our unsecured credit facility and unsecured term loans as of June 30, 2023 was approximately $780.7 million, including issued letters of credit. Our actual borrowing capacity at any given point in time may be less and is restricted to a maximum amount based on our debt covenant compliance.

Our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes are subject to ongoing compliance with a number of financial and other covenants. As of June 30, 2023, we were in compliance with the applicable financial covenants.

On January 5, 2023, we redeemed in full at maturity the $100.0 million in aggregate principal amount of the Series F Unsecured Notes with a fixed interest rate of 3.98%.

On January 19, 2023, the sustainability-related interest rate adjustment for our Unsecured Term Loan H and Unsecured Term Loan I went into effect in connection with our 2022 public disclosure assessment score of “A” from the Global Real Estate Sustainability Benchmark (GRESB). The interest rate adjustment, a 0.02% interest rate reduction for each instrument, will end on June 29, 2024, in accordance with the respective loan agreements.

The following table summarizes our debt capital structure as of June 30, 2023.


Debt Capital Structure	June 30, 2023
Total principal outstanding (in thousands)	$	2,448,868
Weighted average duration (years)	4.9

% Secured debt	0.3		%
% Debt maturing next 12 months	0.1		%
Net Debt to Real Estate Cost Basis(1)	35.1		%

(1)“Net Debt” means amounts outstanding under our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes, less cash and cash equivalents. “Real Estate Cost Basis” means the book value of rental property and deferred leasing intangibles, exclusive of the related accumulated depreciation and amortization.

We regularly pursue new financing opportunities to ensure an appropriate balance sheet position. As a result of these dedicated efforts, we are confident in our ability to meet future debt maturities and fund acquisitions. We believe that our current balance sheet is in an adequate position at the date of this filing, despite possible volatility in the credit markets.

Our interest rate exposure on our floating rate debt is managed through the use of interest rate swaps, which fix the rate of our long term floating rate debt. For a detailed discussion on our use of interest rate swaps, see “Interest Rate Risk” below.

Equity

Preferred Stock

We are authorized to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share. As of June 30, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

Common Stock

We are authorized to issue up to 300,000,000 shares of common stock, par value $0.01 per share.

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The following table summarizes our at-the-market (“ATM”) common stock offering program as of June 30, 2023. Pursuant to the equity distribution agreements for our ATM common stock offering program, we may from time to time sell common stock through sales agents and their affiliates, including shares sold on a forward basis under forward sale agreements.


ATM Common Stock Offering Program	Date	Maximum Aggregate Offering Price (in thousands)		Aggregate Available as of June 30, 2023 (in thousands)
2022 $750 million ATM	February 17, 2022	$	750,000	$	679,463

The following table summarizes the shares sold through sales agents under the ATM common stock offering program during the three months ended June 30, 2023


	Three months ended June 30, 2023
ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share		Net Proceeds (in thousands)

2022 $750 million ATM(1)	249,016	$	35.55	$	8,765
Total/weighted average	249,016	$	35.55	$	8,765

(1)Excludes shares sold on a forward basis under the ATM common stock offering program during the six months ended June 30, 2023, which are discussed below.

In addition, on May 5, 2023, we sold 725,698 shares on a forward basis under the ATM common stock offering program at a sale price of $35.0458 per share (an aggregate of approximately $25.4 million in gross sale price), or $34.6953 per share net of commissions. We did not receive any proceeds from the sale of shares on a forward basis. We expect to fully physically settle the applicable forward sale agreement on one or more dates prior to the scheduled maturity date of May 6, 2024; provided, however, we may elect to cash settle or net share settle such forward sale agreement at any time through the scheduled maturity date.

On June 16, 2023, we also sold 992,295 shares on a forward basis under the ATM common stock offering program at a weighted average sale price of $36.5319 per share (an aggregate of approximately $36.3 million in gross sale price), or $36.1820 per share net of commissions. We did not initially receive any proceeds from the sale of shares on a forward basis. We expect to fully physically settle the applicable forward sale agreement on one or more dates prior to the scheduled maturity date of June 21, 2024; provided, however, we may elect to cash settle or net share settle the forward sale agreement at any time through the scheduled maturity date.

