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 March 31, ~~2022~~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 ~~May 2, 2022~~April 25, 2023 was ~~179,213,310.~~179,376,755.

Table of Contents

STAG Industrial, Inc.

Table of Contents



PART I.	Financial Information	3

Item 1.	Financial Statements (unaudited)	3

	Consolidated Balance Sheets as of March ~~31, 2022~~ 3 1 , 2023 and December 31, ~~2021~~2022	3

	Consolidated Statements of Operations for the Three Months ~~Ended March 31, 2022~~Ende d Marc h 3 1 , 202 3 and ~~2021~~2022	4

	Consolidated Statements of Comprehensive Income for the Three ~~Months~~ M o n t h s Ended March ~~31, 2022~~ 3 1 , 202 3 and ~~2021~~2022	5

	Consolidated Statements of Equity for the Three Months Ended March ~~31, 2022~~3 1 , 202 3 and ~~2021~~2022	6

	Consolidated Statements of Cash Flows for the Three Months Ended March ~~31, 2022~~ 3 1 , 202 3 and ~~2021~~2022	7

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2321

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4035

Item 4.	Controls and Procedures	4136

PART II.	Other Information	4237

Item 1.	Legal Proceedings	4237

Item 1A.	Risk Factors	4237

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4237

Item 3.	Defaults Upon Senior Securities	4338

Item 4.	Mine Safety Disclosures	4338

Item 5.	Other Information	4338

Item 6.	Exhibits	4539

	SIGNATURES	4640

Table of Contents

Part I. Financial Information

Item 1. Financial Statements

STAG Industrial, Inc.

Consolidated Balance Sheets

(unaudited, in thousands, except share data)


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Assets	Assets					Assets
Rental Property:	Rental Property:					Rental Property:
Land	Land	$	626,385	$	617,297	Land	$	645,477	$	647,098
Buildings and improvements, net of accumulated depreciation of $650,370 and $611,867, respectively		4,535,725		4,435,743
Deferred leasing intangibles, net of accumulated amortization of $288,640 and $282,038, respectively		561,267		567,658
Buildings and improvements, net of accumulated depreciation of $802,584 and $763,128, respectively						Buildings and improvements, net of accumulated depreciation of $802,584 and $763,128, respectively	4,683,041		4,706,745
Deferred leasing intangibles, net of accumulated amortization of $333,672 and $328,848, respectively						Deferred leasing intangibles, net of accumulated amortization of $333,672 and $328,848, respectively	483,583		508,935
Total rental property, net	Total rental property, net	5,723,377		5,620,698		Total rental property, net	5,812,101		5,862,778
Cash and cash equivalents	Cash and cash equivalents	34,830		18,981		Cash and cash equivalents	17,210		25,884
Restricted cash	Restricted cash	3,175		4,215		Restricted cash	963		905
Tenant accounts receivable	Tenant accounts receivable	98,320		93,600		Tenant accounts receivable	116,767		115,509
Prepaid expenses and other assets	Prepaid expenses and other assets	64,308		60,953		Prepaid expenses and other assets	78,567		71,733
Interest rate swaps	Interest rate swaps	27,696		5,220		Interest rate swaps	56,203		72,223
Operating lease right-of-use assets	Operating lease right-of-use assets	29,151		29,582		Operating lease right-of-use assets	30,843		31,313

Assets held for sale, net						Assets held for sale, net	3,183		4,643
Total assets	Total assets	$	5,980,857	$	5,833,249	Total assets	$	6,115,837	$	6,184,988
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Liabilities:	Liabilities:					Liabilities:
Unsecured credit facility	Unsecured credit facility	$	384,000	$	296,000	Unsecured credit facility	$	235,000	$	175,000
Unsecured term loans, net	Unsecured term loans, net	970,925		970,577		Unsecured term loans, net	1,020,772		1,020,440
Unsecured notes, net	Unsecured notes, net	897,058		896,941		Unsecured notes, net	1,195,619		1,295,442
Mortgage notes, net	Mortgage notes, net	54,190		54,744		Mortgage notes, net	7,813		7,898
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	72,726		76,475		Accounts payable, accrued expenses and other liabilities	94,122		97,371
Interest rate swaps		2,298		17,052

Tenant prepaid rent and security deposits	Tenant prepaid rent and security deposits	36,062		37,138		Tenant prepaid rent and security deposits	44,142		40,847
Dividends and distributions payable	Dividends and distributions payable	22,282		21,906		Dividends and distributions payable	22,484		22,282
Deferred leasing intangibles, net of accumulated amortization of $22,245 and $21,136, respectively		33,712		35,721
Deferred leasing intangibles, net of accumulated amortization of $25,506 and $24,593, respectively						Deferred leasing intangibles, net of accumulated amortization of $25,506 and $24,593, respectively	30,373		32,427
Operating lease liabilities	Operating lease liabilities	32,725		33,108		Operating lease liabilities	34,692		35,100

Total liabilities	Total liabilities	2,505,978		2,439,662		Total liabilities	2,685,017		2,726,807
Commitments and contingencies (Note 11)	Commitments and contingencies (Note 11)					Commitments and contingencies (Note 11)
Equity:	Equity:					Equity:
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at March 31, 2022 and December 31, 2021; none issued or outstanding		—		—
Common stock, par value $0.01 per share, 300,000,000 shares authorized at March 31, 2022 and December 31, 2021, 179,211,305 and 177,769,342 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		1,792		1,777
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at March 31, 2023 and December 31, 2022; none issued or outstanding						Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at March 31, 2023 and December 31, 2022; none issued or outstanding	—		—
Common stock, par value $0.01 per share, 300,000,000 shares authorized at March 31, 2023 and December 31, 2022, 179,372,871 and 179,248,980 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively						Common stock, par value $0.01 per share, 300,000,000 shares authorized at March 31, 2023 and December 31, 2022, 179,372,871 and 179,248,980 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	1,794		1,792
Additional paid-in capital	Additional paid-in capital	4,179,361		4,130,038		Additional paid-in capital	4,188,960		4,188,677
Cumulative dividends in excess of earnings	Cumulative dividends in excess of earnings	(805,400)		(792,332)		Cumulative dividends in excess of earnings	(892,676)		(876,145)
Accumulated other comprehensive income (loss)		24,652		(11,783)
Accumulated other comprehensive income						Accumulated other comprehensive income	54,849		70,500
Total stockholders’ equity	Total stockholders’ equity	3,400,405		3,327,700		Total stockholders’ equity	3,352,927		3,384,824
Noncontrolling interest	Noncontrolling interest	74,474		65,887		Noncontrolling interest	77,893		73,357
Total equity	Total equity	3,474,879		3,393,587		Total equity	3,430,820		3,458,181
Total liabilities and equity	Total liabilities and equity	$	5,980,857	$	5,833,249	Total liabilities and equity	$	6,115,837	$	6,184,988

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

Table of Contents

STAG Industrial, Inc.

Consolidated Statements of Operations

(unaudited, in thousands, except per share data)


		Three months ended March 31,				Three months ended March 31,
		2022		2021				2023		2022
Revenue	Revenue						Revenue
Rental income	Rental income	$	158,601	$	133,825		Rental income	$	173,268	$	158,601
Other income	Other income	608		170			Other income	285		608
Total revenue	Total revenue	159,209		133,995			Total revenue	173,553		159,209
Expenses	Expenses						Expenses
Property	Property	31,775		27,002			Property	35,881		31,775
General and administrative	General and administrative	12,313		12,790			General and administrative	12,676		12,313
Depreciation and amortization	Depreciation and amortization	67,366		58,407			Depreciation and amortization	68,944		67,366

Other expenses	Other expenses	497		852			Other expenses	2,979		497
Total expenses	Total expenses	111,951		99,051			Total expenses	120,480		111,951
Other income (expense)	Other income (expense)						Other income (expense)
Interest and other income	Interest and other income	34		32			Interest and other income	19		34
Interest expense	Interest expense	(17,259)		(15,358)			Interest expense	(22,612)		(17,259)
Debt extinguishment and modification expenses		—		(679)

Gain on the sales of rental property, net	Gain on the sales of rental property, net	23,955		6,409			Gain on the sales of rental property, net	20,128		23,955
Total other income (expense)	Total other income (expense)	6,730		(9,596)			Total other income (expense)	(2,465)		6,730
Net income	Net income	$	53,988	$	25,348		Net income	$	50,608	$	53,988
Less: income attributable to noncontrolling interest after preferred stock dividends		1,162		473
Less: income attributable to noncontrolling interest							Less: income attributable to noncontrolling interest	1,142		1,162
Net income attributable to STAG Industrial, Inc.	Net income attributable to STAG Industrial, Inc.	$	52,826	$	24,875		Net income attributable to STAG Industrial, Inc.	$	49,466	$	52,826
Less: preferred stock dividends		—		1,289
Less: redemption of preferred stock		—		2,582

Less: amount allocated to participating securities	Less: amount allocated to participating securities	62		73			Less: amount allocated to participating securities	53		62
Net income attributable to common stockholders	Net income attributable to common stockholders	$	52,764	$	20,931		Net income attributable to common stockholders	$	49,413	$	52,764
Weighted average common shares outstanding — basic	Weighted average common shares outstanding — basic	177,827		158,430			Weighted average common shares outstanding — basic	179,196		177,827
Weighted average common shares outstanding — diluted	Weighted average common shares outstanding — diluted	178,065		159,126			Weighted average common shares outstanding — diluted	179,297		178,065
Net income per share — basic and diluted	Net income per share — basic and diluted						Net income per share — basic and diluted

Net income per share attributable to common stockholders — basic	Net income per share attributable to common stockholders — basic	$	0.30	$	0.13		Net income per share attributable to common stockholders — basic	$	0.28	$	0.30
Net income per share attributable to common stockholders — diluted	Net income per share attributable to common stockholders — diluted	$	0.30	$	0.13		Net income per share attributable to common stockholders — diluted	$	0.28	$	0.30

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

Table of Contents

STAG Industrial, Inc.

Consolidated Statements of Comprehensive Income

(unaudited, in thousands)


		Three months ended March 31,				Three months ended March 31,
		2022		2021				2023		2022
Net income	Net income	$	53,988	$	25,348		Net income	$	50,608	$	53,988
Other comprehensive income:
Income on interest rate swaps		37,237		12,150
Other comprehensive income		37,237		12,150
Other comprehensive income (loss):							Other comprehensive income (loss):
Income (loss) on interest rate swaps							Income (loss) on interest rate swaps	(16,012)		37,237
Other comprehensive income (loss)							Other comprehensive income (loss)	(16,012)		37,237
Comprehensive income	Comprehensive income	91,225		37,498			Comprehensive income	34,596		91,225
Income attributable to noncontrolling interest after preferred stock dividends	Income attributable to noncontrolling interest after preferred stock dividends	(1,162)		(473)			Income attributable to noncontrolling interest after preferred stock dividends	(1,142)		(1,162)
Other comprehensive income attributable to noncontrolling interest		(802)		(268)
Other comprehensive (income) loss attributable to noncontrolling interest							Other comprehensive (income) loss attributable to noncontrolling interest	361		(802)
Comprehensive income attributable to STAG Industrial, Inc.	Comprehensive income attributable to STAG Industrial, Inc.	$	89,261	$	36,757		Comprehensive income attributable to STAG Industrial, Inc.	$	33,815	$	89,261

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

Table of Contents

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 March 31, 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		54,963		—		—		54,976		—		54,976

Dividends and distributions, net	—		—	—		—		(65,114)		—		(65,114)		(1,474)		(66,588)
Non-cash compensation activity, net	—		48,628	1		(3,279)		(780)		—		(4,058)		5,737		1,679
Redemption of common units to common stock	—		65,000	1		1,216		—		—		1,217		(1,217)		—
Rebalancing of noncontrolling interest	—		—	—		(3,577)		—		—		(3,577)		3,577		—
Other comprehensive income	—		—	—		—		—		36,435		36,435		802		37,237
Net income	—		—	—		—		52,826		—		52,826		1,162		53,988
Balance, March 31, 2022	$	—	179,211,305	$	1,792	$	4,179,361	$	(805,400)	$	24,652	$	3,400,405	$	74,474	$	3,474,879
Three months ended March 31, 2021
Balance, December 31, 2020	$	75,000	158,209,823	$	1,582	$	3,421,721	$	(742,071)	$	(40,025)	$	2,716,207	$	54,845	$	2,771,052
Proceeds from sales of common stock, net	—		680,276	7		21,559		—		—		21,566		—		21,566
Redemption of preferred stock	(75,000)		—	—		2,573		(2,582)		—		(75,009)		—		(75,009)
Dividends and distributions, net	—		—	—		—		(58,828)		—		(58,828)		(1,436)		(60,264)
Non-cash compensation activity, net	—		95,190	1		(3,214)		(121)		—		(3,334)		6,607		3,273
Redemption of common units to common stock	—		97,159	1		1,622		—		—		1,623		(1,623)		—
Rebalancing of noncontrolling interest	—		—	—		(474)		—		—		(474)		474		—
Other comprehensive income	—		—	—		—		—		11,882		11,882		268		12,150
Net income	—		—	—		—		24,875		—		24,875		473		25,348
Balance, March 31, 2021	$	—	159,082,448	$	1,591	$	3,443,787	$	(778,727)	$	(28,143)	$	2,638,508	$	59,608	$	2,698,116

																			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 March 31, 2023																		Three months ended March 31, 2023
Balance, December 31, 2022																		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																		Proceeds from sales of common stock, net	—		—		—		(152)		—		—		(152)		—		(152)

Dividends and distributions, net ($0.37 per share/unit)																		Dividends and distributions, net ($0.37 per share/unit)	—		—		—		—		(65,914)		—		(65,914)		1,816		(64,098)
Non-cash compensation activity, net																		Non-cash compensation activity, net	—		80,057		1		(3,831)		(83)		—		(3,913)		6,206		2,293
Redemption of common units to common stock																		Redemption of common units to common stock	—		43,834		1		828		—		—		829		(829)		—

Rebalancing of noncontrolling interest																		Rebalancing of noncontrolling interest	—		—		—		3,438		—		—		3,438		(3,438)		—
Other comprehensive loss																		Other comprehensive loss	—		—		—		—		—		(15,651)		(15,651)		(361)		(16,012)
Net income																		Net income	—		—		—		—		49,466		—		49,466		1,142		50,608
Balance, March 31, 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
Three months ended March 31, 2022																		Three months ended March 31, 2022
Balance, December 31, 2021																		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																		Proceeds from sales of common stock, net	—		1,328,335		13		54,963		—		—		54,976		—		54,976

Dividends and distributions, net ($0.37 per share/unit)																		Dividends and distributions, net ($0.37 per share/unit)	—		—		—		—		(65,114)		—		(65,114)		(1,474)		(66,588)
Non-cash compensation activity, net																		Non-cash compensation activity, net	—		48,628		1		(3,279)		(780)		—		(4,058)		5,737		1,679
Redemption of common units to common stock																		Redemption of common units to common stock	—		65,000		1		1,216		—		—		1,217		(1,217)		—

Rebalancing of noncontrolling interest																		Rebalancing of noncontrolling interest	—		—		—		(3,577)		—		—		(3,577)		3,577		—
Other comprehensive income																		Other comprehensive income	—		—		—		—		—		36,435		36,435		802		37,237
Net income																		Net income	—		—		—		—		52,826		—		52,826		1,162		53,988
Balance, March 31, 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

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

Table of Contents

STAG Industrial, Inc.

