10-Q

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, 2020

OR

☐ 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
6.875% Series C Cumulative Redeemable Preferred Stock ($0.01 par value)	STAG-PC	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 April 29, 2020 was 148,713,097.

STAG Industrial, Inc.

Table of Contents 

PART I.	Financial Information	3
Item 1.	Financial Statements (unaudited)	3
	Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019	3
	Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019	4
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2020 and 2019	5
	Consolidated Statements of Equity for the Three Months Ended March 31, 2020 and 2019	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	43
PART II.	Other Information	44
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
	SIGNATURES	47

2

Part I. Financial Information

Item 1.  Financial Statements

STAG Industrial, Inc.

Consolidated Balance Sheets

(unaudited, in thousands, except share data)

	March 31, 2020		December 31, 2019
Assets
Rental Property:
Land	$	443,427	$	435,923
Buildings and improvements, net of accumulated depreciation of $416,654 and $387,633, respectively	3,155,744		3,087,435
Deferred leasing intangibles, net of accumulated amortization of $256,537 and $241,304, respectively	473,610		475,149
Total rental property, net	4,072,781		3,998,507
Cash and cash equivalents	324,877		9,041
Restricted cash	16,506		2,823
Tenant accounts receivable	62,144		57,592
Prepaid expenses and other assets	37,312		38,231
Interest rate swaps	—		303
Operating lease right-of-use assets	22,528		15,129
Assets held for sale, net	1,157		43,019
Total assets	$	4,537,305	$	4,164,645
Liabilities and Equity
Liabilities:
Unsecured credit facility	$	225,000	$	146,000
Unsecured term loans, net	971,701		871,375
Unsecured notes, net	572,982		572,883
Mortgage notes, net	54,289		54,755
Accounts payable, accrued expenses and other liabilities	55,404		53,737
Interest rate swaps	48,714		18,819
Tenant prepaid rent and security deposits	21,552		21,993
Dividends and distributions payable	18,301		17,465
Deferred leasing intangibles, net of accumulated amortization of $13,357 and $12,064, respectively	27,784		26,738
Operating lease liabilities	24,464		16,989
Total liabilities	2,020,191		1,800,754
Commitments and contingencies (Note 11)
Equity:
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at March 31, 2020 and December 31, 2019, respectively,
Series C, 3,000,000 shares (liquidation preference of $25.00 per share) issued and outstanding at March 31, 2020 and December 31, 2019	75,000		75,000
Common stock, par value $0.01 per share, 300,000,000 shares authorized at March 31, 2020 and December 31, 2019, respectively, 148,708,031 and 142,815,593 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	1,487		1,428
Additional paid-in capital	3,142,495		2,970,553
Cumulative dividends in excess of earnings	(714,799)		(723,027)
Accumulated other comprehensive loss	(47,860)		(18,426)
Total stockholders’ equity	2,456,323		2,305,528
Noncontrolling interest	60,791		58,363
Total equity	2,517,114		2,363,891
Total liabilities and equity	$	4,537,305	$	4,164,645

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

3

STAG Industrial, Inc.

Consolidated Statements of Operations

(unaudited, in thousands, except per share data)

	Three months ended March 31,
	2020		2019
Revenue
Rental income	$	118,339	$	95,615
Other income	209		87
Total revenue	118,548		95,702
Expenses
Property	21,947		19,511
General and administrative	10,373		9,212
Depreciation and amortization	52,688		42,303
Loss on impairments	—		5,344
Other expenses	476		399
Total expenses	85,484		76,769
Other income (expense)
Interest and other income	79		16
Interest expense	(14,864)		(12,834)
Gain on the sales of rental property, net	46,759		1,274
Total other income (expense)	31,974		(11,544)
Net income	$	65,038	$	7,389
Less: income attributable to noncontrolling interest after preferred stock dividends	1,598		214
Net income attributable to STAG Industrial, Inc.	$	63,440	$	7,175
Less: preferred stock dividends	1,289		1,289
Less: amount allocated to participating securities	79		79
Net income attributable to common stockholders	$	62,072	$	5,807
Weighted average common shares outstanding — basic	147,570		114,721
Weighted average common shares outstanding — diluted	147,656		114,993
Net income per share — basic and diluted
Net income per share attributable to common stockholders — basic	$	0.42	$	0.05
Net income per share attributable to common stockholders — diluted	$	0.42	$	0.05

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

4

STAG Industrial, Inc.

Consolidated Statements of Comprehensive Income

(unaudited, in thousands)

	Three months ended March 31,
	2020		2019
Net income	$	65,038	$	7,389
Other comprehensive loss:
Loss on interest rate swaps	(30,191)		(6,978)
Other comprehensive loss	(30,191)		(6,978)
Comprehensive income	34,847		411
Income attributable to noncontrolling interest after preferred stock dividends	(1,598)		(214)
Other comprehensive loss attributable to noncontrolling interest	757		244
Comprehensive income attributable to STAG Industrial, Inc.	$	34,006	$	441

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

5

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, 2020
Balance, December 31, 2019	$	75,000	142,815,593	$	1,428	$	2,970,553	$	(723,027)	$	(18,426)	$	2,305,528	$	58,363	$	2,363,891
Proceeds from sales of common stock, net	—		5,600,000	56		172,667		—		—		172,723		—		172,723
Dividends and distributions, net	—		—	—		—		(54,822)		—		(54,822)		(896)		(55,718)
Non-cash compensation activity, net	—		73,048	1		(858)		(390)		—		(1,247)		2,618		1,371
Redemption of common units to common stock	—		219,390	2		3,426		—		—		3,428		(3,428)		—
Rebalancing of noncontrolling interest	—		—	—		(3,293)		—		—		(3,293)		3,293		—
Other comprehensive loss	—		—	—		—		—		(29,434)		(29,434)		(757)		(30,191)
Net income	—		—	—		—		63,440		—		63,440		1,598		65,038
Balance, March 31, 2020	$	75,000	148,708,031	$	1,487	$	3,142,495	$	(714,799)	$	(47,860)	$	2,456,323	$	60,791	$	2,517,114
Three months ended March 31, 2019
Balance, December 31, 2018	$	75,000	112,165,786	$	1,122	$	2,118,179	$	(584,979)	$	4,481	$	1,613,803	$	55,829	$	1,669,632
Leases cumulative effect adjustment	—		—	—		—		(214)		—		(214)		—		(214)
Proceeds from sales of common stock, net	—		5,441,409	55		148,474		—		—		148,529		—		148,529
Dividends and distributions, net	—		—	—		—		(42,834)		—		(42,834)		(1,546)		(44,380)
Non-cash compensation activity, net	—		127,836	1		(1,133)		(373)		—		(1,505)		2,368		863
Redemption of common units to common stock	—		439,071	4		6,024		—		—		6,028		(6,028)		—
Rebalancing of noncontrolling interest	—		—	—		(4,849)		—		—		(4,849)		4,849		—
Other comprehensive loss	—		—	—		—		—		(6,734)		(6,734)		(244)		(6,978)
Net income	—		—	—		—		7,175		—		7,175		214		7,389
Balance, March 31, 2019	$	75,000	118,174,102	$	1,182	$	2,266,695	$	(621,225)	$	(2,253)	$	1,719,399	$	55,442	$	1,774,841

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

6

STAG Industrial, Inc.

Consolidated Statements of Cash Flows

(unaudited, in thousands)

	Three months ended March 31,
	2020		2019
Cash flows from operating activities:
Net income	$	65,038	$	7,389
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	52,688		42,303
Loss on impairments	—		5,344
Non-cash portion of interest expense	676		618
Amortization of above and below market leases, net	984		961
Straight-line rent adjustments, net	(3,849)		(2,256)
Dividends on forfeited equity compensation	—		6
Gain on the sales of rental property, net	(46,759)		(1,274)
Non-cash compensation expense	2,852		2,278
Change in assets and liabilities:
Tenant accounts receivable	(509)		(859)
Prepaid expenses and other assets	(490)		(2,686)
Accounts payable, accrued expenses and other liabilities	390		(3,775)
Tenant prepaid rent and security deposits	(441)		(899)
Total adjustments	5,542		39,761
Net cash provided by operating activities	70,580		47,150
Cash flows from investing activities:
Acquisitions of land and buildings and improvements	(100,187)		(159,969)
Additions of land and building and improvements	(16,815)		(5,058)
Acquisitions of other assets	(450)		(1,049)
Proceeds from sales of rental property, net	99,678		16,602
Acquisition deposits, net	500		(2,997)
Acquisitions of deferred leasing intangibles	(18,706)		(24,345)
Net cash used in investing activities	(35,980)		(176,816)
Cash flows from financing activities:
Proceeds from unsecured credit facility	387,000		208,000
Repayment of unsecured credit facility	(308,000)		(193,000)
Proceeds from unsecured term loans	100,000		—
Repayment of mortgage notes	(497)		(481)
Proceeds from sales of common stock, net	172,771		148,645
Dividends and distributions	(54,883)		(42,288)
Repurchase and retirement of share-based compensation	(1,472)		(1,444)
Net cash provided by financing activities	294,919		119,432
Increase (decrease) in cash and cash equivalents and restricted cash	329,519		(10,234)
Cash and cash equivalents and restricted cash—beginning of period	11,864		22,542
Cash and cash equivalents and restricted cash—end of period	$	341,383	$	12,308
Supplemental disclosure:
Cash paid for interest, net of capitalized interest	$	12,544	$	10,449
Supplemental schedule of non-cash investing and financing activities
Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities	$	(1,080)	$	(1,094)
Additions to building and other capital improvements from non-cash compensation	$	(8)	$	(14)
Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities	$	(62)	$	(116)
Leases cumulative effect adjustment	$	—	$	(214)
Dividends and distributions accrued	$	18,301	$	15,846

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

7

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 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, 2020 and December 31, 2019, the Company owned a 97.5% and 97.5%, respectively, common equity interest 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 and partnerships, including the Operating Partnership, except where context otherwise requires.

As of March 31, 2020, the Company owned 456 buildings in 38 states with approximately 91.8 million rentable square feet, consisting of 378 warehouse/distribution buildings, 70 light manufacturing buildings, and eight flex/office buildings.

COVID-19 Pandemic

Currently, one of the most significant risks and uncertainties facing the Company and the real estate industry generally is the potential adverse effect of the ongoing public health crisis of the novel coronavirus disease (“COVID-19”) pandemic. The extent to which the COVID-19 pandemic impacts 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. Refer to Note 12 for additional information.

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, 2019.

Basis of Presentation

The Company’s consolidated financial statements include the accounts of the Company, the Operating Partnership, and their 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 eliminated in the consolidation of entities. The financial statements of the Company are presented on a consolidated basis for all periods presented.

New Accounting Standards

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the quarter ended March 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to

8

assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

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, 2020		December 31, 2019
Cash and cash equivalents	$	324,877	$	9,041
Restricted cash	16,506		2,823
Total cash and cash equivalents and restricted cash	$	341,383	$	11,864

Taxes

Federal Income Taxes

The Company’s taxable REIT subsidiaries recognized net loss of approximately $0 and $12,000 for the three months ended March 31, 2020 and 2019, respectively, which has been included on the accompanying Consolidated Statements of Operations.

State and Local Income, Excise, and Franchise Tax

State and local income, excise, and franchise taxes in the amount of $0.4 million and $0.2 million have been recorded in other expenses on the accompanying Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019, respectively.

Uncertain Tax Positions

As of March 31, 2020 and December 31, 2019, there were no liabilities for uncertain tax positions.

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 as of March 31, 2020 and December 31, 2019.

Rental Property (in thousands)	March 31, 2020		December 31, 2019
Land	$	443,427	$	435,923
Buildings, net of accumulated depreciation of $272,953 and $254,458, respectively	2,844,520		2,787,234
Tenant improvements, net of accumulated depreciation of $23,101 and $21,487, respectively	40,442		38,339
Building and land improvements, net of accumulated depreciation of $120,600 and $111,688, respectively	244,045		232,456
Construction in progress	26,737		29,406
Deferred leasing intangibles, net of accumulated amortization of $256,537 and $241,304, respectively	473,610		475,149
Total rental property, net	$	4,072,781	$	3,998,507

9

Acquisitions

The following table summarizes the acquisitions of the Company during the three months ended March 31, 2020.

Market (1)	Date Acquired	Square Feet	Buildings	Purchase Price (in thousands)
Detroit, MI	January 10, 2020	491,049	1	$	29,543
Rochester, NY	January 10, 2020	124,850	1	8,565
Minneapolis/St Paul, MN	February 6, 2020	139,875	1	10,460
Sacramento, CA	February 6, 2020	160,534	1	18,468
Richmond, VA	February 6, 2020	78,128	1	5,481
Milwaukee/Madison, WI	February 7, 2020	81,230	1	7,219
Detroit, MI	February 11, 2020	311,123	1	23,141
Philadelphia, PA	March 9, 2020	78,000	1	6,571
Tulsa, OK	March 9, 2020	134,600	1	9,895
Three months ended March 31, 2020		1,599,389	9	$	119,343

(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 consideration paid at the date of acquisition during the three months ended March 31, 2020 for the acquired assets and liabilities in connection with the acquisitions identified in the table above.

Acquired Assets and Liabilities	Purchase Price (in thousands)		Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land	$	9,311	N/A
Buildings	84,409		N/A
Tenant improvements	1,438		N/A
Building and land improvements	4,360		N/A
Construction in progress	669		N/A
Other assets	450		N/A
Deferred leasing intangibles - In-place leases	13,788		7.8
Deferred leasing intangibles - Tenant relationships	6,589		11.1
Deferred leasing intangibles - Above market leases	901		5.5
Deferred leasing intangibles - Below market leases	(2,572)		5.4
Total purchase price	$	119,343

The following table summarizes the results of operations for the three months ended March 31, 2020 for the buildings acquired during the three months ended March 31, 2020 included in the Company’s Consolidated Statements of Operations from the date of acquisition.

Results of Operations (in thousands)	Three months ended March 31, 2020
Total revenue	$	1,942
Net income	$	252

Dispositions

During the three months ended March 31, 2020, the Company sold three buildings to third parties comprised of approximately 1.2 million rentable square feet with a net book value of approximately $52.9 million. These buildings contributed approximately $0 and $1.3 million to revenue for the three months ended March 31, 2020 and 2019, respectively. These buildings contributed approximately $(0.1) million and $0.4 million to net income (loss) (exclusive of gain on the sales of rental property, net) for the three months ended March 31, 2020 and 2019, respectively. Net proceeds from the sales of rental property were approximately $99.7 million and the Company recognized the full gain on the sales of rental property, net, of approximately $46.8 million for the three months ended March 31, 2020.

Loss on Impairments

During the three months ended March 31, 2020, the Company did not recognize any loss on impairments. During the three months ended March 31, 2019, the Company recognized approximately $5.3 million of loss on impairments related to one building.

10

Assets Held for Sale

As of March 31, 2020, the related land and building and improvements, net of approximately $0.2 million and $1.0 million, respectively, for one building located in Johnstown, NY was classified as assets held for sale, net on the accompanying Consolidated Balance Sheets. This building did not contribute to revenue for the three months ended March 31, 2020 and 2019, and contributed approximately $40,000 and $44,000 to net loss for the three months ended March 31, 2020 and 2019, respectively.

Deferred Leasing Intangibles

The following table summarizes the deferred leasing intangibles on the accompanying Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019.

	March 31, 2020						December 31, 2019
Deferred Leasing Intangibles (in thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Above market leases	$	93,226	$	(34,349)	$	58,877	$	92,607	$	(32,115)	$	60,492
Other intangible lease assets	636,921		(222,188)		414,733		623,846		(209,189)		414,657
Total deferred leasing intangible assets	$	730,147	$	(256,537)	$	473,610	$	716,453	$	(241,304)	$	475,149
Below market leases	$	41,141	$	(13,357)	$	27,784	$	38,802	$	(12,064)	$	26,738
Total deferred leasing intangible liabilities	$	41,141	$	(13,357)	$	27,784	$	38,802	$	(12,064)	$	26,738

The following table summarizes the amortization expense and the net decrease to rental income for the amortization of deferred leasing intangibles during the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Deferred Leasing Intangibles Amortization (in thousands)	2020		2019
Net decrease to rental income related to above and below market lease amortization	$	990	$	967
Amortization expense related to other intangible lease assets	$	20,302	$	16,814

The following table summarizes the amortization of deferred leasing intangibles over the next five calendar years beginning with 2020 as of March 31, 2020.

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 2020	$	56,849	$	2,894
2021	$	65,234	$	2,770
2022	$	55,558	$	2,202
2023	$	46,998	$	2,379
2024	$	38,009	$	2,687

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, 2020 and December 31, 2019.

11

Loan	Principal Outstanding as of March 31, 2020 (in thousands)		Principal Outstanding as of December 31, 2019 (in thousands)		Interest  Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)	$	225,000	$	146,000	L + 0.90%		January 12, 2024	i
Total unsecured credit facility	225,000		146,000
Unsecured term loans:
Unsecured Term Loan C(5)	150,000		150,000		2.39	%	September 29, 2020	i
Unsecured Term Loan B(5)	150,000		150,000		3.05	%	March 21, 2021	i
Unsecured Term Loan A	150,000		150,000		3.38	%	March 31, 2022	i
Unsecured Term Loan D	150,000		150,000		2.85	%	January 4, 2023	i
Unsecured Term Loan E	175,000		175,000		3.92	%	January 15, 2024	i
Unsecured Term Loan F	200,000		100,000		L + 1.00%		January 12, 2025	i
Total unsecured term loans	975,000		875,000
Less: Total unamortized deferred financing fees and debt issuance costs	(3,299)		(3,625)
Total carrying value unsecured term loans, net	971,701		871,375
Unsecured notes:
Series F Unsecured Notes	100,000		100,000		3.98	%	January 5, 2023	ii
Series A Unsecured Notes	50,000		50,000		4.98	%	October 1, 2024	ii
Series D Unsecured Notes	100,000		100,000		4.32	%	February 20, 2025	ii
Series G Unsecured Notes	75,000		75,000		4.10	%	June 13, 2025	ii
Series B Unsecured Notes	50,000		50,000		4.98	%	July 1, 2026	ii
Series C Unsecured Notes	80,000		80,000		4.42	%	December 30, 2026	ii
Series E Unsecured Notes	20,000		20,000		4.42	%	February 20, 2027	ii
Series H Unsecured Notes	100,000		100,000		4.27	%	June 13, 2028	ii
Total unsecured notes	575,000		575,000
Less: Total unamortized deferred financing fees and debt issuance costs	(2,018)		(2,117)
Total carrying value unsecured notes, net	572,982		572,883
Mortgage notes (secured debt):
Wells Fargo Bank, National Association CMBS Loan	50,939		51,406		4.31	%	December 1, 2022	iii
Thrivent Financial for Lutherans	3,649		3,679		4.78	%	December 15, 2023	iv
Total mortgage notes	54,588		55,085
Add: Total unamortized fair market value premiums	37		39
Less: Total unamortized deferred financing fees and debt issuance costs	(336)		(369)
Total carrying value mortgage notes, net	54,289		54,755
Total / weighted average interest rate(6)	$	1,823,972	$	1,645,013	3.28	%

(1)Interest rate as of March 31, 2020. At March 31, 2020, the one-month LIBOR (“L”) was 0.99288%. 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. 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, as defined in the respective loan agreements.

(2)The unsecured term loans have a stated interest rate of one-month LIBOR plus a spread of 1.0%. As of March 31, 2020, one-month LIBOR for the Unsecured Term Loans A, B, C, D and E was swapped to a fixed rate of 2.38%, 2.05%, 1.39%, 1.85% and 2.92%, respectively. One-month LIBOR for the Unsecured Term Loan F will be swapped to a fixed rate of 2.11% effective July 15, 2020.

(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, however can be defeased; and (iv) pre-payable without penalty three months prior to the maturity date.

(4)The capacity of the unsecured credit facility is $500.0 million. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately $2.2 million and $2.4 million is included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, respectively. The maturity date is January 15, 2023, or such later date as may be extended pursuant to two six-month extension options exercisable by the Company in its 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.

(5)Subsequent to March 31, 2020, the Unsecured Term Loan B and Unsecured Term Loan C were repaid in full in connection with the new unsecured term loan agreement entered into on April 17, 2020. Refer to Note 12 for additional details.

(6)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $775.0 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.

12

The aggregate undrawn nominal commitment on the unsecured credit facility as of March 31, 2020 was approximately $272.0 million, including issued letters of credit. The Company’s actual borrowing capacity at any given point in time may be less and is restricted to a maximum amount based on the Company’s debt covenant compliance. Total accrued interest for the Company’s indebtedness was approximately $7.7 million and $6.3 million as of March 31, 2020 and December 31, 2019, 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, 2020 and 2019.

	Three months ended March 31,
Costs Included in Interest Expense (in thousands)	2020		2019
Amortization of deferred financing fees and debt issuance costs and fair market value premiums	$	676	$	618
Facility, unused, and other fees	$	364	$	383

On March 25, 2020, the Company drew the remaining $100.0 million of the $200.0 million Unsecured Term Loan F that was entered into on July 12, 2019.

Financial Covenant Considerations

The Company was in compliance with all financial and other covenants as of March 31, 2020 and December 31, 2019 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 $84.6 million and $85.5 million at March 31, 2020 and December 31, 2019, respectively, and is limited to senior, property-level secured debt financing arrangements.

Fair Value of Debt

The following table summarizes the aggregate principal outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of March 31, 2020 and December 31, 2019.

	March 31, 2020				December 31, 2019
Indebtedness (in thousands)	Principal Outstanding		Fair Value		Principal Outstanding		Fair Value
Unsecured credit facility	$	225,000	$	221,921	$	146,000	$	146,000
Unsecured term loans	975,000		962,764		875,000		875,000
Unsecured notes	575,000		574,121		575,000		614,493
Mortgage notes	54,588		53,471		55,085		56,021
Total principal amount	1,829,588		$	1,812,277	1,651,085		$	1,691,514
Add: Total unamortized fair market value premiums	37				39
Less: Total unamortized deferred financing fees and debt issuance costs	(5,653)				(6,111)
Total carrying value	$	1,823,972			$	1,645,013

The applicable fair value guidance establishes a three tier 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 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.

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.

13

The following table summarizes the Company’s outstanding interest rate swaps as of March 31, 2020. All of the Company’s interest rate swaps 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
The Toronto-Dominion Bank	Oct-14-2015	Sep-29-2016	$	25,000	$	(116)	1.3830	%	One-month L	Sep-29-2020
PNC Bank, N.A.	Oct-14-2015	Sep-29-2016	$	50,000	$	(234)	1.3906	%	One-month L	Sep-29-2020
Regions Bank	Oct-14-2015	Sep-29-2016	$	35,000	$	(163)	1.3858	%	One-month L	Sep-29-2020
U.S. Bank, N.A.	Oct-14-2015	Sep-29-2016	$	25,000	$	(118)	1.3950	%	One-month L	Sep-29-2020
Capital One, N.A.	Oct-14-2015	Sep-29-2016	$	15,000	$	(71)	1.3950	%	One-month L	Sep-29-2020
Royal Bank of Canada	Jan-08-2015	Mar-20-2015	$	25,000	$	(334)	1.7090	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank	Jan-08-2015	Mar-20-2015	$	25,000	$	(334)	1.7105	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank	Jan-08-2015	Sep-10-2017	$	100,000	$	(1,840)	2.2255	%	One-month L	Mar-21-2021
Wells Fargo, N.A.	Jan-08-2015	Mar-20-2015	$	25,000	$	(775)	1.8280	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jan-08-2015	Feb-14-2020	$	25,000	$	(1,091)	2.4535	%	One-month L	Mar-31-2022
Regions Bank	Jan-08-2015	Feb-14-2020	$	50,000	$	(2,204)	2.4750	%	One-month L	Mar-31-2022
Capital One, N.A.	Jan-08-2015	Feb-14-2020	$	50,000	$	(2,259)	2.5300	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,077)	1.8485	%	One-month L	Jan-04-2023
Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,079)	1.8505	%	One-month L	Jan-04-2023
Wells Fargo, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,079)	1.8505	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,077)	1.8485	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(2,154)	1.8475	%	One-month L	Jan-04-2023
The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,890)	2.9180	%	One-month L	Jan-12-2024
PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,892)	2.9190	%	One-month L	Jan-12-2024
Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,892)	2.9190	%	One-month L	Jan-12-2024
U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(2,446)	2.9190	%	One-month L	Jan-12-2024
Wells Fargo, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,195)	2.2460	%	One-month L	Jan-15-2025
U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,194)	2.2459	%	One-month L	Jan-15-2025
Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	(4,195)	2.2459	%	One-month L	Jan-15-2025
Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	(3,005)	1.7165	%	One-month L	Jan-15-2025

The following table summarizes the fair value of the interest rate swaps outstanding as of March 31, 2020 and December 31, 2019.

