STAG Industrial is positioned to deliver approximately 9% annual growth in adjusted funds from operations (AFFO) per share, driven by three core levers. First, mark-to-market lease roll-ups on its existing portfolio should generate 3%–5% organic growth, with STAG signing new leases at 38.1% higher GAAP rates (24% higher on a cash basis) versus expirations through December 2025. Second, rising cap rates into the mid-6% range have unlocked accretive acquisitions; management targets roughly $700 million in deployment for 2026, up from guidance of $350–500 million in 2025. Third, a healthy development pipeline forecast to deliver about $158 million of new assets at 7% initial yields (and up to 9.3% on select projects) supports incremental AFFO. Together, our analysis shows run-rate accretion of $0.12 from same-store NOI, $0.06 from acquisitions and $0.01 from developments, totaling $0.19 per share.

Following a 50% surge in national asking rents from 2021–2024, deliveries of large-format logistics assets have lifted vacancy rates to just over 7%, returning leasing markets to historical norms. Asking rents now range from modest increases in tight submarkets to slight declines in higher-supply regions. STAG’s same-store net operating income (NOI) run-rate reached $161 million in 3Q 2025, and management guides to 4.0%–4.25% NOI growth in 2025—our forecast for 2026 is 3.5%, equating to $22 million in annual NOI gain and $0.12 per share of AFFO uplift.

Cap rates for STAG’s target assets average approximately 6.5%, creating a 75 basis-point spread over its cost of capital (5.86% equity, 5.65% debt). This spread drives immediate AFFO accretion on acquisitions, with STAG expecting to return to its five-year average of about $700 million in annual purchases. On development, five projects scheduled for delivery by early 2026 total $158 million in cost, targeted at 7% stabilized yields. One recent Nashville build stabilized at 9.3% yield, 210 basis points above underwriting and six months ahead of schedule. These developments contribute roughly $0.01 per share of AFFO accretion.

STAG trades at a 17x forward AFFO multiple, offering a value discount relative to peer multiples and a consensus net asset value of $44.24 per share. The company recently raised its dividend yield to 4%, complementing its projected 9% AFFO growth for a potential 13% total return if multiplicative effects hold constant. STAG operates with a conservative balance sheet—net debt at approximately 5x EBITDA and a BBB credit rating—while generating over $100 million in free cash flow after dividends, providing further funding flexibility for acquisitions and developments.