Consolidated Statements of Cash Flows

(unaudited, in thousands)


		Three months ended March 31,					Three months ended March 31,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	53,988	$	25,348	Net income	$	50,608	$	53,988
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	67,366		58,407		Depreciation and amortization	68,944		67,366

Non-cash portion of interest expense	Non-cash portion of interest expense	864		487		Non-cash portion of interest expense	976		864
Amortization of above and below market leases, net	Amortization of above and below market leases, net	(84)		1,474		Amortization of above and below market leases, net	(129)		(84)
Straight-line rent adjustments, net	Straight-line rent adjustments, net	(4,450)		(4,676)		Straight-line rent adjustments, net	(5,044)		(4,450)

Gain on the sales of rental property, net	Gain on the sales of rental property, net	(23,955)		(6,409)		Gain on the sales of rental property, net	(20,128)		(23,955)
Non-cash compensation expense	Non-cash compensation expense	3,260		4,615		Non-cash compensation expense	3,092		3,260

Change in assets and liabilities:	Change in assets and liabilities:					Change in assets and liabilities:
Tenant accounts receivable	Tenant accounts receivable	(262)		3,281		Tenant accounts receivable	2,694		(262)

Prepaid expenses and other assets	Prepaid expenses and other assets	(3,371)		(4,132)		Prepaid expenses and other assets	(11,288)		(3,371)
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	(3,401)		(4,613)		Accounts payable, accrued expenses and other liabilities	(6,599)		(3,401)
Tenant prepaid rent and security deposits	Tenant prepaid rent and security deposits	(1,076)		(322)		Tenant prepaid rent and security deposits	3,295		(1,076)
Total adjustments	Total adjustments	34,891		48,112		Total adjustments	35,813		34,891
Net cash provided by operating activities	Net cash provided by operating activities	88,879		73,460		Net cash provided by operating activities	86,421		88,879
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Acquisitions of land and buildings and improvements	Acquisitions of land and buildings and improvements	(144,600)		(81,969)		Acquisitions of land and buildings and improvements	—		(144,600)
Additions of land and building and improvements		(17,061)		(10,269)
Additions of land and buildings and improvements						Additions of land and buildings and improvements	(27,685)		(17,061)
Acquisitions of other assets	Acquisitions of other assets	(2,134)		—		Acquisitions of other assets	—		(2,134)

Proceeds from sales of rental property, net	Proceeds from sales of rental property, net	35,326		23,884		Proceeds from sales of rental property, net	36,333		35,326

Acquisition deposits, net	Acquisition deposits, net	(711)		2,008		Acquisition deposits, net	1,185		(711)
Acquisitions of deferred leasing intangibles	Acquisitions of deferred leasing intangibles	(19,617)		(13,156)		Acquisitions of deferred leasing intangibles	—		(19,617)

Net cash used in investing activities		(148,797)		(79,502)
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	9,833		(148,797)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Proceeds from unsecured credit facility	Proceeds from unsecured credit facility	675,000		393,000		Proceeds from unsecured credit facility	209,000		675,000
Repayment of unsecured credit facility	Repayment of unsecured credit facility	(587,000)		(267,000)		Repayment of unsecured credit facility	(149,000)		(587,000)
Proceeds from unsecured term loans		—		300,000
Repayment of unsecured term loans		—		(300,000)

Repayment of unsecured notes						Repayment of unsecured notes	(100,000)		—

Repayment of mortgage notes	Repayment of mortgage notes	(586)		(531)		Repayment of mortgage notes	(86)		(586)
Payment of loan fees and costs	Payment of loan fees and costs	(4)		(2,750)		Payment of loan fees and costs	—		(4)

Proceeds from sales of common stock, net	Proceeds from sales of common stock, net	55,126		21,639		Proceeds from sales of common stock, net	(76)		55,126
Redemption of preferred stock		—		(75,000)

Dividends and distributions	Dividends and distributions	(66,213)		(59,996)		Dividends and distributions	(63,896)		(66,213)
Repurchase and retirement of share-based compensation	Repurchase and retirement of share-based compensation	(1,596)		(1,342)		Repurchase and retirement of share-based compensation	(812)		(1,596)
Net cash provided by financing activities		74,727		8,020
Increase in cash and cash equivalents and restricted cash		14,809		1,978
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	(104,870)		74,727
Increase (decrease) in cash and cash equivalents and restricted cash						Increase (decrease) in cash and cash equivalents and restricted cash	(8,616)		14,809
Cash and cash equivalents and restricted cash—beginning of period	Cash and cash equivalents and restricted cash—beginning of period	23,196		20,339		Cash and cash equivalents and restricted cash—beginning of period	26,789		23,196
Cash and cash equivalents and restricted cash—end of period	Cash and cash equivalents and restricted cash—end of period	$	38,005	$	22,317	Cash and cash equivalents and restricted cash—end of period	$	18,173	$	38,005
Supplemental disclosure:	Supplemental disclosure:					Supplemental disclosure:
Cash paid for interest, net of capitalized interest	Cash paid for interest, net of capitalized interest	$	17,172	$	13,471	Cash paid for interest, net of capitalized interest	$	18,597	$	17,172
Supplemental schedule of non-cash investing and financing activities	Supplemental schedule of non-cash investing and financing activities					Supplemental schedule of non-cash investing and financing activities

Additions to building and other capital improvements		$	(539)	$	—
Additions of land and buildings and improvements						Additions of land and buildings and improvements	$	—	$	(539)
Transfer of other assets to building and other capital improvements	Transfer of other assets to building and other capital improvements	$	539	$	—	Transfer of other assets to building and other capital improvements	$	—	$	539
Acquisitions of land and buildings and improvements		$	—	$	(4,239)
Acquisitions of deferred leasing intangibles		$	—	$	(703)

Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities		$	590	$	4,281

Change in additions of land, building, and improvements included in accounts payable, accrued expenses and other liabilities						Change in additions of land, building, and improvements included in accounts payable, accrued expenses and other liabilities	$	(4,596)	$	590
Additions to building and other capital improvements from non-cash compensation	Additions to building and other capital improvements from non-cash compensation	$	(26)	$	—	Additions to building and other capital improvements from non-cash compensation	$	(13)	$	(26)
Assumption of mortgage notes		$	—	$	5,103
Fair market value adjustment to mortgage notes acquired		$	—	$	(161)
Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities		$	(167)	$	879

Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses and other liabilities						Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses and other liabilities	$	(76)	$	(167)

Dividends and distributions accrued	Dividends and distributions accrued	$	22,282	$	19,657	Dividends and distributions accrued	$	22,484	$	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 single-tenant, 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 ~~substantially~~ all of its ~~assets~~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 March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company owned a ~~97.9%~~97.7% and ~~98.1%~~97.9%, respectively, of the common ~~equity interest~~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 March 31, ~~2022,~~2023, the Company owned ~~551~~561 industrial buildings in 4041 states with approximately ~~110.1~~111.6 million rentable square feet.

~~COVID-19 Pandemic~~

~~The Company and the real estate industry generally continue to face risks and uncertainties related to the ongoing public health crisis of the novel coronavirus disease (“COVID-19”) pandemic.~~

The Company closely monitors the effect of the COVID-19 pandemic on all aspects of its business, including how the pandemic will affect its tenants and business partners. The Company did not incur significant disruptions from the COVID-19 pandemic or enter into any rent deferral agreements during the three months ended March 31, 2022 and 2021. The Company will continue to evaluate tenant rent relief requests on an individual basis, considering a number of factors. Not all tenant requests will ultimately result in modified agreements, nor is the Company foregoing its contractual rights under its lease agreements.

The Company remains unable to predict the ultimate impact that the pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties. The extent to which the COVID-19 pandemic affects the Company’s operations and those of its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.

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, ~~2021.~~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

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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) March 31, 2022 December 31, 2021
Cash and cash equivalents $ 34,830 $ 18,981
Restricted cash 3,175 4,215
Total cash and cash equivalents and restricted cash $ 38,005 $ 23,196

~~Taxes~~

~~Federal Income Taxes~~

~~The Company’s taxable REIT subsidiary recognized net income of approximately $0.1 million and $0 for the three months ended March 31, 2022 and 2021, respectively.~~

~~State and Local Income, Excise, and Franchise Tax~~

State and local income, excise, and franchise taxes in the amount of approximately $0.5 million and $0.4 million have been recorded in other expenses on the accompanying Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021, respectively.


Reconciliation of cash and cash equivalents and restricted cash (in thousands)	March 31, 2023		December 31, 2022
Cash and cash equivalents	$	17,210	$	25,884
Restricted cash	963		905
Total cash and cash equivalents and restricted cash	$	18,173	$	26,789

Uncertain Tax Positions

As of March 31, ~~2022~~2023 and December 31, ~~2021,~~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 March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.


Rental Property (in thousands)	Rental Property (in thousands)	March 31, 2022		December 31, 2021		Rental Property (in thousands)	March 31, 2023		December 31, 2022
Land	Land	$	626,385	$	617,297	Land	$	645,477	$	647,098
Buildings, net of accumulated depreciation of $433,560 and $406,670, respectively		4,126,324		4,035,210
Tenant improvements, net of accumulated depreciation of $27,270 and $26,065, respectively		43,788		43,999
Building and land improvements, net of accumulated depreciation of $189,540 and $179,132, respectively		324,917		320,041
Buildings, net of accumulated depreciation of $540,811 and $513,053, respectively						Buildings, net of accumulated depreciation of $540,811 and $513,053, respectively	4,216,760		4,232,964
Tenant improvements, net of accumulated depreciation of $32,556 and $31,578, respectively						Tenant improvements, net of accumulated depreciation of $32,556 and $31,578, respectively	42,647		44,526
Building and land improvements, net of accumulated depreciation of $229,217 and $218,497, respectively						Building and land improvements, net of accumulated depreciation of $229,217 and $218,497, respectively	347,172		339,274
Construction in progress	Construction in progress	40,696		36,493		Construction in progress	76,462		89,981
Deferred leasing intangibles, net of accumulated amortization of $288,640 and $282,038, respectively		561,267		567,658
Deferred leasing intangibles, net of accumulated amortization of $333,672 and $328,848, respectively						Deferred leasing intangibles, net of accumulated amortization of $333,672 and $328,848, respectively	483,583		508,935
Total rental property, net	Total rental property, net	$	5,723,377	$	5,620,698	Total rental property, net	$	5,812,101	$	5,862,778

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Acquisitions

~~The following table summarizes the acquisitions of the Company during the three months ended March 31, 2022. The Company accounted for all of its acquisitions as asset acquisitions.~~

Market(1)
Date Acquired Square Feet Number of Buildings Purchase Price
(in thousands)
Kansas City, MO January 6, 2022 702,000 1 $ 60,428
Chicago, IL January 31, 2022 72,499 1 8,128
Columbus, OH February 8, 2022 138,213 1 11,492
Cleveland, OH February 8, 2022 136,800 1 13,001
Nashville, TN March 10, 2022 109,807 1 12,810
Greenville/Spartanburg, SC March 10, 2022 289,103 1 28,274
Memphis, TN March 18, 2022 195,622 1 15,828
Greenville/Spartanburg, SC March 18, 2022 155,717 1 16,390
Three months ended March 31, 2022 1,799,761 8 $ 166,351

~~(1) As defined by CoStar Realty Information Inc (“CoStar”). If the building is located outside of a CoStar 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~~There were no assets ~~and liabilities~~ acquired by the Company during the three months ended March 31, ~~2022 in connection with~~2023, compared to eight acquisitions for a purchase price of approximately $166.4 million during the ~~acquisitions identified in the table above.~~three months ended March 31, 2022.

Three months ended March 31, 2022
Acquired Assets and Liabilities Purchase Price (in thousands) Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land $ 10,746 N/A
Buildings 127,778 N/A
Tenant improvements 692 N/A
Building and land improvements 5,384 N/A
Other assets 2,134 N/A
Deferred leasing intangibles - In-place leases 11,512 5.3
Deferred leasing intangibles - Tenant relationships 7,319 9.0
Deferred leasing intangibles - Above market leases 959 6.9
Deferred leasing intangibles - Below market leases (173) 3.7
Total purchase price $ 166,351
Dispositions

The following table summarizes the ~~results of operations~~Company’s dispositions for the three months ended March 31, ~~2022~~2023. All of the dispositions were sold to third parties and were accounted for under the ~~buildings acquired during the three months ended March 31, 2022, which are included in the Company’s Consolidated Statements of Operations from the date of acquisition.~~full accrual method.


~~Results~~Sales of ~~Operations (in~~rental property, net (dollars in thousands)	Three months ended March 31, ~~2022~~2023
~~Total revenue~~Number of buildings	2

Building square feet (in millions)	0.4
2023 contribution to net income(1)	$	180
2022 contribution to net income	$	~~1,251~~246

Proceeds from sales of rental property, net	$	36,333
Net ~~loss~~book value	$	~~113~~16,205
Gain on the sales of rental property, net	$	20,128

~~Dispositions~~

During the three months ended March 31, 2022, the Company sold 1 building and 1 land parcel to third parties comprised of approximately 0.2 million rentable square feet with a net book value of approximately $11.3 million. This building contributed approximately $0.2 million and $0.4 million to revenue for the three months ended March 31, 2022 and 2021, respectively. This building contributed approximately $0.2 million and $0.3 million to net income (exclusive(1) Exclusive of gain on the sales of rental property, ~~net)~~net.

Assets Held for Sale

As of March 31, 2023, the ~~three~~related land and buildings and improvements, net of approximately $0.5 million and $2.7 million, respectively, for one building was classified as assets held for sale, net on the accompanying Consolidated Balance Sheets. This building contributed approximately $(0.2) million and $0.1 million to net income (loss) during the months ended March 31, 2023 and 2022, ~~and 2021,~~ respectively. Net proceeds from the sales of rental property were approximately $35.3 million and the Company recognized the full gain on the sales of rental property, net, of approximately $24.0 million for the three months endedSubsequent to March 31, ~~2022.~~

2023, in April 2023, this building was sold to a third party.

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Deferred Leasing Intangibles

The following table summarizes the deferred leasing intangibles, net on the accompanying Consolidated Balance Sheets as of March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.


		March 31, 2022						December 31, 2021							March 31, 2023						December 31, 2022
Deferred Leasing Intangibles (in thousands)	Deferred Leasing Intangibles (in thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net		Deferred Leasing Intangibles (in thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Above market leases	Above market leases	$	89,747	$	(31,436)	$	58,311	$	91,565	$	(32,110)	$	59,455	Above market leases	$	83,040	$	(33,752)	$	49,288	$	86,172	$	(34,954)	$	51,218
Other intangible lease assets	Other intangible lease assets	760,160		(257,204)		502,956		758,131		(249,928)		508,203		Other intangible lease assets	734,215		(299,920)		434,295		751,611		(293,894)		457,717
Total deferred leasing intangible assets	Total deferred leasing intangible assets	$	849,907	$	(288,640)	$	561,267	$	849,696	$	(282,038)	$	567,658	Total deferred leasing intangible assets	$	817,255	$	(333,672)	$	483,583	$	837,783	$	(328,848)	$	508,935

Below market leases	Below market leases	$	55,957	$	(22,245)	$	33,712	$	56,857	$	(21,136)	$	35,721	Below market leases	$	55,879	$	(25,506)	$	30,373	$	57,020	$	(24,593)	$	32,427
Total deferred leasing intangible liabilities	Total deferred leasing intangible liabilities	$	55,957	$	(22,245)	$	33,712	$	56,857	$	(21,136)	$	35,721	Total deferred leasing intangible liabilities	$	55,879	$	(25,506)	$	30,373	$	57,020	$	(24,593)	$	32,427

The following table summarizes the ~~amortization expense and the~~ net ~~decrease~~increase to rental income and amortization expense for the amortization of deferred leasing intangibles during the three months ended March 31, ~~2022~~2023 and ~~2021.~~

Three months ended March 31,
Deferred Leasing Intangibles Amortization (in thousands) 2022 2021
Net increase (decrease) to rental income related to above and below market lease amortization $ 79 $ (1,480)
Amortization expense related to other intangible lease assets $ 24,077 $ 22,447

~~The following table summarizes the amortization of deferred leasing intangibles over the next five calendar years (including the remainder of 2022) as of March 31,~~ 2022.

Year Amortization Expense Related to Other Intangible Lease Assets (in thousands) Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands)
Remainder of 2022 $ 67,986 $ 180
2023 $ 80,666 $ 727
2024 $ 69,720 $ 1,361
2025 $ 60,629 $ 1,185
2026 $ 52,145 $ 1,626


	Three months ended March 31,
Deferred Leasing Intangibles Amortization (in thousands)	2023		2022
Net increase to rental income related to above and below market lease amortization	$	124	$	79
Amortization expense related to other intangible lease assets	$	22,445	$	24,077

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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 March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.