Balance Sheet Line Item (in thousands)	Notional Amount March 31, 2020		Fair Value March 31, 2020		Notional Amount December 31, 2019		Fair Value December 31, 2019
Interest rate swaps-Asset	$	—	$	—	$	250,000	$	303
Interest rate swaps-Liability	$	975,000	$	(48,714)	$	850,000	$	(18,819)

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 into interest expense in the same periods during which the hedged transaction affects earnings.

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 $15.9 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the next 12 months.

14

The following table summarizes the effect of cash flow hedge accounting and the location in the consolidated financial statements for the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Effect of Cash Flow Hedge Accounting (in thousands)	2020		2019
Loss recognized in accumulated other comprehensive loss on interest rate swaps	$	31,087	$	5,856
Income (loss) reclassified from accumulated other comprehensive loss into income as interest expense	$	(896)	$	1,122
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	14,864	$	12,834

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, 2020, 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 of these provisions at March 31, 2020, it could have been required to settle its obligations under the agreement of the interest rate swaps in a net liability position by counterparty plus accrued interest for approximately $49.4 million.

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 itself and its counterparties. However, as of March 31, 2020 and December 31, 2019, 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.

The following table summarizes the Company’s financial instruments that are accounted for at fair value on a recurring basis as of March 31, 2020 and December 31, 2019. 

			Fair Value Measurements as of March 31, 2020 Using
Balance Sheet Line Item (in thousands)	Fair Value March 31, 2020		Level 1		Level 2		Level 3
Interest rate swaps-Asset	$	—	$	—	$	—	$	—
Interest rate swaps-Liability	$	(48,714)	$	—	$	(48,714)	$	—

			Fair Value Measurements as of December 31, 2019 Using
Balance Sheet Line Item (in thousands)	Fair Value December 31, 2019		Level 1		Level 2		Level 3
Interest rate swaps-Asset	$	303	$	—	$	303	$	—
Interest rate swaps-Liability	$	(18,819)	$	—	$	(18,819)	$	—

15

6. Equity

Preferred Stock

The following table summarizes the Company’s outstanding preferred stock issuances as of March 31, 2020.

Preferred Stock Issuances	Issuance Date	Number of Shares	Liquidation Value Per Share		Interest Rate
6.875% Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock")	March 17, 2016	3,000,000	$	25.00	6.875	%

The following tables summarize the dividends attributable to the Company’s outstanding preferred stock issuances during the three months ended March 31, 2020 and the year ended December 31, 2019.

Quarter Ended 2020	Declaration Date	Series C Preferred Stock Per Share		Payment Date
March 31	January 8, 2020	$	0.4296875	March 31, 2020
Total		$	0.4296875

Quarter Ended 2019	Declaration Date	Series C Preferred Stock Per Share		Payment Date
December 31	October 15, 2019	$	0.4296875	December 31, 2019
September 30	July 15, 2019	0.4296875		September 30, 2019
June 30	April 9, 2019	0.4296875		July 1, 2019
March 31	January 10, 2019	0.4296875		April 1, 2019
Total		$	1.7187500

On April 9, 2020, the Company’s board of directors declared the Series C Preferred Stock dividends for the quarter ending June 30, 2020 at a quarterly rate of $0.4296875 per share.

Common Stock

The following table summarizes the terms of the Company’s at-the market (“ATM”) common stock offering program as of March 31, 2020.

ATM Common Stock Offering Program	Date	Maximum Aggregate Offering Price (in thousands)		Aggregate Common Stock Available as of March 31, 2020 (in thousands)
2019 $600 million ATM	February 14, 2019	$	600,000	$	318,248

The table below summarizes the activity under the ATM common stock offering program during the year ended December 31, 2019 (in thousands, except share data). There was no activity under the ATM common stock offering program during the three months ended March 31, 2020.

	Year ended December 31, 2019
ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share		Net Proceeds
2019 $600 million ATM	9,711,706	$	29.01	$	279,156
Total/weighted average	9,711,706	$	29.01	$	279,156

On January 13, 2020, the Company completed an underwritten public offering of an aggregate 10,062,500 shares of common stock at a price to the underwriters of $30.9022 per share, consisting of (i) 5,600,000 shares offered directly by the Company and (ii) 4,462,500 shares offered by the forward dealer in connection with certain forward sale agreements (including 1,312,500 shares offered pursuant to the underwriters’ option to purchase additional shares, which option was exercised in full). The offering closed on January 16, 2020 and the Company received net proceeds from the sale of shares offered directly by the Company of approximately $173.1 million. Subject to the Company’s right to elect cash or net share settlement, the Company has the ability to settle the forward sales agreements at any time through scheduled maturity date of the forward sale agreements of January 13, 2021.

16

The following tables summarize the dividends attributable to the Company’s outstanding shares of common stock that were declared during the three months ended March 31, 2020 and the year ended December 31, 2019.

Month Ended 2020	Declaration Date	Record Date	Per Share		Payment Date
March 31	January 8, 2020	March 31, 2020	$	0.12	April 15, 2020
February 29	January 8, 2020	February 28, 2020	0.12		March 16, 2020
January 31	January 8, 2020	January 31, 2020	0.12		February 18, 2020
Total			$	0.36

Month Ended 2019	Declaration Date	Record Date	Per Share		Payment Date
December 31	October 15, 2019	December 31, 2019	$	0.119167	January 15, 2020
November 30	October 15, 2019	November 29, 2019	0.119167		December 16, 2019
October 31	October 15, 2019	October 31, 2019	0.119167		November 15, 2019
September 30	July 15, 2019	September 30, 2019	0.119167		October 15, 2019
August 31	July 15, 2019	August 30, 2019	0.119167		September 16, 2019
July 31	July 15, 2019	July 31, 2019	0.119167		August 15, 2019
June 30	April 9, 2019	June 28, 2019	0.119167		July 15, 2019
May 31	April 9, 2019	May 31, 2019	0.119167		June 17, 2019
April 30	April 9, 2019	April 30, 2019	0.119167		May 15, 2019
March 31	January 10, 2019	March 29, 2019	0.119167		April 15, 2019
February 28	January 10, 2019	February 28, 2019	0.119167		March 15, 2019
January 31	January 10, 2019	January 31, 2019	0.119167		February 15, 2019
Total			$	1.430004

On April 9, 2020, the Company’s board of directors declared the common stock dividends for the months ending April 30, 2020, May 31, 2020, and June 30, 2020 at a monthly rate of $0.12 per share of common stock.

Restricted Shares of Common Stock

Restricted shares of common stock granted on February 13, 2020 and January 8, 2020 to certain employees of the Company, subject to the recipient’s continued employment, will vest in four equal installments on January 1 of each year beginning in 2021. Refer to Note 8 for a discussion of the restricted shares of common stock granted on January 8, 2020 pursuant to the January 6, 2017 performance units. The following table summarizes activity related to the Company’s unvested restricted shares of common stock for the three months ended March 31, 2020 and the year ended December 31, 2019.

Unvested Restricted Shares of Common Stock	Shares
Balance at December 31, 2018	190,462
Granted	110,830	(1)
Vested	(101,109)	(2)
Forfeited	(7,138)
Balance at December 31, 2019	193,045
Granted	75,419	(1)
Vested	(78,010)	(2)
Forfeited	(542)
Balance at March 31, 2020	189,912

(1)The fair value per share on the grant date of February 13, 2020, January 8, 2020, and January 7, 2019 was $32.64, $31.49, and $24.85, respectively.

(2)The Company repurchased and retired 33,119 and 28,504 restricted shares of common stock that vested during the three months ended March 31, 2020 and the year ended December 31, 2019, respectively.

The weighted average grant date fair value of unvested restricted shares of common stock was $24.38 per share at January 1, 2020, $31.60 per share granted during the three months ended March 31, 2020, $23.11 per share vested during the three months ended March 31, 2020, $24.85 per share forfeited during the three months ended March 31, 2020, and $27.77 per share at March 31, 2020.

The unrecognized compensation expense associated with the Company’s restricted shares of common stock at March 31, 2020 was approximately $4.7 million and is expected to be recognized over a weighted average period of approximately 2.9 years.

17

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, 2020 and 2019.

	Three months ended March 31,
Vested Restricted Shares of Common Stock	2020		2019
Vested restricted shares of common stock	78,010		78,431
Fair value of vested restricted shares of common stock (in thousands)	$	2,463	$	1,951

7. Noncontrolling Interest

The following table summarizes the activity for noncontrolling interest in the Company for the three months ended March 31, 2020 and the year ended December 31, 2019.

Noncontrolling Interest	LTIP Units	Other Common Units	Total Noncontrolling Common Units	Noncontrolling Interest
Balance at December 31, 2018	1,616,200	2,453,234	4,069,434	3.5	%
Granted/Issued	364,173	—	364,173	N/A
Forfeited	(16,618)	—	(16,618)	N/A
Conversions from LTIP units to Other Common Units	(266,397)	266,397	—	N/A
Redemptions from Other Common Units to common stock	—	(680,137)	(680,137)	N/A
Balance at December 31, 2019	1,697,358	2,039,494	3,736,852	2.5	%
Granted/Issued	278,806	—	278,806	N/A
Forfeited	—	—	—	N/A
Conversions from LTIP units to Other Common Units	(197,775)	197,775	—	N/A
Redemptions from Other Common Units to common stock	—	(219,390)	(219,390)	N/A
Balance at March 31, 2020	1,778,389	2,017,879	3,796,268	2.5	%

The weighted average grant date fair value of outstanding LTIP units was $21.64 per unit at January 1, 2020, $29.47 per unit granted during the three months ended March 31, 2020, $18.72 per unit converted during the three months ended March 31, 2020, and $23.19 per unit at March 31, 2020.

LTIP Units

LTIP units granted on January 8, 2020 to non-employee, independent directors, subject to the recipient’s continued service, will vest on January 1, 2021. LTIP units granted on January 8, 2020 to certain senior executive officers and senior employees, subject to the recipient’s continued employment, will vest quarterly over four years, with the first vesting date having been March 31, 2020. Refer to Note 8 for a discussion of the LTIP units granted on January 8, 2020 pursuant to the January 6, 2017 performance units.

The fair value of the LTIP units at the date of grant 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 are non-recurring fair value measurements. The following table summarizes the assumptions used in valuing such LTIP units granted during the three months ended March 31, 2020 (excluding those LTIP units granted pursuant to the January 6, 2017 performance units; refer to Note 8 for details).

LTIP Units	Assumptions
Grant date	January 8, 2020
Expected term (years)	10
Expected volatility	18.0		%
Expected dividend yield	5.75		%
Risk-free interest rate	1.61		%
Fair value of LTIP units at issuance (in thousands)	$	4,030
LTIP units at issuance	136,741
Fair value unit price per LTIP unit at issuance	$	29.47

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The following table summarizes activity related to the Company’s unvested LTIP units for the three months ended March 31, 2020 and the year ended December 31, 2019.

Unvested LTIP Units	LTIP Units
Balance at December 31, 2018	251,216
Granted	364,173
Vested	(371,423)
Forfeited	(16,618)
Balance at December 31, 2019	227,348
Granted	278,806
Vested	(130,187)
Forfeited	—
Balance at March 31, 2020	375,967

The weighted average grant date fair value of unvested LTIP units was $23.37 per unit at January 1, 2020, $29.47 per unit granted during the three months ended March 31, 2020, $27.37 per unit vested during the three months ended March 31, 2020, and $26.51 per unit at March 31, 2020.

The unrecognized compensation expense associated with the Company’s LTIP units at March 31, 2020 was approximately $7.5 million and is expected to be recognized over a weighted average period of approximately 2.6 years.

The following table summarizes the fair value at vesting for the LTIP units that vested during the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Vested LTIP units	2020		2019
Vested LTIP units	130,187		157,689
Fair value of vested LTIP units (in thousands)	$	3,861	$	4,063

8. Equity Incentive Plan

On January 8, 2020, the Company granted performance units approved by the compensation committee of the board of directors under the 2011 Plan to certain key employees of the Company. The terms of the performance units granted on January 8, 2020 are substantially the same as the terms of the performance units granted on January 7, 2019, except that the measuring period commenced on January 1, 2020 and ends on December 31, 2022.

The fair value of the performance units at the date of grant was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units are based on Level 3 inputs and are 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, 2020.

Performance Units	Assumptions
Grant date	January 8, 2020
Expected volatility	17.4		%
Expected dividend yield	5.75		%
Risk-free interest rate	1.59		%
Fair value of performance units grant (in thousands)	$	5,389

On December 31, 2019 the measuring period pursuant to the January 6, 2017 performance units concluded and it was determined that the Company’s total stockholder return exceeded the threshold percentage and return hurdle. The compensation committee of the board of directors approved the issuance of 76,096 vested LTIP units and 46,376 vested shares of common stock to the participants (of which 18,241 shares of common stock were repurchased and retired), which were issued on January 8, 2020. The compensation committee of the board of directors also approved the issuance of 65,969 LTIP units and 3,398 restricted shares of common stock that will vest on December 31, 2020, which were issued on January 8, 2020.

The unrecognized compensation expense associated with the Company’s performance units at March 31, 2020 was approximately $10.0 million and is expected to be recognized over a weighted average period of approximately 2.2 years.

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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, 2020 and 2019.

	Three months ended March 31,
Non-Cash Compensation Expense (in thousands)	2020		2019
Restricted shares of common stock	$	467	$	427
LTIP units	964		887
Performance units	1,307		859
Director compensation (1)	114		105
Total non-cash compensation expense	$	2,852	$	2,278

(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, 2020 and 2019. The number of shares of common stock granted is calculated based on the trailing ten days average common stock price ending 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”). 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 recognized during the three months ended March 31, 2020 and 2019 included in the accompanying Consolidated Statements of Operations.

	Three months ended March 31,
Rental Income (in thousands)	2020		2019
Fixed lease payments	$	90,396	$	72,117
Variable lease payments	25,006		22,181
Straight-line rental income	3,927		2,284
Net decrease to rental income related to above and below market lease amortization	(990)		(967)
Total rental income	$	118,339	$	95,615

As of March 31, 2020 and December 31, 2019, the Company had accrued rental income of approximately $48.3 million and $44.3 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.

As of March 31, 2020 and December 31, 2019, the Company had approximately $28.2 million and $22.6 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, 2020 and December 31, 2019, 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, 2020 and December 31, 2019, the Company’s total liability associated with these lease security deposits was approximately $9.9 million and $9.8 million, respectively, and is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.

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 $4.8 million and $3.9 million for the three months ended March 31, 2020 and 2019, 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.

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The following table summarizes the maturity of fixed lease payments under the Company’s leases as of March 31, 2020.

Year	Maturity of Fixed Lease Payments (in thousands)
Remainder of 2020	$	273,733
2021	$	333,967
2022	$	297,877
2023	$	256,251
2024	$	212,829
Thereafter	$	798,803

Lessee Leases

The Company has operating leases in which it is the lessee for ground leases and its corporate office lease. These leases have remaining lease terms of approximately 6.3 years to 46.8 years. Certain ground leases contain options to extend the leases for five 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, 2020 and December 31, 2019.

Operating Lease Term and Discount Rate	March 31, 2020		December 31, 2019
Weighted average remaining lease term (years)	27.1		36.0
Weighted average discount rate	6.8	%	7.1	%

The following table summarizes the operating lease cost recognized during the three months ended March 31, 2020 and 2019 included in the Company’s Consolidated Statements of Operations.

	Three months ended March 31,
Operating Lease Cost (in thousands)	2020		2019
Operating lease cost included in property expense attributable to ground leases	$	331	$	331
Operating lease cost included in general and administrative expense attributable to corporate office lease	318		266
Total operating lease cost	$	649	$	597

The following table summarizes supplemental cash flow information related to operating leases recognized during the three months ended March 31, 2020 and 2019 in the Company’s Consolidated Statements of Cash Flows.

	Three months ended March 31,
Operating Leases (in thousands)	2020		2019
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	571	$	569
Right-of-use assets obtained in exchange for new lease liabilities	$	7,718	$	—

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The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office lease as of March 31, 2020.

Year	Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2020	$	1,723
2021	2,102
2022	2,975
2023	3,021
2024	3,064
Thereafter	50,017
Total lease payments	62,902
Less: Imputed interest	(38,438)
Present value of operating lease liabilities	$	24,464

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

10. Earnings Per Share

During the three months ended March 31, 2020 and 2019, there were 181,747 and 213,856, respectively, of unvested restricted shares of common stock on a weighted average basis that were considered participating securities.

The following table reconciles the numerators and denominators in the computation of basic and diluted earnings per common share for the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Earnings Per Share (in thousands, except per share data)	2020		2019
Numerator
Net income attributable to common stockholders	$	62,072	$	5,807
Denominator
Weighted average common shares outstanding — basic	147,570		114,721
Effect of dilutive securities(1)
Share-based compensation	86		272
Shares issuable under forward sales agreements	—		—
Weighted average common shares outstanding — diluted	147,656		114,993
Net income per share — basic and diluted
Net income per share attributable to common stockholders — basic	$	0.42	$	0.05
Net income per share attributable to common stockholders — diluted	$	0.42	$	0.05

(1)During the three months ended March 31, 2020 and 2019, there were 182 and 214, unvested shares of restricted common stock, respectively, on a weighted average basis 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 $3.0 million as of March 31, 2020 related to construction projects and certain other agreements.

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12. Subsequent Events

The following non-recognized subsequent events were noted.

On April 17, 2020, the Company entered into a $300.0 million unsecured term loan agreement. In connection with the new unsecured term loan agreement, the $150.0 million Unsecured Term Loan B and the $150.0 million Unsecured Term Loan C were repaid in full. The new unsecured term loan bears a current interest rate of LIBOR plus a spread of 1.5% based on the Company’s debt rating, as defined in the loan agreement, and subject to a minimum rate for LIBOR of 0.25%. The new unsecured term loan matures on April 16, 2021, subject to two one year extension options at the Company's discretion, and subject to certain conditions (other than lender discretion) such as the absence of default and the payment of an extension fee. On April 20, 2020, the Company entered into four interest rate swaps with a total notional amount of $300.0 million which fix LIBOR at 0.27725% on the new unsecured term loan. The interest rate swaps do not cover the interest rate floor. As a result, the Company’s effective interest rate will be 1.77725% plus the amount, if any, by which LIBOR is below 0.25%. The interest rate swaps become effective on September 29, 2020 and March 19, 2021 upon the maturity of the interest rate swaps previously designated to the Unsecured Term Loan B and Unsecured Term Loan C and mature on April 18, 2023.

COVID-19 Pandemic

The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how the pandemic will impact its tenants and business partners. While the Company did not incur significant disruptions from the COVID-19 pandemic during the three months ended March 31, 2020, a number of the Company’s tenants have recently requested rent deferral or rent abatement as a result of the pandemic, and therefore, the Company is unable to predict the impact that the pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties. The Company is evaluating each tenant rent relief request on an individual basis, considering a number of factors. Not all tenant requests will ultimately result in modified agreements, nor is the Company forgoing its contractual rights under its lease agreements. The extent to which the COVID-19 pandemic impacts 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.

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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, 2019, as updated elsewhere in 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 potential adverse effect of the ongoing public health crisis of the novel coronavirus disease (“COVID-19”) pandemic, or any future pandemic, epidemic or outbreak of infectious disease, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets;

•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 and the general economic climate in local markets and competition for tenants in such markets;

•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, and other potentially catastrophic events such as acts of war and/or terrorism;

•international, national, regional and local economic conditions;

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•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;

•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:

We define “GAAP” as generally accepted accounting principles in the United States.

We define “total annualized base rental revenue” as the contractual monthly base rent as of March 31, 2020 (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, 2020, the total annualized base rental revenue is calculated based on the first contractual monthly base rent amount multiplied by 12.

We define “occupancy rate” as 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.

We define the “Value Add Portfolio” as properties that 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 (iv) development.

We define “Stabilization” for properties under development or being redeveloped as 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.

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We define the “Operating Portfolio” as all warehouse and light manufacturing assets that were acquired stabilized or have achieved Stabilization. The Operating Portfolio excludes non-core flex/office assets, assets contained in the Value Add Portfolio, and assets classified at held for sale.

We define a “Comparable Lease” as 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.

We define “SL Rent Change” as the percentage change in the average monthly base rent over the term of the 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 applicable recoverable expenses, and this calculation excludes the impact of any holdover rent.

We define “Cash Rent Change” as 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.

We define a “New Lease” as any lease that is signed for an initial term equal to or greater than 12 months for any vacant space, including a lease signed by a new tenant or an existing tenant that is expanding into new (additional) space.

We define “Renewal” Lease as 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.

Overview

We are a REIT focused on the acquisition, ownership, and operation of single-tenant, industrial properties throughout the United States. 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 qualify 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 acquisition activity, and (ii) internal growth, specifically occupancy and rental rates on our portfolio. A variety of other factors, including those noted below, also affect our future results of operations.

COVID-19 Pandemic

Since initially being reported in December 2019, COVID-19 has spread around the world, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. The COVID-19 pandemic has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The global impact of the pandemic is rapidly evolving and many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. As a result, the COVID-19 pandemic is negatively impacting almost every industry, including the real estate industry and the industries of our tenants, directly or indirectly. The rapid development and fluidity of the COVID-19 pandemic precludes any prediction as to the ultimate adverse impact the pandemic may have on our business, financial condition, results of operations and cash flows.

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; disruption in supply and delivery chains; a general decline in business activity and demand for real estate; reduced economic

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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 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. 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

Our business, like all businesses, is being impacted by the uncertainty regarding the COVID-19 pandemic, the effectiveness of policies introduced to neutralize the disease, and the impact of those policies on economic activity. While there are weakening macroeconomic conditions and some negative impact to our tenants, we have a well-diversified portfolio across industry, market, and lease term. Additionally, we strongly believe the current economic environment is likely to curb new industrial supply in the near term and to accelerate a number of trends that positively impact industrial demand.

The U.S. federal and state governments, as well as the Federal Reserve, responded to the uncertain economic outlook with a series of policies to ease the economic burden of COVID-19 closures on businesses and individuals. The major U.S. congressional policy action known as the Coronavirus, Aid, Relief and Economic Security Act, or the CARES Act, allocated $2 trillion in federal aid to specific industries, small businesses and individuals. The Federal Reserve also took major actions in response to the COVID-19 pandemic, including the completion of two emergency federal funds rate cuts in March 2020 to a range between 0% to 0.25%, adding liquidity to the bond market, establishing new lending facilities, and expanding its bond buying program to include mortgage backed securities, investment grade corporate debt, and high yield corporate ETFs.

We believe the current economic circumstances, while challenging, will provide an opportunity to demonstrate the diversification of our portfolio. Specifically, our existing portfolio should benefit from competitive rental rates and strong occupancy. Furthermore, we believe certain characteristics of our business should position us well in an uncertain environment, including the fact that we have a highly diversified portfolio, minimal floating rate debt exposure (taking into account our hedging activities), strong liquidity, access to capital, and that many of our competitors for the assets we purchase tend to be smaller local and regional investors who are likely to be more heavily impacted by interest rates and availability of capital.

Due to the COVID-19 pandemic, we expect acceleration in a number of industrial specific trends to support stronger long-term demand, 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 United States consumer market, an increase in overseas labor costs and the overall cost of supplying and shipping goods (i.e. the shortening and fattening of the supply chain); and

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

Our portfolio continues to benefit from historically low availability throughout the national industrial market. We expect a near-term reduction in demand, in the aggregate, brought on by COVID-19. Certain industries and geographies are expected to be more heavily impacted. We believe 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, but it is likely to decelerate in the near-term. We have limited exposure to many of the most active development markets. We will continue to monitor the supply and demand fundamentals for industrial real estate and assess its impact on our business.

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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. As of March 31, 2020, our Operating Portfolio was approximately 97.0% leased and our SL Rent Change on new and renewal leases together grew approximately 11.2% during the three months ended March 31, 2020 and our Cash Rent Change on new and renewal leases together grew approximately 3.3% during the three months ended March 31, 2020.

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 our Operating Portfolio leases that commenced during the three months ended March 31, 2020. Certain leases contain rental concessions; any such rental concessions are accounted for on a straight-line basis over the term of the lease.

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)
Three months ended March 31, 2020
New Leases	427,471	$	4.18	$	4.38	$	1.56	(2.0)	%	4.5	%	4.9	$	0.55
Renewal Leases	1,346,254	$	4.56	$	4.72	$	0.66	4.9	%	13.2	%	4.1	$	0.05
Total/weighted average	1,773,725	$	4.47	$	4.64	$	0.88	3.3	%	11.2	%	4.3	$	0.17

(1)We define Total Costs as 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)We define weighted average lease term as the contractual lease term in years, assuming that tenants exercise no renewal options, purchase options, or early termination rights, weighted by square footage.

