Stag Industrial's CEO Discusses Q3 2013 Results - Earnings Call Transcript

Nov. 5.13 | About: STAG Industrial, (STAG)

Stag Industrial, Inc. (NYSE:STAG)

Q3 2013 Earnings Call

November 5, 2013 11:00 AM ET

Executives

Brad Shepherd – VP, IR

Benjamin Butcher – Chairman, President and CEO

Gregory Sullivan – EVP, CFO and Treasurer

Stephen Mecke – EVP and CFO

David King – EVP and Director, Real Estate Operations

Analysts

Gabe Hilmoe – UBS

David Toti – Cantor Fitzgerald

Jonathan Pong – Robert W. Baird

Brendon Mariana – Wells Fargo

Michael Salinsky – RBC Capital Markets

Operator

Greetings and welcome to the STAG Industrial Incorporated Third Quarter 2013 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brad Shepherd, VP of Investor Relations. Thank you. Mr. Shepherd, you may begin.

Brad Shepherd

Thank you. Welcome to STAG Industrial’s conference call covering the third quarter 2013 results. In addition to the press release distributed yesterday, we have posted an un-audited quarterly supplemental information presentation on the company’s website at www.stagindustrial.com under the Investor Relations section. On today’s call, the company’s prepared remarks and answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actually results to differ from those discussed today. Examples of forward-looking statements include those related to STAG Industrial’s revenues and operating income, financial guidance, as well as non-GAAP financial measures such as trends from operation, core FFO and EBITDA. We encourage all of our listeners to review this more detailed discussion related to these forward-looking statements, contained in the company’s filings with the SEC and the definitions and reconciliations of non-GAAP measures contained in the supplemental information package available on the company’s website. As a reminder, forward-looking statements represent management’s estimates of as today, Tuesday, November 05, 2013. STAG Industrial will strive to keep its stockholders as current as possible on company matters but assumes no obligations to update any forward-looking statements in the future. On today’s call we’ll hear from Ben Butcher, our Chief Executive Officer; and Greg Sullivan, our Chief Financial Officer.

I will now turn this call over to Ben.

Benjamin Butcher

Thank you, Brad. Good morning, everybody and welcome to the third quarter earnings call for STAG Industrial. We are pleased to have you join us and look forward to telling you about our third quarter results and some significant subsequent events. We’re happy to report 2013 continues to be a good year for STAG and its properties. Presenting today in addition to myself, will be Greg Sullivan our CFO, who will review our third quarter financial and operating result. Also with me today are Steve Mecke, our COO; Dave King our Director of Real Estate Operations and Bill Crooker, our Chief Accounting Officer. They will be available to answer questions specific to their areas of focus. Our third quarter operational results provide continued validation of our investment thesis, with significant acquisition and leasing activity by the company.

Acquisitions; during the third quarter the company acquired six building. The 1.9 million square feet acquired represented approximately 5.8% increase in the square footage of the company’s real-estate assets over the previous quarter. On a year-over-year basis the square footage of our on properties increased by 50%. The acquisition of these buildings allowed us to achieve a couple of notable portfolio milestones, 200 buildings and 35 million square feet. A year earlier, at the end of the third quarter of 2012, these portfolio totals were 134 buildings and 23.5 million square feet. Six buildings were acquired for a combined all-in purchase price of approximately $79.5 million. Total acquisitions through the third quarter were 249 million versus 215 million over the same period in 2012. The six buildings acquired in the quarter are located in six different states. The tenants reflect diverse industries including containers and packaging, industrial equipment and business services and varied [ph] lease explorations. In addition, our pipeline of deals will meet our investment criteria continues to be robust with over $600 million of potential acquisitions being reviewed and considered by our acquisition teams. As we head into the historically active fourth quarter, we remain very confident of our ability to meet our acquisition goals and to maintain a vibrant acquisition pace going forward.

Leasing; the company experienced strong leasing activities in the third quarter as well. In the quarter, the company renewed leases totaling slightly more than 320,000 square feet. Also in the quarter, we leased approximately 150,000 square feet of existing vacant space. The rental rates on renewed leases in the third quarter increased 1.3% on a cash basis and increased 9% on a GAAP basis. Occupancy rose slightly in the quarter from 93.9% to 94%. This performance is in spite of the fact that our lease execution for the 427,000 square foot building in Sun Prairie Wisconsin occurred shortly after quarter end. This tenure lease increased full portfolio occupancy to over 95%. Tenant retention; 13% in this quarter after month to month expansion expired, continues to trend below our long-term expectations for this metric, both for the quarter and for the year. We believe this is due to a number of factors including, small sample anomalies, a period of heightened incorporate change activity after period of stasis caused by the recent global financial crisis more on this shortly and general economic improvement.