Loan		Principal Outstanding as of March 31, 2022 (in thousands)		Principal Outstanding as of December 31, 2021 (in thousands)		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Indebtedness (dollars in thousands)										Indebtedness (dollars in thousands)	March 31, 2023		December 31, 2022		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:	Unsecured credit facility:									Unsecured credit facility:
Unsecured Credit Facility(4)	Unsecured Credit Facility(4)	$	384,000	$	296,000	L + 0.775%		October 23, 2026	i	Unsecured Credit Facility(4)	$	235,000	$	175,000	Term SOFR + 0.855%		October 23, 2026	i
Total unsecured credit facility	Total unsecured credit facility	384,000		296,000						Total unsecured credit facility	235,000		175,000

Unsecured term loans:	Unsecured term loans:									Unsecured term loans:
Unsecured Term Loan D		150,000		150,000		2.85	%	January 4, 2023	i
Unsecured Term Loan E		175,000		175,000		3.77	%	January 15, 2024	i
Unsecured Term Loan F	Unsecured Term Loan F	200,000		200,000		2.96	%	January 12, 2025	i	Unsecured Term Loan F	200,000		200,000		2.94	%	January 12, 2025	i
Unsecured Term Loan G	Unsecured Term Loan G	300,000		300,000		1.13	%	February 5, 2026	i	Unsecured Term Loan G	300,000		300,000		1.09	%	February 5, 2026	i
Unsecured Term Loan A	Unsecured Term Loan A	150,000		150,000		3.23	%	March 15, 2027	i	Unsecured Term Loan A	150,000		150,000		2.14	%	March 15, 2027	i
Unsecured Term Loan H										Unsecured Term Loan H	187,500		187,500		3.73	%	January 25, 2028	i
Unsecured Term Loan I										Unsecured Term Loan I	187,500		187,500		3.49	%	January 25, 2028	i
Total unsecured term loans	Total unsecured term loans	975,000		975,000						Total unsecured term loans	1,025,000		1,025,000
Total unamortized deferred financing fees and debt issuance costs	Total unamortized deferred financing fees and debt issuance costs	(4,075)		(4,423)						Total unamortized deferred financing fees and debt issuance costs	(4,228)		(4,560)
Total carrying value unsecured term loans, net	Total carrying value unsecured term loans, net	970,925		970,577						Total carrying value unsecured term loans, net	1,020,772		1,020,440

Unsecured notes:	Unsecured notes:									Unsecured notes:
Series F Unsecured Notes	Series F Unsecured Notes	100,000		100,000		3.98	%	January 5, 2023	ii	Series F Unsecured Notes	—		100,000		3.98	%	January 5, 2023	ii
Series A Unsecured Notes	Series A Unsecured Notes	50,000		50,000		4.98	%	October 1, 2024	ii	Series A Unsecured Notes	50,000		50,000		4.98	%	October 1, 2024	ii
Series D Unsecured Notes	Series D Unsecured Notes	100,000		100,000		4.32	%	February 20, 2025	ii	Series D Unsecured Notes	100,000		100,000		4.32	%	February 20, 2025	ii
Series G Unsecured Notes	Series G Unsecured Notes	75,000		75,000		4.10	%	June 13, 2025	ii	Series G Unsecured Notes	75,000		75,000		4.10	%	June 13, 2025	ii
Series B Unsecured Notes	Series B Unsecured Notes	50,000		50,000		4.98	%	July 1, 2026	ii	Series B Unsecured Notes	50,000		50,000		4.98	%	July 1, 2026	ii
Series C Unsecured Notes	Series C Unsecured Notes	80,000		80,000		4.42	%	December 30, 2026	ii	Series C Unsecured Notes	80,000		80,000		4.42	%	December 30, 2026	ii
Series E Unsecured Notes	Series E Unsecured Notes	20,000		20,000		4.42	%	February 20, 2027	ii	Series E Unsecured Notes	20,000		20,000		4.42	%	February 20, 2027	ii
Series H Unsecured Notes	Series H Unsecured Notes	100,000		100,000		4.27	%	June 13, 2028	ii	Series H Unsecured Notes	100,000		100,000		4.27	%	June 13, 2028	ii
Series I Unsecured Notes	Series I Unsecured Notes	275,000		275,000		2.80	%	September 29, 2031	ii	Series I Unsecured Notes	275,000		275,000		2.80	%	September 29, 2031	ii
Series K Unsecured Notes										Series K Unsecured Notes	400,000		400,000		4.12	%	June 28, 2032	ii
Series J Unsecured Notes	Series J Unsecured Notes	50,000		50,000		2.95	%	September 28, 2033	ii	Series J Unsecured Notes	50,000		50,000		2.95	%	September 28, 2033	ii
Total unsecured notes	Total unsecured notes	900,000		900,000						Total unsecured notes	1,200,000		1,300,000
Total unamortized deferred financing fees and debt issuance costs	Total unamortized deferred financing fees and debt issuance costs	(2,942)		(3,059)						Total unamortized deferred financing fees and debt issuance costs	(4,381)		(4,558)
Total carrying value unsecured notes, net	Total carrying value unsecured notes, net	897,058		896,941						Total carrying value unsecured notes, net	1,195,619		1,295,442

Mortgage notes (secured debt):	Mortgage notes (secured debt):									Mortgage notes (secured debt):
Wells Fargo Bank, National Association CMBS Loan		46,106		46,610		4.31	%	December 1, 2022	iii
Thrivent Financial for Lutherans	Thrivent Financial for Lutherans	3,397		3,430		4.78	%	December 15, 2023	iv	Thrivent Financial for Lutherans	3,262		3,296		4.78	%	December 15, 2023	iii
United of Omaha Life Insurance Company	United of Omaha Life Insurance Company	4,894		4,943		3.71	%	October 1, 2039	ii	United of Omaha Life Insurance Company	4,692		4,744		3.71	%	October 1, 2039	ii
Total mortgage notes	Total mortgage notes	54,397		54,983						Total mortgage notes	7,954		8,040
Net unamortized fair market value discount	Net unamortized fair market value discount	(136)		(136)						Net unamortized fair market value discount	(138)		(137)
Total unamortized deferred financing fees and debt issuance costs	Total unamortized deferred financing fees and debt issuance costs	(71)		(103)						Total unamortized deferred financing fees and debt issuance costs	(3)		(5)
Total carrying value mortgage notes, net	Total carrying value mortgage notes, net	54,190		54,744						Total carrying value mortgage notes, net	7,813		7,898
Total / weighted average interest rate(5)	Total / weighted average interest rate(5)	$	2,306,173	$	2,218,262	2.87	%			Total / weighted average interest rate(5)	$	2,459,204	$	2,498,780	3.49	%

(1)Interest rate as of March 31, ~~2022.~~2023. At March 31, ~~2022,~~2023, the one-month ~~LIBOR~~Term Secured Overnight Financing Rate (“L”Term SOFR”) was ~~0.452%~~4.80247%. 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.~~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 ~~LIBOR~~Term SOFR plus a 0.10% adjustment and a spread of 0.85%, ~~with the exception of Unsecured Term Loan D which has~~less a ~~stated~~sustainability-related interest rate adjustment of ~~one-month LIBOR plus a spread of 1.0%~~0.02%. As of March 31, ~~2022,~~2023, one-month ~~LIBOR~~Term SOFR for the Unsecured Term Loans A, ~~D, E,~~ F, G, H, and GI was swapped to a fixed rate of ~~2.38%, 1.85%, 2.92%~~1.31%, 2.11%, 0.26%, 2.90%, and ~~0.28%~~2.66%, ~~respectively.~~respectively (which includes the 0.10% adjustment). One-month ~~LIBOR for the Unsecured~~ Term ~~Loan A will be swapped to a fixed rate of 1.30% effective April 1, 2022. One-month LIBOR~~SOFR for the Unsecured Term Loan G will be swapped to a fixed rate of ~~0.94%~~0.95% effective April 18, 2023. 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, subject to defeasance; and (iv) pre-payable without penalty three months prior to the maturity~~ date.

(4)The capacity of the unsecured credit facility is ~~$750.0 million.~~$1.0 billion. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately ~~$4.9~~$4.7 million and $5.2 million are included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. The initial maturity date is October 24, 2025, or such later date

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which may be extended pursuant to 2 ~~six-month~~two six-month extension options exercisable by the Company in its discretion upon advance written notice. Exercise

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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. 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 ~~$975.0~~$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 March 31, ~~2022~~2023 was approximately ~~$362.3~~$761.7 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 ~~$8.2~~$16.5 million and ~~$8.6~~$13.1 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~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 months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


		Three months ended March 31,				Three months ended March 31,
Costs Included in Interest Expense (in thousands)	Costs Included in Interest Expense (in thousands)	2022		2021			Costs Included in Interest Expense (in thousands)	2023		2022
Amortization of deferred financing fees and debt issuance costs and fair market value premiums/discounts	Amortization of deferred financing fees and debt issuance costs and fair market value premiums/discounts	$	864	$	487		Amortization of deferred financing fees and debt issuance costs and fair market value premiums/discounts	$	976	$	864
Facility, unused, and other fees	Facility, unused, and other fees	$	341	$	386		Facility, unused, and other fees	$	435	$	341

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 March 31, ~~2022~~2023 and December 31, ~~2021~~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 ~~$87.8~~$14.8 million and ~~$88.5~~$14.8 million at March 31, ~~2022~~2023 and December 31, ~~2021,~~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 March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.


		March 31, 2022				December 31, 2021					March 31, 2023				December 31, 2022
Indebtedness (in thousands)	Indebtedness (in thousands)	Principal Outstanding		Fair Value		Principal Outstanding		Fair Value		Indebtedness (in thousands)	Principal Outstanding		Fair Value		Principal Outstanding		Fair Value
Unsecured credit facility	Unsecured credit facility	$	384,000	$	383,927	$	296,000	$	296,000	Unsecured credit facility	$	235,000	$	235,000	$	175,000	$	175,000
Unsecured term loans	Unsecured term loans	975,000		975,015		975,000		975,224		Unsecured term loans	1,025,000		1,025,000		1,025,000		1,025,000
Unsecured notes	Unsecured notes	900,000		880,674		900,000		937,183		Unsecured notes	1,200,000		1,072,943		1,300,000		1,150,283
Mortgage notes	Mortgage notes	54,397		54,628		54,983		56,323		Mortgage notes	7,954		6,996		8,040		6,855
Total principal amount	Total principal amount	2,313,397		$	2,294,244	2,225,983		$	2,264,730	Total principal amount	2,467,954		$	2,339,939	2,508,040		$	2,357,138
Net unamortized fair market value discount	Net unamortized fair market value discount	(136)				(136)				Net unamortized fair market value discount	(138)				(137)
Total unamortized deferred financing fees and debt issuance costs	Total unamortized deferred financing fees and debt issuance costs	(7,088)				(7,585)				Total unamortized deferred financing fees and debt issuance costs	(8,612)				(9,123)
Total carrying value	Total carrying value	$	2,306,173			$	2,218,262			Total carrying value	$	2,459,204			$	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.

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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.

~~The following table summarizes~~As of March 31, 2023, the ~~Company’s outstanding~~Company had 25 interest rate swaps asoutstanding, all of ~~March 31, 2022.~~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 ~~designated as qualifying cash flow hedges.~~

Interest Rate Derivative Counterparty Trade Date Effective Date Notional Amount
(in thousands) Fair Value
(in thousands) Pay Fixed Interest Rate Receive Variable Interest Rate Maturity Date
Wells Fargo Bank, N.A. Jan-08-2015 Mar-20-2015 $ 25,000 $ — 1.8280 % One-month L Mar-31-2022
The Toronto-Dominion Bank Jan-08-2015 Feb-14-2020 $ 25,000 $ — 2.4535 % One-month L Mar-31-2022
Regions Bank Jan-08-2015 Feb-14-2020 $ 50,000 $ — 2.4750 % One-month L Mar-31-2022
Capital One, N.A. Jan-08-2015 Feb-14-2020 $ 50,000 $ — 2.5300 % One-month L Mar-31-2022
The Toronto-Dominion Bank Jul-20-2017 Oct-30-2017 $ 25,000 $ (64) 1.8485 % One-month L Jan-04-2023
Royal Bank of Canada Jul-20-2017 Oct-30-2017 $ 25,000 $ (63) 1.8505 % One-month L Jan-04-2023
Wells Fargo Bank, N.A. Jul-20-2017 Oct-30-2017 $ 25,000 $ (63) 1.8505 % One-month L Jan-04-2023
PNC Bank, N.A. Jul-20-2017 Oct-30-2017 $ 25,000 $ (63) 1.8485 % One-month L Jan-04-2023
PNC Bank, N.A. Jul-20-2017 Oct-30-2017 $ 50,000 $ (126) 1.8475 % One-month L Jan-04-2023
The Toronto-Dominion Bank Apr-20-2020 Sep-29-2020 $ 75,000 $ 1,223 0.2750 % One-month L Apr-18-2023
Wells Fargo Bank, N.A. Apr-20-2020 Sep-29-2020 $ 75,000 $ 1,219 0.2790 % One-month L Apr-18-2023
The Toronto-Dominion Bank Apr-20-2020 Mar-19-2021 $ 75,000 $ 1,223 0.2750 % One-month L Apr-18-2023
Wells Fargo Bank, N.A. Apr-20-2020 Mar-19-2021 $ 75,000 $ 1,218 0.2800 % One-month L Apr-18-2023
The Toronto-Dominion Bank Jul-24-2018 Jul-26-2019 $ 50,000 $ (548) 2.9180 % One-month L Jan-12-2024
PNC Bank, N.A. Jul-24-2018 Jul-26-2019 $ 50,000 $ (549) 2.9190 % One-month L Jan-12-2024
Bank of Montreal Jul-24-2018 Jul-26-2019 $ 50,000 $ (548) 2.9190 % One-month L Jan-12-2024
U.S. Bank, N.A. Jul-24-2018 Jul-26-2019 $ 25,000 $ (274) 2.9190 % One-month L Jan-12-2024
Wells Fargo Bank, N.A. May-02-2019 Jul-15-2020 $ 50,000 $ 280 2.2460 % One-month L Jan-15-2025
U.S. Bank, N.A. May-02-2019 Jul-15-2020 $ 50,000 $ 284 2.2459 % One-month L Jan-15-2025
Regions Bank May-02-2019 Jul-15-2020 $ 50,000 $ 280 2.2459 % One-month L Jan-15-2025
Bank of Montreal Jul-16-2019 Jul-15-2020 $ 50,000 $ 1,008 1.7165 % One-month L Jan-15-2025
U.S. Bank, N.A. Feb-17-2021 Apr-18-2023 $ 150,000 $ 6,853 0.9385 % One-month L Feb-5-2026
Wells Fargo Bank, N.A. Feb-17-2021 Apr-18-2023 $ 75,000 $ 3,409 0.9365 % One-month L Feb-5-2026
The Toronto-Dominion Bank Feb-17-2021 Apr-18-2023 $ 75,000 $ 3,419 0.9360 % One-month L Feb-5-2026
Regions Bank Oct-26-2021 Apr-01-2022 $ 50,000 $ 2,419 1.3045 % One-month L Mar-15-2027
Bank of Montreal Oct-26-2021 Apr-01-2022 $ 50,000 $ 2,438 1.3045 % One-month L Mar-15-2027
PNC Bank, N.A. Oct-26-2021 Apr-01-2022 $ 50,000 $ 2,423 1.3045 % One-month L Mar-15-2027

highly effective. The following table summarizes the fair value of the interest rate swaps outstanding as of March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.


Balance Sheet Line Item (in thousands)	Balance Sheet Line Item (in thousands)	Notional Amount March 31, 2022		Fair Value March 31, 2022		Notional Amount December 31, 2021		Fair Value December 31, 2021		Balance Sheet Line Item (in thousands)	Notional Amount March 31, 2023		Fair Value March 31, 2023		Notional Amount December 31, 2022		Fair Value December 31, 2022
Interest rate swaps-Asset	Interest rate swaps-Asset	$	950,000	$	27,696	$	600,000	$	5,220	Interest rate swaps-Asset	$	1,500,000	$	56,203	$	1,650,000	$	72,223
Interest rate swaps-Liability	Interest rate swaps-Liability	$	325,000	$	(2,298)	$	825,000	$	(17,052)	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.

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Amounts reported in accumulated other comprehensive income ~~(loss)~~ 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 ~~$2.2~~$28.6 million will be reclassified from accumulated other comprehensive income ~~(loss)~~ 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 months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


		Three months ended March 31,				Three months ended March 31,
Effect of Cash Flow Hedge Accounting (in thousands)	Effect of Cash Flow Hedge Accounting (in thousands)	2022		2021			Effect of Cash Flow Hedge Accounting (in thousands)	2023		2022
Income recognized in accumulated other comprehensive income (loss) on interest rate swaps		$	33,506	$	7,750
Loss reclassified from accumulated other comprehensive income (loss) into income as interest expense		$	3,731	$	4,400
Income (loss) recognized in accumulated other comprehensive income on interest rate swaps							Income (loss) recognized in accumulated other comprehensive income on interest rate swaps	$	(8,542)	$	33,506
Income (loss) reclassified from accumulated other comprehensive income into income as interest expense							Income (loss) reclassified from accumulated other comprehensive income into income as interest expense	$	7,470	$	(3,731)
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	17,259	$	15,358		Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	22,612	$	17,259

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 March 31, ~~2022,~~2023, the Company had not breached the provisions of these agreements and had not posted any collateral related to these agreements. ~~If the Company had breached any~~

Table of these provisions at March 31, 2022, it could have been required to settle its obligations under the agreements for any interest rate swaps in a net liability position by counterparty, plus accrued interest of approximately $0.1 million.Contents

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 March 31, ~~2022~~2023 and December 31, ~~2021,~~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.

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The following table summarizes the Company’s financial instruments that were recorded at fair value on a recurring basis as of March 31, ~~2022~~2023 and December 31, ~~2021.~~ 2022. There were no financial instruments in a liability position at March 31, 2023 and December 31, 2022.


				Fair Value Measurements as of March 31, 2022 Using									Fair Value Measurements as of March 31, 2023 Using
Balance Sheet Line Item (in thousands)	Balance Sheet Line Item (in thousands)	Fair Value March 31, 2022		Level 1		Level 2		Level 3		Balance Sheet Line Item (in thousands)	Fair Value March 31, 2023		Level 1		Level 2		Level 3
Interest rate swaps-Asset	Interest rate swaps-Asset	$	27,696	$	—	$	27,696	$	—	Interest rate swaps-Asset	$	56,203	$	—	$	56,203	$	—
Interest rate swaps-Liability		$	(2,298)	$	—	$	(2,298)	$	—


				Fair Value Measurements as of December 31, 2021 Using									Fair Value Measurements as of December 31, 2022 Using
Balance Sheet Line Item (in thousands)	Balance Sheet Line Item (in thousands)	Fair Value December 31, 2021		Level 1		Level 2		Level 3		Balance Sheet Line Item (in thousands)	Fair Value December 31, 2022		Level 1		Level 2		Level 3
Interest rate swaps-Asset	Interest rate swaps-Asset	$	5,220	$	—	$	5,220	$	—	Interest rate swaps-Asset	$	72,223	$	—	$	72,223	$	—
Interest rate swaps-Liability		$	(17,052)	$	—	$	(17,052)	$	—

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 March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, there were no shares of preferred stock issued or outstanding.