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

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. The terms of those leases vary and on some occasions we may absorb certain building related expenses of our tenants. In our modified gross leases, we are responsible for some building related expenses during the lease term, but the cost of most of the expenses is passed through to the tenant for reimbursement to us. In our gross leases, we are responsible for all costs 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 will impact our results of operations and is affected by economic and competitive conditions in our markets and by the desirability of our individual buildings. Leases that comprise approximately 8.9% of our annualized base rental revenue will expire during the period from April 1, 2020 to March 31, 2021, 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 generally be the same as the rates under existing leases expiring during the period April 1, 2020 to March 31, 2021, thereby resulting in approximately the same revenue from the same space.

The following table summarizes lease expirations for leases in place as of March 31, 2020, plus available space, for each of the ten calendar years beginning with 2020 and thereafter in our portfolio. The information in the table assumes that tenants exercise no renewal options and no early termination rights.

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
Available	—	3,476,265	—		—		—
Month-to-month leases	2	22,800	—	%	$	54	—	%
Remainder of 2020	28	5,998,351	6.8	%	27,490		7.0	%
2021	69	10,910,117	12.4	%	48,291		12.3	%
2022	72	9,001,575	10.2	%	40,007		10.2	%
2023	79	11,742,191	13.3	%	46,476		11.9	%
2024	63	11,337,734	12.8	%	48,596		12.4	%
2025	48	8,128,115	9.2	%	35,600		9.1	%
2026	43	6,916,716	7.8	%	31,586		8.1	%
2027	23	3,316,401	3.8	%	16,692		4.3	%
2028	25	4,716,771	5.3	%	20,231		5.2	%
2029	22	4,055,023	4.6	%	19,895		5.1	%
Thereafter	45	12,162,813	13.8	%	56,951		14.4	%
Total	519	91,784,872	100.0	%	$	391,869	100.0	%

Portfolio Summary

The following table summarizes information relating to diversification by building type in our portfolio as of March 31, 2020.

		Square Footage					Annualized Base Rental Revenue
Building Type	Number of Buildings	Amount	%		Occupancy Rate		Amount (in thousands)		%
Warehouse/Distribution	372	82,319,155	89.7	%	96.9	%	$	347,114	88.6	%
Light Manufacturing	70	7,902,777	8.6	%	98.1	%	38,214		9.8	%
Total Operating Portfolio/weighted average	442	90,221,932	98.3	%	97.0	%	$	385,328	98.4	%
Value Add/Other	6	1,130,625	1.2	%	50.6	%	3,287		0.8	%
Flex/Office	8	432,315	0.5	%	58.1	%	3,254		0.8	%
Total portfolio/weighted average	456	91,784,872	100.0	%	96.2	%	$	391,869	100.0	%

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Portfolio Acquisitions

The following table summarizes our acquisitions during the three months ended March 31, 2020.

Market (1)	Date Acquired	Square Feet	Buildings	Purchase Price (in thousands)
Detroit, MI	January 10, 2020	491,049	1	$	29,543
Rochester, NY	January 10, 2020	124,850	1	8,565
Minneapolis/St Paul, MN	February 6, 2020	139,875	1	10,460
Sacramento, CA	February 6, 2020	160,534	1	18,468
Richmond, VA	February 6, 2020	78,128	1	5,481
Milwaukee/Madison, WI	February 7, 2020	81,230	1	7,219
Detroit, MI	February 11, 2020	311,123	1	23,141
Philadelphia, PA	March 9, 2020	78,000	1	6,571
Tulsa, OK	March 9, 2020	134,600	1	9,895
Three months ended March 31, 2020		1,599,389	9	$	119,343

(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, 2020, we sold three buildings comprised of approximately 1.2 million rentable square feet with a net book value of approximately $52.9 million to third parties. Net proceeds from the sales of rental property were approximately $99.7 million and we recognized the full gain on the sales of rental property, net, of approximately $46.8 million for the three months ended March 31, 2020.

Geographic Diversification

The following table summarizes information about the 20 largest markets in our portfolio based on total annualized base rental revenue as of March 31, 2020.

Top 20 Markets (1)	% of Total Annualized Base Rental Revenue
Philadelphia, PA	8.5	%
Chicago, IL	7.3	%
Greenville/Spartanburg, SC	5.4	%
Detroit, MI	4.6	%
Pittsburgh, PA	4.4	%
Milwaukee/Madison, WI	4.3	%
Minneapolis/St Paul, MN	4.2	%
Houston, TX	3.6	%
Charlotte, NC	2.7	%
Indianapolis, IN	2.6	%
Cincinnati/Dayton, OH	2.5	%
Boston, MA	2.5	%
West Michigan, MI	2.4	%
Columbus, OH	2.3	%
El Paso, TX	2.3	%
Columbia, SC	1.8	%
Westchester/So Connecticut, CT/NY	1.7	%
Raleigh/Durham, NC	1.5	%
Memphis, TN	1.4	%
Kansas City, MO	1.4	%
Total	67.4	%

(1) As defined by CoStar.

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Industry Diversification

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, 2020.

Top 20 Tenant Industries (1)	% of Total Annualized Base Rental Revenue
Auto Components	11.6	%
Air Freight & Logistics	8.4	%
Commercial Services & Supplies	7.3	%
Containers & Packaging	7.3	%
Machinery	4.7	%
Food Products	4.6	%
Household Durables	4.6	%
Building Products	4.5	%
Electrical Equipment	3.7	%
Food & Staples Retailing	3.4	%
Internet & Direct Mkt Retail	3.3	%
Media	3.0	%
Beverages	2.8	%
Household Products	2.8	%
Electronic Equip, Instruments	2.3	%
Chemicals	2.1	%
Specialty Retail	2.0	%
Textiles, Apparel, Luxury Good	1.9	%
Metals & Mining	1.7	%
Pharmaceuticals	1.6	%
Total	83.6	%

(1) Industry classification based on Global Industry Classification Standard methodology.

Tenant Diversification

The following table summarizes information about the 20 largest tenants in our portfolio based on total annualized base rental revenue as of March 31, 2020.

Top 20 Tenants (1)	Number of Leases	% of Total Annualized Base Rental Revenue
Amazon	3	1.9	%
General Service Administration	1	1.8	%
XPO Logistics, Inc.	5	1.3	%
DHL Supply Chain	5	1.0	%
TriMas Corporation	4	1.0	%
Solo Cup	1	1.0	%
DS Smith	2	0.9	%
Hachette Book Group, Inc.	1	0.8	%
Ford Motor Company	1	0.8	%
American Tire Distributors Inc	5	0.8	%
Packaging Corp. of America	5	0.8	%
Yanfeng US Automotive Interior	2	0.8	%
Schneider Electric USA, Inc.	3	0.8	%
FedEx Corporation	3	0.8	%
WestRock Company	6	0.8	%
Kenco Logistic Services, LLC	2	0.8	%
Perrigo Company	2	0.7	%
Generation Brands	1	0.7	%
Carolina Beverage Group	2	0.7	%
Emerson Electric	2	0.7	%
Total	56	18.9	%

(1) Includes tenants, guarantors, and/or non-guarantor parents.

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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, 2019, for a discussion of our critical accounting policies and estimates.

Results of Operations

The following discussion of our results of our same store (as defined below) net operating income (“NOI”) should be read in conjunction with our Consolidated Financial Statements. 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. Same Store excludes termination fees, solar income, and revenue associated with one-time tenant reimbursements of capital expenditures. Same store properties exclude Operating Portfolio properties with expansions placed into service after December 31, 2018. On March 31, 2020, we owned 368 industrial buildings consisting of approximately 73.4 million square feet, which represents approximately 80% of our total portfolio, that are considered our same store portfolio in the analysis below. Same store occupancy increased approximately 0.3% to 96.3% as of March 31, 2020 compared to 96.0% as of March 31, 2019.

Comparison of the three months ended March 31, 2020 to the three months ended March 31, 2019

The following table summarizes selected operating information for our same store portfolio and our total portfolio for the three months ended March 31, 2020 and 2019 (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, 2020 and 2019 with respect to the buildings acquired and disposed of and Operating Portfolio buildings with expansions placed into service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2018 and our flex/office buildings and Value Add Portfolio.

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	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
	2020		2019		$		%		2020		2019		2020		2019		2020		2019		$		%
Revenue
Operating revenue
Rental income	$	91,559	$	90,864	$	695	0.8	%	$	24,128	$	3,228	$	2,652	$	1,523	$	118,339	$	95,615	$	22,724	23.8	%
Other income	168		49		119		242.9	%	6		38		35		—		209		87		122		140.2	%
Total operating revenue	91,727		90,913		814		0.9	%	24,134		3,266		2,687		1,523		118,548		95,702		22,846		23.9	%
Expenses
Property	16,830		17,641		(811)		(4.6)	%	3,768		968		1,349		902		21,947		19,511		2,436		12.5	%
Net operating income (1)	$	74,897	$	73,272	$	1,625	2.2	%	$	20,366	$	2,298	$	1,338	$	621	96,601		76,191		20,410		26.8	%
Other expenses
General and administrative																	10,373		9,212		1,161		12.6	%
Depreciation and amortization																	52,688		42,303		10,385		24.5	%
Loss on impairments																	—		5,344		(5,344)		(100.0)	%
Other expenses																	476		399		77		19.3	%
Total other expenses																	63,537		57,258		6,279		11.0	%
Total expenses																	85,484		76,769		8,715		11.4	%
Other income (expense)
Interest and other income																	79		16		63		393.8	%
Interest expense																	(14,864)		(12,834)		(2,030)		15.8	%
Gain on the sales of rental property, net																	46,759		1,274		45,485		3,570.3	%
Total other income (expense)																	31,974		(11,544)		43,518		377.0	%
Net income																	$	65,038	$	7,389	$	57,649	780.2	%

(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 by $57.6 million or 780.2% to $65.0 million for the three months ended March 31, 2020, compared to $7.4 million for the three months ended March 31, 2019.

Same Store Total Operating Revenue

Same store total operating revenue consists primarily of rental income consisting of (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 is comprised of lease income and other billings as discussed below, increased by $0.7 million or 0.8% to $91.6 million for the three months ended March 31, 2020 compared to $90.9 million for the three months ended March 31, 2019.

Same store lease income increased by $1.7 million or 2.2% to $77.5 million for the three months ended March 31, 2020 compared to $75.8 million for the three months ended March 31, 2019. Approximately $2.4 million of the increase was attributable to rental increases due to new leases and renewals of existing tenants, and approximately $0.1 million of the increase was due to a net decrease in the amortization of net above market leases. This increase was partially offset by an approximately $0.8 million decrease due to a reduction of base rent due to tenants downsizing their spaces and vacancies.

Same store other billings decreased by $1.0 million or 6.3% to $14.1 million for the three months ended March 31, 2020 compared to $15.1 million for the three months ended March 31, 2019. The decrease was primarily attributable to a decrease in real estate taxes levied by the taxing authority and changes to lease terms where the tenants began paying the real estate taxes that we had previously paid on behalf of the tenant to the taxing authority of approximately $0.7 million. The decrease was also attributable to a decrease of approximately $0.3 million related to tenant specific billings.

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 decreased by $0.8 million or 4.6% to $16.8 million for the three months ended March 31, 2020 compared to $17.6 million for the three months ended March 31, 2019. This decrease was primarily related to a decrease in snow removal expense of approximately $1.0 million and a decrease in real estate taxes levied by the taxing authority and changes to lease terms where the tenants began paying the real estate taxes that we had previously paid on behalf of the tenant to the taxing authority of approximately $0.5 million. These decreases were partially offset by an increase in repairs and maintenance and other expense of approximately $0.7 million.

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, 2018, we acquired 73 buildings consisting of approximately 16.5 million square feet (excluding five buildings that were included in the Value Add Portfolio at March 31, 2020 or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2018), and sold 12 buildings and two land parcels consisting of approximately 2.8 million square feet. For the three months ended March 31, 2020 and 2019, the buildings acquired after December 31, 2018 contributed approximately $20.5 million and $0.8 million to NOI, respectively. For the three months ended March 31, 2020 and 2019, the buildings sold after December 31, 2018 contributed approximately $(0.1) and $1.5 million to NOI, respectively. Refer to Note 3 in the accompanying Notes to Consolidated Financial Statements for additional discussion regarding buildings acquired or sold.

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Other Net Operating Income

Our other assets include our flex/office buildings, Value Add Portfolio, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2018. Other NOI also includes termination adjustments from buildings in our same store portfolio.

For a detailed reconciliation of our other NOI to net income, see the table above.

At March 31, 2020, we owned eight flex/office buildings consisting of approximately 0.4 million square feet, five buildings in our Value Add Portfolio consisting of approximately 1.1 million square feet, one building classified as held for sale consisting of approximately 0.1 million square feet, and one building consisting of approximately 0.3 million square feet that was an Operating Portfolio building with expansion placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2018. These buildings contributed approximately $1.2 million and $0.5 million to NOI for the three months ended March 31, 2020 and 2019, respectively. Additionally, there was approximately $0.1 million and $0.1 million of one-time adjustments from certain buildings in our same store portfolio for the three months ended March 31, 2020 and 2019, respectively.

Total Other Expenses

Total other expenses consist of general and administrative expenses, depreciation and amortization, loss on impairments, and other expenses.

Total other expenses increased $6.3 million or 11.0% for the three months ended March 31, 2020 to $63.5 million compared to $57.3 million for the three months ended March 31, 2019. The increase is primarily a result of an increase in depreciation and amortization of approximately $10.4 million due to an increase in the depreciable asset base as a result of net acquisitions. Additionally, general and administrative expenses increased by approximately $1.2 million primarily due to increases in compensation and other payroll costs. These increases were partially offset by a decrease in loss on impairments of approximately $5.3 million.

Total Other Income (Expense)

Total other income (expense) consists of interest and other income, interest expense, loss on extinguishment of debt, 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 net other expense increased $43.5 million or 377.0% to total other income of $32.0 million for the three months ended March 31, 2020 compared $11.5 million total other expense for the three months ended March 31, 2019. This increase is primarily the result of an increase in the gain on the sales of rental property, net of approximately $45.5 million. This increase was partially offset due to an increase in interest expense of approximately $2.0 million which was primarily attributable to the funding of an unsecured term loans on March 25, 2020, December 18, 2019, and July 25, 2019.

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

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

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,
Reconciliation of Net Income to FFO (in thousands)	2020		2019
Net income	$	65,038	$	7,389
Rental property depreciation and amortization	52,617		42,229
Loss on impairments	—		5,344
Gain on the sales of rental property, net	(46,759)		(1,274)
FFO	70,896		53,688
Preferred stock dividends	(1,289)		(1,289)
Amount allocated to restricted shares of common stock and unvested units	(221)		(247)
FFO attributable to common stockholders and unit holders	$	69,386	$	52,152

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,
Reconciliation of Net Income to NOI (in thousands)	2020		2019
Net income	$	65,038	$	7,389
General and administrative	10,373		9,212
Transaction costs	51		74
Depreciation and amortization	52,688		42,303
Interest and other income	(79)		(16)
Interest expense	14,864		12,834
Loss on impairments	—		5,344
Other expenses	425		325
Gain on the sales of rental property, net	(46,759)		(1,274)
Net operating income	$	96,601	$	76,191

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Cash Flows

Comparison of the three months ended March 31, 2020 to the three months ended March 31, 2019

The following table summarizes our cash flows for the three months ended March 31, 2020 compared to the three months ended March 31, 2019.

	Three months ended March 31,				Change
Cash Flows (dollars in thousands)	2020		2019		$		%
Net cash provided by operating activities	$	70,580	$	47,150	$	23,430	49.7	%
Net cash used in investing activities	$	35,980	$	176,816	$	(140,836)	(79.7)	%
Net cash provided by financing activities	$	294,919	$	119,432	$	175,487	146.9	%

Net cash provided by operating activities increased $23.4 million to $70.6 million for the three months ended March 31, 2020 compared to $47.2 million for the three months ended March 31, 2019. The increase was primarily attributable to incremental operating cash flows from property acquisitions completed after March 31, 2019, and operating performance at existing properties. These increases were partially offset by the loss of cash flows from property dispositions completed after March 31, 2019 and fluctuations in working capital due to timing of payments and rental receipts.

Net cash used in investing activities decreased $140.8 million to $36.0 million for the three months ended March 31, 2020 compared to $176.8 million for the three months ended March 31, 2019. The decrease was primarily attributable to an increase in proceeds from sales of rental property, net related to the disposition of three buildings during the three months ended March 31, 2020 for net proceeds of approximately $99.7 million, compared to the three months ended March 31, 2019 where we sold five buildings for net proceeds of approximately $16.6 million. The decrease was also attributable to the acquisition of nine buildings for a total cash consideration of approximately $119.3 million for the three months ended March 31, 2020 compared to the acquisition of ten buildings for a total cash consideration of approximately $185.4 million for the three months ended March 31, 2019.

Net cash provided by financing activities increased $175.5 million to $294.9 million for the three months ended March 31, 2020 compared to $119.4 million for the three months ended March 31, 2019. The increase is primarily attributable to an increase of net proceeds from the sales of common stock of approximately $24.1 million, an increase of net cash inflow on our unsecured credit facility of approximately $64.0 million, and increase in proceeds from unsecured term loans of approximately $100.0 million during the three months ended March 31, 2020 compared to the three months ended March 31, 2019. These increases were partially offset by an increase of approximately $12.6 million in dividends paid during the three months ended March 31, 2020 compared to the three months ended March 31, 2019.

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 is primarily rental income, expense recoveries from tenants, and other income from operations and is our principal source of funds that we use to pay operating expenses, debt service, recurring capital expenditures and the distributions required to maintain our REIT qualification. We look to the capital markets (common equity, preferred equity, and debt) to primarily fund our acquisition activity. We seek to increase cash flows from our properties by maintaining quality standards for our buildings 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 debt and equity financings, will continue to provide funds for our short-term and medium-term liquidity needs.

Our short-term liquidity requirements consist primarily of funds 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, funding of property acquisitions under contract, general and administrative expenses, and capital expenditures for tenant improvements and leasing commissions.

Our long-term liquidity needs, in addition to recurring short-term liquidity needs as discussed above, consist primarily of funds necessary to pay for acquisitions, non-recurring capital expenditures, and scheduled debt maturities. We intend to satisfy our 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.

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As of March 31, 2020, we had total immediate liquidity of approximately $596.9 million, comprised of $324.9 million of cash and cash equivalents and $272.0 million of immediate availability on our unsecured credit facility.

In response to the events surrounding the COVID-19 pandemic, in late March we drew the remaining $100.0 million of our Unsecured Term Loan F and drew $200.0 million of our unsecured credit facility. This resulted in a cash balance of approximately $324.9 million at March 31, 2020. When incorporating the remaining undrawn balance available on our unsecured credit facility, the approximately $136.3 million of forward equity proceeds available to us at our option, and unused 1031 like-kind exchange proceeds, total liquidity as of March 31, 2020 stands at approximately $746.7 million dollars, with a material amount of that liquidity in cash. Additionally, on April 17, 2020 we refinanced our Unsecured Term Loan B and Unsecured Term Loan C, as discussed in “Indebtedness Outstanding” below.

In addition, we require funds for future dividends to be paid to our common and preferred stockholders and unit holders in the Operating Partnership. These distributions on our common stock are voluntary (at the discretion of our board of directors), to the extent we have satisfied distribution requirements in order to maintain our REIT status for federal income tax purposes, and may be reduced or stopped if needed to fund other liquidity requirements or for other reasons. The following table summarizes the dividends attributable to our outstanding common stock that had a record date during the three months ended March 31, 2020.

Month Ended 2020	Declaration Date	Record Date	Per Share		Payment Date
March 31	January 8, 2020	March 31, 2020	$	0.12	April 15, 2020
February 29	January 8, 2020	February 28, 2020	0.12		March 16, 2020
January 31	January 8, 2020	January 31, 2020	0.12		February 18, 2020
Total			$	0.36

On April 9, 2020, our board of directors declared the common stock dividends for the months ending April 30, 2020, May 31, 2020, and June 30, 2020 at a monthly rate of $0.12 per share of common stock.

During the three months ended March 31, 2020, we declared quarterly cumulative dividends on the 6.875% Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”) at a rate equivalent to the fixed annual rate of $1.71875 per share. The following table summarizes the dividends on the Series C Preferred Stock during the three months ended March 31, 2020.

Quarter Ended 2020	Declaration Date	Series C Preferred Stock Per Share		Payment Date
March 31	January 8, 2020	$	0.4296875	March 31, 2020
Total		$	0.4296875

On April 9, 2020, our board of directors declared the Series C Preferred Stock dividends for the quarter ending June 30, 2020 at a quarterly rate of $0.4296875 per share.

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Indebtedness Outstanding

The following table summarizes certain information with respect to our indebtedness outstanding as of March 31, 2020

Loan	Principal Outstanding as of March 31, 2020 (in thousands)		Interest  Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)	$	225,000	L + 0.90%		January 12, 2024	i
Total unsecured credit facility	225,000
Unsecured term loans:
Unsecured Term Loan C(5)	150,000		2.39	%	September 29, 2020	i
Unsecured Term Loan B(5)	150,000		3.05	%	March 21, 2021	i
Unsecured Term Loan A	150,000		3.38	%	March 31, 2022	i
Unsecured Term Loan D	150,000		2.85	%	January 4, 2023	i
Unsecured Term Loan E	175,000		3.92	%	January 15, 2024	i
Unsecured Term Loan F	200,000		L + 1.00%		January 12, 2025	i
Total unsecured term loans	975,000
Less: Total unamortized deferred financing fees and debt issuance costs	(3,299)
Total carrying value unsecured term loans, net	971,701
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
Total unsecured notes	575,000
Less: Total unamortized deferred financing fees and debt issuance costs	(2,018)
Total carrying value unsecured notes, net	572,982
Mortgage notes (secured debt):
Wells Fargo Bank, National Association CMBS Loan	50,939		4.31	%	December 1, 2022	iii
Thrivent Financial for Lutherans	3,649		4.78	%	December 15, 2023	iv
Total mortgage notes	54,588
Add: Total unamortized fair market value premiums	37
Less: Total unamortized deferred financing fees and debt issuance costs	(336)
Total carrying value mortgage notes, net	54,289
Total / weighted average interest rate(6)	$	1,823,972	3.28	%

(1)Interest rate as of March 31, 2020. At March 31, 2020, the one-month LIBOR (“L”) was 0.99288%. 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. The spread over the applicable rate for our unsecured credit facility and unsecured term loans is based on the our debt rating, as defined in the respective loan agreements.

(2)The unsecured term loans have a stated interest rate of one-month LIBOR plus a spread of 1.0%. As of March 31, 2020, one-month LIBOR for the Unsecured Term Loans A, B, C, D and E was swapped to a fixed rate of 2.38%, 2.05%, 1.39%, 1.85% and 2.92%, respectively. One-month LIBOR for the Unsecured Term Loan F will be swapped to a fixed rate of 2.11% effective July 15, 2020.

(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, however can be defeased; and (iv) pre-payable without penalty three months prior to the maturity date.

(4)The capacity of the unsecured credit facility is $500.0 million. The maturity date is January 15, 2023, or such later date as may be extended pursuant to two six-month extension options exercisable by the Company in its 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.

(5)Subsequent to March 31, 2020, the Unsecured Term Loan B and Unsecured Term Loan C were repaid in full in connection with the new unsecured term loan agreement entered into on April 17, 2020, as discussed below.

(6)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $775.0 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.

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The aggregate undrawn nominal commitments on the unsecured credit facility and unsecured term loans as of March 31, 2020 was approximately $272.0 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, 2020, we were in compliance with the applicable financial covenants.

On April 17, 2020, we entered into a $300.0 million unsecured term loan agreement. In connection with the new unsecured term loan agreement, the $150.0 million Unsecured Term Loan B and the $150.0 million Unsecured Term Loan C were repaid in full. The new unsecured term loan bears a current interest rate of LIBOR plus a spread of 1.5% based on our debt rating, as defined in the loan agreement, and subject to a minimum rate for LIBOR of 0.25%. The new unsecured term loan matures on April 16, 2021, subject to two one-year extension options at our discretion, and subject to certain conditions (other than lender discretion) such as the absence of default and the payment of an extension fee. On April 20, 2020, we entered into four interest rate swaps with a total notional amount of $300.0 million which fix LIBOR at 0.27725% on the new unsecured term loan. The interest rate swaps do not cover the interest rate floor. As a result, our effective interest rate will be 1.77725% plus the amount, if any, by which LIBOR is below 0.25%. The interest rate swaps become effective on September 29, 2020 and March 19, 2021 upon the maturity of the interest rate swaps previously designated to the Unsecured Term Loan B and Unsecured Term Loan C and mature on April 18, 2023.

The following table summarizes our debt capital structure as of March 31, 2020.