Tenant retention has historically had a slightly interest [ph] correlation with the general economic conditions. As we reviewed our recent norm renewals, no clear reason behind the above list, for a period of lower tenant retention is evident i.e. no fundamental change in tenant behavior has occurred. Seamless tenant retention since our IPO has been about 70%. It should be pointed out the aforementioned heightened corporate change activity also had a positive attack on our portfolio through lease up. This is evidenced by despite the low tenant retention for the quarter same-store occupancy was essentially flat from the previous quarter. We believe that this heightened activity, with effects on tenant retention and leasing activity, may continue to play out over the next few quarters.

Dividend; during the third quarter our board approved and moved payment of dividend on a monthly from quarterly basis. We see this move to put the funds in the hands of our shareholders sooner, as consistent with our focus on providing predictable cash flows and durable dividends. On the board; our board is to add Virgis Colbert as an additional independent director. Virgis brings the wealth of general corporate director experience to the board, having served as the director of insurance such as Bank of America, Stanley Black & Decker, Hillshire Brands normally known as Sara Lee, Lorillard and others. He also brings viable operations and logistics experience having run those functions for Miller Brewing. I will now turn it over to Greg to review our third quarter financial results and provide some further details on our balance sheet and liquidity.

Gregory Sullivan

Thanks, Ben. As Ben mentioned, we had another solid quarter from an acquisition and operations standpoint. Our cash NOI was up 53% over the third quarter 2012. This growth was driven primarily by our strong acquisition activity. Our core FFO increased by 60% over the third quarter of 2012. We think these non-per share metrics are important, because they convey our ability to grow the business while their more typically cited per share metrics are heavily influenced by our financing and liquidity decisions. Having said that, our core FFO per share significantly increased by 21% over Q3 of 2012, while maintaining our low 30% leverage. Our AFFO for the quarter increased 60% over the third quarter of 2012. This is one of our key valuation metrics, as it reflects the low CapEx nature of our portfolio. Because of the single tenant focus of our business, our leasing and CapEx cost continues to be quite modest. I should note that TI costs were a bit higher this quarter, due to driven by office lease and a building expansion.

As usual, we had a number of acquisitions closed towards the end of the quarter. Of the 79 million that closed in Q3, 69 million closed in the last half of the quarter. Our occupancy was 94% at the end of this quarter compared to 93.9% at the end of the second quarter 2013. Sequential same-store occupancy was also stable at 93.4%, down 20 basis points and same store NOI was flat. We had success at backfilling expiring leases. Of the 450,000 square feet that did not renew in the third quarter, 220,000 square feet were leased and occupied the next business day. And another 41,000 square feet was leased on a month to month basis. As Ben mentioned, we also leased the entire 427,000 square foot Sun Prairie space subsequent to quarter end, for 10 years at higher rent. Our debt metrics continue to be quite strong. Our interest coverage for the third quarter was five times, our total debt to total assets was 41% and our debt to enterprise value was 30%. Our net debt to annualized adjusted EBITDA was 4.6 times at quarter end. This figure somewhat overstated since once again a sizeable portion of the acquisition income occurred late in the quarter yet we timed a full debt balance on those acquisitions. If these acquisitions were acquired on the first day of the quarter, our annualized adjusted EBITDA would have increased $4.3 million.

In general, the capital markets continue to be attracted to our property’s ability to generate high cash yields with limited leasing cost. As a result, we improved the borrowings spread and fees in our revolving credit facility and five year term loan. As at quarter end, we had approximately $24 million in cash, $20 million drawn under our revolver total capacity of $300 million. The ATM program was [indiscernible] as funding our granular acquisition strategy with gross proceeds of $37 million for the quarter and we expect to continue to utilize the ATM going forward. Given our extremely strong credit statistics facilitated by our investment grade rating, our financing strategies continue to emphasize unsecured financings and maintain credit metrics consistent with investment grade rating and the financial flexibility that comes with that as we continue to grow. Due to our stable, well-leased and highly diversified portfolio as Ben mentioned, we have elected to pay dividends on a monthly basis going forward. This model is attracted to our investor base, particularly the retail shareholders and better matches monthly ETF distributions.

