STAG Industrial (NYSE: STAG): Industrial Revolution 2.0

This week’s report will be taking a look at STAG Industrial (NYSE: STAG), an industrial REIT that operates across 40 states. The premise behind this investment idea is teeing up for a shift to nearshoring industrial and manufacturing operations. This can create an impactful growth spurt for companies that fall within STAG’s customer base, bringing improved demand to properties under management, and in turn, higher lease rates.

STAG is already experiencing improved leasing rates as the firm has 38% of the square footage for 2025 already committed to. The cash leasing spreads for these renewals is 24.1%, similar to the growth rate in the previous year.

The big shift will begin in 2025 as the bulk of leases begin to turn over, resulting in improved rental rates going forward. With an average lease duration of 4.5 years, STAG’s rental growth has the flexibility to remain relatively close to inflation. In addition to this, roughly 21% of STAG’s rental revenue is linked to CPI, allowing for rates to adjust during times of cost headwinds.

STAG Industrial (NYSE: STAG)

STAG Operations