Noncontrolling Interest

We own our interests in all of our properties and conduct substantially all of our business through the Operating Partnership. We are the sole member of the sole general partner of the Operating Partnership. As of June 30, 2023, we owned approximately 97.8% of the common units in the Operating Partnership, and our current and former executive officers, directors, senior employees and their affiliates, and third parties that contributed properties to us in exchange for common units in the Operating Partnership owned the remaining 2.2%.

Interest Rate Risk

We use interest rate swaps to fix the rate of our variable rate debt. As of June 30, 2023, all of our outstanding variable rate debt, with the exception of our unsecured credit facility, was fixed with interest rate swaps through maturity.

We recognize all derivatives on the balance sheet at fair value. If the derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income (loss), which is a component of equity. Derivatives that are not designated as hedges must be adjusted to fair value and the changes in fair value must be reflected as income or expense.

We have established criteria for suitable counterparties in relation to various specific types of risk. We only use counterparties that have a credit rating of no lower than investment grade at swap inception from Moody’s Investor Services, Standard & Poor’s, or Fitch Ratings or other nationally recognized rating agencies.

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The swaps are all designated as cash flow hedges of interest rate risk, and all are valued as Level 2 financial instruments. Level 2 financial instruments are defined as significant other observable inputs. As of June 30, 2023, we had 21 interest rate swaps outstanding that were in an asset position of approximately $72.0 million, including any adjustment for nonperformance risk related to these agreements.

As of June 30, 2023, we had approximately $1,241.0 million of variable rate debt. As of June 30, 2023, all of our outstanding variable rate debt, with the exception of our unsecured credit facility, was fixed with interest rate swaps through maturity. To the extent interest rates increase, interest costs on our floating rate debt not fixed with interest rate swaps will increase, which could adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our security holders. From time to time, we may enter into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors. In addition, an increase in interest rates could decrease the amounts third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions.

Off-balance Sheet Arrangements

As of June 30, 2023, we had letters of credit related to development projects and certain other agreements of approximately $3.3 million. As of June 30, 2023, we had no other material off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The primary market risk we are exposed to is interest rate risk. We have used derivative financial instruments to manage, or hedge, interest rate risks related to our borrowings, primarily through interest rate swaps.

As of June 30, 2023, we had $1,241.0 million of variable rate debt outstanding. As of June 30, 2023, all of our outstanding variable rate debt, with the exception of our unsecured credit facility which had a balance of $216.0 million, was fixed with interest rate swaps through maturity. To the extent we undertake additional variable rate indebtedness, if interest rates increase, then so will the interest costs on our unhedged variable rate debt, which could adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our security holders. Further, rising interest rates could limit our ability to refinance existing debt when it matures or significantly increase our future interest expense. From time to time, we enter into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors. While these agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risk that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges under GAAP. In addition, an increase in interest rates could decrease the amounts third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions. If interest rates increased by 100 basis points and assuming we had an outstanding balance of $216.0 million on our unsecured credit facility for the six months ended June 30, 2023, our interest expense would have increased by approximately $1.1 million for the six months ended June 30, 2023.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by SEC Rule 13a-15(b), we have evaluated, under the supervision of and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of June 30, 2023. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures for the periods covered by this report were effective to provide reasonable assurance that information required to be disclosed by our Company in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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Changes in Internal Controls

There was no change to our internal control over financial reporting during the quarter ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. Other Information

Item 1. Legal Proceedings

From time to time, we are a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently a party, as plaintiff or defendant, to any legal proceedings that, individually or in the aggregate, would be expected to have a material effect on our business, financial condition or results of operations if determined adversely to our company.

Item 1A. Risk Factors

Other than the following, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 15, 2023.

Recent macroeconomic trends, including inflation and rising interest rates, and adverse developments affecting the financial services industry may adversely affect our business, financial condition and results of operations.

