Ben Butcher, chairman, president and CEO of STAG Industrial, Inc. (NYSE: STAG), joined REIT.com for a CEO Spotlight video interview during REITWeek 2014: NAREIT’s Investor Forum, held in New York.
Butcher discussed his company’s acquisition activity, which picked up in April after a slow start to the year.
“We pride ourselves on our agnosticity with regard to assets. We’re really looking for assets that produce great cash flows and we are willing to go to anywhere in the secondary and primary markets in the U.S. where we find those,” Butcher explained.
Butcher stressed that STAG does pay attention to limiting its exposure to a particular geographic region, lease expiration year or industry.
“We’re finding assets in areas that are growing in the U.S. We’re finding assets leased to e-commerce companies, auto companies, companies related to home building and the like,” Butcher said. He noted that the company’s portfolio of assets, which are worth roughly $2 billion, and its current pipeline, worth more than $1 billion are widely diversified.
Butcher also discussed the company’s leasing prospects.
“We’ve seen continued improvement in leasing… Absorption continues to outpace new supply, by a large margin, so you’re seeing the leasing market getting better for landlords. Occupancy levels are up, rent levels are up and we’re seeing more tenant activity in general, so the leasing market is continuing to improve this year,” Butcher said.
Meanwhile, Butcher was asked about the impact of e-commerce and rapid delivery services on the company. He responded that the rise of e-commerce and faster delivery times generally result in the industrial segment taking more of the overall real estate business from other sectors.
“We would expect the industrial sector to outperform GDP going forward,” Butcher concluded.