STAG Stock: Dividend vs CAD, Lease Expirations and Debt

The quarterly dividend: why the cash-flow ratio can mislead

STAG's January 8, 2026 announcement changed both the amount and the frequency. The board increased the annual rate and moved to quarterly payments. Comparing a new quarterly payment with one old monthly payment exaggerates the increase; the annual rate is the appropriate comparison.

The July earnings release records the latest declaration located in the primary sources reviewed through October 18, 2026. It authorized the Q3 dividend for common stockholders and common unit holders, with a September 30, 2026 record date and October 15, 2026 payment date. A scheduled payment date in a declaration does not independently establish that cash settled in every account. We did not locate a later primary declaration for Q4.

The numerator comes from the consolidated statements of equity in the June 30, 2026 10-Q, including operating partnership distributions. It is the filing's net equity recognition amount, rather than a claim about cash paid during that quarter. CAD also operates at the company and partnership level, making an aggregate comparison more useful than mixing common-only cash payments with partnership earnings.

In the first half of 2026, the cash-flow statement shows $100.034 million of dividends and distributions paid, against $141.993 million a year earlier. The company attributes the decline to the switch to quarterly payments. Using that smaller cash-paid number against CAD yields a superficially comfortable 47.4% payout; using the first half's $152.087 million of recognized distributions yields 72.0% (our arithmetic). Neither number should be presented without naming its basis.

Coverage therefore remained positive, but the quarterly cash cushion narrowed relative to the prior year on the recognition basis. Q2 CAD less recognized distributions was $25.042 million (our arithmetic). That amount is a coverage residual, not unrestricted cash available after acquisitions, development and debt maturities.

AFFO versus CAD: follow STAG's actual reconciliation

An investor searching for STAG AFFO needs the company's definitions before comparing payout ratios. STAG reports Core FFO and CAD in this release. CAD adjusts Core FFO for straight-line rent and capital spending, among other items. It also adds back non-cash compensation and non-cash interest. Those addbacks do not eliminate their economic cost.

Source: the CAD reconciliation in the July 28, 2026 earnings release furnished with Form 8-K, accession 0001479094-26-000025. Figures are signed adjustments, converted from the source's thousands to millions.

The bridge removes $26.301 million, or 20.6% of Core FFO (our arithmetic). The per-share dividend/Core FFO ratio of 59.6% therefore leaves out meaningful cash demands. It also uses diluted weighted average shares, whereas the aggregate distribution ratio reflects the actual equity recognition amounts. The two ratios answer different questions.

CAD is not the cash-flow statement. First-half operating cash flow was $228.376 million, compared with CAD of $211.114 million. Operating cash flow incorporates working-capital timing; CAD uses the company's specific adjustments. Neither is an all-in measure of the cash left after expanding the portfolio. For comparison, Rexford Industrial's Core FFO and Southern California rent analysis shows why a common label alone does not make REIT cash measures interchangeable.

Lease expirations: the near-term roll has already been worked down

At June 30, 2026, the total portfolio was 94.5% occupied and the operating portfolio was 95.5% occupied. The distinction matters: STAG excludes value-add and certain other properties from the operating portfolio. A reader should not apply the stronger operating occupancy figure to all buildings.

Source: lease expiration table in the Q2 2026 10-Q. This is a selected portion of the schedule, not a complete portfolio total. It assumes tenants do not exercise renewal options or early termination rights. Annualized base rent is not the same as future GAAP revenue or NOI.

The small remaining 2026 figure does not mean the original lease roll was small. STAG had already extended leases covering approximately 14.7 million square feet originally scheduled to expire in 2026. Those leases move into their new expiration years. Separately, the schedule showed 6,715,246 square feet available; that vacant area has no annualized base rent in the expiration table and must not disappear from an assessment of leasing risk.

The concentration to watch is the 40.7% of annualized base rent expiring during 2027 through 2029 (our arithmetic). Higher rent on renewed space can help, but vacancy, free rent, commissions and tenant improvements can absorb part of that benefit. This is why the leasing expense deduction belongs alongside the rent-change headline.

September's first look improves the leasing picture, with limits

The September business update, posted September 10, 2026, contains operating information as of September 7, 2026. It describes its estimates as preliminary and subject to closing and review procedures. Its leasing universe excludes value-add assets and first-generation leasing.

The first-look period was still incomplete. Its rent-change percentages describe the comparable leases that commenced; they are not growth rates for rent across every building. Likewise, STAG's statement that 97.6% of expected 2026 new and renewal leasing had been addressed, covering 17.4 million square feet at 20.5% cash rent change, mixes executed and addressed activity rather than proving all that revenue was already in the income statement.

That update supports a better near-term leasing read than the June table alone. It does not establish final Q3 CAD, dividend coverage or occupancy. The company's October 1, 2026 announcement schedules the complete third-quarter release after market close on October 27, 2026.

Debt: refinancing extended maturities, but the rate resets upward

At June 30, 2026, total debt principal was $3,452.985 million, carrying value was a different accounting measure, and the weighted interest rate was 4.42%. Net Debt to Annualized Run Rate Adjusted EBITDAre was 5.2 times. The denominator is a company-defined run-rate measure rather than a GAAP leverage ratio.

The July 22, 2026 8-K describes the July 16, 2026 combination of the $150 million term loan A and $200 million term loan F. Its maturity descriptions assume applicable extension options where stated. The extension reduces refinancing pressure; it does not preserve the old interest bill. Applying the rounded weighted-rate increase to the combined balance produces approximately $4.41 million of additional annual interest after the March 2027 resets (our arithmetic). This is a constant-balance illustration, not company guidance; the individual tranches reset on different dates in March.

There is a source detail worth preserving: the earnings-release summary says both old loans were scheduled to mature in March 2027. The financing 8-K specifies March 2029 for loan F assuming discretionary extensions. We use the financing filing's terms rather than treating those two maturity descriptions as identical.

The September liquidity estimate consists of $24.0 million in cash and $609.8 million of undrawn revolver. Most liquidity is therefore borrowing capacity, rather than cash already earned. The presentation's debt ladder assumes exercise of the company's extension options, subject to conditions. On August 6, 2026, STAG announced S&P's BBB/stable rating for the operating partnership; the update also lists Fitch BBB/stable and Moody's Baa2/stable. Ratings describe credit assessments and do not guarantee common distributions.

What a holder can do with this

Use the next release to update the same comparisons: recognized distributions against CAD, cash reinvestment against rent gains, and the remaining lease roll against new vacancies. The current cash coverage is positive, while the transition from monthly to quarterly payments makes a simple cash-paid payout ratio unusually easy to misread.

For an industrial-property comparison, the Ares Industrial REIT review follows a non-traded vehicle's operating distributions and liquidity. STAG shares trade on an exchange; a non-traded vehicle's redemption terms introduce a different constraint. Our non-traded REIT listing analysis explains why a reported private NAV is not an executable exchange price.

The useful alert is the next filed result or dividend declaration, especially whether leasing costs consume more of Core FFO. This is analysis of public documents, not investment, legal or tax advice.

Frequently asked questions

Sources: STAG Industrial's Q2 2026 Form 10-Q, July 28, 2026 earnings release furnished with Form 8-K, July financing Form 8-K, January dividend announcement, September business update, August rating announcement, and October earnings-date announcement. Primary-source review cutoff: October 18, 2026. Sources are saved with the downloadable research dataset; computed ratios are identified as our arithmetic.