~~The following table summarizes the dividends declared on the Company’s outstanding shares of preferred stock during the year ended December 31, 2021.~~

~~Quarter Ended 2021~~

~~Declaration Date~~

Series C
Preferred Stock Per Share

~~Payment Date~~

~~March 31~~

~~January 11, 2021~~

~~0.4296875~~

~~March 31, 2021~~

~~Total~~

~~0.4296875~~

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 March 31, ~~2022.~~2023.

ATM Common Stock Offering Program

Date

Maximum Aggregate Offering Price (in thousands)

Aggregate Available as of March 31, 2022 (in thousands)

ATM Common Stock Offering Program

Date

Maximum Aggregate Offering Price (in thousands)

Aggregate Available as of March 31, 2023 (in thousands)

2022 $750 million ATM

February 17, 2022

750,000

2022 $750 million ATM

February 17, 2022

750,000

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The following ~~tables summarize~~table summarizes the activity under the ATM common stock offering program during the year ended December 31, 2022. There was no activity under the ATM common stock offering program during the three months ended March 31, ~~2022 and year ended December 31, 2021.~~2023.


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

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

Year ended December 31, 2021
ATM Common Stock Offering Program(1)
Shares
Sold Weighted Average Price Per Share Net Proceeds (in thousands)
2019 $600 million ATM(2)
5,110,002 $ 37.53 $ 189,974
Total/weighted average 5,110,002 $ 37.53 $ 189,974

~~(1)Excludes shares of common stock sold under the ATM common stock offering program on a forward basis or issued upon physical settlement of the related forward sale agreements during the period.~~

~~(2)This program ended before March 31, 2022.~~

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In connection with the Company’s underwritten public offering that closed in November 2021, on December 3, 2021, the Company executed a forward sale agreement for the sale of an additional 1,200,000 shares of common stock on a forward basis at a price of $41.87 per share. The Company did not initially receive any proceeds from the sale of shares on a forward basis. ~~On March 29, 2022, the Company physically settled in full the forward sales agreement by issuing 1,200,000 shares of common stock for net proceeds of approximately $49.7 million , or $41.39 per share.~~

~~The following tables summarize the dividends declared on the Company’s outstanding shares of common stock during the three months ended March 31, 2022 and the year ended December 31, 2021.~~

~~Month Ended 2022~~

~~Declaration Date~~

~~Record Date~~

~~Per Share~~

~~Payment Date~~

~~March 31~~

~~January 10, 2022~~

~~March 31, 2022~~

~~0.121667~~

~~April 18, 2022~~

~~February 28~~

~~January 10, 2022~~

~~February 28, 2022~~

~~0.121667~~

~~March 15, 2022~~

~~January 31~~

~~January 10, 2022~~

~~January 31, 2022~~

~~0.121667~~

~~February 15, 2022~~

~~Total~~

~~0.365001~~

~~Month Ended 2021~~

~~Declaration Date~~

~~Record Date~~

~~Per Share~~

~~Payment Date~~

~~December 31~~

~~October 13, 2021~~

~~December 31, 2021~~

~~0.120833~~

~~January 18, 2022~~

~~November 30~~

~~October 13, 2021~~

~~November 30, 2021~~

~~0.120833~~

~~December 15, 2021~~

~~October 31~~

~~October 13, 2021~~

~~October 29, 2021~~

~~0.120833~~

~~November 15, 2021~~

~~September 30~~

~~July 13, 2021~~

~~September 30, 2021~~

~~0.120833~~

~~October 15, 2021~~

~~August 31~~

~~July 13, 2021~~

~~August 31, 2021~~

~~0.120833~~

~~September 15, 2021~~

~~July 31~~

~~July 13, 2021~~

~~July 30, 2021~~

~~0.120833~~

~~August 16, 2021~~

~~June 30~~

~~April 12, 2021~~

~~June 30, 2021~~

~~0.120833~~

~~July 15, 2021~~

~~May 31~~

~~April 12, 2021~~

~~May 28, 2021~~

~~0.120833~~

~~June 15, 2021~~

~~April 30~~

~~April 12, 2021~~

~~April 30, 2021~~

~~0.120833~~

~~May 17, 2021~~

~~March 31~~

~~January 11, 2021~~

~~March 31, 2021~~

~~0.120833~~

~~April 15, 2021~~

~~February 28~~

~~January 11, 2021~~

~~February 26, 2021~~

~~0.120833~~

~~March 15, 2021~~

~~January 31~~

~~January 11, 2021~~

~~January 29, 2021~~

~~0.120833~~

~~February 16, 2021~~

~~Total~~

~~1.449996~~

On April 14, 2022, the Company’s board of directors declared dividends of the Company’s outstanding shares of common stock for the months ending April 30, 2022, May 31, 2022, and June 30, 2022 at a monthly rate of $0.121667 per share.

Restricted Shares of Common Stock

The Company granted restricted shares of common stock under the 2011 Plan on January ~~10, 2022~~11, 2023 to certain employees of the Company, which will vest over four years in equal installments on ~~an annual basis over four years (beginning~~January 1 of each year beginning on January 1, ~~2023),~~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 three months ended March 31, ~~2022~~2023 and the year ended December 31, ~~2021.~~2022.


Unvested Restricted Shares of Common Stock	Unvested Restricted Shares of Common Stock	Shares		Weighted Average Grant Date Fair Value per Share		Unvested Restricted Shares of Common Stock	Shares	Weighted Average Grant Date Fair Value per Share
Balance at December 31, 2020		184,890		$	27.70
Granted		90,304		$	29.77
Vested		(79,140)	(1)	$	27.01
Forfeited		(10,339)		$	30.32
Balance at December 31, 2021	Balance at December 31, 2021	185,715		$	28.86	Balance at December 31, 2021	185,715	$	28.86
Granted	Granted	58,580		$	44.19	Granted	58,580	$	44.19
Vested		(73,556)	(1)	$	28.03
Vested(1)						Vested(1)	(73,556)	$	28.03
Forfeited	Forfeited	(6,373)		$	34.72	Forfeited	(14,036)	$	36.16
Balance at March 31, 2022		164,366		$	34.47
Balance at December 31, 2022						Balance at December 31, 2022	156,703	$	34.32
Granted						Granted	55,954	$	34.73
Vested(1)						Vested(1)	(68,625)	$	31.71
Forfeited						Forfeited	—	$	—
Balance at March 31, 2023						Balance at March 31, 2023	144,032	$	35.73

(1)The Company repurchased and retired ~~25,836~~24,210 and ~~27,706~~25,836 restricted shares of common stock that vested during the three months ended March 31, ~~2022~~2023 and the year ended December 31, ~~2021,~~2022, respectively.

The unrecognized compensation expense associated with the Company’s restricted shares of common stock at March 31, ~~2022~~2023 was approximately ~~$4.9~~$4.4 million and is expected to be recognized over a weighted average period of approximately ~~2.8~~2.7 years.

~~Table of Contents~~

The following table summarizes the fair value at vesting for the restricted shares of common stock that vested during the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


		Three months ended March 31,				Three months ended March 31,
Vested Restricted Shares of Common Stock	Vested Restricted Shares of Common Stock	2022		2021			Vested Restricted Shares of Common Stock	2023		2022
Vested restricted shares of common stock	Vested restricted shares of common stock	73,556		72,788			Vested restricted shares of common stock	68,625		73,556
Fair value of vested restricted shares of common stock (in thousands)	Fair value of vested restricted shares of common stock (in thousands)	$	3,528	$	2,280		Fair value of vested restricted shares of common stock (in thousands)	$	2,217	$	3,528

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7. Noncontrolling Interest

The following table summarizes the activity for noncontrolling interest in the Company during the three months ended March 31, ~~2022~~2023 and the year ended December 31, ~~2021.~~2022.


Noncontrolling Interest	Noncontrolling Interest	LTIP Units	Other Common Units	Total Noncontrolling Common Units	Noncontrolling Interest		Noncontrolling Interest	LTIP Units	Other Common Units	Total Noncontrolling Common Units	Noncontrolling Interest
Balance at December 31, 2020		1,692,423	1,592,815	3,285,238	2.0	%
Granted/Issued		405,844	—	405,844	N/A
Forfeited		—	—	—	N/A
Conversions from LTIP units to Other Common Units		(149,143)	149,143	—	N/A
Redemptions from Other Common Units to common stock		—	(171,318)	(171,318)	N/A

Balance at December 31, 2021	Balance at December 31, 2021	1,949,124	1,570,640	3,519,764	1.9	%	Balance at December 31, 2021	1,949,124	1,570,640	3,519,764	1.9	%
Granted/Issued	Granted/Issued	470,237	—	470,237	N/A		Granted/Issued	470,237	—	470,237	N/A
Forfeited	Forfeited	—	—	—	N/A		Forfeited	(6,791)	—	(6,791)	N/A
Conversions from LTIP units to Other Common Units	Conversions from LTIP units to Other Common Units	(65,000)	65,000	—	N/A		Conversions from LTIP units to Other Common Units	(98,494)	98,494	—	N/A
Redemptions from Other Common Units to common stock	Redemptions from Other Common Units to common stock	—	(65,000)	(65,000)	N/A		Redemptions from Other Common Units to common stock	—	(98,494)	(98,494)	N/A

Balance at March 31, 2022		2,354,361	1,570,640	3,925,001	2.1	%
Balance at December 31, 2022							Balance at December 31, 2022	2,314,076	1,570,640	3,884,716	2.1	%
Granted/Issued							Granted/Issued	326,215	—	326,215	N/A
Forfeited							Forfeited	—	—	—	N/A
Conversions from LTIP units to Other Common Units							Conversions from LTIP units to Other Common Units	(43,834)	43,834	—	N/A
Redemptions from Other Common Units to common stock							Redemptions from Other Common Units to common stock	—	(43,834)	(43,834)	N/A

Balance at March 31, 2023							Balance at March 31, 2023	2,596,457	1,570,640	4,167,097	2.3	%

LTIP Units

The Company granted LTIP units under the 2011 Plan on January ~~10, 2022~~11, 2023 to non-employee, independent directors, which will vest on January 1, ~~2023,~~2024, subject to the recipient’s continued service. The Company granted LTIP units under the 2011 Plan on January ~~10, 2022~~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, ~~(beginning on~~with the first vesting date having been March 31, ~~2022),~~2023, subject to the recipient’s continued employment. Refer to Note 8 for a discussion of the LTIP units granted on January ~~10, 2022~~11, 2023 pursuant to the ~~2019~~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 ~~the~~such LTIP units granted during the three months ended March 31, ~~2022~~2023 (excluding the LTIP units granted pursuant to the ~~2019~~2020 performance units discussed in Note ~~8 below)~~8).


~~LTIP Units~~	~~Assumptions~~
~~Grant date~~	~~January 10, 2022~~
~~Expected term (years)~~	10
~~Expected stock price volatility~~	~~34.0~~		%
~~Expected dividend yield~~	~~4.0~~		%
~~Risk-free interest rate~~	~~1.204~~		%
~~Fair value of LTIP units at issuance (in thousands)~~	$	~~4,385~~
~~LTIP units at issuance~~	~~104,241~~
~~Fair value unit price per LTIP unit at issuance~~	$	~~42.07~~


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

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.

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The following table summarizes activity related to the Company’s unvested LTIP units during the three months ended March 31, ~~2022~~2023 and the year ended December 31, ~~2021.~~2022.


Unvested LTIP Units	Unvested LTIP Units	LTIP Units	Weighted Average Grant Date Fair Value per Unit		Unvested LTIP Units	LTIP Units	Weighted Average Grant Date Fair Value per Unit
Balance at December 31, 2020		211,448	$	26.54
Granted		405,844	$	28.13
Vested		(427,184)	$	27.47
Forfeited		—	$	—
Balance at December 31, 2021	Balance at December 31, 2021	190,108	$	27.84	Balance at December 31, 2021	190,108	$	27.84
Granted	Granted	470,237	$	42.07	Granted	470,237	$	42.07
Vested	Vested	(414,348)	$	40.39	Vested	(513,438)	$	38.67
Forfeited	Forfeited	—	$	—	Forfeited	(6,791)	$	34.02
Balance at March 31, 2022		245,997	$	33.90
Balance at December 31, 2022					Balance at December 31, 2022	140,116	$	35.60
Granted					Granted	326,215	$	33.29
Vested					Vested	(212,230)	$	34.14
Forfeited					Forfeited	—	$	—
Balance at March 31, 2023					Balance at March 31, 2023	254,101	$	33.85

The unrecognized compensation expense associated with the Company’s LTIP units at March 31, ~~2022~~2023 was approximately ~~$5.5~~$6.5 million and is expected to be recognized over a weighted average period of approximately ~~2.3~~2.4 years.

The following table summarizes the fair value at vesting for the LTIP units that vested during the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


		Three months ended March 31,				Three months ended March 31,
Vested LTIP units	Vested LTIP units	2022		2021			Vested LTIP units	2023		2022
Vested LTIP units	Vested LTIP units	414,348		183,486			Vested LTIP units	212,230		414,348
Fair value of vested LTIP units (in thousands)	Fair value of vested LTIP units (in thousands)	$	18,593	$	5,683		Fair value of vested LTIP units (in thousands)	$	7,023	$	18,593

8. Equity Incentive Plan

On January ~~10, 2022,~~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 ~~10, 2022~~11, 2023 are substantially the same as the terms of the performance units granted in January 2022, 2021, ~~2020,~~ and ~~2019,~~2020, except that the measuring period commenced on January 1, ~~2022~~2023 and ends on December 31, ~~2024.~~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.

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 three months ended March 31, ~~2022.~~2023.


~~Performance Units~~	~~Assumptions~~
~~Grant date~~	~~January 10, 2022~~
~~Expected stock price volatility~~	~~34.1~~		%
~~Expected dividend yield~~	~~4.0~~		%
~~Risk-free interest rate~~	~~1.1979~~		%
~~Fair value of performance units grant (in thousands)~~	$	~~6,289~~


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

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On December 31, ~~2021,~~2022, the measuring period for the ~~2019~~2020 performance units ~~concluded.~~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 ~~determined that~~and issued upon the ~~Company’s total stockholder return exceeded~~settlement of the ~~threshold percentage and return hurdle and approved~~2020 performance units at the ~~issuance~~conclusion of ~~an aggregate of 365,996 vested LTIP units and 27,934 vested shares of common stock to~~ the ~~participants (of which 8,257 shares of common stock were repurchased and retired), which were issued on January 10, 2022.~~applicable measuring period during the three months ended March 31, 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 March 31, ~~2022~~2023 was approximately ~~$10.0~~$9.0 million and is expected to be recognized over a weighted average period of approximately 2.2 years.

~~Table of Contents~~

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 months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


		Three months ended March 31,				Three months ended March 31,
Non-Cash Compensation Expense (in thousands)	Non-Cash Compensation Expense (in thousands)	2022		2021			Non-Cash Compensation Expense (in thousands)	2023		2022
Restricted shares of common stock	Restricted shares of common stock	$	548	$	651		Restricted shares of common stock	$	509	$	548
LTIP units	LTIP units	1,284		2,408			LTIP units	1,328		1,284
Performance units	Performance units	1,296		1,438			Performance units	1,119		1,296
Director compensation(1)	Director compensation(1)	121		118			Director compensation(1)	136		121
Total non-cash compensation expense	Total non-cash compensation expense	$	3,249	$	4,615		Total non-cash compensation expense	$	3,092	$	3,249

(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 months ended March 31, ~~2022~~2023 and ~~2021.~~2022. The number of shares of common stock granted was calculated based on the trailing ~~ten~~10 day average common stock price on the third business day preceding the grant date.

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 months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

Three months ended March 31,
Rental Income (in thousands) 2022 2021
Fixed lease payments $ 120,240 $ 101,179
Variable lease payments 33,778 29,244
Straight-line rental income 4,504 4,882
Net increase (decrease) to rental income related to above and below market lease amortization 79 (1,480)
Total rental income $ 158,601 $ 133,825

The Company evaluates its operating leases to determine if it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term. For those that are not probable of collection, the Company converts to the cash basis of accounting. If the Company subsequently determines that it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term, the Company will reinstate the accrued rent balance adjusting for the amount related to the period when the lease was accounted for on a cash basis.


	Three months ended March 31,
Rental Income (in thousands)	2023		2022
Fixed lease payments	$	131,086	$	120,240
Variable lease payments	36,946		33,778
Straight-line rental income	5,112		4,504
Net increase to rental income related to above and below market lease amortization	124		79
Total rental income	$	173,268	$	158,601

As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had accrued rental income of approximately ~~$80.2~~$95.2 million and ~~$75.8~~$91.2 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.