Our dividend payout in the third quarter was 86% of AFFO. Because of the ongoing high positive spreads between our going in [ph] cap rates and our financing rates, our existing portfolio has been able to generate a debt – a dividend yield that is roughly twice the average REIT dividend, which we would expect to continue even if we didn’t buy another asset. Yet as Ben mentioned, our pipeline is quite large, so we can expect to continue to deliver attractive income plus growth for our investors. In terms of guidance, the only guidance we’re giving for 2014 is that we expect to grow our assets by another 25% next year, typically financed at 40% leverage and we expect G&A to run around 21 million.

I will now turn it back over to, Ben.

Benjamin Butcher

Thank you, Greg. Another busy and successful third quarter has continued what we expect to be a great for 2013 for STAG. We will continue to move forward with our low levered strategy for the execution of our differentiated investment thesis. STAG continues to benefit from a combination of factors through a lot of significant volumes of quality and accretive opportunities for acquisitions, both on a relative dial [ph] and spread investment basis. General market conditions remain favorable with relatively and stable low interest rates of strength in the leasing market and a relatively stable cap rate environment. In particular for our differentiated investment thesis, this year’s provided a significant validation of the lease ability of our assets when [indiscernible] soon occur. Thus, we continue to be optimistic for the future for our company for our owned assets and for our investment thesis. We believe that our business plan to aggregate and operate a large portfolio of granular and diversified industrial assets will produce strong and predictable returns for our shareholders. Our third quarter operational results will add continued validation with this contraction. Going forward, we will maintain our pricing discipline and focus on shareholder returns. We thank you for your continued support.

Question-and-Answer Session

Operator

Thank you. We would now be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from Gabe Hilmoe with UBS. Please proceed.

Gabe Hilmoe – UBS

Hi, thanks. May be a question for Greg, just on the same store ally front a downside we have in the quarter running roughly down since the year. How should we think about that number trending at the end of the year given some of the you’ve done on the [indiscernible]

Gregory Sullivan

I don’t know if we can make a forward-looking statement for the final quarter, but let me give you a little color on the third quarter. One of the things that happens when you have a large tenant like Sun Prairie in the mix, those numbers would have been substantially different without Sun Prairie. So for example, the cash NOI would have been down 3.4% instead of 5.5% and the same store occupancy difference would have been 100 basis points instead of 3.1%. The other thing I’d add and I know that some people on their commentary pointed out that the increase in operating expenses. They are again because most of our leases – the vast majority are about 95% are triple net leases. When those tenants go vacant, not only are they not paying their expenses, but we are taking up those expenses. You tend to see a lot more variability on the expense side. The other thing that happened in that same store pool was that there were a couple larger tenants that were paying the expenses directly. So that revenue and expense component was not on our income statement at all. And those tenants were replaced with tenants that were triple net where we paid the expense and they paid the revenue. So it’s a little hard sometimes when you look at these same store stats because of the same store – because of the single tenant triple net nature of the leases where these expenses can bounce around a fair bit.

Gabe Hilmoe – UBS

I guess given the fact that you did Sun Prairie now and there is some back of occupancy with some guys that are renewing in the third quarter. I guess from a trend perspective should we think of that same store number as likely moving closer to zero or not running at the negative 5.5 for the fourth quarter?

Gregory Sullivan

Dave I don’t know whether you have any thoughts

David King

I haven’t looked at it at that level, but I would tell you that Sun Prairie that the lease and all those expenses would fade away in this quarter and that’s pretty sizeable sum. So can’t answer the question specifically but I’m trying to [indiscernible].

Gabe Hilmoe – UBS

Okay. And just one more the 21 million in G&A for ‘14, I think that’s roughly kind of 3.5 million above the run rate of third quarter? I guess what are the big drivers of that increase?

Gregory Sullivan

There are a couple of drivers one is that we mentioned this I think in our last call perhaps so we’ve been ‘building’ out the machine. So we’ve been adding particularly on the acquisitions side to increase our throughput of the enterprise. And so there’s been some staffing additions and some expected staffing additions in 2014 along with those staffing additions those additional space needs. So we built in some additional space needs in 2014 a potential relocation to another location.