Debt Capital Structure	March 31, 2020
Total principal outstanding (in thousands)	$	1,829,588
Weighted average duration (years)	3.7
% Secured debt	3.0		%
% Debt maturing next 12 months(1)	16.4		%
Net Debt to Real Estate Cost Basis(2)	32.0		%

(1)Represents the Unsecured Term Loan B and Unsecured Term Loan C, which, subsequent to March 31, 2020, were repaid in full in connection with the new unsecured term loan agreement entered into on April 17, 2020, as previously discussed.

(2)We define Net Debt as our amounts outstanding under our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes, less cash and cash equivalents. We define Real Estate Cost Basis as 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 building acquisition funding needs. 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 as it relates to interest expense payments on our floating rate debt is managed through our 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

The following table summarizes our outstanding preferred stock issuances as of March 31, 2020.

Preferred Stock Issuances	Issuance Date	Number of Shares	Liquidation Value Per Share		Interest Rate
Series C Preferred Stock	March 17, 2016	3,000,000	$	25.00	6.875	%

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Common Stock

The following table summarizes our at-the-market (“ATM”) common stock offering program as of March 31, 2020. We may from time to time sell common stock through sales agents under the program. There was no activity under the ATM common stock offering program during the three months ended March 31, 2020.

ATM Common Stock Offering Program	Date	Maximum Aggregate Offering Price (in thousands)		Aggregate Common Stock Available as of March 31, 2020 (in thousands)
2019 $600 million ATM	February 14, 2019	$	600,000	$	318,248

On January 13, 2020, we completed an underwritten public offering of an aggregate 10,062,500 shares of common stock at a price to the underwriters of $30.9022 per share, consisting of (i) 5,600,000 shares offered directly by us and (ii) 4,462,500 shares offered by the forward dealer in connection with certain forward sale agreements (including 1,312,500 shares offered pursuant to the underwriters’ option to purchase additional shares, which option was exercised in full). The offering closed on January 16, 2020 and we received net proceeds from the sale of shares offered directly by us of approximately $173.1 million. Subject to our right to elect cash or net share settlement, we have the ability to settle the forward sales agreements at any time through scheduled maturity date of the forward sale agreements of January 13, 2021.

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, 2020, we owned approximately 97.5% of the Operating Partnership, and our current and former executive officers, directors, senior employees and their affiliates, and third parties who contributed properties to us in exchange for common units in our Operating Partnership, owned the remaining 2.5%.

Interest Rate Risk

We use interest rate swaps to fix the rate of our variable rate debt. As of March 31, 2020, all of our outstanding variable rate debt, with the exception of our unsecured credit facility and Unsecured Term Loan F, was fixed with interest rate swaps through maturity. The Unsecured Term Loan F will be swapped to a fixed rate effective July 15, 2020 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.

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The following table details our outstanding interest rate swaps as of March 31, 2020.

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
The Toronto-Dominion Bank	Oct-14-2015	Sep-29-2016	$	25,000	$	(116)	1.3830	%	One-month L	Sep-29-2020
PNC Bank, N.A.	Oct-14-2015	Sep-29-2016	$	50,000	$	(234)	1.3906	%	One-month L	Sep-29-2020
Regions Bank	Oct-14-2015	Sep-29-2016	$	35,000	$	(163)	1.3858	%	One-month L	Sep-29-2020
U.S. Bank, N.A.	Oct-14-2015	Sep-29-2016	$	25,000	$	(118)	1.3950	%	One-month L	Sep-29-2020
Capital One, N.A.	Oct-14-2015	Sep-29-2016	$	15,000	$	(71)	1.3950	%	One-month L	Sep-29-2020
Royal Bank of Canada	Jan-08-2015	Mar-20-2015	$	25,000	$	(334)	1.7090	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank	Jan-08-2015	Mar-20-2015	$	25,000	$	(334)	1.7105	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank	Jan-08-2015	Sep-10-2017	$	100,000	$	(1,840)	2.2255	%	One-month L	Mar-21-2021
Wells Fargo, N.A.	Jan-08-2015	Mar-20-2015	$	25,000	$	(775)	1.8280	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jan-08-2015	Feb-14-2020	$	25,000	$	(1,091)	2.4535	%	One-month L	Mar-31-2022
Regions Bank	Jan-08-2015	Feb-14-2020	$	50,000	$	(2,204)	2.4750	%	One-month L	Mar-31-2022
Capital One, N.A.	Jan-08-2015	Feb-14-2020	$	50,000	$	(2,259)	2.5300	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,077)	1.8485	%	One-month L	Jan-04-2023
Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,079)	1.8505	%	One-month L	Jan-04-2023
Wells Fargo, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,079)	1.8505	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,077)	1.8485	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(2,154)	1.8475	%	One-month L	Jan-04-2023
The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,890)	2.9180	%	One-month L	Jan-12-2024
PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,892)	2.9190	%	One-month L	Jan-12-2024
Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,892)	2.9190	%	One-month L	Jan-12-2024
U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(2,446)	2.9190	%	One-month L	Jan-12-2024
Wells Fargo, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,195)	2.2460	%	One-month L	Jan-15-2025
U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,194)	2.2459	%	One-month L	Jan-15-2025
Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	(4,195)	2.2459	%	One-month L	Jan-15-2025
Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	(3,005)	1.7165	%	One-month L	Jan-15-2025

The swaps outlined in the above table were 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, 2020, the fair value of all of our 25 interest rate swaps were in a liability position of approximately $48.7 million, including any adjustment for nonperformance risk related to these agreements.

As of March 31, 2020, we had $1,200.0 million of variable rate debt. As of March 31, 2020, all of our outstanding variable rate debt, with the exception of our unsecured credit facility and Unsecured Term Loan F, was fixed with interest rate swaps through maturity. The Unsecured Term Loan F will be swapped to a fixed rate effective July 15, 2020 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, 2020, we had letters of credit related to development projects and certain other agreements of approximately $3.0 million. As of March 31, 2020, 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.

As of March 31, 2020, we had $1,200.0 million of variable rate debt outstanding. As of March 31, 2020, all of our outstanding variable rate debt, with the exception of $425.0 million outstanding under our unsecured credit facility and Unsecured Term

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Loan F, was fixed with interest rate swaps through maturity. The Unsecured Term Loan F will be swapped to a fixed rate effective July 15, 2020 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 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. If interest rates increased by 100 basis points and assuming we had an outstanding balance of $425.0 million on our unsecured credit facility and Unsecured Term Loan F (the portion outstanding at March 31, 2020 not fixed by interest rate swaps) for the three months ended March 31, 2020, our interest expense would have increased by approximately $1.1 million for the three months ended March 31, 2020.

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, 2020. 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, 2020 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, 2019 filed with the SEC on February 12, 2020.

The COVID-19 pandemic or any future pandemic, epidemic or outbreak of infectious disease could have material and adverse effects on our business, financial condition, results of operations and cash flows and the markets and communities in which we and our tenants operate.

Since initially being reported in December 2019, COVID-19 has spread around the world, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. The COVID-19 pandemic has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving and many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly. Many experts predict that the COVID-19 pandemic will trigger a period of global economic slowdown or recession. The rapid development and fluidity of the COVID-19 pandemic precludes any prediction as to the ultimate adverse impact of COVID-19.

The COVID-19 pandemic or any 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;

•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 ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential impacts on our business and operations, our tenant’s business and operations or the global economy as a whole. While the spread of COVID-19 may eventually be contained or mitigated, there is no guarantee that a future outbreak or any other widespread epidemics will not occur, or that the global economy will recover, either of which could materially harm our business.

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

Recent Sales of Unregistered Equity Securities

During the quarter ended March 31, 2020, the Operating Partnership issued 197,775 common units in the Operating Partnership upon exchange of outstanding long term incentive plan units pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated. Subject to certain restrictions, common units in the Operating Partnership may be redeemed for cash

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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, 2020, we issued 219,390 shares of common stock upon redemption of 219,390 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, 2020, 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, 2020 - January 31, 2020	51,360	$	31.48	—	$	—
February 1, 2020 - February 29, 2020	—	$	—	—	$	—
March 1, 2020 - March 31, 2020	—	$	—	—	$	—
Total/weighted average	51,360	$	31.48	—	$	—

(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, as amended and restated. 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

None.

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Item 6.  Exhibits

Exhibit  Number	Description of Document
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 *	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 *	XBRL Taxonomy Extension Schema Document
101.CAL *	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF *	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB *	XBRL Taxonomy Extension Label Linkbase Document
101.PRE *	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: April 30, 2020	BY:	/s/ WILLIAM R. CROOKER
		William R. Crooker
		Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer)
	BY:	/s/ JACLYN M. PAUL
		Jaclyn M. Paul
		Chief Accounting Officer, Senior Vice President (Principal Accounting Officer)

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EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Benjamin S. Butcher, certify that:

1.I have reviewed this quarterly report on Form 10-Q of STAG Industrial, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2020	/s/ BENJAMIN S. BUTCHER
	Benjamin S. Butcher Chairman, Chief Executive Officer and President

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, William R. Crooker, certify that:

1.I have reviewed this quarterly report on Form 10-Q of STAG Industrial, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 30, 2020	/s/ WILLIAM R. CROOKER
	William R. Crooker Chief Financial Officer, Executive Vice President and Treasurer

EX-32.1

Exhibit 32.1

Certification Pursuant To

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of STAG Industrial, Inc. on Form 10-Q for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officers of STAG Industrial, Inc., certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)the Report, containing the financial statements, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of STAG Industrial, Inc.

Date: April 30, 2020	/s/ BENJAMIN S. BUTCHER
	Benjamin S. Butcher Chairman, Chief Executive Officer and President
	/s/ WILLIAM R. CROOKER
	William R. Crooker Chief Financial Officer, Executive Vice President and Treasurer

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments [Table Text Block]

The following table summarizes the Company’s outstanding interest rate swaps as of March 31, 2020. All of the Company’s interest rate swaps 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
The Toronto-Dominion Bank	Oct-14-2015	Sep-29-2016	$	25,000	$	(116)	1.3830	%	One-month L	Sep-29-2020
PNC Bank, N.A.	Oct-14-2015	Sep-29-2016	$	50,000	$	(234)	1.3906	%	One-month L	Sep-29-2020
Regions Bank	Oct-14-2015	Sep-29-2016	$	35,000	$	(163)	1.3858	%	One-month L	Sep-29-2020
U.S. Bank, N.A.	Oct-14-2015	Sep-29-2016	$	25,000	$	(118)	1.3950	%	One-month L	Sep-29-2020
Capital One, N.A.	Oct-14-2015	Sep-29-2016	$	15,000	$	(71)	1.3950	%	One-month L	Sep-29-2020
Royal Bank of Canada	Jan-08-2015	Mar-20-2015	$	25,000	$	(334)	1.7090	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank	Jan-08-2015	Mar-20-2015	$	25,000	$	(334)	1.7105	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank	Jan-08-2015	Sep-10-2017	$	100,000	$	(1,840)	2.2255	%	One-month L	Mar-21-2021
Wells Fargo, N.A.	Jan-08-2015	Mar-20-2015	$	25,000	$	(775)	1.8280	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jan-08-2015	Feb-14-2020	$	25,000	$	(1,091)	2.4535	%	One-month L	Mar-31-2022
Regions Bank	Jan-08-2015	Feb-14-2020	$	50,000	$	(2,204)	2.4750	%	One-month L	Mar-31-2022
Capital One, N.A.	Jan-08-2015	Feb-14-2020	$	50,000	$	(2,259)	2.5300	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,077)	1.8485	%	One-month L	Jan-04-2023
Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,079)	1.8505	%	One-month L	Jan-04-2023
Wells Fargo, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,079)	1.8505	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,077)	1.8485	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(2,154)	1.8475	%	One-month L	Jan-04-2023
The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,890)	2.9180	%	One-month L	Jan-12-2024
PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,892)	2.9190	%	One-month L	Jan-12-2024
Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,892)	2.9190	%	One-month L	Jan-12-2024
U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(2,446)	2.9190	%	One-month L	Jan-12-2024
Wells Fargo, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,195)	2.2460	%	One-month L	Jan-15-2025
U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,194)	2.2459	%	One-month L	Jan-15-2025
Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	(4,195)	2.2459	%	One-month L	Jan-15-2025
Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	(3,005)	1.7165	%	One-month L	Jan-15-2025

Schedule of interest rate swaps

The following table summarizes the fair value of the interest rate swaps outstanding as of March 31, 2020 and December 31, 2019.

Balance Sheet Line Item (in thousands)	Notional Amount March 31, 2020		Fair Value March 31, 2020		Notional Amount December 31, 2019		Fair Value December 31, 2019
Interest rate swaps-Asset	$	—	$	—	$	250,000	$	303
Interest rate swaps-Liability	$	975,000	$	(48,714)	$	850,000	$	(18,819)

Schedule of the location in the financial statements of the gain or loss recognized on interest rate swaps

The following table summarizes the effect of cash flow hedge accounting and the location in the consolidated financial statements for the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Effect of Cash Flow Hedge Accounting (in thousands)	2020		2019
Loss recognized in accumulated other comprehensive loss on interest rate swaps	$	31,087	$	5,856
Income (loss) reclassified from accumulated other comprehensive loss into income as interest expense	$	(896)	$	1,122
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	14,864	$	12,834

Schedule of financial instruments accounted for at fair value on a recurring basis

The following table summarizes the Company’s financial instruments that are accounted for at fair value on a recurring basis as of March 31, 2020 and December 31, 2019. 

			Fair Value Measurements as of March 31, 2020 Using
Balance Sheet Line Item (in thousands)	Fair Value March 31, 2020		Level 1		Level 2		Level 3
Interest rate swaps-Asset	$	—	$	—	$	—	$	—
Interest rate swaps-Liability	$	(48,714)	$	—	$	(48,714)	$	—

			Fair Value Measurements as of December 31, 2019 Using
Balance Sheet Line Item (in thousands)	Fair Value December 31, 2019		Level 1		Level 2		Level 3
Interest rate swaps-Asset	$	303	$	—	$	303	$	—
Interest rate swaps-Liability	$	(18,819)	$	—	$	(18,819)	$	—

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Quarterly Financial Information

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, 2019.

Basis of Presentation

Basis of Presentation

The Company’s consolidated financial statements include the accounts of the Company, the Operating Partnership, and their 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 eliminated in the consolidation of entities. The financial statements of the Company are presented on a consolidated basis for all periods presented.

New Accounting Pronouncements

New Accounting Standards

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the quarter ended March 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to

assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

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Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Operating Lease, Lease Income [Table Text Block]

The following table summarizes the components of rental income recognized during the three months ended March 31, 2020 and 2019 included in the accompanying Consolidated Statements of Operations.

	Three months ended March 31,
Rental Income (in thousands)	2020		2019
Fixed lease payments	$	90,396	$	72,117
Variable lease payments	25,006		22,181
Straight-line rental income	3,927		2,284
Net decrease to rental income related to above and below market lease amortization	(990)		(967)
Total rental income	$	118,339	$	95,615

Lessor, Operating Lease, Payments to be Received, Maturity

The following table summarizes the maturity of fixed lease payments under the Company’s leases as of March 31, 2020.

Year	Maturity of Fixed Lease Payments (in thousands)
Remainder of 2020	$	273,733
2021	$	333,967
2022	$	297,877
2023	$	256,251
2024	$	212,829
Thereafter	$	798,803

Lease, Cost [Table Text Block]

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, 2020 and December 31, 2019.

Operating Lease Term and Discount Rate	March 31, 2020		December 31, 2019
Weighted average remaining lease term (years)	27.1		36.0
Weighted average discount rate	6.8	%	7.1	%

The following table summarizes the operating lease cost recognized during the three months ended March 31, 2020 and 2019 included in the Company’s Consolidated Statements of Operations.

	Three months ended March 31,
Operating Lease Cost (in thousands)	2020		2019
Operating lease cost included in property expense attributable to ground leases	$	331	$	331
Operating lease cost included in general and administrative expense attributable to corporate office lease	318		266
Total operating lease cost	$	649	$	597

The following table summarizes supplemental cash flow information related to operating leases recognized during the three months ended March 31, 2020 and 2019 in the Company’s Consolidated Statements of Cash Flows.

	Three months ended March 31,
Operating Leases (in thousands)	2020		2019
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	571	$	569
Right-of-use assets obtained in exchange for new lease liabilities	$	7,718	$	—

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office lease as of March 31, 2020.

Year	Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2020	$	1,723
2021	2,102
2022	2,975
2023	3,021
2024	3,064
Thereafter	50,017
Total lease payments	62,902
Less: Imputed interest	(38,438)
Present value of operating lease liabilities	$	24,464

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

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	Apr. 29, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	1-34907
Entity Registrant Name	STAG Industrial, Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	27-3099608
Entity Address, Address Line One	One Federal Street
Entity Address, Address Line Two	23rd Floor
Entity Address, City or Town	Boston,
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02110
City Area Code	617
Local Phone Number	574-4777
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		148,713,097
Entity Central Index Key	0001479094
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Central Index Key	0001479094
Current Fiscal Year End Date	--12-31
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	STAG
Security Exchange Name	NYSE
Series C Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	6.875% Series C Cumulative Redeemable Preferred Stock ($0.01 par value)
Trading Symbol	STAG-PC
Security Exchange Name	NYSE

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Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 65,038	$ 7,389
Other comprehensive loss:
Loss on interest rate swaps	(30,191)	(6,978)
Other comprehensive loss	(30,191)	(6,978)
Comprehensive income	34,847	411
Income attributable to noncontrolling interest after preferred stock dividends	(1,598)	(214)
Other comprehensive loss attributable to noncontrolling interest	757	244
Comprehensive income attributable to STAG Industrial, Inc.	$ 34,006	$ 441

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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, 2019.

Basis of Presentation

The Company’s consolidated financial statements include the accounts of the Company, the Operating Partnership, and their 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 eliminated in the consolidation of entities. The financial statements of the Company are presented on a consolidated basis for all periods presented.

New Accounting Standards

In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the quarter ended March 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to

assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

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, 2020		December 31, 2019
Cash and cash equivalents	$	324,877	$	9,041
Restricted cash	16,506		2,823
Total cash and cash equivalents and restricted cash	$	341,383	$	11,864

Taxes

Federal Income Taxes

The Company’s taxable REIT subsidiaries recognized net loss of approximately $0 and $12,000 for the three months ended March 31, 2020 and 2019, respectively, which has been included on the accompanying Consolidated Statements of Operations.

State and Local Income, Excise, and Franchise Tax

State and local income, excise, and franchise taxes in the amount of $0.4 million and $0.2 million have been recorded in other expenses on the accompanying Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019, respectively.

Uncertain Tax Positions

As of March 31, 2020 and December 31, 2019, there were no liabilities for uncertain tax positions.

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.

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Subsequent Events - Debt (Details) $ in Thousands	Apr. 17, 2020 USD ($)	Apr. 20, 2020 USD ($) derivative	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Subsequent Event [Line Items]
Long-term debt, gross			$ 1,829,588	$ 1,651,085
Derivative, Number of Instruments Held | derivative		4
Subsequent Event [Member]
Subsequent Event [Line Items]
Derivative, Number of Instruments Held | derivative		4
Derivative notional amount swapped		$ 300,000
Fixed Interest Rate (as a percent)		0.27725%
Debt Instrument, Interest Rate, Effective Percentage		1.77725%
$300 Million Unsecured Term Loan [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Long-term debt, gross	$ 300,000
$300 Million Unsecured Term Loan [Member] | Subsequent Event [Member] | London Interbank Offered Rate (LIBOR) [Member]
Subsequent Event [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.50%
$300 Million Unsecured Term Loan [Member] | Subsequent Event [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Subsequent Event [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.25%
$150 Million Wells Fargo Unsecured Term Loan B | Subsequent Event [Member]
Subsequent Event [Line Items]
Repayments of Debt	$ 150,000
$150 Million Wells Fargo Unsecured Term Loan C | Subsequent Event [Member]
Subsequent Event [Line Items]
Repayments of Debt	$ 150,000

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Leases - Maturity of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Leases [Abstract]
2020	$ 1,723
2021	2,102
2022	2,975
2023	3,021
2024	3,064
Thereafter	50,017
Lessee, Operating Lease, Liability, Payments, Due	62,902
Less: Imputed interest	(38,438)
Operating lease liabilities	$ 24,464	$ 16,989

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Equity - Common Stock ATM (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Jan. 16, 2020	Jan. 13, 2020	Dec. 31, 2019	Mar. 31, 2020
Class of Stock [Line Items]
Common Stock, Shares Authorized			300,000,000	300,000,000
Net proceeds from the sale of common stock	$ 173,100
Sale of Stock, Number of Shares Issued in Transaction		10,062,500
Shares Issued, Price Per Share		$ 30.9022
Warrant [Member]
Class of Stock [Line Items]
Sale of Stock, Number of Shares Issued in Transaction		4,462,500
Common Stock
Class of Stock [Line Items]
Sale of Stock, Number of Shares Issued in Transaction		5,600,000
At The Market Program 2019 $600 Million
Class of Stock [Line Items]
Common Stock Value Authorized under Stock Offering Program				$ 600,000
At The Market Program 2019 $600 Million | Common Stock
Class of Stock [Line Items]
Aggregate value of common stock available to be sold under the ATM				$ 318,248
Number of shares sold			9,711,706
Net proceeds from the sale of common stock			$ 279,156
Over-Allotment Option
Class of Stock [Line Items]
Sale of Stock, Number of Shares Issued in Transaction		1,312,500
Weighted Average | At The Market Program 2019 $600 Million | Common Stock
Class of Stock [Line Items]
Sale of Stock, Price Per Share			$ 29.01

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Debt - Summary (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,829,588	$ 1,651,085
Unamortized debt issuance costs	(5,653)	(6,111)
Unamortized fair market value premium	37	39
Principal outstanding	$ 1,823,972	1,645,013
Weighted average interest rate	3.28%
Interest Rate Swaps
Debt Instrument [Line Items]
Derivative notional amount swapped	$ 775,000
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Stated interest rate	0.99288%
Unsecured Credit Facility
Debt Instrument [Line Items]
Principal outstanding	$ 225,000	146,000
Debt Instrument, Maturity Date	Jan. 12, 2024
Maximum borrowing capacity	$ 500,000
Unsecured Credit Facility | Prepaid Expenses and Other Assets
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ (2,200)	(2,400)
Unsecured Credit Facility | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.90%
Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	$ 975,000	875,000
Unamortized debt issuance costs	(3,299)	(3,625)
Principal outstanding	971,701	871,375
Unsecured Term Loans | $150 Million Wells Fargo Unsecured Term Loan C
Debt Instrument [Line Items]
Long-term debt, gross	$ 150,000	150,000
Debt Instrument, Interest Rate, Effective Percentage	2.39%
Debt Instrument, Maturity Date	Sep. 29, 2020
Fixed Interest Rate (as a percent)	1.39%
Unsecured Term Loans | $150 Million Wells Fargo Unsecured Term Loan B
Debt Instrument [Line Items]
Long-term debt, gross	$ 150,000	150,000
Debt Instrument, Interest Rate, Effective Percentage	3.05%
Debt Instrument, Maturity Date	Mar. 21, 2021
Fixed Interest Rate (as a percent)	2.05%
Unsecured Term Loans | $150 Million Wells Fargo Unsecured Term Loan A
Debt Instrument [Line Items]
Long-term debt, gross	$ 150,000	150,000
Debt Instrument, Interest Rate, Effective Percentage	3.38%
Debt Instrument, Maturity Date	Mar. 31, 2022
Fixed Interest Rate (as a percent)	2.38%
Unsecured Term Loans | $150 Million Unsecured Term Loan D [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 150,000	150,000
Debt Instrument, Interest Rate, Effective Percentage	2.85%
Debt Instrument, Maturity Date	Jan. 04, 2023
Fixed Interest Rate (as a percent)	1.85%
Unsecured Term Loans | $175 Million Unsecured Term Loan E [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 175,000	175,000
Debt Instrument, Interest Rate, Effective Percentage	3.92%
Debt Instrument, Maturity Date	Jan. 15, 2024
Fixed Interest Rate (as a percent)	2.92%
Unsecured Term Loans | $200 Million Unsecured Term Loan F [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 200,000	100,000
Debt Instrument, Maturity Date	Jan. 12, 2025
Fixed Interest Rate (as a percent)	2.11%
Unsecured Term Loans | $200 Million Unsecured Term Loan F [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.00%
Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 575,000	575,000
Unamortized debt issuance costs	(2,018)	(2,117)
Principal outstanding	572,982	572,883
Unsecured Notes | $100 Million Series F Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 100,000	100,000
Stated interest rate	3.98%
Debt Instrument, Maturity Date	Jan. 05, 2023
Unsecured Notes | $50 Million Series A Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 50,000	50,000
Stated interest rate	4.98%
Debt Instrument, Maturity Date	Oct. 01, 2024
Unsecured Notes | $100 Million Series D Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 100,000	100,000
Stated interest rate	4.32%
Debt Instrument, Maturity Date	Feb. 20, 2025
Unsecured Notes | $75 Million Series G Unsecured Notes [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 75,000	75,000
Stated interest rate	4.10%
Debt Instrument, Maturity Date	Jun. 13, 2025
Unsecured Notes | $50 Million Series B Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 50,000	50,000
Stated interest rate	4.98%
Debt Instrument, Maturity Date	Jul. 01, 2026
Unsecured Notes | $80 Million Series C Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 80,000	80,000
Stated interest rate	4.42%
Debt Instrument, Maturity Date	Dec. 30, 2026
Unsecured Notes | $20 Million Series E Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, gross	$ 20,000	20,000
Stated interest rate	4.42%
Debt Instrument, Maturity Date	Feb. 20, 2027
Unsecured Notes | $100 Million Series H Unsecured Notes [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 100,000	100,000
Stated interest rate	4.27%
Debt Instrument, Maturity Date	Jun. 13, 2028
Mortgage Loans Payable
Debt Instrument [Line Items]
Long-term debt, gross	$ 54,588	55,085
Unamortized debt issuance costs	(336)	(369)
Unamortized fair market value premium	37	39
Principal outstanding	54,289	54,755
Mortgage Loans Payable | Wells Fargo Bank, National Association CMBS Loan
Debt Instrument [Line Items]
Long-term debt, gross	$ 50,939	51,406
Stated interest rate	4.31%
Debt Instrument, Maturity Date	Dec. 01, 2022
Penalty free prepayment period	3 months
Mortgage Loans Payable | Thrivent Financial for Lutherans Due December 15, 2023 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 3,649	$ 3,679
Stated interest rate	4.78%
Debt Instrument, Maturity Date	Dec. 15, 2023
Penalty free prepayment period	3 months