During the year ended December 31, 2022, inflation in the United States accelerated and is currently expected to continue at an elevated level in the near-term. Beginning in 2022, in an effort to combat inflation and restore price stability, the Federal Reserve significantly raised its benchmark federal funds rate, which led to increases in interest rates in the credit markets. The Federal Reserve may continue to raise the federal funds rate, which will likely lead to higher interest rates in the credit markets and the possibility of slowing economic growth and/or a recession. Additionally, U.S. government policies implemented to address inflation, including actions by the Federal Reserve to increase interest rates, could negatively impact consumer spending, our tenants’ businesses, and/or future demand for industrial space.

Rising inflation could also have an adverse impact on our financing costs (either through near-term borrowings on our variable rate debt, including our unsecured credit facility, or refinancing of existing debt at higher interest rates), and general and administrative expenses and property operating expenses, as these costs could increase at a rate higher than our rental and other revenue. To the extent our exposure to increases in interest rates is not eliminated through interest rate swaps or other protection agreements, such increases may also result in higher debt service costs, which will adversely affect our cash flows. Historically, during periods of increasing interest rates, real estate valuations have generally decreased due to rising capitalization rates, which tend to move directionally with interest rates. Consequently, prolonged periods of higher interest rates may negatively impact the valuation of our real estate assets and could result in the decline of the market price of our common stock, which may adversely impact our ability and willingness to raise equity capital on favorable terms, including through our at-the-market (“ATM”) common stock offering program. Although the extent of any prolonged periods of higher interest rates remains unknown at this time, negative impacts to our cost of capital may adversely affect our future business plans and growth, at least in the near term.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. In addition, if any parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. Although we assess our banking relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.

If debt is unavailable at reasonable rates, we may not be able to finance acquisitions or refinance our existing debt.

If debt is unavailable at reasonable rates, we may not be able to finance acquisitions or refinance existing debt when the loans come due on favorable terms, or at all. Most of our financing arrangements require us to make a lump-sum or “balloon” payment at maturity. Our ability to make a payment at maturity is uncertain and, in the event that we do not have sufficient

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funds, we will need to refinance this debt. If interest rates are higher when we refinance such debt, our net income, cash flow, and, consequently, our cash available for distribution to stockholders could be reduced. If the credit environment is constrained at the time a payment is due, we may not be able to refinance the existing debt on acceptable terms and may be forced to choose from a number of unfavorable options, including accepting unfavorable financing terms, selling properties on disadvantageous terms or defaulting and permitting the lender to foreclose.

In addition, adverse developments affecting the financial services industry or investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our financial or other obligations or reduce our net income and cash available for distribution to stockholders.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Equity Securities

During the quarter ended June 30, 2023, the Operating Partnership issued 35,000 common units in the Operating Partnership upon exchange of outstanding long term incentive plan units issued pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”). Subject to certain restrictions, common units in the Operating Partnership may be redeemed for cash in an amount equal to the value of a share of common stock or, at our election, for a share of common stock on a one-for-one basis.

During the quarter ended June 30, 2023, we issued 35,000 shares of common stock upon redemption of 35,000 common units in the Operating Partnership held by various limited partners. The issuance of such shares of common stock was either registered under the Securities Act or effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act and the rules and regulations promulgated thereunder.

All other issuances of unregistered securities during the quarter ended June 30, 2023, if any, have previously been disclosed in filings with the SEC.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended June 30, 2023, none of the Company’s directors or officers adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).

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Item 6. Exhibits


Exhibit Number						Description of Document
10.1						Amendment to the 2011 Equity Incentive Plan, dated as of April 25, 2023 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on April 28, 2023)
31.1 *						Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 *						Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 **						Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS *						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH *						Inline XBRL Taxonomy Extension Schema Document
101.CAL *						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF *						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB *						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE *						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 *						Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		STAG INDUSTRIAL, INC.

Date: July 26, 2023	BY:	/s/ MATTS S. PINARD
		Matts S. Pinard
		Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer)

	BY:	/s/ JACLYN M. PAUL
		Jaclyn M. Paul
		Chief Accounting Officer (Principal Accounting Officer)