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As of March 31, ~~2022~~2023 and December 31, 2021, the Company had approximately $28.9 million and $32.9 million, respectively, of total lease security deposits available in the form of existing letters of credit, which are not reflected on the accompanying Consolidated Balance Sheets. As of March 31, 2022, and December 31, 2021, the Company had approximately $0.7 million and $0.7 million, respectively, of lease security deposits available in cash, which are included in restricted cash on the accompanying Consolidated Balance Sheets. The Company’s remaining lease security deposits are commingled in cash and cash equivalents. These funds may be used to settle tenant accounts receivables in the event of a default under the related lease. As of March 31, 2022 and December 31, 2021, the Company’s total liability associated with ~~these~~ lease security deposits was approximately ~~$15.9~~$19.2 million and ~~$15.2~~$19.1 million, respectively, which is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.

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The Company estimates that billings for real estate taxes, which are the responsibility of certain tenants under the terms of their leases and are not reflected on the Company’s consolidated financial statements, was approximately $5.4 million and $5.1 million for the three months ended March 31, 2022 and 2021, respectively. These amounts would have been the maximum real estate tax expense of the Company, excluding any penalties or interest, had the tenants not met their contractual obligations for these periods.

The following table summarizes the maturity of fixed lease payments under the Company’s leases as of March 31, ~~2022.~~2023.


Year	Year	Maturity of Fixed Lease Payments (in thousands)		Year	Maturity of Fixed Lease Payments (in thousands)
Remainder of 2022		$	368,223
2023		$	464,868
Remainder of 2023				Remainder of 2023	$	398,889
2024	2024	$	413,356	2024	$	501,045
2025	2025	$	355,130	2025	$	441,586
2026	2026	$	298,475	2026	$	362,398
2027				2027	$	283,565
Thereafter	Thereafter	$	979,172	Thereafter	$	860,686

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 ~~1.2~~0.2 years to ~~47.6~~47.5 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 March 31, ~~2022~~2023 and December 31, ~~2021.~~2022.


Operating Lease Term and Discount Rate	Operating Lease Term and Discount Rate	March 31, 2022		December 31, 2021		Operating Lease Term and Discount Rate	March 31, 2023		December 31, 2022
Weighted average remaining lease term (years)	Weighted average remaining lease term (years)	29.0		29.0		Weighted average remaining lease term (years)	31.3		31.2
Weighted average discount rate	Weighted average discount rate	6.6	%	6.6	%	Weighted average discount rate	6.7	%	6.7	%

The following table summarizes the operating lease cost included in the Company’s Consolidated Statements of Operations for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


		Three months ended March 31,				Three months ended March 31,
Operating Lease Cost (in thousands)	Operating Lease Cost (in thousands)	2022		2021			Operating Lease Cost (in thousands)	2023		2022
Operating lease cost included in property expense attributable to ground leases	Operating lease cost included in property expense attributable to ground leases	$	533	$	417		Operating lease cost included in property expense attributable to ground leases	$	618	$	533
Operating lease cost included in general and administrative expense attributable to corporate office leases	Operating lease cost included in general and administrative expense attributable to corporate office leases	437		429			Operating lease cost included in general and administrative expense attributable to corporate office leases	437		437
Total operating lease cost	Total operating lease cost	$	970	$	846		Total operating lease cost	$	1,055	$	970

The following table summarizes supplemental cash flow information related to operating leases in the Company’s Consolidated Statements of Cash Flows for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


		Three months ended March 31,					Three months ended March 31,
Operating Leases (in thousands)	Operating Leases (in thousands)	2022		2021		Operating Leases (in thousands)	2023		2022
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	900	$	627	Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	970	$	900

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Table of Contents

The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office leases as of March 31, ~~2022.~~2023.


Year	Year	Maturity of Operating Lease Liabilities(1) (in thousands)		Year	Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2022		$	2,727
2023		3,660
Remainder of 2023				Remainder of 2023	$	2,905
2024	2024	3,699		2024	3,914
2025	2025	3,744		2025	3,959
2026	2026	2,778		2026	2,993
2027				2027	2,023
Thereafter	Thereafter	68,807		Thereafter	81,962
Total lease payments	Total lease payments	85,415		Total lease payments	97,756
Less: Imputed interest	Less: Imputed interest	(52,690)		Less: Imputed interest	(63,064)
Present value of operating lease liabilities	Present value of operating lease liabilities	$	32,725	Present value of operating lease liabilities	$	34,692

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

10. Earnings Per Share

During the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, there were 139,340 and 165,259 ~~and 198,812~~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.

The following table reconciles the numerators and denominators in the computation of basic and diluted earnings per share of common stock for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


		Three months ended March 31,				Three months ended March 31,
Earnings Per Share (in thousands, except per share data)	Earnings Per Share (in thousands, except per share data)	2022		2021			Earnings Per Share (in thousands, except per share data)	2023		2022
Numerator	Numerator						Numerator
Net income attributable to common stockholders	Net income attributable to common stockholders	$	52,764	$	20,931		Net income attributable to common stockholders	$	49,413	$	52,764
Denominator	Denominator						Denominator
Weighted average common shares outstanding — basic	Weighted average common shares outstanding — basic	177,827		158,430			Weighted average common shares outstanding — basic	179,196		177,827
Effect of dilutive securities(1)	Effect of dilutive securities(1)						Effect of dilutive securities(1)
Share-based compensation	Share-based compensation	238		350			Share-based compensation	101		238
Shares issuable under forward sales agreements		—		346

Weighted average common shares outstanding — diluted	Weighted average common shares outstanding — diluted	178,065		159,126			Weighted average common shares outstanding — diluted	179,297		178,065
Net income per share — basic and diluted	Net income per share — basic and diluted						Net income per share — basic and diluted
Net income per share attributable to common stockholders — basic	Net income per share attributable to common stockholders — basic	$	0.30	$	0.13		Net income per share attributable to common stockholders — basic	$	0.28	$	0.30
Net income per share attributable to common stockholders — diluted	Net income per share attributable to common stockholders — diluted	$	0.30	$	0.13		Net income per share attributable to common stockholders — diluted	$	0.28	$	0.30

(1)During the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, there were approximately ~~165~~139 and ~~199,~~165 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 ~~$3.7~~$3.3 million as of March 31, ~~2022~~2023 related to construction projects and certain other agreements.

12. Subsequent Events

~~The following~~There were no recognized or non-recognized subsequent ~~events were noted.~~

On April 28, 2022, the Company entered into a note purchase agreement for the future private placement by the Operating Partnership of $400.0 million senior unsecured notes, maturing June 28, 2032, with a fixed annual interest rate of 4.12%. The notes are expected to be issued on or around June 28, 2022, subject to conditions.events.

2220

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, ~~2021,~~2022, as updated elsewhere isin 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 ~~ongoing adverse effects~~risk of ~~the public health crisis of the novel coronavirus disease (“COVID-19”) pandemic,~~global or ~~any future pandemic, epidemic or outbreak of infectious disease, on the financial condition, results of operations, cash flows~~national recessions and ~~performance of the Company~~international, national, regional, and ~~its tenants, the real estate market and the global economy and financial markets;~~

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 ~~escalating~~ conflict between Russia and Ukraine and the related impact on macroeconomic conditions as a result of such conflict);

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•~~international, national, regional and local economic conditions;~~

•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. Moreover, you should interpret many of the risks identified in this report, as well as the risks set forth above, as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. 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.

“~~Total annualized base rental revenue”~~New Lease” means ~~the contractual monthly base rent as of March 31, 2022 (which differs from rent calculated in accordance with GAAP) multiplied~~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 ~~12. If~~ a new tenant or an existing tenant that is ~~in a free rent period as of March 31, 2022, the total annualized base rental revenue is calculated based on the first contractual monthly base rent amount multiplied by 12.~~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”~~Portfolio, and buildings classified as held for sale.

“Renewal Lease” means ~~our properties that meet any~~a lease signed by an existing tenant to extend the term for 12 months or more, including (i) a renewal of the ~~following criteria: (i) less than 75% occupied~~same space as the current lease at lease expiration, (ii) a renewal of only a portion of the ~~acquisition date; (ii) will be less than 75% occupied due to known move-outs within two years~~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 ~~acquisition date; (iii) out of service with significant physical renovation~~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 ~~asset; or (iv)development.~~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 March 31, 2023 (which differs from rent calculated in accordance with GAAP) multiplied by 12. If a tenant is in a free rent period as of March 31, 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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“~~Operating~~Value Add Portfolio” means ~~all warehouse and light manufacturing assets~~our properties that ~~were acquired stabilized~~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 ~~have achieved Stabilization. The Operating Portfolio excludes non-core flex/office assets, assets contained in the Value Add Portfolio, and assets classified as held for sale.~~(iv) development.

“~~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.~~

~~“SL Rent Change”~~Weighted Average Lease Term” means the ~~percentage change~~contractual lease term in ~~the average monthly base rent over the term of the lease~~years, assuming that ~~commenced during the period compared to the Comparable Lease for assets included in the Operating Portfolio. Rent under gross~~tenants exercise no renewal options, purchase options, 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.~~

“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 theearly 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.~~

~~“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~~rights, weighted by ~~a new tenant or an existing tenant that is expanding into new (additional) space.~~

“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.square footage.

Overview

We are a ~~real estate operating company~~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.

~~COVID-19 Pandemic~~

Since March 2020, the COVID-19 pandemic has severely harmed global economic activity, caused significant volatility and negative pressure in financial markets, and negatively impacted almost every industry, including the real estate industry and the industries of our tenants, directly or indirectly.

We did not incur significant disruptions or enter into any rent deferral agreements from the COVID-19 pandemic during the three months ended March 31, 2022. We will continue to evaluate tenant rent relief requests on an individual basis, considering a number of factors. Not all tenant requests will ultimately result in modified agreements, nor are we foregoing our contractual rights under our lease agreements.

The COVID-19 pandemic or a future pandemic, epidemic or outbreak of infectious disease affecting states or regions in which we or our tenants operate could have material and adverse effects on our business, financial condition, results of operations and cash flows due to, among other factors: health or other government authorities requiring the closure of offices or other businesses or instituting quarantines of personnel as the result of, or in order to avoid, exposure to a contagious disease;

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disruption in supply and delivery chains; a general decline in business activity and demand for real estate; reduced economic activity, general economic decline or recession, which may impact our tenants’ businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to make rent payments to us timely, or at all, or to otherwise seek modifications of lease obligations; difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions, which may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis; and the potential negative impact on the health of our personnel, particularly if a significant number of our employees are impacted, which would result in a deterioration in our ability to ensure business continuity during a disruption.

The extent to which the COVID-19 pandemic or any other pandemic, epidemic or disease impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including among others, the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. Nevertheless, the COVID-19 pandemic (or a future pandemic, epidemic or disease) presents material uncertainty and risk with respect to our business, financial condition, results of operations and cash flows.

Outlook

~~Since~~Our business is affected by the ~~economic trough from~~uncertainty regarding the ~~COVID-19 pandemic in April 2020, the U.S. economy has rebounded and GDP increased by approximately 5.7% in 2021. However,~~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. In the first ~~quarter~~two quarters of 2022, ~~this economic growth was overshadowed by continued high inflation rates~~U.S. GDP declined before posting gains of 3.2% and ~~supply chain disruptions due~~2.7% in the third quarter and fourth quarters of 2022, respectively. Labor conditions remained strong with a 3.6% unemployment rate as of February 2023. Going forward, the general consensus among economists is to ~~many factors, including, but not limited to, Russia’s invasion~~expect an elevated risk of ~~Ukraine and~~recession over the ~~ongoing COVID-19 pandemic (including periods of rising COVID-19 cases from new or mutated variants).~~near term. While the macro-economic conditions continue to evolve and ~~impact our tenants,~~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 the COVID-19 pandemic and geopolitical tensions ~~are accelerating~~have accelerated a number of trends that positively impact U.S. industrial demand.

~~Over~~ However, given the ~~course of the COVID-19 pandemic, the U.S. federal~~current uncertainty and ~~state governments, as well as the Federal Reserve, responded with a series of fiscal~~events discussed above, our acquisition activity slowed in 2022 and ~~monetary policies to ease the economic burden of COVID-19 closures on businesses and individuals. Given the historically high inflation and strong employment reports~~so far in ~~the first quarter of 2022, the Federal Reserve~~2023 has shifted away from an expansionary monetary policy and raised interest rates 25 basis points to a range between 0.25% to 0.50% in March 2022, which was the first rate increase in over three years. We expect monetary policy to continue to tighten with increasing interest rates and decreasing Federal Reserve balance sheet; provided, that fiscal policy will likely remain accommodative, as needed, to counteract COVID-19 variants.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 ~~among others,~~ our minimal ~~amount of~~ floating rate debt exposure (taking into account our hedging activities), strong banking relationships, strong liquidity, access to capital, and ~~ample liquidity.~~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 ~~ongoing~~ COVID-19 pandemic, geopolitical uncertainty, and recent legislative bills supporting U.S. infrastructure, we expect acceleration in a number of industrial specific trends ~~will continue~~ to support ~~long-term~~stronger long term demand, ~~for industrial properties,~~ 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 ~~overall cost of supplying and shipping goods~~long term (i.e. the shortening and fattening of the supply chain); and

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

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Our portfolio continues to benefit from historically low availability throughout the national industrial market. ~~While the~~The COVID-19 pandemic has caused both positive and negative impacts at varying levels across different industries and ~~geographies,~~geographies. Ultimately, the ~~rise of~~acceleration in e-commerce brought on by the COVID-19 pandemic, initial actions taken by federal and state governments and the Federal Reserve in response to the pandemic, and the ~~recent~~growing desire for greater supply chain resilience has helped industrial space demand remain relatively strong to start 2023. The weakening global and U.S. economic ~~recovery have resulted~~trends could be a notable headwind and may result in ~~strong~~relatively less demand for ~~industrial space.~~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. ~~Industrial development continues to be concentrated in the larger primary markets and, after a brief deceleration, it has returned to and exceeded pre-COVID-19~~

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~~pandemic levels. We will continue to monitor the supply and demand fundamentals for industrial real estate and assess its impact on our business.~~

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. During the three months ended March 31, 2022, the SL Rent Change and the Cash Rent Change on New Leases and Renewal Leases in the Operating Portfolio together grew approximately 25.1% and 15.2%, respectively, during the three months ended March 31, 2022.

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, ~~including those brought on by the COVID-19 pandemic,~~ 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 months ended March 31, ~~2022.~~2023. Any rental concessions in such leases are accounted for on a straight-line basis over the term of the lease.


Operating Portfolio	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(2) (years)	Rental Concessions per Square Foot(3)		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 March 31, 2022
Three months ended March 31, 2023																Three months ended March 31, 2023
New Leases	New Leases	1,179,224	$	6.04	$	6.44	$	3.61	25.0	%	36.4	%	7.1	$	1.28	New Leases	775,324	$	7.48	$	7.79	$	3.22	47.3	%	55.6	%	3.8	$	0.50
Renewal Leases	Renewal Leases	1,960,672	$	4.97	$	5.32	$	0.95	8.9	%	17.9	%	5.9	$	0.10	Renewal Leases	4,025,974	$	4.92	$	5.17	$	0.94	20.1	%	30.4	%	4.5	$	0.06
Total/weighted average	Total/weighted average	3,139,896	$	5.37	$	5.74	$	1.96	15.2	%	25.1	%	6.3	$	0.54	Total/weighted average	4,801,298	$	5.34	$	5.60	$	1.31	25.3	%	35.3	%	4.4	$	0.13

(1)"“Total ~~Costs"~~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)'Weighted average lease term' means the contractual lease term in years, assuming that tenants do not exercise any renewal options, purchase options, or early termination rights, weighted by square footage.

~~(3)~~Represents the total rental concessions for the entire lease term.

Additionally, for the three months ended March 31, ~~2022,~~2023, leases commenced totaling 708,432 square feet related to ~~the~~ Value Add ~~Portfolio~~assets and first generation ~~leasing, with a total of 511,236 square feet,~~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 overall performance will be affected by the extent to which we are able to pass-through property operating expenses to our tenants.

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Scheduled Lease Expirations

Our ability to re-lease space subject to expiring leases ~~impacts~~will impact our results of operations and ~~will be~~is affected by economic and competitive conditions in our markets and by the desirability of our individual buildings. Leases that comprise approximately ~~6.8%~~7.3% of our total annualized base rental revenue will expire during the period from April 1, ~~2022~~2023 to March 31, ~~2023,~~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 April 1, ~~2022~~2023 to March 31, ~~2023,~~2024, thereby resulting in an increase in revenue from the same space.