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Derivative Financial Instruments - FV of Interest Rate Swaps (Details) - Interest Rate Swaps - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Fair value of the interest rate swaps outstanding
Notional amount assets	$ 0	$ 250,000
Fair value - assets	0	303
Notional amount liabilities	975,000	850,000
Fair Value - liabilities	$ (48,714)	$ (18,819)

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Noncontrolling Interest - LTIP Units (Details) - LTIP Units - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		12 Months Ended
	Jan. 08, 2020	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Jan. 01, 2020
Units
Unvested at beginning of period (in shares)		227,348	251,216	251,216
Granted	136,741	278,806		364,173
Vested (in units)		(130,187)	(157,689)	(371,423)
Forfeited (in units)		0		(16,618)
Unvested at end of period (in shares)		375,967		227,348
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value		$ 26.51			$ 23.37
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 29.47	29.47
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value		$ 27.37
Unrecognized compensation costs		$ 7,500
Unrecognized compensation costs, period for recognition		2 years 7 months 6 days
Vested (in units)		130,187	157,689	371,423
Fair value of units vested		$ 3,861	$ 4,063

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Equity - Common Stock Dividends (Details) - $ / shares		1 Months Ended															3 Months Ended	12 Months Ended
	Apr. 09, 2020	Mar. 31, 2020	Feb. 29, 2020	Jan. 31, 2020	Dec. 31, 2019	Nov. 30, 2019	Oct. 31, 2019	Sep. 30, 2019	Aug. 31, 2019	Jul. 31, 2019	Jun. 30, 2019	May 31, 2019	Apr. 30, 2019	Mar. 31, 2019	Feb. 28, 2019	Jan. 31, 2019	Mar. 31, 2020	Dec. 31, 2019
Class of Stock [Line Items]
Common Stock, Shares Authorized		300,000,000			300,000,000												300,000,000	300,000,000
Common Stock, Dividends, Per Share, Cash Paid					$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167		$ 1.430004
Common Stock, Dividends, Per Share, Declared		$ 0.12	$ 0.12	$ 0.12	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.119167	$ 0.36	$ 1.430004
Subsequent Event [Member]
Class of Stock [Line Items]
Common Stock, Dividends, Per Share, Declared	$ 0.12
Common Stock
Class of Stock [Line Items]
Dividends Payable, Date Declared		Jan. 08, 2020	Jan. 08, 2020	Jan. 08, 2020	Oct. 15, 2019	Oct. 15, 2019	Oct. 15, 2019	Jul. 15, 2019	Jul. 15, 2019	Jul. 15, 2019	Apr. 09, 2019	Apr. 09, 2019	Apr. 09, 2019	Jan. 10, 2019	Jan. 10, 2019	Jan. 10, 2019
Dividends Payable, Date to be Paid		Apr. 15, 2020	Mar. 16, 2020	Feb. 18, 2020	Jan. 15, 2020	Dec. 16, 2019	Nov. 15, 2019	Oct. 15, 2019	Sep. 16, 2019	Aug. 15, 2019	Jul. 15, 2019	Jun. 17, 2019	May 15, 2019	Apr. 15, 2019	Mar. 15, 2019	Feb. 15, 2019

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Leases - Rental Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Fixed lease payments	$ 90,396	$ 72,117
Variable lease payments	25,006	22,181
Straight-line rental income	3,927	2,284
Net decrease to rental income related to above and below market lease amortization	(990)	(967)
Rental income	$ 118,339	$ 95,615

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Rental Property - Held for Sale (Details)	3 Months Ended
	Mar. 31, 2020 USD ($) building	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Long Lived Assets Held-for-sale [Line Items]
Real Estate Held-for-sale	$ 1,157,000		$ 43,019,000
Number of properties | building	456
Disposal Group, Held-for-sale, Not Discontinued Operations [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of properties | building	1
Disposal Group, Including Discontinued Operation, Operating Income (Loss)	$ (40,000)	$ (44,000)
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Land [Member]
Long Lived Assets Held-for-sale [Line Items]
Real Estate Held-for-sale	200,000
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Building and Building Improvements [Member]
Long Lived Assets Held-for-sale [Line Items]
Real Estate Held-for-sale	$ 1,000,000.0

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Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Cash and cash equivalents	$ 324,877	$ 9,041
Restricted cash	16,506	2,823
Cash and cash equivalents and restricted cash—end of period	$ 341,383	$ 11,864	$ 12,308	$ 22,542

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Rental Property - Acquisitions - Allocation of Consideration (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Allocation of the consideration paid for the acquired assets and liabilities
Land	$ 9,311
Buildings	84,409
Tenant improvements	1,438
Building and land improvements	4,360
Other assets	450
Total purchase price	119,343
Construction in progress
Allocation of the consideration paid for the acquired assets and liabilities
Construction in progress	669
In-place leases
Allocation of the consideration paid for the acquired assets and liabilities
Deferred leasing intangibles	$ (13,788)
Weighted average amortization period of lease intangibles	7 years 9 months 18 days
Tenant relationships
Allocation of the consideration paid for the acquired assets and liabilities
Deferred leasing intangibles	$ (6,589)
Weighted average amortization period of lease intangibles	11 years 1 month 6 days
Above market leases
Allocation of the consideration paid for the acquired assets and liabilities
Deferred leasing intangibles	$ (901)
Weighted average amortization period of lease intangibles	5 years 6 months
Below market leases
Allocation of the consideration paid for the acquired assets and liabilities
Deferred leasing intangibles	$ 2,572
Weighted average amortization period of lease intangibles	5 years 4 months 24 days

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Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

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”). 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 recognized during the three months ended March 31, 2020 and 2019 included in the accompanying Consolidated Statements of Operations.

	Three months ended March 31,
Rental Income (in thousands)	2020		2019
Fixed lease payments	$	90,396	$	72,117
Variable lease payments	25,006		22,181
Straight-line rental income	3,927		2,284
Net decrease to rental income related to above and below market lease amortization	(990)		(967)
Total rental income	$	118,339	$	95,615

As of March 31, 2020 and December 31, 2019, the Company had accrued rental income of approximately $48.3 million and $44.3 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.

As of March 31, 2020 and December 31, 2019, the Company had approximately $28.2 million and $22.6 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, 2020 and December 31, 2019, 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, 2020 and December 31, 2019, the Company’s total liability associated with these lease security deposits was approximately $9.9 million and $9.8 million, respectively, and is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.

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 $4.8 million and $3.9 million for the three months ended March 31, 2020 and 2019, 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, 2020.

Year	Maturity of Fixed Lease Payments (in thousands)
Remainder of 2020	$	273,733
2021	$	333,967
2022	$	297,877
2023	$	256,251
2024	$	212,829
Thereafter	$	798,803

Lessee Leases

The Company has operating leases in which it is the lessee for ground leases and its corporate office lease. These leases have remaining lease terms of approximately 6.3 years to 46.8 years. Certain ground leases contain options to extend the leases for five 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, 2020 and December 31, 2019.

Operating Lease Term and Discount Rate	March 31, 2020		December 31, 2019
Weighted average remaining lease term (years)	27.1		36.0
Weighted average discount rate	6.8	%	7.1	%

The following table summarizes the operating lease cost recognized during the three months ended March 31, 2020 and 2019 included in the Company’s Consolidated Statements of Operations.

	Three months ended March 31,
Operating Lease Cost (in thousands)	2020		2019
Operating lease cost included in property expense attributable to ground leases	$	331	$	331
Operating lease cost included in general and administrative expense attributable to corporate office lease	318		266
Total operating lease cost	$	649	$	597

The following table summarizes supplemental cash flow information related to operating leases recognized during the three months ended March 31, 2020 and 2019 in the Company’s Consolidated Statements of Cash Flows.

	Three months ended March 31,
Operating Leases (in thousands)	2020		2019
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	571	$	569
Right-of-use assets obtained in exchange for new lease liabilities	$	7,718	$	—

The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office lease as of March 31, 2020.

Year	Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2020	$	1,723
2021	2,102
2022	2,975
2023	3,021
2024	3,064
Thereafter	50,017
Total lease payments	62,902
Less: Imputed interest	(38,438)
Present value of operating lease liabilities	$	24,464

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

Leases

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”). 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 recognized during the three months ended March 31, 2020 and 2019 included in the accompanying Consolidated Statements of Operations.

	Three months ended March 31,
Rental Income (in thousands)	2020		2019
Fixed lease payments	$	90,396	$	72,117
Variable lease payments	25,006		22,181
Straight-line rental income	3,927		2,284
Net decrease to rental income related to above and below market lease amortization	(990)		(967)
Total rental income	$	118,339	$	95,615

As of March 31, 2020 and December 31, 2019, the Company had accrued rental income of approximately $48.3 million and $44.3 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.

As of March 31, 2020 and December 31, 2019, the Company had approximately $28.2 million and $22.6 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, 2020 and December 31, 2019, 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, 2020 and December 31, 2019, the Company’s total liability associated with these lease security deposits was approximately $9.9 million and $9.8 million, respectively, and is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.

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 $4.8 million and $3.9 million for the three months ended March 31, 2020 and 2019, 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, 2020.

Year	Maturity of Fixed Lease Payments (in thousands)
Remainder of 2020	$	273,733
2021	$	333,967
2022	$	297,877
2023	$	256,251
2024	$	212,829
Thereafter	$	798,803

Lessee Leases

The Company has operating leases in which it is the lessee for ground leases and its corporate office lease. These leases have remaining lease terms of approximately 6.3 years to 46.8 years. Certain ground leases contain options to extend the leases for five 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, 2020 and December 31, 2019.

Operating Lease Term and Discount Rate	March 31, 2020		December 31, 2019
Weighted average remaining lease term (years)	27.1		36.0
Weighted average discount rate	6.8	%	7.1	%

The following table summarizes the operating lease cost recognized during the three months ended March 31, 2020 and 2019 included in the Company’s Consolidated Statements of Operations.

	Three months ended March 31,
Operating Lease Cost (in thousands)	2020		2019
Operating lease cost included in property expense attributable to ground leases	$	331	$	331
Operating lease cost included in general and administrative expense attributable to corporate office lease	318		266
Total operating lease cost	$	649	$	597

The following table summarizes supplemental cash flow information related to operating leases recognized during the three months ended March 31, 2020 and 2019 in the Company’s Consolidated Statements of Cash Flows.

	Three months ended March 31,
Operating Leases (in thousands)	2020		2019
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)	$	571	$	569
Right-of-use assets obtained in exchange for new lease liabilities	$	7,718	$	—

The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office lease as of March 31, 2020.

Year	Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2020	$	1,723
2021	2,102
2022	2,975
2023	3,021
2024	3,064
Thereafter	50,017
Total lease payments	62,902
Less: Imputed interest	(38,438)
Present value of operating lease liabilities	$	24,464

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

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Use of Derivative Financial Instruments

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 the Company’s outstanding interest rate swaps as of March 31, 2020. All of the Company’s interest rate swaps 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
The Toronto-Dominion Bank	Oct-14-2015	Sep-29-2016	$	25,000	$	(116)	1.3830	%	One-month L	Sep-29-2020
PNC Bank, N.A.	Oct-14-2015	Sep-29-2016	$	50,000	$	(234)	1.3906	%	One-month L	Sep-29-2020
Regions Bank	Oct-14-2015	Sep-29-2016	$	35,000	$	(163)	1.3858	%	One-month L	Sep-29-2020
U.S. Bank, N.A.	Oct-14-2015	Sep-29-2016	$	25,000	$	(118)	1.3950	%	One-month L	Sep-29-2020
Capital One, N.A.	Oct-14-2015	Sep-29-2016	$	15,000	$	(71)	1.3950	%	One-month L	Sep-29-2020
Royal Bank of Canada	Jan-08-2015	Mar-20-2015	$	25,000	$	(334)	1.7090	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank	Jan-08-2015	Mar-20-2015	$	25,000	$	(334)	1.7105	%	One-month L	Mar-21-2021
The Toronto-Dominion Bank	Jan-08-2015	Sep-10-2017	$	100,000	$	(1,840)	2.2255	%	One-month L	Mar-21-2021
Wells Fargo, N.A.	Jan-08-2015	Mar-20-2015	$	25,000	$	(775)	1.8280	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jan-08-2015	Feb-14-2020	$	25,000	$	(1,091)	2.4535	%	One-month L	Mar-31-2022
Regions Bank	Jan-08-2015	Feb-14-2020	$	50,000	$	(2,204)	2.4750	%	One-month L	Mar-31-2022
Capital One, N.A.	Jan-08-2015	Feb-14-2020	$	50,000	$	(2,259)	2.5300	%	One-month L	Mar-31-2022
The Toronto-Dominion Bank	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,077)	1.8485	%	One-month L	Jan-04-2023
Royal Bank of Canada	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,079)	1.8505	%	One-month L	Jan-04-2023
Wells Fargo, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,079)	1.8505	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	25,000	$	(1,077)	1.8485	%	One-month L	Jan-04-2023
PNC Bank, N.A.	Jul-20-2017	Oct-30-2017	$	50,000	$	(2,154)	1.8475	%	One-month L	Jan-04-2023
The Toronto-Dominion Bank	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,890)	2.9180	%	One-month L	Jan-12-2024
PNC Bank, N.A.	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,892)	2.9190	%	One-month L	Jan-12-2024
Bank of Montreal	Jul-24-2018	Jul-26-2019	$	50,000	$	(4,892)	2.9190	%	One-month L	Jan-12-2024
U.S. Bank, N.A.	Jul-24-2018	Jul-26-2019	$	25,000	$	(2,446)	2.9190	%	One-month L	Jan-12-2024
Wells Fargo, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,195)	2.2460	%	One-month L	Jan-15-2025
U.S. Bank, N.A.	May-02-2019	Jul-15-2020	$	50,000	$	(4,194)	2.2459	%	One-month L	Jan-15-2025
Regions Bank	May-02-2019	Jul-15-2020	$	50,000	$	(4,195)	2.2459	%	One-month L	Jan-15-2025
Bank of Montreal	Jul-16-2019	Jul-15-2020	$	50,000	$	(3,005)	1.7165	%	One-month L	Jan-15-2025

The following table summarizes the fair value of the interest rate swaps outstanding as of March 31, 2020 and December 31, 2019.

Balance Sheet Line Item (in thousands)	Notional Amount March 31, 2020		Fair Value March 31, 2020		Notional Amount December 31, 2019		Fair Value December 31, 2019
Interest rate swaps-Asset	$	—	$	—	$	250,000	$	303
Interest rate swaps-Liability	$	975,000	$	(48,714)	$	850,000	$	(18,819)

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 into interest expense in the same periods during which the hedged transaction affects earnings.

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 $15.9 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the next 12 months.

The following table summarizes the effect of cash flow hedge accounting and the location in the consolidated financial statements for the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Effect of Cash Flow Hedge Accounting (in thousands)	2020		2019
Loss recognized in accumulated other comprehensive loss on interest rate swaps	$	31,087	$	5,856
Income (loss) reclassified from accumulated other comprehensive loss into income as interest expense	$	(896)	$	1,122
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$	14,864	$	12,834

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, 2020, 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 of these provisions at March 31, 2020, it could have been required to settle its obligations under the agreement of the interest rate swaps in a net liability position by counterparty plus accrued interest for approximately $49.4 million.

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 itself and its counterparties. However, as of March 31, 2020 and December 31, 2019, 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.

The following table summarizes the Company’s financial instruments that are accounted for at fair value on a recurring basis as of March 31, 2020 and December 31, 2019. 

			Fair Value Measurements as of March 31, 2020 Using
Balance Sheet Line Item (in thousands)	Fair Value March 31, 2020		Level 1		Level 2		Level 3
Interest rate swaps-Asset	$	—	$	—	$	—	$	—
Interest rate swaps-Liability	$	(48,714)	$	—	$	(48,714)	$	—

			Fair Value Measurements as of December 31, 2019 Using
Balance Sheet Line Item (in thousands)	Fair Value December 31, 2019		Level 1		Level 2		Level 3
Interest rate swaps-Asset	$	303	$	—	$	303	$	—
Interest rate swaps-Liability	$	(18,819)	$	—	$	(18,819)	$	—

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Leases - Tenant Accounts Receivable (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Lease Security Deposits Available in Letters of Credit	$ 28.2		$ 22.6
Lease security deposits in restricted cash	0.7		0.7
Lease security deposits included in tenant prepaid rent and security deposits on the Balance Sheet	9.9		9.8
Real Estate Taxes, Tenant Responsibility	4.8	$ 3.9
Accrued Income Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Deferred Rent Receivables, Net	$ 48.3		$ 44.3

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Equity Incentive Plan - Performance Plan Assumptions (Details) - Performance shares $ in Thousands	Jan. 08, 2020 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	17.40%
Expected dividend yield	5.75%
Risk-free interest rate	1.59%
Fair value of performance units grant (in thousands)	$ 5,389

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Equity - Restricted Stock (Details) - Restricted stock - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		12 Months Ended
	Feb. 13, 2020	Jan. 08, 2020	Jan. 07, 2019	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Jan. 01, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)	4 years	4 years
Shares
Unvested at beginning of period (in shares)				193,045	190,462	190,462
Granted (in shares)				75,419		110,830
Vested (in shares)				(78,010)	(78,431)	(101,109)
Forfeited (in shares)				(542)		(7,138)
Unvested at end of period (in shares)				189,912		193,045
Fair value of restricted stock per share at grant date	$ 32.64	$ 31.49	$ 24.85	$ 31.60
Stock Repurchased and Retired During Period, Shares				33,119		28,504
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value				$ 27.77			$ 24.38
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value				23.11
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value				$ 24.85
Unrecognized compensation costs				$ 4,700
Unrecognized compensation costs, period for recognition				2 years 10 months 24 days
Vested (in shares)				(78,010)	(78,431)	(101,109)
Fair value of shares vested				$ 2,463	$ 1,951

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Organization and Description of Business (Details) ft² in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2020 ft² building state	Dec. 31, 2019
Real Estate Properties [Line Items]
Number of properties	456
Number of states in which the entity owned buildings | state	38
Area (in square feet) | ft²	91.8
STAG Industrial, Inc. [Member]
Real Estate Properties [Line Items]
Ownership interest in Operating Partnership (as a percent)	97.50%	97.50%
Warehouse - Distribution buildings
Real Estate Properties [Line Items]
Number of properties	378
Light Manufacturing buildings
Real Estate Properties [Line Items]
Number of properties	70
Flex/Office Buildings
Real Estate Properties [Line Items]
Number of properties	8

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Rental Property - Acquisitions (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) ft² building
Business Acquisition [Line Items]
Area (in square feet)	91,800,000
Acquisitions 2020
Business Acquisition [Line Items]
Area (in square feet)	1,599,389
Number of Buildings Acquired | building	9
Business Combination, Consideration Transferred | $	$ 119,343
Canton, MI - 1-10-20
Business Acquisition [Line Items]
Area (in square feet)	491,049
Number of Buildings Acquired | building	1
Business Combination, Consideration Transferred | $	$ 29,543
Rochester, NY - 1-10-20
Business Acquisition [Line Items]
Area (in square feet)	124,850
Number of Buildings Acquired | building	1
Business Combination, Consideration Transferred | $	$ 8,565
Hudson, WI - 2-6-20
Business Acquisition [Line Items]
Area (in square feet)	139,875
Number of Buildings Acquired | building	1
Business Combination, Consideration Transferred | $	$ 10,460
McClellan, CA - 2-6-20
Business Acquisition [Line Items]
Area (in square feet)	160,534
Number of Buildings Acquired | building	1
Business Combination, Consideration Transferred | $	$ 18,468
Richmond, VA - 2-6-20
Business Acquisition [Line Items]
Area (in square feet)	78,128
Number of Buildings Acquired | building	1
Business Combination, Consideration Transferred | $	$ 5,481
Muskego, WI - 2-7-20
Business Acquisition [Line Items]
Area (in square feet)	81,230
Number of Buildings Acquired | building	1
Business Combination, Consideration Transferred | $	$ 7,219
Warren, MI - 2-11-20
Business Acquisition [Line Items]
Area (in square feet)	311,123
Number of Buildings Acquired | building	1
Business Combination, Consideration Transferred | $	$ 23,141
Langhorne, PA - 3-9-20
Business Acquisition [Line Items]
Area (in square feet)	78,000
Number of Buildings Acquired | building	1
Business Combination, Consideration Transferred | $	$ 6,571
Tulsa, OK - 3-9-20
Business Acquisition [Line Items]
Area (in square feet)	134,600
Number of Buildings Acquired | building	1
Business Combination, Consideration Transferred | $	$ 9,895

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Rental Property - Loss on Impairments (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) building
Real Estate [Abstract]
Impairment of Real Estate | $	$ 5.3
Number of Buildings Impaired | building	1

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Earnings Per Share

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

During the three months ended March 31, 2020 and 2019, there were 181,747 and 213,856, respectively, of unvested restricted shares of common stock on a weighted average basis that were considered participating securities.

The following table reconciles the numerators and denominators in the computation of basic and diluted earnings per common share for the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Earnings Per Share (in thousands, except per share data)	2020		2019
Numerator
Net income attributable to common stockholders	$	62,072	$	5,807
Denominator
Weighted average common shares outstanding — basic	147,570		114,721
Effect of dilutive securities(1)
Share-based compensation	86		272
Shares issuable under forward sales agreements	—		—
Weighted average common shares outstanding — diluted	147,656		114,993
Net income per share — basic and diluted
Net income per share attributable to common stockholders — basic	$	0.42	$	0.05
Net income per share attributable to common stockholders — diluted	$	0.42	$	0.05

(1)During the three months ended March 31, 2020 and 2019, there were 182 and 214, unvested shares of restricted common stock, respectively, on a weighted average basis 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.

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Equity

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

Equity

Equity

Preferred Stock

The following table summarizes the Company’s outstanding preferred stock issuances as of March 31, 2020.

Preferred Stock Issuances	Issuance Date	Number of Shares	Liquidation Value Per Share		Interest Rate
6.875% Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock")	March 17, 2016	3,000,000	$	25.00	6.875	%

The following tables summarize the dividends attributable to the Company’s outstanding preferred stock issuances during the three months ended March 31, 2020 and the year ended December 31, 2019.

Quarter Ended 2020	Declaration Date	Series C Preferred Stock Per Share		Payment Date
March 31	January 8, 2020	$	0.4296875	March 31, 2020
Total		$	0.4296875

Quarter Ended 2019	Declaration Date	Series C Preferred Stock Per Share		Payment Date
December 31	October 15, 2019	$	0.4296875	December 31, 2019
September 30	July 15, 2019	0.4296875		September 30, 2019
June 30	April 9, 2019	0.4296875		July 1, 2019
March 31	January 10, 2019	0.4296875		April 1, 2019
Total		$	1.7187500

On April 9, 2020, the Company’s board of directors declared the Series C Preferred Stock dividends for the quarter ending June 30, 2020 at a quarterly rate of $0.4296875 per share.

Common Stock

The following table summarizes the terms of the Company’s at-the market (“ATM”) common stock offering program as of March 31, 2020.