Gabe Hilmoe – UBS

Thank you.

Gregory Sullivan

Thanks.

Operator

Thank you. Our next question comes from David Toti with Cantor Fitzgerald. Please proceed.

David Toti – Cantor Fitzgerald

Hey good morning guys. Relative to the assumption of another 25% growth next year, how would you characterize what you think the asset pool is going to look like going forward? I mean would you expect compressed cap rate with respect to different market banks or should think about next you’re looking like this year?

Benjamin Butcher

I think it’s fair to say it would look a lot like this year but it will continue to have caps on things like correlated risk in the portfolio geographic lease exploration industry etcetera in specific tenant credits. All those things we’ll watch to keep them down but we really as we continue to sort of agnostic look at the market out there, we’ll continue to buy at a lot of different places and we continue to see lots of opportunity to do so. So we’re very comfortable about continuing the 25% growth the portfolio we’ll continue to look sort of what it looks like now.

David Toti – Cantor Fitzgerald

Okay. And in terms of capital sources, does it make sense that at some point when you brought in an asset may be re-leased it long term or maybe you guys have been working but have become weak over time disclosed of asset at some point use that as a source of capital?

Benjamin Butcher

Well I think that the sense of the market become weak over time, there is certainly some component to that markets they don’t specifically the markets we operate in are a really low volatility markets they don’t really change that much. And the tenants used the specific reason there in that building is even less likely to have changed. So I think that the dispositions that you’ll see us do are driven out of cleaning up the portfolio of the flags and single storey office system we bought back in 2007 after continual process. You’ll also see us sell assets to users where we can get the economics that are similar to having lease the building. And then finally, there could be instances where we get a long term lease with a particular good credit where the asset might actually be worth more outside in the portfolio certainly at least that would be inside the portfolio. We’re buying and we think a very long term cash flow producing assets and the reason for them being that are likely to be pretty durable so we’re not likely to be a big seller.

David Toti – Cantor Fitzgerald

Okay. And then my last question guys just related to kind of this sort of overall strategy related as you do grow and the acquisitions funds may be become a smaller part of the growth profile. Is it possible we could see more than internal focus in expansion of the operations efforts in order to sort of accelerate organic growth? In other words, do you see the company as it gets bigger evolving from more than external focus to an internal focus potentially?

Benjamin Butcher

Well I think there is some opportunity for us to do expansions and we’re undertaking some of them now. My illusion to sort of heightened change activity some of that is being evidenced tenants looking for expansions. But I don’t see us becoming other than expanding existing buildings, I don’t see us moving into arenas where we’re going to take on either development or leasing risks. We’re pretty comfortable that the – our ability to grow gradually but continually grow in size will persist for years to come. So we don’t see a need to change focus to continue to deliver the kind of growth that we are – the growth pattern that we are on today.

David Toti – Cantor Fitzgerald

Okay, great. Thanks for the detail today.

Operator

Thank you. Our next question comes from Jonathan Pong with Robert W. Baird. Please proceed.

Jonathan Pong – Robert W. Baird

Hey good morning guys.

Benjamin Butcher

Good morning.

Jonathan Pong – Robert W. Baird

Just wanted to get a little bit more on the credit quality of the tenants and [indiscernible] acquisition Q3 and may be the deals that you have in your pipeline can you speak a little bit to sort of the strength of what you’ve done may be previously and where you see that quality trending in the pipeline going forward?

Benjamin Butcher

Greg, you want to address that?

Gregory Sullivan

Yeah sure. I would say that the profile of the recent acquisitions is consistent with the rest of our portfolio. I think one of the things that people often overlook is that quality of our tenants is quite good. Our average tenant size is about 185,000 square feet. So unlike many of the public peers that have been our smaller tenants that tend to be a little more Mom ‘n Pop, oriented 56% of our tenants view tenure of the parent are publicly graded and 31% are investment grade. So again, we don’t sort of change the mix very much on an ongoing basis, but we obviously strive towards very strong credit profile in our tenants and that we expect to continue.

Jonathan Pong – Robert W. Baird

Great, that’s helpful. And then when you think about the leasing pipeline as we head into the stretch for the year, can you talk about any seasonal factors that might benefit or headwind going into year end? And what are some of the more privileged[ph] factors that’s impacting leasing today?