The following table summarizes lease expirations for leases in place as of March 31, ~~2022,~~2023, plus available space, for each of the ten calendar years beginning with ~~2022~~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	Lease Expiration Year	Number of Leases Expiring	Total Rentable Square Feet	% of Total Occupied Square Feet		Total Annualized Base Rental Revenue (in thousands)		% of Total Annualized Base Rental Revenue		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	Available	—	3,412,002	—		—		—		Available	—	2,679,458	—		—		—
Month-to-month leases(1)	Month-to-month leases(1)	3	123,031	0.1	%	$	477	0.1	%	Month-to-month leases(1)	—	60,000	0.1	%	$	471	0.1	%
Remainder of 2022		34	3,559,398	3.3	%	16,780		3.3	%
2023		100	13,138,341	12.3	%	57,723		11.4	%
Remainder of 2023(2)										Remainder of 2023(2)	38	4,680,993	4.3	%	22,627		4.2	%
2024	2024	98	13,767,694	12.9	%	63,864		12.6	%	2024	98	13,364,749	12.3	%	65,239		12.0	%
2025	2025	88	12,901,137	12.1	%	58,034		11.4	%	2025	106	14,856,734	13.6	%	69,084		12.7	%
2026	2026	97	14,658,908	13.7	%	71,460		14.1	%	2026	127	18,963,488	17.4	%	95,037		17.4	%
2027	2027	75	11,979,061	11.2	%	57,918		11.4	%	2027	94	14,110,659	13.0	%	71,077		13.0	%
2028	2028	44	6,886,711	6.6	%	31,679		6.2	%	2028	76	10,125,841	9.3	%	49,256		9.0	%
2029	2029	41	7,039,607	6.6	%	33,763		6.7	%	2029	49	8,294,915	7.6	%	40,879		7.5	%
2030	2030	27	3,763,278	3.5	%	21,576		4.3	%	2030	32	4,233,184	3.9	%	24,519		4.5	%
2031	2031	39	7,182,980	6.7	%	34,219		6.7	%	2031	41	7,312,872	6.7	%	35,403		6.5	%
2032										2032	18	2,542,575	2.3	%	17,885		3.3	%
Thereafter	Thereafter	47	11,710,329	11.0	%	60,082		11.8	%	Thereafter	36	10,328,555	9.5	%	53,317		9.8	%
Total	Total	693	110,122,477	100.0	%	$	507,575	100.0	%	Total	715	111,554,023	100.0	%	$	544,794	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 8.5 million square feet, have been executed as of March 31, 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~~There were no assets acquired during the three months ended March 31, 2023, compared to eight acquisitions for a purchase price of approximately $166.4 million during the three months ended March 31, 2022.

~~(1) As defined by CoStar Realty Information Inc (“CoStar”). If the building is located outside of a CoStar defined market, the city and state is reflected.~~

~~Portfolio~~ Dispositions

During the three months ended March 31, ~~2022,~~2023, we sold ~~one building and one land parcel~~two buildings comprised of approximately ~~0.2~~0.4 million rentable square feet with a net book value of approximately ~~$11.3~~$16.2 million to third parties. Net proceeds from the sales of rental property were approximately ~~$35.3~~$36.3 million and we recognized the full gain on the sales of rental property, net, of approximately ~~$24.0~~$20.1 million for the three months ended March 31, ~~2022.~~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 March 31, ~~2022.~~2023.


Top 20 Markets(1)	% of Total Annualized Base Rental Revenue
Chicago, IL	~~7.8~~7.2	%
~~Philadelphia,~~Greenville, SC	5.3	%
Pittsburgh, PA	~~7.1~~	%
~~Greenville/Spartanburg, SC~~	~~5.4~~	%
~~Milwaukee/Madison, WI~~	~~4.5~~4.3	%
Detroit, MI	~~4.3~~4.2	%
Columbus, OH	~~4.1~~3.7	%
~~Minneapolis/St Paul,~~Minneapolis, MN	~~3.8~~3.6	%
~~Pittsburgh,~~South Central PA	~~3.8~~3.3	%
Houston, TX	~~3.0~~	%
~~West Michigan, MI~~	~~2.4~~	%
~~Charlotte, NC~~	~~2.3~~	%
~~Indianapolis, IN~~	~~2.3~~2.7	%
El Paso, TX	~~2.2~~2.5	%
~~Cincinnati/Dayton, OH~~Philadelphia, PA	~~2.0~~2.3	%
Milwaukee, WI	2.2	%
Charlotte, NC	2.1	%
Indianapolis, IN	1.9	%
Cleveland, OH	1.9	%
Sacramento, CA	1.8	%
Kansas City, KS	1.7	%
Boston, MA	~~1.9~~	%
~~Kansas City, MO~~	~~1.8~~1.7	%
Columbia, SC	1.6	%
~~Westchester/So Connecticut, CT/NY~~	~~1.6~~	%
~~Washington, DC~~Grand Rapids, MI	1.5	%
Raleigh, NC	1.4	%
Total	~~65.3~~56.9	%

(1) ~~As defined by CoStar.~~Top markets 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 March 31, ~~2022.~~2023.

Top 20 Tenant Industries(1)

% of Total Annualized Base Rental Revenue

Air Freight & Logistics

~~10.8~~11.3

Containers & Packaging

~~8.3~~8.2

~~Auto~~Automobile Components

~~7.1~~7.3

~~Trading Companies & Distributors (Industrial Goods)~~Machinery

~~5.3~~5.9

Commercial Services & Supplies

~~5.3~~5.5

~~Internet~~Trading Companies & ~~Direct Mkt Retail~~Distribution (Industrial Goods)

~~4.9~~5.1

~~Machinery~~Household Durables

~~4.7~~4.4

Distributors (Consumer Goods)

~~4.6~~4.2

~~Household Durables~~Consumer Staples Distribution

~~4.5~~3.7

~~Food & Staples Retailing~~Broadline Retail

~~3.5~~

~~Media~~

~~3.4~~3.6

Building Products

~~3.2~~3.6

Media

3.3

Specialty Retail

~~2.9~~2.8

Ground Transportation

2.4

Food Products

2.4

Chemicals

~~2.3~~2.2

~~Road & Rail~~Beverages

2.2

Electronic Equip, Instruments

2.1

~~Food Products~~Textiles, Apparel, Luxury Goods

~~2.1~~1.9

~~Beverages~~Health Care Equipment & Supplies

~~2.0~~

~~Textiles, Apparel, Luxury Good~~

~~2.0~~

~~Household Products~~

~~1.7~~1.8

Total

~~82.9~~83.9

(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 March 31, ~~2022.~~2023.


Top 20 Tenants(1)	Top 20 Tenants(1)	Number of Leases	% of Total Annualized Base Rental Revenue		Top 20 Tenants(1)	Number of Leases	% of Total Annualized Base Rental Revenue
Amazon	Amazon	7	3.2	%	Amazon	6	2.8	%
Eastern Metal Supply, Inc.	Eastern Metal Supply, Inc.	5	1.0	%	Eastern Metal Supply, Inc.	5	0.9	%
American Tire Distributors Inc		7	1.0	%
American Tire Distributors, Inc.					American Tire Distributors, Inc.	7	0.9	%
Tempur Sealy International, Inc.					Tempur Sealy International, Inc.	2	0.9	%
Hachette Book Group, Inc.					Hachette Book Group, Inc.	1	0.8	%
Kenco Logistic Services, LLC					Kenco Logistic Services, LLC	3	0.8	%
WestRock Company					WestRock Company	7	0.7	%
FedEx Corporation	FedEx Corporation	4	0.9	%	FedEx Corporation	3	0.7	%
Tempur Sealy International Inc		2	0.9	%
Lippert Component Manufact		5	0.8	%
Kenco Logistic Services, LLC		3	0.8	%
Penguin Random House LLC		1	0.8	%
Penguin Random House, LLC					Penguin Random House, LLC	1	0.7	%
Lippert Component Manufacturing					Lippert Component Manufacturing	4	0.7	%
DS Smith North America	DS Smith North America	2	0.7	%	DS Smith North America	2	0.7	%
Westrock Company		7	0.7	%
GXO Logistics, Inc.	GXO Logistics, Inc.	2	0.7	%	GXO Logistics, Inc.	2	0.7	%
Yanfeng US Automotive Interior					Yanfeng US Automotive Interior	2	0.7	%
DHL Supply Chain	DHL Supply Chain	4	0.7	%	DHL Supply Chain	4	0.7	%
LKQ Corporation		4	0.7	%
Hachette Book Group, Inc.		1	0.7	%
Yanfeng US Automotive Interior		2	0.7	%
AFL Telecommunications LLC					AFL Telecommunications LLC	2	0.7	%
Carolina Beverage Group					Carolina Beverage Group	3	0.7	%
Berlin Packaging L.L.C.					Berlin Packaging L.L.C.	4	0.6	%
Iron Mountain Information Management					Iron Mountain Information Management	5	0.6	%
Ford Motor Company	Ford Motor Company	1	0.7	%	Ford Motor Company	1	0.6	%
Carolina Beverage Group		3	0.7	%
Packaging Corp of America		5	0.6	%
Schneider Electric USA, Inc.	Schneider Electric USA, Inc.	3	0.6	%	Schneider Electric USA, Inc.	3	0.6	%
Costco Wholesale Corporation		1	0.6	%
Total	Total	69	17.5	%	Total	67	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, ~~2021~~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, ~~2020.~~2021. On March 31, ~~2022,~~2023, we owned ~~463~~522 industrial buildings consisting of approximately ~~94.6~~103.4 million square feet and representing approximately ~~85.9%~~92.7% of our total portfolio, that are considered our same store portfolio in the analysis below. Same store occupancy ~~decreased~~increased approximately ~~0.5%~~0.6% to ~~97.4%~~98.1% as of March 31, ~~2022~~2023 compared to ~~97.9%~~97.5% as of March 31, ~~2021.~~2022.

Comparison of the three months ended March 31, ~~2022~~2023 to the three months ended March 31, ~~2021~~2022

The following table summarizes selected operating information for our same store portfolio and our total portfolio for the three months ended March 31, ~~2022~~2023 and ~~2021~~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 March 31, ~~2022~~2023 and ~~2021~~2022 with respect to the buildings acquired and sold after December 31, ~~2020,~~2021, Operating Portfolio buildings with expansions placed into service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, ~~2020, and our~~2021, flex/office buildings, Value Add ~~Portfolio,~~buildings, and buildings classified as held for sale.

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		Same Store Portfolio								Acquisitions/Dispositions				Other				Total Portfolio									Same Store Portfolio								Acquisitions/Dispositions				Other				Total Portfolio
		Three months ended March 31,				Change				Three months ended March 31,				Three months ended March 31,				Three months ended March 31,				Change					Three months ended March 31,				Change				Three months ended March 31,				Three months ended March 31,				Three months ended March 31,				Change
		2022		2021		$		%		2022		2021		2022		2021		2022		2021		$		%			2023		2022		$		%		2023		2022		2023		2022		2023		2022		$		%
Revenue	Revenue																									Revenue
Operating revenue	Operating revenue																									Operating revenue
Rental income	Rental income	$	133,168	$	128,952	$	4,216	3.3	%	$	21,043	$	3,280	$	4,390	$	1,593	$	158,601	$	133,825	$	24,776	18.5	%	Rental income	$	158,145	$	150,774	$	7,371	4.9	%	$	8,211	$	3,459	$	6,912	$	4,368	$	173,268	$	158,601	$	14,667	9.2	%
Other income	Other income	278		102		176		172.5	%	—		68		330		—		608		170		438		257.6	%	Other income	136		163		(27)		(16.6)	%	13		110		136		335		285		608		(323)		(53.1)	%
Total operating revenue	Total operating revenue	133,446		129,054		4,392		3.4	%	21,043		3,348		4,720		1,593		159,209		133,995		25,214		18.8	%	Total operating revenue	158,281		150,937		7,344		4.9	%	8,224		3,569		7,048		4,703		173,553		159,209		14,344		9.0	%
Expenses	Expenses																									Expenses
Property	Property	26,852		24,932		1,920		7.7	%	3,813		1,550		1,110		520		31,775		27,002		4,773		17.7	%	Property	31,750		30,352		1,398		4.6	%	2,131		544		2,000		879		35,881		31,775		4,106		12.9	%
Net operating income(1)	Net operating income(1)	$	106,594	$	104,122	$	2,472	2.4	%	$	17,230	$	1,798	$	3,610	$	1,073	127,434		106,993		20,441		19.1	%	Net operating income(1)	$	126,531	$	120,585	$	5,946	4.9	%	$	6,093	$	3,025	$	5,048	$	3,824	137,672		127,434		10,238		8.0	%
Other expenses	Other expenses																									Other expenses
General and administrative	General and administrative																	12,313		12,790		(477)		(3.7)	%	General and administrative																	12,676		12,313		363		2.9	%

Depreciation and amortization	Depreciation and amortization																	67,366		58,407		8,959		15.3	%	Depreciation and amortization																	68,944		67,366		1,578		2.3	%

Other expenses	Other expenses																	497		852		(355)		(41.7)	%	Other expenses																	2,979		497		2,482		499.4	%
Total other expenses	Total other expenses																	80,176		72,049		8,127		11.3	%	Total other expenses																	84,599		80,176		4,423		5.5	%
Total expenses	Total expenses																	111,951		99,051		12,900		13.0	%	Total expenses																	120,480		111,951		8,529		7.6	%
Other income (expense)	Other income (expense)																									Other income (expense)
Interest and other income	Interest and other income																	34		32		2		6.3	%	Interest and other income																	19		34		(15)		(44.1)	%
Interest expense	Interest expense																	(17,259)		(15,358)		(1,901)		12.4	%	Interest expense																	(22,612)		(17,259)		(5,353)		31.0	%
Debt extinguishment and modification expenses																		—		(679)		679		(100.0)	%

Gain on the sales of rental property, net	Gain on the sales of rental property, net																	23,955		6,409		17,546		273.8	%	Gain on the sales of rental property, net																	20,128		23,955		(3,827)		(16.0)	%
Total other income (expense)	Total other income (expense)																	6,730		(9,596)		16,326		170.1	%	Total other income (expense)																	(2,465)		6,730		(9,195)		(136.6)	%
Net income	Net income																	$	53,988	$	25,348	$	28,640	113.0	%	Net income																	$	50,608	$	53,988	$	(3,380)	(6.3)	%

(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~~decreased by approximately ~~$28.6~~$3.4 million, or ~~113.0%~~6.3%, to approximately $50.6 million for the three months ended March 31, 2023, compared to approximately $54.0 million for the three months ended March 31, ~~2022, compared to approximately $25.3 million for the three months ended March 31, 2021.~~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 ~~$4.2~~$7.4 million, or ~~3.3%~~4.9%, to approximately ~~$133.2~~$158.1 million for the three months ended March 31, ~~2022~~2023 compared to approximately ~~$129.0~~$150.8 million for the three months ended March 31, ~~2021.~~2022.

Same store lease income increased by approximately ~~$2.1~~$5.3 million, or ~~2.0%~~4.3%, to approximately ~~$109.4~~$129.2 million for the three months ended March 31, ~~2022~~2023 compared to approximately ~~$107.3~~$123.9 million for the three months ended March 31, ~~2021.~~2022. The increase was primarily due to an increase in rental income of approximately ~~$4.3~~$6.9 million from the execution of new leases and lease renewals with existing ~~tenants~~tenants. This increase was partially offset by the reduction of base rent of approximately $1.4 million due to tenant vacancies and a net ~~decrease~~increase in the amortization of net above market leases of approximately $0.2 million. ~~These increases were partially offset by the reduction of base rent of approximately $2.4 million due to tenant vacancies.~~

Same store other billings increased by approximately $2.1 million, or ~~9.5%~~7.8%, to approximately ~~$23.8~~$29.0 million for the three months ended March 31, ~~2022~~2023 compared to approximately ~~$21.7~~$26.9 million for the three months ended March 31, ~~2021.~~2022. The increase was attributable to an increase of approximately ~~$1.7~~$1.6 million ~~related~~of real estate tax reimbursements due to other expense reimbursements from an increase in corresponding expenses and 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. Additionally, there was an increase in real estate taxes levied by the taxing authority ~~and~~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 ~~$0.4 million.~~$0.5 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 property operating expenses increased by approximately ~~$1.9~~$1.4 million, or ~~7.7%~~4.6%, to approximately ~~$26.9~~$31.8 million for the three months ended March 31, ~~2022~~2023 compared to approximately ~~$24.9~~$30.4 million for the three months ended March 31, ~~2021.~~2022. This increase was ~~primarily related~~due to ~~an increase~~increases in ~~utilities expense of approximately $0.8 million~~repairs and maintenance, insurance, utility, and real estate taxes expenses of approximately ~~$0.7~~$0.5 million, ~~levied by the taxing authority~~$0.4 million, $0.3 million, and 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. The increase was also attributable to increases of approximately $0.2 million, ~~in insurance expense and approximately $0.2 million in repairs and maintenance and other expenses.~~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, ~~2020,~~2021, we acquired 7424 buildings consisting of approximately ~~13.1~~4.0 million square feet (excluding ~~eight~~two buildings that were included in the Value Add Portfolio at March 31, ~~2022~~2023 or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, ~~2020)~~2021), and sold 2310 buildings consisting of approximately ~~2.9~~2.2 million square ~~feet and one land parcel.~~feet. For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the buildings acquired after December 31, ~~2020~~2021 contributed approximately ~~$16.9~~$5.9 million and ~~$0.8~~$1.1 million to NOI, respectively. For the ~~three months~~years ended March 31, ~~2022~~2023 and ~~2021,~~March 31, 2022, the buildings sold after December 31, ~~2020~~2021 contributed approximately ~~$0.3~~$0.2 million and ~~$1.0~~$1.9 million to NOI, respectively. Refer to Note 3 in the accompanying Notes to ~~Consolidated~~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, ~~2020.~~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 ~~$2.7~~$4.1 million and ~~$0.8~~$2.9 million to NOI for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. Additionally, there was approximately $0.9 million and ~~$0.3~~$0.9 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the three months ended March 31, ~~2022~~2023 and ~~2021,~~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 ~~$8.1~~$4.4 million, or ~~11.3%~~5.5%, for the three months ended March 31, ~~2022~~2023 to approximately ~~$80.2~~$84.6 million compared to approximately ~~$72.0~~$80.2 million for the three months ended March 31, ~~2021.~~2022. The increase was ~~primarily a result of~~attributable to an increase in ~~depreciation~~other expenses of approximately $2.5 million during the three months ended March 31, 2022, 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 ofalso increased approximately ~~$9.0~~$1.6 million due to an increase in the depreciable asset base from net acquisitions. This increase was partially offset by a decrease in general and administrative expenses of approximately $0.5 million primarily due to the adoption of our retirement vesting program on January 7, 2021 and related acceleration of equity-based compensation expense for certain eligible employeesacquisitions that ~~did not recur during the three months ended~~occurred after March 31, 2022.