ATM Common Stock Offering Program	Date	Maximum Aggregate Offering Price (in thousands)		Aggregate Common Stock Available as of March 31, 2020 (in thousands)
2019 $600 million ATM	February 14, 2019	$	600,000	$	318,248

The table below summarizes the activity under the ATM common stock offering program during the year ended December 31, 2019 (in thousands, except share data). There was no activity under the ATM common stock offering program during the three months ended March 31, 2020.

	Year ended December 31, 2019
ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share		Net Proceeds
2019 $600 million ATM	9,711,706	$	29.01	$	279,156
Total/weighted average	9,711,706	$	29.01	$	279,156

On January 13, 2020, the Company completed an underwritten public offering of an aggregate 10,062,500 shares of common stock at a price to the underwriters of $30.9022 per share, consisting of (i) 5,600,000 shares offered directly by the Company and (ii) 4,462,500 shares offered by the forward dealer in connection with certain forward sale agreements (including 1,312,500 shares offered pursuant to the underwriters’ option to purchase additional shares, which option was exercised in full). The offering closed on January 16, 2020 and the Company received net proceeds from the sale of shares offered directly by the Company of approximately $173.1 million. Subject to the Company’s right to elect cash or net share settlement, the Company has the ability to settle the forward sales agreements at any time through scheduled maturity date of the forward sale agreements of January 13, 2021.

The following tables summarize the dividends attributable to the Company’s outstanding shares of common stock that were declared during the three months ended March 31, 2020 and the year ended December 31, 2019.

Month Ended 2020	Declaration Date	Record Date	Per Share		Payment Date
March 31	January 8, 2020	March 31, 2020	$	0.12	April 15, 2020
February 29	January 8, 2020	February 28, 2020	0.12		March 16, 2020
January 31	January 8, 2020	January 31, 2020	0.12		February 18, 2020
Total			$	0.36

Month Ended 2019	Declaration Date	Record Date	Per Share		Payment Date
December 31	October 15, 2019	December 31, 2019	$	0.119167	January 15, 2020
November 30	October 15, 2019	November 29, 2019	0.119167		December 16, 2019
October 31	October 15, 2019	October 31, 2019	0.119167		November 15, 2019
September 30	July 15, 2019	September 30, 2019	0.119167		October 15, 2019
August 31	July 15, 2019	August 30, 2019	0.119167		September 16, 2019
July 31	July 15, 2019	July 31, 2019	0.119167		August 15, 2019
June 30	April 9, 2019	June 28, 2019	0.119167		July 15, 2019
May 31	April 9, 2019	May 31, 2019	0.119167		June 17, 2019
April 30	April 9, 2019	April 30, 2019	0.119167		May 15, 2019
March 31	January 10, 2019	March 29, 2019	0.119167		April 15, 2019
February 28	January 10, 2019	February 28, 2019	0.119167		March 15, 2019
January 31	January 10, 2019	January 31, 2019	0.119167		February 15, 2019
Total			$	1.430004

On April 9, 2020, the Company’s board of directors declared the common stock dividends for the months ending April 30, 2020, May 31, 2020, and June 30, 2020 at a monthly rate of $0.12 per share of common stock.

Restricted Shares of Common Stock

Restricted shares of common stock granted on February 13, 2020 and January 8, 2020 to certain employees of the Company, subject to the recipient’s continued employment, will vest in four equal installments on January 1 of each year beginning in 2021. Refer to Note 8 for a discussion of the restricted shares of common stock granted on January 8, 2020 pursuant to the January 6, 2017 performance units. The following table summarizes activity related to the Company’s unvested restricted shares of common stock for the three months ended March 31, 2020 and the year ended December 31, 2019.

Unvested Restricted Shares of Common Stock	Shares
Balance at December 31, 2018	190,462
Granted	110,830	(1)
Vested	(101,109)	(2)
Forfeited	(7,138)
Balance at December 31, 2019	193,045
Granted	75,419	(1)
Vested	(78,010)	(2)
Forfeited	(542)
Balance at March 31, 2020	189,912

(1)The fair value per share on the grant date of February 13, 2020, January 8, 2020, and January 7, 2019 was $32.64, $31.49, and $24.85, respectively.

(2)The Company repurchased and retired 33,119 and 28,504 restricted shares of common stock that vested during the three months ended March 31, 2020 and the year ended December 31, 2019, respectively.

The weighted average grant date fair value of unvested restricted shares of common stock was $24.38 per share at January 1, 2020, $31.60 per share granted during the three months ended March 31, 2020, $23.11 per share vested during the three months ended March 31, 2020, $24.85 per share forfeited during the three months ended March 31, 2020, and $27.77 per share at March 31, 2020.

The unrecognized compensation expense associated with the Company’s restricted shares of common stock at March 31, 2020 was approximately $4.7 million and is expected to be recognized over a weighted average period of approximately 2.9 years.

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, 2020 and 2019.

	Three months ended March 31,
Vested Restricted Shares of Common Stock	2020		2019
Vested restricted shares of common stock	78,010		78,431
Fair value of vested restricted shares of common stock (in thousands)	$	2,463	$	1,951

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted earnings per common share

The following table reconciles the numerators and denominators in the computation of basic and diluted earnings per common share for the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Earnings Per Share (in thousands, except per share data)	2020		2019
Numerator
Net income attributable to common stockholders	$	62,072	$	5,807
Denominator
Weighted average common shares outstanding — basic	147,570		114,721
Effect of dilutive securities(1)
Share-based compensation	86		272
Shares issuable under forward sales agreements	—		—
Weighted average common shares outstanding — diluted	147,656		114,993
Net income per share — basic and diluted
Net income per share attributable to common stockholders — basic	$	0.42	$	0.05
Net income per share attributable to common stockholders — diluted	$	0.42	$	0.05

(1)During the three months ended March 31, 2020 and 2019, there were 182 and 214, unvested shares of restricted common stock, respectively, on a weighted average basis 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.

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Equity (Tables)

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

Schedule of Stock by Class

The following table summarizes the Company’s outstanding preferred stock issuances as of March 31, 2020.

Preferred Stock Issuances	Issuance Date	Number of Shares	Liquidation Value Per Share		Interest Rate
6.875% Series C Cumulative Redeemable Preferred Stock ("Series C Preferred Stock")	March 17, 2016	3,000,000	$	25.00	6.875	%

Dividends Declared [Table Text Block]

The following tables summarize the dividends attributable to the Company’s outstanding preferred stock issuances during the three months ended March 31, 2020 and the year ended December 31, 2019.

Quarter Ended 2020	Declaration Date	Series C Preferred Stock Per Share		Payment Date
March 31	January 8, 2020	$	0.4296875	March 31, 2020
Total		$	0.4296875

Quarter Ended 2019	Declaration Date	Series C Preferred Stock Per Share		Payment Date
December 31	October 15, 2019	$	0.4296875	December 31, 2019
September 30	July 15, 2019	0.4296875		September 30, 2019
June 30	April 9, 2019	0.4296875		July 1, 2019
March 31	January 10, 2019	0.4296875		April 1, 2019
Total		$	1.7187500

On April 9, 2020, the Company’s board of directors declared the Series C Preferred Stock dividends for the quarter ending June 30, 2020 at a quarterly rate of $0.4296875 per share.

Schedule of stock sale activity

The following table summarizes the terms of the Company’s at-the market (“ATM”) common stock offering program as of March 31, 2020.

ATM Common Stock Offering Program	Date	Maximum Aggregate Offering Price (in thousands)		Aggregate Common Stock Available as of March 31, 2020 (in thousands)
2019 $600 million ATM	February 14, 2019	$	600,000	$	318,248

The table below summarizes the activity under the ATM common stock offering program during the year ended December 31, 2019 (in thousands, except share data). There was no activity under the ATM common stock offering program during the three months ended March 31, 2020.

	Year ended December 31, 2019
ATM Common Stock Offering Program	Shares Sold	Weighted Average Price Per Share		Net Proceeds
2019 $600 million ATM	9,711,706	$	29.01	$	279,156
Total/weighted average	9,711,706	$	29.01	$	279,156

On January 13, 2020, the Company completed an underwritten public offering of an aggregate 10,062,500 shares of common stock at a price to the underwriters of $30.9022 per share, consisting of (i) 5,600,000 shares offered directly by the Company and (ii) 4,462,500 shares offered by the forward dealer in connection with certain forward sale agreements (including 1,312,500 shares offered pursuant to the underwriters’ option to purchase additional shares, which option was exercised in full). The offering closed on January 16, 2020 and the Company received net proceeds from the sale of shares offered directly by the Company of approximately $173.1 million. Subject to the Company’s right to elect cash or net share settlement, the Company has the ability to settle the forward sales agreements at any time through scheduled maturity date of the forward sale agreements of January 13, 2021.

Common Stock Dividends Declared [Table Text Block]

The following tables summarize the dividends attributable to the Company’s outstanding shares of common stock that were declared during the three months ended March 31, 2020 and the year ended December 31, 2019.

Month Ended 2020	Declaration Date	Record Date	Per Share		Payment Date
March 31	January 8, 2020	March 31, 2020	$	0.12	April 15, 2020
February 29	January 8, 2020	February 28, 2020	0.12		March 16, 2020
January 31	January 8, 2020	January 31, 2020	0.12		February 18, 2020
Total			$	0.36

Month Ended 2019	Declaration Date	Record Date	Per Share		Payment Date
December 31	October 15, 2019	December 31, 2019	$	0.119167	January 15, 2020
November 30	October 15, 2019	November 29, 2019	0.119167		December 16, 2019
October 31	October 15, 2019	October 31, 2019	0.119167		November 15, 2019
September 30	July 15, 2019	September 30, 2019	0.119167		October 15, 2019
August 31	July 15, 2019	August 30, 2019	0.119167		September 16, 2019
July 31	July 15, 2019	July 31, 2019	0.119167		August 15, 2019
June 30	April 9, 2019	June 28, 2019	0.119167		July 15, 2019
May 31	April 9, 2019	May 31, 2019	0.119167		June 17, 2019
April 30	April 9, 2019	April 30, 2019	0.119167		May 15, 2019
March 31	January 10, 2019	March 29, 2019	0.119167		April 15, 2019
February 28	January 10, 2019	February 28, 2019	0.119167		March 15, 2019
January 31	January 10, 2019	January 31, 2019	0.119167		February 15, 2019
Total			$	1.430004

On April 9, 2020, the Company’s board of directors declared the common stock dividends for the months ending April 30, 2020, May 31, 2020, and June 30, 2020 at a monthly rate of $0.12 per share of common stock.

Schedule of activity related to unvested restricted stock awards

The following table summarizes activity related to the Company’s unvested restricted shares of common stock for the three months ended March 31, 2020 and the year ended December 31, 2019.

Unvested Restricted Shares of Common Stock	Shares
Balance at December 31, 2018	190,462
Granted	110,830	(1)
Vested	(101,109)	(2)
Forfeited	(7,138)
Balance at December 31, 2019	193,045
Granted	75,419	(1)
Vested	(78,010)	(2)
Forfeited	(542)
Balance at March 31, 2020	189,912

(1)The fair value per share on the grant date of February 13, 2020, January 8, 2020, and January 7, 2019 was $32.64, $31.49, and $24.85, respectively.

(2)The Company repurchased and retired 33,119 and 28,504 restricted shares of common stock that vested during the three months ended March 31, 2020 and the year ended December 31, 2019, respectively.

Schedule of vested restricted shares of common stock activity

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, 2020 and 2019.

	Three months ended March 31,
Vested Restricted Shares of Common Stock	2020		2019
Vested restricted shares of common stock	78,010		78,431
Fair value of vested restricted shares of common stock (in thousands)	$	2,463	$	1,951

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Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Tables)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Schedule of Cash, Cash Equivalents and 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, 2020		December 31, 2019
Cash and cash equivalents	$	324,877	$	9,041
Restricted cash	16,506		2,823
Total cash and cash equivalents and restricted cash	$	341,383	$	11,864

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Organization and Description of Business

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

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 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, 2020 and December 31, 2019, the Company owned a 97.5% and 97.5%, respectively, common equity interest 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 and partnerships, including the Operating Partnership, except where context otherwise requires.

As of March 31, 2020, the Company owned 456 buildings in 38 states with approximately 91.8 million rentable square feet, consisting of 378 warehouse/distribution buildings, 70 light manufacturing buildings, and eight flex/office buildings.

COVID-19 Pandemic

Currently, one of the most significant risks and uncertainties facing the Company and the real estate industry generally is the potential adverse effect of the ongoing public health crisis of the novel coronavirus disease (“COVID-19”) pandemic. The extent to which the COVID-19 pandemic impacts 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. Refer to Note 12 for additional information.

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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues [Abstract]
Rental income	$ 118,339	$ 95,615
Other income	209	87
Total revenue	118,548	95,702
Expenses
Property	21,947	19,511
General and administrative	10,373	9,212
Depreciation and amortization	52,688	42,303
Loss on impairments	0	5,344
Other expenses	476	399
Total expenses	85,484	76,769
Other income (expense)
Interest and other income	79	16
Interest expense	(14,864)	(12,834)
Gain on the sales of rental property, net	46,759	1,274
Total other income (expense)	31,974	(11,544)
Net income	65,038	7,389
Less: income attributable to noncontrolling interest after preferred stock dividends	1,598	214
Net income attributable to STAG Industrial, Inc.	63,440	7,175
Less: preferred stock dividends	1,289	1,289
Less: amount allocated to participating securities	79	79
Net income attributable to common stockholders	$ 62,072	$ 5,807
Weighted average common shares outstanding — basic	147,570	114,721
Weighted average common shares outstanding — diluted	147,656	114,993
Net income per share — basic and diluted
Net income per share attributable to common stockholders — basic	$ 0.42	$ 0.05
Net income per share attributable to common stockholders — diluted	$ 0.42	$ 0.05

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Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Participating securities	181,747	213,856

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Rental Property - Deferred Leasing Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Deferred leasing intangibles, gross	$ 730,147		$ 716,453
Deferred leasing intangibles assets, accumulated amortization	(256,537)		(241,304)
Deferred leasing intangibles, net	473,610		475,149
Below market lease, gross	41,141		38,802
Below market lease, accumulated amortization	(13,357)		(12,064)
Below market lease, net	27,784		26,738
Net decrease to rental income related to above and below market lease amortization	990	$ 967
Above market leases
Finite-Lived Intangible Assets [Line Items]
Deferred leasing intangibles, gross	93,226		92,607
Deferred leasing intangibles assets, accumulated amortization	(34,349)		(32,115)
Deferred leasing intangibles, net	58,877		60,492
Other intangible lease assets
Finite-Lived Intangible Assets [Line Items]
Deferred leasing intangibles, gross	636,921		623,846
Deferred leasing intangibles assets, accumulated amortization	(222,188)		(209,189)
Deferred leasing intangibles, net	414,733		$ 414,657
Amortization expense related to other intangible lease assets	20,302	$ 16,814
Estimated Net Amortization of In-Place Leases, Leasing Commissions and Tenant Relationships
Remainder of 2020	56,849
2021	65,234
2022	55,558
2023	46,998
2024	38,009
Net decrease to rental income related to above and below market lease amortization
Estimated Net Amortization of In-Place Leases, Leasing Commissions and Tenant Relationships
Remainder of 2020	2,894
2021	2,770
2022	2,202
2023	2,379
2024	$ 2,687

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Derivative Financial Instruments - Risk Management and Unsecured Loan Swaps (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Interest Rate Swaps
Unsecured Term Loan Swaps
Notional amount assets	$ 0	$ 250,000
Notional amount liabilities	975,000	850,000
Notional amount liabilities	975,000	$ 850,000
Interest Rate Derivative, The Toronto-Dominion Bank, September 29, 2016
Unsecured Term Loan Swaps
Notional amount liabilities	25,000
Derivative Liability, Fair Value, Gross Liability	$ (116)
Fixed Interest Rate (as a percent)	1.383%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (116)
Fixed Interest Rate (as a percent)	1.383%
Interest Rate Derivative, PNC Bank, September 29, 2016
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (234)
Fixed Interest Rate (as a percent)	1.3906%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (234)
Fixed Interest Rate (as a percent)	1.3906%
Interest Rate Derivative, Regions Bank, September 29, 2016
Unsecured Term Loan Swaps
Notional amount liabilities	$ 35,000
Derivative Liability, Fair Value, Gross Liability	$ (163)
Fixed Interest Rate (as a percent)	1.3858%
Notional amount liabilities	$ 35,000
Derivative Liability, Fair Value, Gross Liability	$ (163)
Fixed Interest Rate (as a percent)	1.3858%
Interest Rate Derivative, US Bank, September 29, 2016
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (118)
Fixed Interest Rate (as a percent)	1.395%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (118)
Fixed Interest Rate (as a percent)	1.395%
Interest Rate Derivative, Capital One, September 29, 2016
Unsecured Term Loan Swaps
Notional amount liabilities	$ 15,000
Derivative Liability, Fair Value, Gross Liability	$ (71)
Fixed Interest Rate (as a percent)	1.395%
Notional amount liabilities	$ 15,000
Derivative Liability, Fair Value, Gross Liability	$ (71)
Fixed Interest Rate (as a percent)	1.395%
Interest Rate Derivative, Royal Bank of Canada, March 20, 2015
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (334)
Fixed Interest Rate (as a percent)	1.709%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (334)
Fixed Interest Rate (as a percent)	1.709%
Interest Rate Derivative, The Toronto-Dominion Bank, March 20, 2015
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (334)
Fixed Interest Rate (as a percent)	1.7105%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (334)
Fixed Interest Rate (as a percent)	1.7105%
Interest Rate Derivative, The Toronto-Dominion Bank, September 10, 2017
Unsecured Term Loan Swaps
Notional amount liabilities	$ 100,000
Derivative Liability, Fair Value, Gross Liability	$ (1,840)
Fixed Interest Rate (as a percent)	2.2255%
Notional amount liabilities	$ 100,000
Derivative Liability, Fair Value, Gross Liability	$ (1,840)
Fixed Interest Rate (as a percent)	2.2255%
Interest Rate Derivative, Wells Fargo Bank, March 20, 2015
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (775)
Fixed Interest Rate (as a percent)	1.828%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (775)
Fixed Interest Rate (as a percent)	1.828%
Interest Rate Derivative, The Toronto-Dominion Bank, February 14, 2020
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,091)
Fixed Interest Rate (as a percent)	2.4535%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,091)
Fixed Interest Rate (as a percent)	2.4535%
Interest Rate Derivative, Regions Bank, February 14, 2020
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (2,204)
Fixed Interest Rate (as a percent)	2.475%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (2,204)
Fixed Interest Rate (as a percent)	2.475%
Interest Rate Derivative, Capital One, February 14, 2020
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (2,259)
Fixed Interest Rate (as a percent)	2.53%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (2,259)
Fixed Interest Rate (as a percent)	2.53%
Interest Rate Derivative, The Toronto-Dominion Bank, October 30, 2017
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,077)
Fixed Interest Rate (as a percent)	1.8485%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,077)
Fixed Interest Rate (as a percent)	1.8485%
Interest Rate Derivative, Royal Bank of Canada, October 30, 2017
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,079)
Fixed Interest Rate (as a percent)	1.8505%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,079)
Fixed Interest Rate (as a percent)	1.8505%
Interest Rate Derivative, Wells Fargo Bank, October 30, 2017
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,079)
Fixed Interest Rate (as a percent)	1.8505%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,079)
Fixed Interest Rate (as a percent)	1.8505%
Interest Rate Derivative, PNC Bank, $25m, October 30, 2017
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,077)
Fixed Interest Rate (as a percent)	1.8485%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (1,077)
Fixed Interest Rate (as a percent)	1.8485%
Interest Rate Derivative, PNC Bank, $50m, October 30, 2017
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (2,154)
Fixed Interest Rate (as a percent)	1.8475%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (2,154)
Fixed Interest Rate (as a percent)	1.8475%
Interest Rate Derivative, The Toronto-Dominion Bank, July 26, 2019 [Member]
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,890)
Fixed Interest Rate (as a percent)	2.918%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,890)
Fixed Interest Rate (as a percent)	2.918%
Interest Rate Derivative, PNC Bank, July 26, 2019 [Member]
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,892)
Fixed Interest Rate (as a percent)	2.919%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,892)
Fixed Interest Rate (as a percent)	2.919%
Interest Rate Derivative, Bank of Montreal, July 26, 2019 [Member]
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,892)
Fixed Interest Rate (as a percent)	2.919%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,892)
Fixed Interest Rate (as a percent)	2.919%
Interest Rate Derivative, US Bank, July 26, 2019 [Member]
Unsecured Term Loan Swaps
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (2,446)
Fixed Interest Rate (as a percent)	2.919%
Notional amount liabilities	$ 25,000
Derivative Liability, Fair Value, Gross Liability	$ (2,446)
Fixed Interest Rate (as a percent)	2.919%
Interest Rate Derivative, Wells Fargo Bank, July 15, 2020 [Member]
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,195)
Fixed Interest Rate (as a percent)	2.246%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,195)
Fixed Interest Rate (as a percent)	2.246%
Interest Rate Derivative, US Bank, July 15, 2020 [Member]
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,194)
Fixed Interest Rate (as a percent)	2.2459%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,194)
Fixed Interest Rate (as a percent)	2.2459%
Interest Rate Derivative, Regions Bank, July 15, 2020 [Member]
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,195)
Fixed Interest Rate (as a percent)	2.2459%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (4,195)
Fixed Interest Rate (as a percent)	2.2459%
Interest Rate Derivative, Bank of Montreal, July 15, 2020
Unsecured Term Loan Swaps
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (3,005)
Fixed Interest Rate (as a percent)	1.7165%
Notional amount liabilities	$ 50,000
Derivative Liability, Fair Value, Gross Liability	$ (3,005)
Fixed Interest Rate (as a percent)	1.7165%

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Equity - Preferred Stock (Details) - $ / shares		3 Months Ended					12 Months Ended
	Apr. 09, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2019
Class of Stock [Line Items]
Preferred Stock, Shares Authorized		20,000,000	20,000,000				20,000,000
Series C Preferred Stock
Class of Stock [Line Items]
Preferred Stock, Shares Issued		3,000,000	3,000,000				3,000,000
Preferred Stock, Liquidation Preference Per Share		$ 25.00	$ 25.00				$ 25.00
Dividend rate (as a percent)		6.875%
Preferred Stock, Dividends Per Share, Declared		$ 0.4296875	$ 0.4296875	$ 0.4296875	$ 0.4296875	$ 0.4296875	$ 1.7187500
Dividends Payable, Date Declared		Jan. 08, 2020	Oct. 15, 2019	Jul. 15, 2019	Apr. 09, 2019	Jan. 10, 2019
Dividends Payable, Date to be Paid		Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jul. 01, 2019	Apr. 01, 2019
Subsequent Event [Member] | Series C Preferred Stock
Class of Stock [Line Items]
Preferred Stock, Dividends Per Share, Declared	$ 0.4296875

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Equity Incentive Plan - Equity Non-cash Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
General and Administrative Expenses
Equity Incentive Plan
Share-based compensation	$ 2,852	$ 2,278
Restricted stock | General and Administrative Expenses
Equity Incentive Plan
Share-based compensation	467	427
LTIP Units | General and Administrative Expenses
Equity Incentive Plan
Share-based compensation	964	887
Performance shares | General and Administrative Expenses
Equity Incentive Plan
Share-based compensation	1,307	859
Independent Director | General and Administrative Expenses
Equity Incentive Plan
Share-based compensation	$ 114	$ 105
Common Stock | Independent Director
Equity Incentive Plan
Number of days of average trailing stock price used to calculate number of shares of common stock granted	10 days	10 days

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Noncontrolling Interest - LTIP FV Assumptions (Details) - LTIP Units - USD ($)		3 Months Ended	12 Months Ended
	Jan. 08, 2020	Mar. 31, 2020	Dec. 31, 2019
Assumptions
Expected term (years)	10 years
Expected volatility	18.00%
Expected dividend yield	5.75%
Risk-free interest rate	1.61%
Fair value of LTIP units at issuance (in thousands)	$ 4,030,000
Granted (in shares)	136,741	278,806	364,173
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 29.47	$ 29.47
Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)	4 years
Independent Director | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)	1 year

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Equity Incentive Plan

3 Months Ended

Mar. 31, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Equity Incentive Plan

Equity Incentive Plan

On January 8, 2020, the Company granted performance units approved by the compensation committee of the board of directors under the 2011 Plan to certain key employees of the Company. The terms of the performance units granted on January 8, 2020 are substantially the same as the terms of the performance units granted on January 7, 2019, except that the measuring period commenced on January 1, 2020 and ends on December 31, 2022.

The fair value of the performance units at the date of grant was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units are based on Level 3 inputs and are 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, 2020.

