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STAG Looking to Make More Deals in 2014, CEO Says

12/18/2013 | By Allen Kenney

Ben Butcher, chairman and CEO of STAG Industrial, Inc. (NYSE: STAG), discussed his company’s 2013 performance and outlook for the coming year in a CEO Spotlight video interview with REIT.com.

Butcher was asked about STAG Industrial’s active presence on the acquisitions market. The company has spent approximately $300 million on acquisitions this year, exceeding its expectations for 2013. He discussed the company’s expectations for deal volume and alternative routes for sourcing transactions.

“The deal volume for the year has been, as predicted, quite active,” Butcher said. “We feel very confident that the environment will allow us to continue to grow at a rate of 25 percent per year or better for the coming years. We continue to have a little over $600 million in our active pipeline where assets are coming in and out. We feel very confident in our ability to continue to grow on these granular asset purchases going forward.”

Butcher also discussed two new initiatives at the company.

“One is looking to become active in the build-to-suit, take-out business,” he said. “A lot of the development that is going on in the country, although muted in total, is occurring in the build-to-suit area. We think that there’s an opportunity to provide take-out funds for build-to-suit activity in the similar types of opportunities that we see in our regular third-party-owned practice. We think we can be a provider of capital there to help the build-to-suit market improve and prosper.”

Butcher said STAG Industrial is interested in smaller portfolios, too.

“Where we’ve talked to owners now about a single asset, we think we can expand that discussion and perhaps talk about three-, five- and ten-asset portfolio purchases as a way of adding to our volume,” he said.

Butchered also offered an analysis of the company’s operating performance in 2013.

“We’ve outperformed in most important metrics,” he said. “Renewal rates have trended a little higher than we thought they would. We’ve seen good rent growth. We’ve seen occupancy levels dip down during the year, but we expect to finish the year around our equilibrium number of 95 percent occupancy.”