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) ~~increased~~decreased approximately ~~$16.3~~$9.2 million, or ~~170.1%~~136.6%, for the three months ended March 31, ~~2022~~2023 to aapproximately $2.5 million total ~~net~~ other ~~income of~~expense compared approximately $6.7 million ~~compared approximately $9.6 million net~~total other ~~expense~~income for the three months ended March 31, ~~2021.~~2022. This decrease was attributable to an increase in interest expense of approximately $5.4 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, respectively. This decrease was ~~primarily~~also a result of ~~an increase~~decrease in the gain on the sales of rental property, net of approximately ~~$17.5~~$3.8 million. This increase was partially offset by an increase in interest expense of approximately $1.9 million which is primarily attributable to the issuance of $325.0 million of unsecured notes on September 28, 2021.

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

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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 March 31,				Three months ended March 31,
Reconciliation of Net Income to FFO (in thousands)	Reconciliation of Net Income to FFO (in thousands)	2022		2021			Reconciliation of Net Income to FFO (in thousands)	2023		2022
Net income	Net income	$	53,988	$	25,348		Net income	$	50,608	$	53,988
Rental property depreciation and amortization	Rental property depreciation and amortization	67,313		58,339			Rental property depreciation and amortization	68,889		67,313

Gain on the sales of rental property, net	Gain on the sales of rental property, net	(23,955)		(6,409)			Gain on the sales of rental property, net	(20,128)		(23,955)
FFO	FFO	97,346		77,278			FFO	99,369		97,346
Preferred stock dividends		—		(1,289)
Redemption of preferred stock		—		(2,582)

Amount allocated to restricted shares of common stock and unvested units	Amount allocated to restricted shares of common stock and unvested units	(157)		(237)			Amount allocated to restricted shares of common stock and unvested units	(147)		(157)
FFO attributable to common stockholders and unit holders	FFO attributable to common stockholders and unit holders	$	97,189	$	73,170		FFO attributable to common stockholders and unit holders	$	99,222	$	97,189

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 March 31,				Three months ended March 31,
Reconciliation of Net Income to NOI (in thousands)	Reconciliation of Net Income to NOI (in thousands)	2022		2021			Reconciliation of Net Income to NOI (in thousands)	2023		2022
Net income	Net income	$	53,988	$	25,348		Net income	$	50,608	$	53,988
General and administrative	General and administrative	12,313		12,790			General and administrative	12,676		12,313

Depreciation and amortization	Depreciation and amortization	67,366		58,407			Depreciation and amortization	68,944		67,366
Interest and other income	Interest and other income	(34)		(32)			Interest and other income	(19)		(34)
Interest expense	Interest expense	17,259		15,358			Interest expense	22,612		17,259

Debt extinguishment and modification expenses		—		679

Other expenses	Other expenses	497		852			Other expenses	2,979		497

Gain on the sales of rental property, net	Gain on the sales of rental property, net	(23,955)		(6,409)			Gain on the sales of rental property, net	(20,128)		(23,955)
Net operating income	Net operating income	$	127,434	$	106,993		Net operating income	$	137,672	$	127,434

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Cash Flows

Comparison of the three months ended March 31, ~~2022~~2023 to the three months ended March 31, ~~2021~~2022

The following table summarizes our cash flows for the three months ended March 31, ~~2022~~2023 compared to the three months ended March 31, ~~2021.~~2022.


		Three months ended March 31,				Change					Three months ended March 31,				Change
Cash Flows (dollars in thousands)	Cash Flows (dollars in thousands)	2022		2021		$		%		Cash Flows (dollars in thousands)	2023		2022		$		%
Net cash provided by operating activities	Net cash provided by operating activities	$	88,879	$	73,460	$	15,419	21.0	%	Net cash provided by operating activities	$	86,421	$	88,879	$	(2,458)	(2.8)	%
Net cash used in investing activities		$	148,797	$	79,502	$	69,295	87.2	%
Net cash provided by financing activities		$	74,727	$	8,020	$	66,707	831.8	%
Net cash provided by (used in) investing activities										Net cash provided by (used in) investing activities	$	9,833	$	(148,797)	$	158,630	106.6	%
Net cash provided by (used in) financing activities										Net cash provided by (used in) financing activities	$	(104,870)	$	74,727	$	(179,597)	(240.3)	%

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Net cash provided by operating activities ~~increased~~decreased approximately ~~$15.4~~$2.5 million to approximately $86.4 million for the three months ended March 31, 2023 compared to approximately $88.9 million for the three months ended March 31, ~~2022 compared to approximately $73.5 million for the three months ended March 31, 2021.~~2022. The ~~increase~~decrease was primarily attributable to ~~incremental operating cash flows from property acquisitions completed after March 31, 2021, and operating performance at existing properties. These increases were partially offset by~~ the loss of cash flows from property dispositions completed after March 31, ~~2021~~2022 and fluctuations in working capital due to the timing of payments and rental receipts. The decrease was partially offset by the incremental operating cash flows from property acquisitions completed after March 31, 2022, and operating performance at existing properties.

Net cash ~~used in~~provided by (used in) investing activities increased approximately ~~$69.3~~$158.6 million to approximately ~~$148.8~~$9.8 million net cash provided by investing activities for the three months ended March 31, ~~2022~~2023 compared to approximately ~~$79.5~~$148.8 million net cash used in investing activities for the three months ended March 31, ~~2021.~~2022. The increase was primarily attributable to the acquisition of ~~eight~~8 buildings for a total cash consideration of approximately $166.4 million for the three months ended March 31, 2022, ~~compared to the acquisition of six buildings for a total cash consideration of approximately $95.1 million for~~whereas there were no acquisitions during the three months ended March 31, ~~2021.~~

~~Net cash provided by financing activities increased approximately $66.7 million to approximately $74.7 million for~~2023. Additionally, the ~~three months ended March 31, 2022 compared to approximately $8.0 million for the three months ended March 31, 2021. The~~ increase ~~is primarily~~was attributable to ~~the redemption~~an increase in proceeds from sales of ~~preferred stock with an aggregate liquidation value~~rental property, net of ~~$75.0~~approximately $1.0 million during the three months ended March 31, ~~2021 that did not recur, as well as an increase in net proceeds received from the sale of common stock of approximately $33.5 million, during~~2023 compared to the three months ended March 31, 2022. These increases were partially offset by aan increase of approximately $10.6 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 $179.6 million to approximately $104.9 million net cash ~~outflow~~used in financing activities for the three months ended March 31, 2023 compared to approximately $74.7 million net cash provided by financing activities for the three months ended March 31, 2022. This decrease was primarily attributable to the redemption of $100.0 million of unsecured notes on January 5, 2023 that did not occur during the three months ended March 31, 2022. This decrease was also attributable to decrease in net proceeds received from the sale of common stock of approximately ~~$38.0~~$55.2 million during the three months ended March 31, 2023 compared to the three months ended March 31, 2022, as well as a decrease in net cash inflow of approximately $28.0 million from our unsecured credit ~~facility and an increase~~facility. These decreases were partially offset by a decrease of approximately ~~$6.2~~$2.3 million in dividends paid during the three months ended March 31, ~~2022~~2023 compared to the three months ended March 31, ~~2021.~~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 ~~for~~including development projects, tenant improvements and leasing commissions.

Our ~~long-term~~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 ~~non-recurring capital expenditures,~~ and scheduled debt maturities. We intend to satisfy our ~~long-term~~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.

~~Table of Contents~~

As of March 31, ~~2022,~~2023, we had total immediate liquidity of approximately ~~$397.1~~$778.9 million, comprised of ~~$34.8~~$17.2 million of cash and cash equivalents and ~~$362.3~~$761.7 million of immediate availability on our unsecured credit facility.

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 ~~voluntary and~~ 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. ~~The following table summarizes the dividends declared on our outstanding common stock during the three months ended March 31, 2022.~~

~~Month Ended 2022~~

~~Declaration Date~~

~~Record Date~~

~~Per Share~~

~~Payment Date~~

~~March 31~~

~~January 10, 2022~~

~~March 31, 2022~~

~~0.121667~~

~~April 18, 2022~~

~~February 28~~

~~January 10, 2022~~

~~February 28, 2022~~

~~0.121667~~

~~March 15, 2022~~

~~January 31~~

~~January 10, 2022~~

~~January 31, 2022~~

~~0.121667~~

~~February 15, 2022~~

~~Total~~

~~0.365001~~

~~On April 14, 2022, our board of directors declared dividends on our common stock for the months ending April 30, 2022, May 31, 2022, and June 30, 2022 at a monthly rate of $0.121667 per share.~~

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Indebtedness Outstanding

The following table summarizes certain information with respect to our indebtedness outstanding as of March 31, ~~2022.~~2023.

Loan Principal Outstanding as of March 31, 2022 (in thousands)
Interest
Rate(1)(2)
Maturity Date
Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)
$ 384,000 L + 0.775% October 23, 2026 i
Total unsecured credit facility 384,000
Unsecured term loans:
Unsecured Term Loan D 150,000 2.85 % January 4, 2023 i
Unsecured Term Loan E 175,000 3.77 % January 15, 2024 i
Unsecured Term Loan F 200,000 2.96 % January 12, 2025 i
Unsecured Term Loan G 300,000 1.13 % February 5, 2026 i
Unsecured Term Loan A 150,000 3.23 % March 15, 2027 i
Total unsecured term loans 975,000
Total unamortized deferred financing fees and debt issuance costs (4,075)
Total carrying value unsecured term loans, net 970,925
Unsecured notes:
Series F Unsecured Notes 100,000 3.98 %

January 5, 2023 ii
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 J Unsecured Notes 50,000 2.95 % September 28, 2033 ii
Total unsecured notes 900,000

Total unamortized deferred financing fees and debt issuance costs (2,942)

Total carrying value unsecured notes, net 897,058

Mortgage notes (secured debt):

Wells Fargo Bank, National Association CMBS Loan 46,106 4.31 % December 1, 2022 iii
Thrivent Financial for Lutherans 3,397 4.78 % December 15, 2023 iv
United of Omaha Life Insurance Company 4,894 3.71 % October 1, 2039 ii
Total mortgage notes 54,397
Less: Net unamortized fair market value discount (136)
Total unamortized deferred financing fees and debt issuance costs (71)
Total carrying value mortgage notes, net 54,190
Total / weighted average interest rate(5)
$ 2,306,173 2.87 %


Indebtedness (dollars in thousands)	March 31, 2023		Interest Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)	$	235,000	Term SOFR + 0.855%		October 23, 2026	i
Total unsecured credit facility	235,000

Unsecured term loans:
Unsecured Term Loan F	200,000		2.94	%	January 12, 2025	i
Unsecured Term Loan G	300,000		1.09	%	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	(4,228)
Total carrying value unsecured term loans, net	1,020,772

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	(4,381)
Total carrying value unsecured notes, net	1,195,619

Mortgage notes (secured debt):
Thrivent Financial for Lutherans	3,262		4.78	%	December 15, 2023	iii
United of Omaha Life Insurance Company	4,692		3.71	%	October 1, 2039	ii
Total mortgage notes	7,954
Net unamortized fair market value discount	(138)
Total unamortized deferred financing fees and debt issuance costs	(3)
Total carrying value mortgage notes, net	7,813
Total / weighted average interest rate(5)	$	2,459,204	3.49	%

(1)Interest rate as of March 31, ~~2022.~~2023. At March 31, ~~2022,~~2023, the one-month ~~LIBOR~~Term Secured Overnight Financing Rate (“L”Term SOFR”) was ~~0.452%~~4.80247%. 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.~~premiums or discounts. The spread over the applicable rate for our unsecured credit facility and unsecured term loans is based on the our debt rating and leverage ratio, as defined in the respective loan agreements.

(2)~~The~~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 ~~LIBOR~~Term SOFR plus a 0.10% adjustment and a spread of 0.85%, ~~with the exception of Unsecured Term Loan D which has~~less a ~~stated~~sustainability-related interest rate adjustment of ~~one-month LIBOR plus a spread of 1.0%~~0.02%. As of March 31, ~~2022,~~2023, one-month ~~LIBOR~~Term SOFR for the Unsecured Term Loans A, ~~D, E,~~ F, G, H, and GI was swapped to a fixed rate of ~~2.38%, 1.85%, 2.92%~~1.31%, 2.11%, 0.26%, 2.90%, and ~~0.28%~~2.66%, ~~respectively.~~respectively (which includes the 0.10% adjustment). One-month ~~LIBOR for the Unsecured~~ Term ~~Loan A will be swapped to a fixed rate of 1.30% effective April 1, 2022. One-month LIBOR~~SOFR for the Unsecured Term Loan G will be swapped to a fixed rate of ~~0.94%~~0.95% effective April 18, 2023. One-month Term SOFR for the Unsecured Term Loan H will be swapped to a fixed rate of 2.50% effective January 12, 2024.

(4)The capacity of our unsecured credit facility is ~~$750.0 million.~~$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.

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The aggregate undrawn nominal commitments on our unsecured credit facility and unsecured term loans as of March 31, ~~2022~~2023 was approximately ~~$362.3~~$761.7 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 March 31, ~~2022,~~2023, we were in compliance with the applicable financial covenants.

~~Subsequent to March 31, 2022, on April 28, 2022,~~On January 5, 2023, we ~~entered into a note purchase agreement for~~redeemed in full at maturity the ~~future private placement by~~$100.0 million in aggregate principal amount of the ~~Operating Partnership of $400.0 million senior unsecured notes, maturing June 28, 2032,~~Series F Unsecured Notes with a fixed ~~annual~~ interest rate of ~~4.12%~~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 ~~unsecured notes are expected to be issued~~interest rate adjustment, a 0.02% interest rate reduction for each instrument, will end on ~~or around~~ June ~~28, 2022, subject to conditions. The note purchase agreement contains a number of financial covenants substantially similar to~~29, 2024, in accordance with the financial covenants contained in our unsecured credit facility, plus a financial covenant that requires us to maintain a minimum interest coverage ratio of not less than 1.50:1.00. The Company and certain of its subsidiaries will guarantee the obligations under the unsecured notes.respective loan agreements.

The following table summarizes our debt capital structure as of March 31, ~~2022.~~2023.


Debt Capital Structure	March 31, ~~2022~~2023
Total principal outstanding (in thousands)	$	~~2,313,397~~2,467,954
Weighted average duration (years)	~~4.3~~5.1

% Secured debt	~~2.4~~0.3		%
% Debt maturing next 12 months	~~12.8~~0.1		%
Net Debt to Real Estate Cost Basis(1)	~~34.5~~35.5		%

(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 March 31, ~~2022~~2023 and December 31, ~~2021,~~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.

The following table summarizes our at-the-market (“ATM”) common stock offering program as of March 31, ~~2022.~~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. There was no activity under the ATM common stock offering program during the three months ended March 31, 2023.

ATM Common Stock Offering Program Date Maximum Aggregate Offering Price (in thousands) Aggregate Available as of March 31, 2022 (in thousands)
2022 $750 million ATM February 17, 2022 $ 750,000 $ 750,000


ATM Common Stock Offering Program	Date	Maximum Aggregate Offering Price (in thousands)		Aggregate Available as of March 31, 2023 (in thousands)
2022 $750 million ATM	February 17, 2022	$	750,000	$	750,000

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~~The following table summarizes the activity under the ATM common stock offering programs during the three months ended March 31, 2022.~~

Three months ended March 31, 2022
ATM Common Stock Offering Program Shares
Sold Weighted Average Price Per Share Sales Agents’ Fees (in thousands) Net Proceeds (in thousands)
2019 $600 million ATM(1)
128,335 $ 45.03 $ 58 $ 5,721
Total/weighted average 128,335 $ 45.03 $ 58 $ 5,721

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

In connection with our underwritten public offering that closed in November 2021, on December 3, 2021, we executed a forward sale agreement for the sale of an additional 1,200,000 shares of common stock on a forward basis at a price of $41.87 per share. We did not initially receive any proceeds from the sale of shares on a forward basis. ~~On March 29, 2022, we physically settled in full the forward sales agreement by issuing 1,200,000 shares of common stock for net proceeds of approximately $49.7 million, or $41.39 per share.~~

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 March 31, ~~2022,~~2023, we owned approximately ~~97.9%~~97.7% 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 ~~2.1%~~2.3%.