Performance Units	Assumptions
Grant date	January 8, 2020
Expected volatility	17.4		%
Expected dividend yield	5.75		%
Risk-free interest rate	1.59		%
Fair value of performance units grant (in thousands)	$	5,389

On December 31, 2019 the measuring period pursuant to the January 6, 2017 performance units concluded and it was determined that the Company’s total stockholder return exceeded the threshold percentage and return hurdle. The compensation committee of the board of directors approved the issuance of 76,096 vested LTIP units and 46,376 vested shares of common stock to the participants (of which 18,241 shares of common stock were repurchased and retired), which were issued on January 8, 2020. The compensation committee of the board of directors also approved the issuance of 65,969 LTIP units and 3,398 restricted shares of common stock that will vest on December 31, 2020, which were issued on January 8, 2020.

The unrecognized compensation expense associated with the Company’s performance units at March 31, 2020 was approximately $10.0 million and is expected to be recognized over a weighted average period of approximately 2.2 years.

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, 2020 and 2019.

	Three months ended March 31,
Non-Cash Compensation Expense (in thousands)	2020		2019
Restricted shares of common stock	$	467	$	427
LTIP units	964		887
Performance units	1,307		859
Director compensation (1)	114		105
Total non-cash compensation expense	$	2,852	$	2,278

(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, 2020 and 2019. The number of shares of common stock granted is calculated based on the trailing ten days average common stock price ending on the third business day preceding the grant date.

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Debt

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Debt

DebtThe 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, 2020 and December 31, 2019.

Loan	Principal Outstanding as of March 31, 2020 (in thousands)		Principal Outstanding as of December 31, 2019 (in thousands)		Interest  Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)	$	225,000	$	146,000	L + 0.90%		January 12, 2024	i
Total unsecured credit facility	225,000		146,000
Unsecured term loans:
Unsecured Term Loan C(5)	150,000		150,000		2.39	%	September 29, 2020	i
Unsecured Term Loan B(5)	150,000		150,000		3.05	%	March 21, 2021	i
Unsecured Term Loan A	150,000		150,000		3.38	%	March 31, 2022	i
Unsecured Term Loan D	150,000		150,000		2.85	%	January 4, 2023	i
Unsecured Term Loan E	175,000		175,000		3.92	%	January 15, 2024	i
Unsecured Term Loan F	200,000		100,000		L + 1.00%		January 12, 2025	i
Total unsecured term loans	975,000		875,000
Less: Total unamortized deferred financing fees and debt issuance costs	(3,299)		(3,625)
Total carrying value unsecured term loans, net	971,701		871,375
Unsecured notes:
Series F Unsecured Notes	100,000		100,000		3.98	%	January 5, 2023	ii
Series A Unsecured Notes	50,000		50,000		4.98	%	October 1, 2024	ii
Series D Unsecured Notes	100,000		100,000		4.32	%	February 20, 2025	ii
Series G Unsecured Notes	75,000		75,000		4.10	%	June 13, 2025	ii
Series B Unsecured Notes	50,000		50,000		4.98	%	July 1, 2026	ii
Series C Unsecured Notes	80,000		80,000		4.42	%	December 30, 2026	ii
Series E Unsecured Notes	20,000		20,000		4.42	%	February 20, 2027	ii
Series H Unsecured Notes	100,000		100,000		4.27	%	June 13, 2028	ii
Total unsecured notes	575,000		575,000
Less: Total unamortized deferred financing fees and debt issuance costs	(2,018)		(2,117)
Total carrying value unsecured notes, net	572,982		572,883
Mortgage notes (secured debt):
Wells Fargo Bank, National Association CMBS Loan	50,939		51,406		4.31	%	December 1, 2022	iii
Thrivent Financial for Lutherans	3,649		3,679		4.78	%	December 15, 2023	iv
Total mortgage notes	54,588		55,085
Add: Total unamortized fair market value premiums	37		39
Less: Total unamortized deferred financing fees and debt issuance costs	(336)		(369)
Total carrying value mortgage notes, net	54,289		54,755
Total / weighted average interest rate(6)	$	1,823,972	$	1,645,013	3.28	%

(1)Interest rate as of March 31, 2020. At March 31, 2020, the one-month LIBOR (“L”) was 0.99288%. 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. 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, as defined in the respective loan agreements.

(2)The unsecured term loans have a stated interest rate of one-month LIBOR plus a spread of 1.0%. As of March 31, 2020, one-month LIBOR for the Unsecured Term Loans A, B, C, D and E was swapped to a fixed rate of 2.38%, 2.05%, 1.39%, 1.85% and 2.92%, respectively. One-month LIBOR for the Unsecured Term Loan F will be swapped to a fixed rate of 2.11% effective July 15, 2020.

(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, however can be defeased; and (iv) pre-payable without penalty three months prior to the maturity date.

(4)The capacity of the unsecured credit facility is $500.0 million. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately $2.2 million and $2.4 million is included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, respectively. The maturity date is January 15, 2023, or such later date as may be extended pursuant to two six-month extension options exercisable by the Company in its 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.

(5)Subsequent to March 31, 2020, the Unsecured Term Loan B and Unsecured Term Loan C were repaid in full in connection with the new unsecured term loan agreement entered into on April 17, 2020. Refer to Note 12 for additional details.

(6)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $775.0 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.

The aggregate undrawn nominal commitment on the unsecured credit facility as of March 31, 2020 was approximately $272.0 million, including issued letters of credit. The Company’s actual borrowing capacity at any given point in time may be less and is restricted to a maximum amount based on the Company’s debt covenant compliance. Total accrued interest for the Company’s indebtedness was approximately $7.7 million and $6.3 million as of March 31, 2020 and December 31, 2019, 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, 2020 and 2019.

	Three months ended March 31,
Costs Included in Interest Expense (in thousands)	2020		2019
Amortization of deferred financing fees and debt issuance costs and fair market value premiums	$	676	$	618
Facility, unused, and other fees	$	364	$	383

On March 25, 2020, the Company drew the remaining $100.0 million of the $200.0 million Unsecured Term Loan F that was entered into on July 12, 2019.

Financial Covenant Considerations

The Company was in compliance with all financial and other covenants as of March 31, 2020 and December 31, 2019 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 $84.6 million and $85.5 million at March 31, 2020 and December 31, 2019, respectively, and is limited to senior, property-level secured debt financing arrangements.

Fair Value of Debt

The following table summarizes the aggregate principal outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of March 31, 2020 and December 31, 2019.

	March 31, 2020				December 31, 2019
Indebtedness (in thousands)	Principal Outstanding		Fair Value		Principal Outstanding		Fair Value
Unsecured credit facility	$	225,000	$	221,921	$	146,000	$	146,000
Unsecured term loans	975,000		962,764		875,000		875,000
Unsecured notes	575,000		574,121		575,000		614,493
Mortgage notes	54,588		53,471		55,085		56,021
Total principal amount	1,829,588		$	1,812,277	1,651,085		$	1,691,514
Add: Total unamortized fair market value premiums	37				39
Less: Total unamortized deferred financing fees and debt issuance costs	(5,653)				(6,111)
Total carrying value	$	1,823,972			$	1,645,013

The applicable fair value guidance establishes a three tier 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 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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Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The following non-recognized subsequent events were noted.

On April 17, 2020, the Company entered into a $300.0 million unsecured term loan agreement. In connection with the new unsecured term loan agreement, the $150.0 million Unsecured Term Loan B and the $150.0 million Unsecured Term Loan C were repaid in full. The new unsecured term loan bears a current interest rate of LIBOR plus a spread of 1.5% based on the Company’s debt rating, as defined in the loan agreement, and subject to a minimum rate for LIBOR of 0.25%. The new unsecured term loan matures on April 16, 2021, subject to two one year extension options at the Company's discretion, and subject to certain conditions (other than lender discretion) such as the absence of default and the payment of an extension fee. On April 20, 2020, the Company entered into four interest rate swaps with a total notional amount of $300.0 million which fix LIBOR at 0.27725% on the new unsecured term loan. The interest rate swaps do not cover the interest rate floor. As a result, the Company’s effective interest rate will be 1.77725% plus the amount, if any, by which LIBOR is below 0.25%. The interest rate swaps become effective on September 29, 2020 and March 19, 2021 upon the maturity of the interest rate swaps previously designated to the Unsecured Term Loan B and Unsecured Term Loan C and mature on April 18, 2023.

COVID-19 Pandemic

The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how the pandemic will impact its tenants and business partners. While the Company did not incur significant disruptions from the COVID-19 pandemic during the three months ended March 31, 2020, a number of the Company’s tenants have recently requested rent deferral or rent abatement as a result of the pandemic, and therefore, the Company is unable to predict the impact that the pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties. The Company is evaluating each tenant rent relief request on an individual basis, considering a number of factors. Not all tenant requests will ultimately result in modified agreements, nor is the Company forgoing its contractual rights under its lease agreements. The extent to which the COVID-19 pandemic impacts 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.

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Summary of Significant Accounting Policies - Taxes (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Business Acquisition [Line Items]
Net income	$ 65,038,000	$ 7,389,000
State and local income, excise and franchise taxes	400,000	200,000
Liabilities for uncertain tax positions	0		$ 0
Real Estate Investment Trust
Business Acquisition [Line Items]
Net income	$ 0	$ (12,000)

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Rental Property - Acquisitions - Results of Operations (Details) - Acquisitions 2020 $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Business Acquisition [Line Items]
Revenue	$ 1,942
Net income (loss)	$ 252

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Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Rental Property:
Land	$ 443,427	$ 435,923
Buildings and improvements, net of accumulated depreciation of $416,654 and $387,633, respectively	3,155,744	3,087,435
Deferred leasing intangibles, net of accumulated amortization of $256,537 and $241,304, respectively	473,610	475,149
Total rental property, net	4,072,781	3,998,507
Cash and cash equivalents	324,877	9,041
Restricted cash	16,506	2,823
Tenant accounts receivable	62,144	57,592
Prepaid expenses and other assets	37,312	38,231
Interest rate swaps	0	303
Operating lease right-of-use assets	22,528	15,129
Assets held for sale, net	1,157	43,019
Total assets	4,537,305	4,164,645
Liabilities:
Unsecured credit facility	225,000	146,000
Unsecured term loans, net	971,701	871,375
Unsecured notes, net	572,982	572,883
Mortgage notes, net	54,289	54,755
Accounts payable, accrued expenses and other liabilities	55,404	53,737
Interest rate swaps	48,714	18,819
Tenant prepaid rent and security deposits	21,552	21,993
Dividends and distributions payable	18,301	17,465
Deferred leasing intangibles, net of accumulated amortization of $13,357 and $12,064, respectively	27,784	26,738
Operating lease liabilities	24,464	16,989
Total liabilities	2,020,191	1,800,754
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Common stock, par value $0.01 per share, 300,000,000 shares authorized at March 31, 2020 and December 31, 2019, respectively, 148,708,031 and 142,815,593 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	1,487	1,428
Additional paid-in capital	3,142,495	2,970,553
Cumulative dividends in excess of earnings	(714,799)	(723,027)
Accumulated other comprehensive loss	(47,860)	(18,426)
Total stockholders’ equity	2,456,323	2,305,528
Noncontrolling interest	60,791	58,363
Total equity	2,517,114	2,363,891
Total liabilities and equity	4,537,305	4,164,645
Series C Preferred Stock
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock	$ 75,000	$ 75,000

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Consolidated Statements of Equity - USD ($) $ in Thousands	Total	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
Balance at Dec. 31, 2018	$ 1,669,632	$ 75,000	$ 1,122	$ 2,118,179	$ (584,979)	$ 4,481	$ 1,613,803	$ 55,829
Balance (in shares) at Dec. 31, 2018			112,165,786
Increase (Decrease) in Stockholders' Equity
Cumulative Effect on Retained Earnings, before Tax	(214)				(214)		(214)
Proceeds from sales of common stock, net	148,529		$ 55	148,474			148,529
Proceeds from sales of common stock (in shares)			5,441,409
Dividends, Common Stock					(42,834)
Dividends							(42,834)
Dividends and Distributions, Net	(44,380)
Distribution Made to Limited Partner, Cash Distributions Declared								(1,546)
Non-cash compensation activity, net	863			(1,133)			(1,505)	2,368
Non-cash compensation activity (in shares)			127,836
Non-cash compensation activity (in excess of earnings)			$ (1)		(373)
Redemption of common units to common stock			$ 4	6,024			6,028	6,028
Redemption of common units to common stock (in shares)			439,071
Rebalancing of noncontrolling interest				(4,849)			(4,849)	4,849
Other comprehensive loss	(6,978)					(6,734)	(6,734)	(244)
Net income	7,389				7,175		7,175	214
Balance at Mar. 31, 2019	1,774,841	75,000	$ 1,182	2,266,695	(621,225)	(2,253)	1,719,399	55,442
Balance (in shares) at Mar. 31, 2019			118,174,102
Balance at Dec. 31, 2018	1,669,632	75,000	$ 1,122	2,118,179	(584,979)	4,481	1,613,803	$ 55,829
Balance (in shares) at Dec. 31, 2018			112,165,786
Increase (Decrease) in Stockholders' Equity
Redemption of common units to common stock (in shares)								0
Balance at Dec. 31, 2019	2,363,891	75,000	$ 1,428	2,970,553	(723,027)	(18,426)	2,305,528	$ 58,363
Balance (in shares) at Dec. 31, 2019			142,815,593
Increase (Decrease) in Stockholders' Equity
Proceeds from sales of common stock, net	172,723		$ 56	172,667			172,723
Proceeds from sales of common stock (in shares)			5,600,000
Dividends, Common Stock					(54,822)
Dividends							(54,822)
Dividends and Distributions, Net	(55,718)
Distribution Made to Limited Partner, Cash Distributions Declared								896
Non-cash compensation activity, net	1,371			(858)			(1,247)	2,618
Non-cash compensation activity (in shares)			73,048
Non-cash compensation activity (in excess of earnings)			$ (1)		(390)
Redemption of common units to common stock			$ 2	3,426			3,428	$ 3,428
Redemption of common units to common stock (in shares)			219,390					0
Rebalancing of noncontrolling interest				(3,293)			(3,293)	$ 3,293
Other comprehensive loss	(30,191)					(29,434)	(29,434)	(757)
Net income	65,038				63,440		63,440	1,598
Balance at Mar. 31, 2020	$ 2,517,114	$ 75,000	$ 1,487	$ 3,142,495	$ (714,799)	$ (47,860)	$ 2,456,323	$ 60,791
Balance (in shares) at Mar. 31, 2020			148,708,031

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Equity Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of share-based payment award, performance unit awards, valuation assumptions

The following table summarizes the assumptions used in valuing the performance units granted during the three months ended March 31, 2020.

Performance Units	Assumptions
Grant date	January 8, 2020
Expected volatility	17.4		%
Expected dividend yield	5.75		%
Risk-free interest rate	1.59		%
Fair value of performance units grant (in thousands)	$	5,389

Summary of Equity 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, 2020 and 2019.

	Three months ended March 31,
Non-Cash Compensation Expense (in thousands)	2020		2019
Restricted shares of common stock	$	467	$	427
LTIP units	964		887
Performance units	1,307		859
Director compensation (1)	114		105
Total non-cash compensation expense	$	2,852	$	2,278

(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, 2020 and 2019. The number of shares of common stock granted is calculated based on the trailing ten days average common stock price ending on the third business day preceding the grant date.

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Debt (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Summary of the mortgage notes payable, unsecured term loans and credit facility

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, 2020 and December 31, 2019.

Loan	Principal Outstanding as of March 31, 2020 (in thousands)		Principal Outstanding as of December 31, 2019 (in thousands)		Interest  Rate(1)(2)		Maturity Date	Prepayment Terms(3)
Unsecured credit facility:
Unsecured Credit Facility(4)	$	225,000	$	146,000	L + 0.90%		January 12, 2024	i
Total unsecured credit facility	225,000		146,000
Unsecured term loans:
Unsecured Term Loan C(5)	150,000		150,000		2.39	%	September 29, 2020	i
Unsecured Term Loan B(5)	150,000		150,000		3.05	%	March 21, 2021	i
Unsecured Term Loan A	150,000		150,000		3.38	%	March 31, 2022	i
Unsecured Term Loan D	150,000		150,000		2.85	%	January 4, 2023	i
Unsecured Term Loan E	175,000		175,000		3.92	%	January 15, 2024	i
Unsecured Term Loan F	200,000		100,000		L + 1.00%		January 12, 2025	i
Total unsecured term loans	975,000		875,000
Less: Total unamortized deferred financing fees and debt issuance costs	(3,299)		(3,625)
Total carrying value unsecured term loans, net	971,701		871,375
Unsecured notes:
Series F Unsecured Notes	100,000		100,000		3.98	%	January 5, 2023	ii
Series A Unsecured Notes	50,000		50,000		4.98	%	October 1, 2024	ii
Series D Unsecured Notes	100,000		100,000		4.32	%	February 20, 2025	ii
Series G Unsecured Notes	75,000		75,000		4.10	%	June 13, 2025	ii
Series B Unsecured Notes	50,000		50,000		4.98	%	July 1, 2026	ii
Series C Unsecured Notes	80,000		80,000		4.42	%	December 30, 2026	ii
Series E Unsecured Notes	20,000		20,000		4.42	%	February 20, 2027	ii
Series H Unsecured Notes	100,000		100,000		4.27	%	June 13, 2028	ii
Total unsecured notes	575,000		575,000
Less: Total unamortized deferred financing fees and debt issuance costs	(2,018)		(2,117)
Total carrying value unsecured notes, net	572,982		572,883
Mortgage notes (secured debt):
Wells Fargo Bank, National Association CMBS Loan	50,939		51,406		4.31	%	December 1, 2022	iii
Thrivent Financial for Lutherans	3,649		3,679		4.78	%	December 15, 2023	iv
Total mortgage notes	54,588		55,085
Add: Total unamortized fair market value premiums	37		39
Less: Total unamortized deferred financing fees and debt issuance costs	(336)		(369)
Total carrying value mortgage notes, net	54,289		54,755
Total / weighted average interest rate(6)	$	1,823,972	$	1,645,013	3.28	%

(1)Interest rate as of March 31, 2020. At March 31, 2020, the one-month LIBOR (“L”) was 0.99288%. 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. 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, as defined in the respective loan agreements.

(2)The unsecured term loans have a stated interest rate of one-month LIBOR plus a spread of 1.0%. As of March 31, 2020, one-month LIBOR for the Unsecured Term Loans A, B, C, D and E was swapped to a fixed rate of 2.38%, 2.05%, 1.39%, 1.85% and 2.92%, respectively. One-month LIBOR for the Unsecured Term Loan F will be swapped to a fixed rate of 2.11% effective July 15, 2020.

(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, however can be defeased; and (iv) pre-payable without penalty three months prior to the maturity date.

(4)The capacity of the unsecured credit facility is $500.0 million. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately $2.2 million and $2.4 million is included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019, respectively. The maturity date is January 15, 2023, or such later date as may be extended pursuant to two six-month extension options exercisable by the Company in its 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.

(5)Subsequent to March 31, 2020, the Unsecured Term Loan B and Unsecured Term Loan C were repaid in full in connection with the new unsecured term loan agreement entered into on April 17, 2020. Refer to Note 12 for additional details.

(6)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $775.0 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.

Interest Income and Interest Expense Disclosure [Table Text Block]

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, 2020 and 2019.

	Three months ended March 31,
Costs Included in Interest Expense (in thousands)	2020		2019
Amortization of deferred financing fees and debt issuance costs and fair market value premiums	$	676	$	618
Facility, unused, and other fees	$	364	$	383

Schedule of aggregate carrying value of the debt and the corresponding estimate of fair value

The following table summarizes the aggregate principal outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of March 31, 2020 and December 31, 2019.

	March 31, 2020				December 31, 2019
Indebtedness (in thousands)	Principal Outstanding		Fair Value		Principal Outstanding		Fair Value
Unsecured credit facility	$	225,000	$	221,921	$	146,000	$	146,000
Unsecured term loans	975,000		962,764		875,000		875,000
Unsecured notes	575,000		574,121		575,000		614,493
Mortgage notes	54,588		53,471		55,085		56,021
Total principal amount	1,829,588		$	1,812,277	1,651,085		$	1,691,514
Add: Total unamortized fair market value premiums	37				39
Less: Total unamortized deferred financing fees and debt issuance costs	(5,653)				(6,111)
Total carrying value	$	1,823,972			$	1,645,013

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Debt - 2020 Activity (Details) - USD ($) $ in Thousands		3 Months Ended
	Mar. 25, 2020	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Debt Instrument, Unused Borrowing Capacity, Amount		$ 272,000
Net book value of properties that are collateral for debt arrangements		84,600		$ 85,500
Accounts Payable and Accrued Liabilities [Member]
Debt Instrument [Line Items]
Interest payable		7,700	$ 6,300
Interest Expense [Member]
Debt Instrument [Line Items]
Amortization of deferred financing fees		676	618
Line of Credit Facility, Commitment Fee Amount		$ 364	$ 383
$200 Million Unsecured Term Loan F [Member]
Debt Instrument [Line Items]
Proceeds from Issuance of Debt	$ 100,000

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Derivative Financial Instruments - Cash Flow Hedges and Contingent Features (Details) - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash Flow Hedges of Interest Rate Risk
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	$ 14,864,000	$ 12,834,000
Interest Rate Swaps
Cash Flow Hedges of Interest Rate Risk
Additional amount reclassified from accumulated other comprehensive income (loss) as a increase (decrease) to interest expense over the next twelve months	15,900,000
Loss recognized in accumulated other comprehensive loss on interest rate swaps	31,087,000	5,856,000
Income (loss) reclassified from accumulated other comprehensive loss into income as interest expense	(896,000)	1,122,000
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded	14,864,000	$ 12,834,000
Assets Needed for Immediate Settlement, Aggregate Fair Value	$ 49,400,000

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Commitments and Contingencies - Agreements (Details) $ in Millions	Mar. 31, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Letters of credit outstanding	$ 3.0

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Leases - Lessee Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Lessee, Lease, Description [Line Items]
Operating Lease, Weighted Average Remaining Lease Term	27 years 1 month 6 days		36 years
Operating Lease, Weighted Average Discount Rate, Percent	6.80%		7.10%
Lease, Cost	$ 649	$ 597
Operating Lease, Payments	571	569
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 7,718	0
Minimum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	6 years 3 months 18 days
Lessee, Operating Lease, Renewal Term	5 years
Maximum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	46 years 9 months 18 days
Lessee, Operating Lease, Renewal Term	20 years
Operating Expense [Member]
Lessee, Lease, Description [Line Items]
Lease, Cost	$ 331	331
General and Administrative Expenses
Lessee, Lease, Description [Line Items]
Lease, Cost	$ 318	$ 266

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Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Building and Improvements, accumulated depreciation	$ 416,654	$ 387,633
Deferred leasing intangible assets, accumulated amortization	256,537	241,304
Deferred leasing intangible liabilities, accumulated amortization	$ 13,357	$ 12,064
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	20,000,000	20,000,000
Preferred Stock, Shares Outstanding	3,000,000	3,000,000
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	300,000,000	300,000,000
Common Stock, Shares, Issued	148,708,031	142,815,593
Common Stock, Shares, Outstanding	148,708,031	142,815,593
Series C Preferred Stock
Preferred Stock, Shares Issued	3,000,000	3,000,000
Preferred Stock, Liquidation Preference Per Share	$ 25.00	$ 25.00

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities:
Net income	$ 65,038	$ 7,389
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	52,688	42,303
Loss on impairments	0	5,344
Non-cash portion of interest expense	676	618
Amortization of above and below market leases, net	984	961
Straight-line rent adjustments, net	(3,849)	(2,256)
Dividends on forfeited equity compensation	0	6
Gain on the sales of rental property, net	(46,759)	(1,274)
Non-cash compensation expense	2,852	2,278
Change in assets and liabilities:
Tenant accounts receivable	(509)	(859)
Prepaid expenses and other assets	(490)	(2,686)
Accounts payable, accrued expenses and other liabilities	390	(3,775)
Tenant prepaid rent and security deposits	(441)	(899)
Total adjustments	5,542	39,761
Net cash provided by operating activities	70,580	47,150
Cash flows from investing activities:
Acquisitions of land and buildings and improvements	(100,187)	(159,969)
Additions of land and building and improvements	(16,815)	(5,058)
Acquisitions of other assets	450	1,049
Proceeds from sales of rental property, net	99,678	16,602
Acquisition deposits, net	500	(2,997)
Acquisitions of deferred leasing intangibles	(18,706)	(24,345)
Net cash used in investing activities	(35,980)	(176,816)
Cash flows from financing activities:
Proceeds from unsecured credit facility	387,000	208,000
Repayment of unsecured credit facility	(308,000)	(193,000)
Proceeds from unsecured term loans	100,000	0
Repayment of mortgage notes	(497)	(481)
Proceeds from sales of common stock, net	172,771	148,645
Dividends and distributions	54,883	42,288
Repurchase and retirement of share-based compensation	(1,472)	(1,444)
Net cash provided by financing activities	294,919	119,432
Increase (decrease) in cash and cash equivalents and restricted cash	329,519	(10,234)
Cash and cash equivalents and restricted cash—beginning of period	11,864	22,542
Cash and cash equivalents and restricted cash—end of period	341,383	12,308
Supplemental disclosure:
Cash paid for interest, net of capitalized interest	12,544	10,449
Supplemental schedule of non-cash investing and financing activities
Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities	(1,080)	(1,094)
Additions to building and other capital improvements from non-cash compensation	(8)	(14)
Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities	(62)	(116)
Leases cumulative effect adjustment	0	(214)
Dividends and distributions payable	$ 18,301	$ 15,846

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Noncontrolling Interest (Tables)

3 Months Ended

Mar. 31, 2020

Noncontrolling Interest [Abstract]

Noncontrolling interest activity

The following table summarizes the activity for noncontrolling interest in the Company for the three months ended March 31, 2020 and the year ended December 31, 2019.