Benjamin Butcher

Well the biggest seasonal impact in our business tells me more of acquisitions because of the fourth quarter is sort of heightened quarter for people, putting their balance sheets in order, moving assets etcetera. From a leasing perspective, the biggest impact on the moving of goods and services is probably seasonally is the impact in Christmas and obviously that happens when people are preparing for Christmas that’s what we know are much earlier in the year. I don’t think you’d really see much in the way of seasonal leasing activity other than perhaps people thinking about the seasonality of retail. Dave you have further comments?

David King

You’re right, most of it the holiday shopping [indiscernible] system.

Jonathan Pong – Robert W. Baird

Great. Thanks a lot guys.

Gregory Sullivan

Thank you.

Operator

Thank you. Our next question comes from Brendon Mariana with Wells Fargo. Please proceed.

Brendon Mariana – Wells Fargo

Thanks. Good morning. Hey Ben if I heard you right, did you think that there is increased tenant movement and then you’re less likely to have as a high tenant retention ratio going forward as you’ve enjoyed over the past few years?

Benjamin Butcher

Yeah I think it’s a short term phenomenon. There was a period from mid-2008 to the end of 2010 or something like that where corporations basically did nothing but try and conserve cash and weren’t making any decisions. And may be from ‘11 and into ‘12 they were sort of in this heightened sort of try to conserve cash but they are still waiting to see what was happening. They saw short of leases, people looking for much shorter term optionality, but not really making any big decision. I think what we’ve seen recently I think Dave may have some stats on it, we’ve seen lease durations extending and we’ve also seen just more activity. So people are waiting to do things over that three four years, all of a sudden in the last may be in the last two or three quarters or so people are sort of trying to catch up with feels to us trying to catch up with that corporate activity that was put aside for those years. We don’t think this is a long term phenomenon, it’s certainly more of a catch up everybody is sort of putting their logistics house etcetera back in order.

Brendon Mariana – Wells Fargo

Is it a risk for your business if you got tenants that are in expansion mode, I mean the benefit for you guys is do you like them to renewed or stay in that space high yield lower same store growth type of model. Is there an expansion mode that creates volatility where their existence space may not…

Benjamin Butcher

There is no question that probably if you take a single reason for the tenants to leave buildings because the building isn’t big enough. That might be the single biggest reason. One of the advantages working primarily with Class B buildings which are used less intensively, they on cubic spaces used less intensively there is more flexibility to expand within the four walls by racking more going up higher. So that most of our, I shouldn’t say most, a significant number of our building I’ll let Dave speak to that what I’m we have expansion capability that’s a feature of most buildings are built for single tenant occupancy we’ll have enough room for some degree of expansion so that’s the big reason you’re most likely to lose a tenant the building is not big enough. Dave?

David King

That’s why earlier, we look at stats on a sequential basis and two years ago lease was 35 now the [indiscernible] most recent six months and that’s more than double in turn. So I think they are seeing more tenant certainty as years progress from recent financial crisis. And regarding expansion a lot of our building giving up their expense land, we can’t typically had 30% or 40% to spread [indiscernible] so we’ve had options for tenants we want to expand.

Brendon Mariana – Wells Fargo

Okay, that’s helpful. And then just my last question second question Ben, when you look at the size of the portion, right now you enjoy nice cost to capital, it makes us to be in acquisition mode because you can issue capital attractively acquire assets attractively. If the market became such that it wasn’t attractive to issue capital, do you think your portfolio of its where you could pursue a portfolio strategy where you sold $200 million of asset to bund $200 million of assets or do you think you need to get bigger to get to that point?

Benjamin Butcher

No Brendon we could do that but we’d be selling assets that we believe are fundamentally good long term cash flow producing assets. And selling them to buy assets that are basically the same thing they may be in a better – we’ll be able to sell assets effectively they have to be leased. So as you’re selling leased assets to buy leased assets I don’t think that trade is likely to produce much for us in the near term. The other thing is that, if we got to the point where our cost of equity and overall cost to capital made it unattractive for us to acquire, there has to be tremendous movement in interest rates because of our higher cap rate environment and enjoy a much bigger cushion or spread before we move into that position. So I think that there is quite a lot of room before we’d be facing that. And if we did face that, we simply wouldn’t buy assets into what was attractive and we’d continue to produce to a very well large and portfolio continue to produce very predictable dividends along the line.

