STAG Industrial is positioned to deliver approximately 9% annual AFFO/share growth driven by three primary levers. First, mark-to-market lease roll-ups on its same-store portfolio support 3%–5% organic growth: in 3Q25 cash NOI run-rate stood at $161 million, and even a conservative 3.5% increase translates into an additional $22 million of annual NOI (roughly $0.12 per share of AFFO). Second, management is guiding to 18%–20% cash leasing spreads in 2026 versus GAAP spreads of 38.1% in 2025, indicating continued but moderating mark-to-market benefits. Third, STAG’s acquisitive strategy—built for higher transaction volume—captures immediate AFFO accretion from elevated cap rates, as detailed below.

After a subdued acquisition year in 2025 with $350–$500 million deployed, STAG anticipates returning to its five-year average of about $700 million in 2026. With industrial cap rates rising into the mid-6% range against a 5.86% cost of equity and 5.65% cost of debt, STAG enjoys a roughly 75 basis-point spread on acquisitions and an estimated $11 million of annual AFFO accretion (about $0.06 per share). On development, the company has $158 million of in-construction projects slated for delivery by early 2026; at its 7% target yield (and demonstrated stabilized yields up to 9.3%), these projects should contribute roughly $2 million—or $0.01 per share—to AFFO.

STAG recently raised its dividend to yield 4%, underpinning a total expected annual return of roughly 13% when combined with 9% AFFO/share growth. Trading at 17× forward AFFO versus a consensus NAV of $44.24 and a peer-adjusted fair multiple closer to 20×, the REIT appears undervalued. With a clean balance sheet at approximately 5× debt/EBITDA and a BBB credit rating, STAG offers a compelling risk-adjusted profile, especially given consensus is modeling only 10 cents of AFFO/share growth in calendar 2026 versus our projection of 19 cents on a run-rate basis.