Noncontrolling Interest	LTIP Units	Other Common Units	Total Noncontrolling Common Units	Noncontrolling Interest
Balance at December 31, 2018	1,616,200	2,453,234	4,069,434	3.5	%
Granted/Issued	364,173	—	364,173	N/A
Forfeited	(16,618)	—	(16,618)	N/A
Conversions from LTIP units to Other Common Units	(266,397)	266,397	—	N/A
Redemptions from Other Common Units to common stock	—	(680,137)	(680,137)	N/A
Balance at December 31, 2019	1,697,358	2,039,494	3,736,852	2.5	%
Granted/Issued	278,806	—	278,806	N/A
Forfeited	—	—	—	N/A
Conversions from LTIP units to Other Common Units	(197,775)	197,775	—	N/A
Redemptions from Other Common Units to common stock	—	(219,390)	(219,390)	N/A
Balance at March 31, 2020	1,778,389	2,017,879	3,796,268	2.5	%

Schedule of share-based payment award, LTIP unit awards, valuation assumptions

The following table summarizes the assumptions used in valuing such LTIP units granted during the three months ended March 31, 2020 (excluding those LTIP units granted pursuant to the January 6, 2017 performance units; refer to Note 8 for details).

LTIP Units	Assumptions
Grant date	January 8, 2020
Expected term (years)	10
Expected volatility	18.0		%
Expected dividend yield	5.75		%
Risk-free interest rate	1.61		%
Fair value of LTIP units at issuance (in thousands)	$	4,030
LTIP units at issuance	136,741
Fair value unit price per LTIP unit at issuance	$	29.47

Schedule of activity related to unvested LTIP unit awards

The following table summarizes activity related to the Company’s unvested LTIP units for the three months ended March 31, 2020 and the year ended December 31, 2019.

Unvested LTIP Units	LTIP Units
Balance at December 31, 2018	251,216
Granted	364,173
Vested	(371,423)
Forfeited	(16,618)
Balance at December 31, 2019	227,348
Granted	278,806
Vested	(130,187)
Forfeited	—
Balance at March 31, 2020	375,967

Schedule of vested LTIP unit award activity

The following table summarizes the fair value at vesting for the LTIP units that vested during the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Vested LTIP units	2020		2019
Vested LTIP units	130,187		157,689
Fair value of vested LTIP units (in thousands)	$	3,861	$	4,063

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Rental Property (Tables)

3 Months Ended

Mar. 31, 2020

Real Estate [Abstract]

Schedule of components of rental property

The following table summarizes the components of rental property as of March 31, 2020 and December 31, 2019.

Rental Property (in thousands)	March 31, 2020		December 31, 2019
Land	$	443,427	$	435,923
Buildings, net of accumulated depreciation of $272,953 and $254,458, respectively	2,844,520		2,787,234
Tenant improvements, net of accumulated depreciation of $23,101 and $21,487, respectively	40,442		38,339
Building and land improvements, net of accumulated depreciation of $120,600 and $111,688, respectively	244,045		232,456
Construction in progress	26,737		29,406
Deferred leasing intangibles, net of accumulated amortization of $256,537 and $241,304, respectively	473,610		475,149
Total rental property, net	$	4,072,781	$	3,998,507

Schedule of real estate properties acquired

The following table summarizes the acquisitions of the Company during the three months ended March 31, 2020.

Market (1)	Date Acquired	Square Feet	Buildings	Purchase Price (in thousands)
Detroit, MI	January 10, 2020	491,049	1	$	29,543
Rochester, NY	January 10, 2020	124,850	1	8,565
Minneapolis/St Paul, MN	February 6, 2020	139,875	1	10,460
Sacramento, CA	February 6, 2020	160,534	1	18,468
Richmond, VA	February 6, 2020	78,128	1	5,481
Milwaukee/Madison, WI	February 7, 2020	81,230	1	7,219
Detroit, MI	February 11, 2020	311,123	1	23,141
Philadelphia, PA	March 9, 2020	78,000	1	6,571
Tulsa, OK	March 9, 2020	134,600	1	9,895
Three months ended March 31, 2020		1,599,389	9	$	119,343

(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.

Summary of allocation of the consideration paid for the acquired assets and liabilities in connection with the acquisition of buildings at the date of acquisition

The following table summarizes the allocation of the consideration paid at the date of acquisition during the three months ended March 31, 2020 for the acquired assets and liabilities in connection with the acquisitions identified in the table above.

Acquired Assets and Liabilities	Purchase Price (in thousands)		Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land	$	9,311	N/A
Buildings	84,409		N/A
Tenant improvements	1,438		N/A
Building and land improvements	4,360		N/A
Construction in progress	669		N/A
Other assets	450		N/A
Deferred leasing intangibles - In-place leases	13,788		7.8
Deferred leasing intangibles - Tenant relationships	6,589		11.1
Deferred leasing intangibles - Above market leases	901		5.5
Deferred leasing intangibles - Below market leases	(2,572)		5.4
Total purchase price	$	119,343

Schedule of pro forma information for acquired properties

The following table summarizes the results of operations for the three months ended March 31, 2020 for the buildings acquired during the three months ended March 31, 2020 included in the Company’s Consolidated Statements of Operations from the date of acquisition.

Results of Operations (in thousands)	Three months ended March 31, 2020
Total revenue	$	1,942
Net income	$	252

Schedule of Finite-Lived Intangible Assets and Below Market Leases

The following table summarizes the deferred leasing intangibles on the accompanying Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019.

	March 31, 2020						December 31, 2019
Deferred Leasing Intangibles (in thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Above market leases	$	93,226	$	(34,349)	$	58,877	$	92,607	$	(32,115)	$	60,492
Other intangible lease assets	636,921		(222,188)		414,733		623,846		(209,189)		414,657
Total deferred leasing intangible assets	$	730,147	$	(256,537)	$	473,610	$	716,453	$	(241,304)	$	475,149
Below market leases	$	41,141	$	(13,357)	$	27,784	$	38,802	$	(12,064)	$	26,738
Total deferred leasing intangible liabilities	$	41,141	$	(13,357)	$	27,784	$	38,802	$	(12,064)	$	26,738

The following table summarizes the amortization expense and the net decrease to rental income for the amortization of deferred leasing intangibles during the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Deferred Leasing Intangibles Amortization (in thousands)	2020		2019
Net decrease to rental income related to above and below market lease amortization	$	990	$	967
Amortization expense related to other intangible lease assets	$	20,302	$	16,814

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The following table summarizes the amortization of deferred leasing intangibles over the next five calendar years beginning with 2020 as of March 31, 2020.

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 2020	$	56,849	$	2,894
2021	$	65,234	$	2,770
2022	$	55,558	$	2,202
2023	$	46,998	$	2,379
2024	$	38,009	$	2,687

Below Market Lease, Future Amortization Income

The following table summarizes the amortization of deferred leasing intangibles over the next five calendar years beginning with 2020 as of March 31, 2020.

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 2020	$	56,849	$	2,894
2021	$	65,234	$	2,770
2022	$	55,558	$	2,202
2023	$	46,998	$	2,379
2024	$	38,009	$	2,687

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Debt - Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,829,588	$ 1,651,085
Unamortized fair market value premium	37	39
Unamortized debt issuance costs	(5,653)	(6,111)
Principal outstanding	1,823,972	1,645,013
Long-term debt, fair value	1,812,277	1,691,514
Unsecured Credit Facility
Debt Instrument [Line Items]
Principal outstanding	225,000	146,000
Long-term debt, fair value	221,921	146,000
Unsecured Term Loans
Debt Instrument [Line Items]
Long-term debt, gross	975,000	875,000
Unamortized debt issuance costs	(3,299)	(3,625)
Principal outstanding	971,701	871,375
Long-term debt, fair value	962,764	875,000
Unsecured Notes
Debt Instrument [Line Items]
Long-term debt, gross	575,000	575,000
Unamortized debt issuance costs	(2,018)	(2,117)
Principal outstanding	572,982	572,883
Long-term debt, fair value	574,121	614,493
Mortgage Loans Payable
Debt Instrument [Line Items]
Long-term debt, gross	54,588	55,085
Unamortized fair market value premium	37	39
Unamortized debt issuance costs	(336)	(369)
Principal outstanding	54,289	54,755
Long-term debt, fair value	$ 53,471	$ 56,021

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Derivative Financial Instruments - FV on Recurring Basis (Details) - Interest Rate Swaps - Fair value on recurring basis - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Assets (liabilities):
Interest rate swaps-Asset	$ 0	$ 303
Interest rate swaps-Liability	(48,714)	(18,819)
Level 1
Assets (liabilities):
Interest rate swaps-Asset	0	0
Interest rate swaps-Liability	0	0
Level 2
Assets (liabilities):
Interest rate swaps-Asset	0	303
Interest rate swaps-Liability	(48,714)	(18,819)
Level 3
Assets (liabilities):
Interest rate swaps-Asset	0	0
Interest rate swaps-Liability	$ 0	$ 0

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Earnings Per Share - Reconciliation of Numerator and Denominator (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Numerator
Net income attributable to common stockholders	$ 62,072	$ 5,807
Denominator
Weighted average common shares outstanding — basic	147,570	114,721
Shares issuable under forward sales agreements	0	0
Weighted average common shares outstanding — diluted	147,656	114,993
Net income per share — basic and diluted
Net income per share attributable to common stockholders — basic	$ 0.42	$ 0.05
Net income per share attributable to common stockholders — diluted	$ 0.42	$ 0.05
Restricted stock
Net income per share — basic and diluted
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	182	214
Stock Compensation Plan
Denominator
Share-based compensation	86	272

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Leases - Maturity of Fixed Lease Payments (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Leases [Abstract]
2020	$ 273,733
2021	333,967
2022	297,877
2023	256,251
2024	212,829
Thereafter	$ 798,803

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Equity Incentive Plan - 2020 Activity (Details) - USD ($) $ in Millions				3 Months Ended	12 Months Ended
	Feb. 13, 2020	Jan. 08, 2020	Jan. 07, 2019	Mar. 31, 2020	Dec. 31, 2019
LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted		136,741		278,806	364,173
Unrecognized compensation costs				$ 7.5
Unrecognized compensation costs, period for recognition				2 years 7 months 6 days
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)	4 years	4 years
Stock Repurchased and Retired During Period, Shares				33,119	28,504
Granted				75,419	110,830
Unrecognized compensation costs				$ 4.7
Unrecognized compensation costs, period for recognition				2 years 10 months 24 days
Performance shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs				$ 10.0
Unrecognized compensation costs, period for recognition				2 years 2 months 12 days
Performance Units Granted in 2017 [Domain] | LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)			1 year
Issuance of vested LTIP units and shares		76,096
Stock Repurchased and Retired During Period, Shares		18,241
Granted		65,969
Performance Units Granted in 2017 [Domain] | Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance of vested LTIP units and shares		46,376
Performance Units Granted in 2017 [Domain] | Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)			1 year
Granted		3,398

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Noncontrolling Interest - Summary (Details) - $ / shares		3 Months Ended	12 Months Ended
	Jan. 08, 2020	Mar. 31, 2020	Dec. 31, 2019	Jan. 01, 2020	Dec. 31, 2018
Limited Partner
Noncontrolling interest
Noncontrolling interest ownership percentage		2.50%	2.50%		3.50%
LTIP Units
Noncontrolling interest
stag_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageGrantDateFairValue		$ 23.19		$ 21.64
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 29.47	29.47
stag_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsConvertedWeightedAverageGrantDateFairValue		$ 18.72
Noncontrolling Interest - Unit holders in Operating Partnership
Noncontrolling interest
Units outstanding, balance at beginning of period (in units)		3,736,852	4,069,434
Granted/Issued		278,806	364,173
Forfeited		0	16,618
Conversions from LTIP units to Other Common Units		0	0
Redemptions from Other Common Units to common stock		219,390	680,137
Units outstanding, balance at end of period (in units)		3,796,268	3,736,852
LTIP Units | Noncontrolling Interest - Unit holders in Operating Partnership
Noncontrolling interest
Units outstanding, balance at beginning of period (in units)		1,697,358	1,616,200
Granted/Issued		278,806	364,173
Forfeited		0	16,618
Conversions from LTIP units to Other Common Units		197,775	266,397
Redemptions from Other Common Units to common stock		0	0
Units outstanding, balance at end of period (in units)		1,778,389	1,697,358
Other Common Units | Noncontrolling Interest - Unit holders in Operating Partnership
Noncontrolling interest
Units outstanding, balance at beginning of period (in units)		2,039,494	2,453,234
Granted/Issued		0	0
Forfeited		0	0
Conversions from LTIP units to Other Common Units		197,775	266,397
Redemptions from Other Common Units to common stock		219,390	680,137
Units outstanding, balance at end of period (in units)		2,017,879	2,039,494

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Commitments and Contingencies	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesThe 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 $3.0 million as of March 31, 2020 related to construction projects and certain other agreements.

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Noncontrolling Interest

3 Months Ended

Mar. 31, 2020

Noncontrolling Interest [Abstract]

Noncontrolling Interest

Noncontrolling Interest

The following table summarizes the activity for noncontrolling interest in the Company for the three months ended March 31, 2020 and the year ended December 31, 2019.

Noncontrolling Interest	LTIP Units	Other Common Units	Total Noncontrolling Common Units	Noncontrolling Interest
Balance at December 31, 2018	1,616,200	2,453,234	4,069,434	3.5	%
Granted/Issued	364,173	—	364,173	N/A
Forfeited	(16,618)	—	(16,618)	N/A
Conversions from LTIP units to Other Common Units	(266,397)	266,397	—	N/A
Redemptions from Other Common Units to common stock	—	(680,137)	(680,137)	N/A
Balance at December 31, 2019	1,697,358	2,039,494	3,736,852	2.5	%
Granted/Issued	278,806	—	278,806	N/A
Forfeited	—	—	—	N/A
Conversions from LTIP units to Other Common Units	(197,775)	197,775	—	N/A
Redemptions from Other Common Units to common stock	—	(219,390)	(219,390)	N/A
Balance at March 31, 2020	1,778,389	2,017,879	3,796,268	2.5	%

The weighted average grant date fair value of outstanding LTIP units was $21.64 per unit at January 1, 2020, $29.47 per unit granted during the three months ended March 31, 2020, $18.72 per unit converted during the three months ended March 31, 2020, and $23.19 per unit at March 31, 2020.

LTIP Units

LTIP units granted on January 8, 2020 to non-employee, independent directors, subject to the recipient’s continued service, will vest on January 1, 2021. LTIP units granted on January 8, 2020 to certain senior executive officers and senior employees, subject to the recipient’s continued employment, will vest quarterly over four years, with the first vesting date having been March 31, 2020. Refer to Note 8 for a discussion of the LTIP units granted on January 8, 2020 pursuant to the January 6, 2017 performance units.

The fair value of the LTIP units at the date of grant 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 are non-recurring fair value measurements. The following table summarizes the assumptions used in valuing such LTIP units granted during the three months ended March 31, 2020 (excluding those LTIP units granted pursuant to the January 6, 2017 performance units; refer to Note 8 for details).

LTIP Units	Assumptions
Grant date	January 8, 2020
Expected term (years)	10
Expected volatility	18.0		%
Expected dividend yield	5.75		%
Risk-free interest rate	1.61		%
Fair value of LTIP units at issuance (in thousands)	$	4,030
LTIP units at issuance	136,741
Fair value unit price per LTIP unit at issuance	$	29.47

The following table summarizes activity related to the Company’s unvested LTIP units for the three months ended March 31, 2020 and the year ended December 31, 2019.

Unvested LTIP Units	LTIP Units
Balance at December 31, 2018	251,216
Granted	364,173
Vested	(371,423)
Forfeited	(16,618)
Balance at December 31, 2019	227,348
Granted	278,806
Vested	(130,187)
Forfeited	—
Balance at March 31, 2020	375,967

The weighted average grant date fair value of unvested LTIP units was $23.37 per unit at January 1, 2020, $29.47 per unit granted during the three months ended March 31, 2020, $27.37 per unit vested during the three months ended March 31, 2020, and $26.51 per unit at March 31, 2020.

The unrecognized compensation expense associated with the Company’s LTIP units at March 31, 2020 was approximately $7.5 million and is expected to be recognized over a weighted average period of approximately 2.6 years.

The following table summarizes the fair value at vesting for the LTIP units that vested during the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Vested LTIP units	2020		2019
Vested LTIP units	130,187		157,689
Fair value of vested LTIP units (in thousands)	$	3,861	$	4,063

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Rental Property

3 Months Ended

Mar. 31, 2020

Real Estate [Abstract]

Rental Property

Rental Property

The following table summarizes the components of rental property as of March 31, 2020 and December 31, 2019.

Rental Property (in thousands)	March 31, 2020		December 31, 2019
Land	$	443,427	$	435,923
Buildings, net of accumulated depreciation of $272,953 and $254,458, respectively	2,844,520		2,787,234
Tenant improvements, net of accumulated depreciation of $23,101 and $21,487, respectively	40,442		38,339
Building and land improvements, net of accumulated depreciation of $120,600 and $111,688, respectively	244,045		232,456
Construction in progress	26,737		29,406
Deferred leasing intangibles, net of accumulated amortization of $256,537 and $241,304, respectively	473,610		475,149
Total rental property, net	$	4,072,781	$	3,998,507

Acquisitions

The following table summarizes the acquisitions of the Company during the three months ended March 31, 2020.

Market (1)	Date Acquired	Square Feet	Buildings	Purchase Price (in thousands)
Detroit, MI	January 10, 2020	491,049	1	$	29,543
Rochester, NY	January 10, 2020	124,850	1	8,565
Minneapolis/St Paul, MN	February 6, 2020	139,875	1	10,460
Sacramento, CA	February 6, 2020	160,534	1	18,468
Richmond, VA	February 6, 2020	78,128	1	5,481
Milwaukee/Madison, WI	February 7, 2020	81,230	1	7,219
Detroit, MI	February 11, 2020	311,123	1	23,141
Philadelphia, PA	March 9, 2020	78,000	1	6,571
Tulsa, OK	March 9, 2020	134,600	1	9,895
Three months ended March 31, 2020		1,599,389	9	$	119,343

(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 consideration paid at the date of acquisition during the three months ended March 31, 2020 for the acquired assets and liabilities in connection with the acquisitions identified in the table above.

Acquired Assets and Liabilities	Purchase Price (in thousands)		Weighted Average Amortization Period (years) of Intangibles at Acquisition
Land	$	9,311	N/A
Buildings	84,409		N/A
Tenant improvements	1,438		N/A
Building and land improvements	4,360		N/A
Construction in progress	669		N/A
Other assets	450		N/A
Deferred leasing intangibles - In-place leases	13,788		7.8
Deferred leasing intangibles - Tenant relationships	6,589		11.1
Deferred leasing intangibles - Above market leases	901		5.5
Deferred leasing intangibles - Below market leases	(2,572)		5.4
Total purchase price	$	119,343

The following table summarizes the results of operations for the three months ended March 31, 2020 for the buildings acquired during the three months ended March 31, 2020 included in the Company’s Consolidated Statements of Operations from the date of acquisition.

Results of Operations (in thousands)	Three months ended March 31, 2020
Total revenue	$	1,942
Net income	$	252

Dispositions

During the three months ended March 31, 2020, the Company sold three buildings to third parties comprised of approximately 1.2 million rentable square feet with a net book value of approximately $52.9 million. These buildings contributed approximately $0 and $1.3 million to revenue for the three months ended March 31, 2020 and 2019, respectively. These buildings contributed approximately $(0.1) million and $0.4 million to net income (loss) (exclusive of gain on the sales of rental property, net) for the three months ended March 31, 2020 and 2019, respectively. Net proceeds from the sales of rental property were approximately $99.7 million and the Company recognized the full gain on the sales of rental property, net, of approximately $46.8 million for the three months ended March 31, 2020.

Loss on Impairments

During the three months ended March 31, 2020, the Company did not recognize any loss on impairments. During the three months ended March 31, 2019, the Company recognized approximately $5.3 million of loss on impairments related to one building.

Assets Held for Sale

As of March 31, 2020, the related land and building and improvements, net of approximately $0.2 million and $1.0 million, respectively, for one building located in Johnstown, NY was classified as assets held for sale, net on the accompanying Consolidated Balance Sheets. This building did not contribute to revenue for the three months ended March 31, 2020 and 2019, and contributed approximately $40,000 and $44,000 to net loss for the three months ended March 31, 2020 and 2019, respectively.

Deferred Leasing Intangibles

The following table summarizes the deferred leasing intangibles on the accompanying Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019.

	March 31, 2020						December 31, 2019
Deferred Leasing Intangibles (in thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Above market leases	$	93,226	$	(34,349)	$	58,877	$	92,607	$	(32,115)	$	60,492
Other intangible lease assets	636,921		(222,188)		414,733		623,846		(209,189)		414,657
Total deferred leasing intangible assets	$	730,147	$	(256,537)	$	473,610	$	716,453	$	(241,304)	$	475,149
Below market leases	$	41,141	$	(13,357)	$	27,784	$	38,802	$	(12,064)	$	26,738
Total deferred leasing intangible liabilities	$	41,141	$	(13,357)	$	27,784	$	38,802	$	(12,064)	$	26,738

The following table summarizes the amortization expense and the net decrease to rental income for the amortization of deferred leasing intangibles during the three months ended March 31, 2020 and 2019.

	Three months ended March 31,
Deferred Leasing Intangibles Amortization (in thousands)	2020		2019
Net decrease to rental income related to above and below market lease amortization	$	990	$	967
Amortization expense related to other intangible lease assets	$	20,302	$	16,814

The following table summarizes the amortization of deferred leasing intangibles over the next five calendar years beginning with 2020 as of March 31, 2020.

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 2020	$	56,849	$	2,894
2021	$	65,234	$	2,770
2022	$	55,558	$	2,202
2023	$	46,998	$	2,379
2024	$	38,009	$	2,687

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Rental Property - Summary (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Property Subject to or Available for Operating Lease [Line Items]
Rental property, net	$ 4,072,781	$ 3,998,507
Deferred leasing intangible assets, accumulated amortization	256,537	241,304
Land
Property Subject to or Available for Operating Lease [Line Items]
Rental property, net	443,427	435,923
Buildings, net of accumulated depreciation of $272,953 and $254,458, respectively
Property Subject to or Available for Operating Lease [Line Items]
Rental property, net	2,844,520	2,787,234
Rental property, accumulated depreciation	272,953	254,458
Tenant improvements, net of accumulated depreciation of $23,101 and $21,487, respectively
Property Subject to or Available for Operating Lease [Line Items]
Rental property, net	40,442	38,339
Rental property, accumulated depreciation	23,101	21,487
Building and land improvements, net of accumulated depreciation of $120,600 and $111,688, respectively
Property Subject to or Available for Operating Lease [Line Items]
Rental property, net	244,045	232,456
Rental property, accumulated depreciation	120,600	111,688
Construction in progress
Property Subject to or Available for Operating Lease [Line Items]
Rental property, net	26,737	29,406
Deferred leasing intangibles, net of accumulated amortization of $256,537 and $241,304, respectively
Property Subject to or Available for Operating Lease [Line Items]
Rental property, net	$ 473,610	$ 475,149

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Rental Property - Disposals (Details) ft² in Millions	3 Months Ended
	Mar. 31, 2020 USD ($) ft² building	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of buildings disposed | building	456
Area (in square feet) | ft²	91.8
Carrying value of property sold	$ 4,072,781,000		$ 3,998,507,000
Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of buildings disposed | building	3
Area (in square feet) | ft²	1.2
Carrying value of property sold	$ 52,900,000
Contribution to revenue	0	$ 1,300,000
Disposal Group, Including Discontinued Operation, Operating Income (Loss)	(100,000)	$ 400,000
Net proceeds from sales of rental property	99,700,000
Gain (Loss) on Sale	$ 46,800,000