Brendon Mariana – Wells Fargo

Yeah I understand that and I know sort of theoretical that’s not like have been now or even 12 months from now part of it how you proposition or part of that potential was, you could cobble together kind of these nine assets in a portfolio and may be sell them for 7.5? And just wondering if may be eventually in the length cycle of STAG, that becomes part of the business model to monetize create that value and recycle it and then do it again?

Benjamin Butcher

Well it’s certainly a possibility our assets are currently around where we think we could sell them. We think there is a portfolio cap rate compression value out there, but we’re already capturing it by our process litigation.

Brendon Mariana – Wells Fargo

Yeah understood. Okay. Thank you.

Operator

Thank you. Our next question comes from Michael Salinsky with RBC Capital Markets. Please proceed.

Michael Salinsky – RBC Capital Markets

Good morning guys. Can you touch a little bit upon the size of the acquisition pipeline right now and how that compares to the fourth quarter of ‘12? Normally you’ve talked about the fourth quarter being your biggest acquisition quarter and it seems like it’s kind of tracking more in line with the rest of the quarter thus far?

Benjamin Butcher

Yeah I think our pipeline and this is a feature that began in January of this year. Our pipeline continues to be seasonally larger than it has been now we’re heading into a quarter where that reflects of the fact that they are using our business quarter, we would expect our pipeline to be as big or bigger than it has been throughout the year. I wouldn’t say that they are largest today. Steve you may have color on that?

Stephen Mecke

Yeah, no the pipeline is – the size of the pipeline is pretty static over the year. It’s been bigger this year than previous years, but as Ben mentioned it’s been pretty static at least in terms of size. And going into the fourth quarter, it’s clear now that right now sort of go time for us to be the real fourth quarter. We got a lot of traction at the end of the year for people just wanting to make a yearend close and they may make very vague decisions. So our ability to close quickly is [indiscernible] situation.

Michael Salinsky – RBC Capital Markets

Do you see any changes in pricing or competition or any thought at that?

Stephen Mecke

No they are still pretty steady for the year we’ve mentioned in previous calls, our primary measure is lot of still so we’re still working against those guys but pricing has been relatively stable and competition is basically the same.

Michael Salinsky – RBC Capital Markets

Okay. The two leases you’re saying in October when do those commence? When do each of those commence? And also as you look forward to ‘14 is there any known vacate at this point of significant?

Benjamin Butcher

Two leases that were signed in the fourth quarter which at the [indiscernible] perhaps on the biggest. So they’re looking forward we only know one sizeable 2014 exploration that’s a known vacate at this point about 200,000 feet.

Michael Salinsky – RBC Capital Markets

Okay when does that occur in the quarter?

Benjamin Butcher

As of April.

Michael Salinsky – RBC Capital Markets

And then finally just as you look at 25% growth next year in the portfolio, how should we think about scalability and incremental G&A?

Benjamin Butcher

Well I think one of the things Greg touched on earlier is there are scalability in the margin is immense. If we simply hold the sort of the fixed cost portions of the business they acquisition team etcetera some of those things that were very scalable. I think we will continue to build or we have been continuing to build staff, machines or little bit fixed cost portion of the machines that has caused us to have what we believe probably is above long term growth on a percentage basis. But we continue to drive that down on a percentage of NOI basis or a percentage of asset basis. And I think the things that we’ve talked about previously bigger company that number will be down and numbers that the 10% of NOI number is a few years out that’s forward looking – but it’s easy to see given the scalability enterprise how we could get there.

Michael Salinsky – RBC Capital Markets

Appreciate the color there. Thank you.

Operator

Thank you. I would like to turn the floor back over to Ben Butcher.

Benjamin Butcher

Thank you everybody. We enjoyed your continued support. I think that the big news for 2013 continues to be our asset management and leasing ability to lease assets and prove out our fungibility on the assets we own. We expect that to continue through the end of 2013 and then 2014 so in off toward user we think we’ll be again the most important [indiscernible] going forward. Thanks again.

Operator

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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STAG Industrial (STAG): Q3 FFO of $0.35 beats by $0.01. Revenue of $34.88M beats by $1.54M. (PR)