Interest Rate Risk

We use interest rate swaps to fix the rate of our variable rate debt. As of March 31, ~~2022,~~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.

~~Table of Contents~~

~~The following table details our outstanding interest rate swaps as of March 31, 2022.~~

The swaps ~~outlined in the above table were~~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 March 31, ~~2022, the fair value of 14 of our~~2023, we had 25 interest rate swaps outstanding that were in an asset position of approximately ~~$27.7 million, including any adjustment for nonperformance risk related to these agreements. The remaining nine interest rate swaps were in a liability position of approximately $2.3~~$56.2 million, including any adjustment for nonperformance risk related to these agreements.

As of March 31, ~~2022,~~2023, we had approximately ~~$1,359.0~~$1,260.0 million of variable rate debt. As of March 31, ~~2022,~~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 March 31, ~~2022,~~2023, we had letters of credit related to development projects and certain other agreements of approximately ~~$3.7~~$3.3 million. As of March 31, ~~2022,~~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.

~~Table of Contents~~

As of March 31, ~~2022,~~2023, we had ~~$1,359.0~~$1,260.0 million of variable rate debt outstanding. As of March 31, ~~2022,~~2023, all of our outstanding variable rate debt, with the exception of our unsecured credit facility which had a balance of ~~$384.0~~$235.0 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

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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. 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 ~~$384.0~~$235.0 million on our unsecured credit facility for the three months ended March 31, ~~2022,~~2023, our interest expense would have increased by approximately ~~$1.0~~$0.6 million for the three months ended March 31, ~~2022.~~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 March 31, ~~2022.~~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.

Changes in Internal Controls

There was no change to our internal control over financial reporting during the quarter ended March 31, ~~2022~~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 which, 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, ~~2021~~2022 filed with the SEC on February ~~16, 2022.~~15, 2023.

~~Our performance~~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 ~~subject~~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 ~~economic conditions~~ and ~~risks associated~~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.~~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.

~~The investment returns available from equity investments~~Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in ~~real estate depend~~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 ~~the amount of income earned and capital appreciation generated~~March 10, 2023, Silicon Valley Bank was closed by the ~~properties,~~California Department of Financial Protection and Innovation, which appointed the FDIC as ~~well as the expenses incurred in connection~~receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. In addition, if any parties with ~~the properties. If our properties do not generate income sufficient~~whom we conduct business are unable to ~~meet operating expenses, including debt service and capital expenditures, then our~~access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to ~~make distributions~~pay their obligations to ~~stockholders~~us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. ~~In addition, there are significant expenditures associated with an investment~~Although we assess our banking relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in ~~real estate (such~~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 ~~debt payments, real estate taxes and maintenance costs) that generally do not decline when circumstances reduce~~liquidity constraints or failures, the ~~income from~~ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the ~~property. Income from and~~financial services industry or financial markets, or concerns or negative expectations about the ~~value of our properties may be adversely affected by, among other things:~~prospects for companies in the financial services industry.

•~~a global economic crisis that results in increased budget deficits and weakened financial condition of international, national and local governments, which~~If debt is unavailable at reasonable rates, we may ~~lead~~not be able to ~~reduced governmental spending, tax increases, public sector job losses, increased interest rates, currency devaluations, defaults on debt obligations~~finance acquisitions or ~~other adverse economic events;~~

•~~other periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur;~~

•~~tenant turnover, the attractiveness of~~refinance our ~~properties to potential tenants and changes in supply of, or demand for, similar or competing properties in an area (including from general overbuilding or excess supply in the market);~~

•~~technological changes, such as reconfiguration of supply chains, autonomous vehicles, drones, robotics, 3D printing, online marketplaces for industrial space, or other developments;~~

•our ability to control rental rates and changes in operating costs and expenses, including costs of compliance with tax, real estate, environmental and zoning laws, rules and regulations and our potential liability thereunder;

•~~changes in the cost or availability of insurance, including coverage for mold or asbestos;~~

•~~unanticipated changes in costs associated with known adverse environmental conditions or retained liabilities for such conditions;~~

•~~periods of high interest rates and tight money supply;~~

•future terrorist attacks, which may result in declining economic activity, which could reduce the demand for, and the value of, our properties, and may adversely affect our tenants’ business and their ability to continue to honor their existing ~~lease; and~~

•~~disruptions in the global supply chain caused by political, regulatory or other factors, including geopolitical developments outside the United States.~~debt.

~~In addition, our investments could~~If debt is unavailable at reasonable rates, we may not be ~~materially adversely affected by changes in national and international political, environmental and socioeconomic circumstances, such as~~able to finance acquisitions or refinance existing debt when the escalating conflict between Russia and Ukraine and the significant sanctions and other restrictive actions taken against Russia by the United States and other countries in response to Russia’s invasion of Ukraine in February 2022, as well as the cessation of all business in Russia by many global companies. As further military conflicts and economic sanctions continue to evolve, it has become increasingly difficult to predict the impact of these eventsloans come due on favorable terms, or how long they will last. Depending on direction and timing, the conflict between Russia and Ukraine may significantly adversely affect economic and market conditions, the level and volatility of real estate and securities prices and the liquidityat all. Most of our ~~investments, which could impair our profitability~~financing arrangements require us to make a lump-sum or ~~result~~“balloon” payment at maturity. Our ability to make a payment at maturity is uncertain and, in ~~losses.~~

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 March 31, ~~2022,~~2023, the Operating Partnership issued ~~65,000~~43,834 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 March 31, ~~2022,~~2023, we issued ~~65,000~~43,834 shares of common stock upon redemption of ~~65,000~~43,834 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. We relied on the exemption based on representations given by the holders of the common units.

All other issuances of unregistered securities during the quarter ended March 31, ~~2022,~~2023, if any, have previously been disclosed in filings with the SEC.

Issuer Purchases of Equity Securities

Period
Total Number of Shares
Purchased(1)
Average Price Paid per
Share(1)
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Plans or
Programs
January 1, 2022 - January 31, 2022 34,093 $ 47.19 — $ —
February 1, 2022 - February 28, 2022 — $ — — $ —
March 1, 2022 - March 31, 2022 — $ — — $ —
Total/weighted average 34,093 $ 47.19 — $ —


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share(1)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
January 1, 2023 - January 31, 2023	25,085	$	32.39	—	$	—
February 1, 2023 - February 28, 2023	—	$	—	—	$	—
March 1, 2023 - March 31, 2023	—	$	—	—	$	—
Total/weighted average	25,085	$	32.39	—	$	—

(1) Reflects shares surrendered to the Company for payment of tax withholdings obligations in connection with the vesting of shares of common stock issued pursuant to the 2011 Plan. The average price paid reflects the average market value of shares withheld for tax purposes.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~As of the quarter ended March 31, 2022, all items required to be disclosed in a Current Report on Form 8-K were reported.~~

~~April 2022 Note Purchase Agreement~~

On April 28, 2022, we entered into a note purchase agreement (the “April 2022 NPA”) for the future private placement by the Operating Partnership of $400 million of senior unsecured notes, maturing June 28, 2032, with a fixed annual interest rate of 4.12%. The notes are expected to be issued on or around June 28, 2022, subject to conditions.

The April 2022 NPA contains a number of financial covenants substantially similar to the financial covenants contained in our unsecured credit facility, plus a financial covenant that requires us to maintain a minimum interest coverage ratio of not less than 1.50:1.00. Subject to the terms of the April 2022 NPA, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal, interest or the Make-Whole Amount (as defined in the April 2022 NPA), and (ii) a default in the payment of certain other indebtedness, the principal, the accrued and unpaid interest and the Make-Whole Amount on the outstanding notes will become due and payable at the option of the holders. The Company and certain of its subsidiaries will guarantee the obligations under the notes, subject to release pursuant to the terms of the April 2022 NPA.

We intend to use the net proceeds from the issuance of the notes to repay indebtedness outstanding under our unsecured credit facility and for general corporate purposes, including funding future acquisitions. The notes have not been and will not be registered under the Securities Act, and may not be offered or sold absent registration or an applicable exemption from the

~~Table of Contents~~

~~registration requirements. We offered and sold the notes in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.~~

The foregoing description of the April 2022 NPA does not purport to be complete and is qualified in its entirety by reference to the full text of the April 2022 NPA (including the form of note), a copy of which is filed as Exhibit 10.2 to this report and incorporated herein by reference.

~~Submission of Matters to a Vote of Security Holders~~

~~On May 2, 2022, STAG Industrial, Inc. (the “Company”) held its annual meeting of stockholders. The matters on which the stockholders voted, in person or by proxy, were:~~

1.~~the election of nine directors to hold office until the 2023 annual meeting of stockholders and until their successors are duly elected and qualified;~~

2.~~the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022; and~~

3.~~the approval, by non-binding vote, of the Company’s executive compensation.~~

The nine nominees were elected, the ratification of the appointment of the independent registered public accounting firm was approved and executive compensation was approved. The results of the voting were as follows:

~~Proposal 1: Election of Directors~~:

Director Votes For Votes Against Abstentions Broker Non-Votes
Benjamin S. Butcher 134,846,422 6,298,673 110,296 16,904,290
Jit Kee Chin 140,695,586 445,057 114,748 16,904,290
Virgis W. Colbert 136,624,964 4,510,114 120,313 16,904,290
Michelle S. Dilley 137,746,144 3,400,815 108,432 16,904,290
Jeffrey D. Furber 137,455,147 3,679,693 120,551 16,904,290
Larry T. Guillemette 137,728,384 3,412,704 114,303 16,904,290
Francis X. Jacoby III 134,747,665 6,390,982 116,744 16,904,290
Christopher P. Marr 135,560,139 5,256,309 438,943 16,904,290
Hans S. Weger 137,625,735 3,513,377 116,279 16,904,290

~~Proposal 2: Ratification of Appointment of Independent Registered Public Accountants:~~

Votes For Votes Against Abstentions Broker Non-Votes
154,474,009 3,555,243 130,429 -0-
None.

~~Proposal 3: Approval of Executive Compensation:~~

Votes For Votes Against Abstentions Broker Non-Votes
135,321,522 5,400,365 533,504 16,904,290

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Item 6. Exhibits


Exhibit Number						Description of Document
10.1						~~Executive Employment~~Second Amended and Restated Agreement ~~with Matts S. Pinard,~~of Limited Partnership, dated ~~January 10, 2022~~as of February 15, 2023 (incorporated by reference to the ~~Current~~Annual Report on Form ~~8-K~~10-K filed with the SEC on ~~January 12, 2022)~~February 15, 2023)
10.2 *						~~Note Purchase~~Executive Employment Agreement ~~dated April 28, 2022~~with Steven T. Kimball, effective as of March 31, 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: ~~May 3, 2022~~April 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
		~~Senior Vice President and~~ Chief Accounting Officer (Principal Accounting Officer)

4640



Market(1)	Date Acquired	Square Feet	Number of Buildings	Purchase Price (in thousands)
Kansas City, MO	January 6, 2022	702,000	1	$	60,428
Chicago, IL	January 31, 2022	72,499	1	8,128
Columbus, OH	February 8, 2022	138,213	1	11,492
Cleveland, OH	February 8, 2022	136,800	1	13,001
Nashville, TN	March 10, 2022	109,807	1	12,810
Greenville/Spartanburg, SC	March 10, 2022	289,103	1	28,274
Memphis, TN	March 18, 2022	195,622	1	15,828
Greenville/Spartanburg, SC	March 18, 2022	155,717	1	16,390
Three months ended March 31, 2022		1,799,761	8	$	166,351


	Three months ended March 31, 2022
Acquired Assets and Liabilities	Purchase Price (in thousands)		Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land	$	10,746	N/A
Buildings	127,778		N/A
Tenant improvements	692		N/A
Building and land improvements	5,384		N/A

Other assets	2,134		N/A

Deferred leasing intangibles - In-place leases	11,512		5.3
Deferred leasing intangibles - Tenant relationships	7,319		9.0
Deferred leasing intangibles - Above market leases	959		6.9
Deferred leasing intangibles - Below market leases	(173)		3.7





Total purchase price	$	166,351


Year	Amortization Expense Related to Other Intangible Lease Assets (in thousands)		Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands)
Remainder of 2022	$	67,986	$	180
2023	$	80,666	$	727
2024	$	69,720	$	1,361
2025	$	60,629	$	1,185
2026	$	52,145	$	1,626


Interest Rate Derivative Counterparty	Trade Date	Effective Date	Notional Amount (in thousands)		Fair Value (in thousands)		Pay Fixed Interest Rate		Receive Variable Interest Rate	Maturity Date
Wells Fargo Bank, N.A.	Jan-08-2015	Mar-20-2015	$	25,000	$	—	1.8280	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jan-08-2015	Feb-14-2020	$	25,000	$	—	2.4535	%	One-month L	Mar-31-2022
Regions Bank	Jan-08-2015	Feb-14-2020	$	50,000	$	—	2.4750	%	One-month L	Mar-31-2022
Capital One, N.A.	Jan-08-2015	Feb-14-2020	$	50,000	$	—	2.5300	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(64)	1.8485	%	One-month L	Jan-04-2023
Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(63)	1.8505	%	One-month L	Jan-04-2023
Wells Fargo Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(63)	1.8505	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(63)	1.8485	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(126)	1.8475	%	One-month L	Jan-04-2023
The Toronto-Dominion Bank	Apr-20-2020	Sep-29-2020	$	75,000	$	1,223	0.2750	%	One-month L	Apr-18-2023
Wells Fargo Bank, N.A.	Apr-20-2020	Sep-29-2020	$	75,000	$	1,219	0.2790	%	One-month L	Apr-18-2023
The Toronto-Dominion Bank	Apr-20-2020	Mar-19-2021	$	75,000	$	1,223	0.2750	%	One-month L	Apr-18-2023
Wells Fargo Bank, N.A.	Apr-20-2020	Mar-19-2021	$	75,000	$	1,218	0.2800	%	One-month L	Apr-18-2023
The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(548)	2.9180	%	One-month L	Jan-12-2024
PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(549)	2.9190	%	One-month L	Jan-12-2024
Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(548)	2.9190	%	One-month L	Jan-12-2024
U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(274)	2.9190	%	One-month L	Jan-12-2024
Wells Fargo Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	280	2.2460	%	One-month L	Jan-15-2025
U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	284	2.2459	%	One-month L	Jan-15-2025
Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	280	2.2459	%	One-month L	Jan-15-2025
Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	1,008	1.7165	%	One-month L	Jan-15-2025
U.S. Bank, N.A.	Feb-17-2021	Apr-18-2023	$	150,000	$	6,853	0.9385	%	One-month L	Feb-5-2026
Wells Fargo Bank, N.A.	Feb-17-2021	Apr-18-2023	$	75,000	$	3,409	0.9365	%	One-month L	Feb-5-2026
The Toronto-Dominion Bank	Feb-17-2021	Apr-18-2023	$	75,000	$	3,419	0.9360	%	One-month L	Feb-5-2026
Regions Bank	Oct-26-2021	Apr-01-2022	$	50,000	$	2,419	1.3045	%	One-month L	Mar-15-2027
Bank of Montreal	Oct-26-2021	Apr-01-2022	$	50,000	$	2,438	1.3045	%	One-month L	Mar-15-2027
PNC Bank, N.A.	Oct-26-2021	Apr-01-2022	$	50,000	$	2,423	1.3045	%	One-month L	Mar-15-2027


	Year ended December 31, 2021
ATM Common Stock Offering Program(1)	Shares Sold	Weighted Average Price Per Share		Net Proceeds (in thousands)
2019 $600 million ATM(2)	5,110,002	$	37.53	$	189,974
Total/weighted average	5,110,002	$	37.53	$	189,974


Director	Votes For	Votes Against	Abstentions	Broker Non-Votes
Benjamin S. Butcher	134,846,422	6,298,673	110,296	16,904,290
Jit Kee Chin	140,695,586	445,057	114,748	16,904,290
Virgis W. Colbert	136,624,964	4,510,114	120,313	16,904,290
Michelle S. Dilley	137,746,144	3,400,815	108,432	16,904,290
Jeffrey D. Furber	137,455,147	3,679,693	120,551	16,904,290
Larry T. Guillemette	137,728,384	3,412,704	114,303	16,904,290
Francis X. Jacoby III	134,747,665	6,390,982	116,744	16,904,290
Christopher P. Marr	135,560,139	5,256,309	438,943	16,904,290
Hans S. Weger	137,625,735	3,513,377	116,279	16,904,290