STAG Industrial, Inc. (STAG) Cash Flow Statement

STAG's operating cash flow has ranged from $103.5M to $147.5M over ten quarters, while FFO has ranged from $114.4M to $165.3M. The fact that FFO can exceed OCF by over $56M in one quarter and trail it by nearly $19M in the next suggests that non-cash rent recognition — particularly straight-line adjustments on new leases — introduces meaningful volatility in reported FFO that is not always reflected in actual cash receipts. This inconsistency warrants investor attention to the quality of FFO as a proxy for distributable operating performance, especially given STAG's single-tenant model where lease commencement timing and rent escalation schedules can create significant straight-line accounting effects.

The dividend payout ratio (Div/AFFO) has averaged roughly 0.48 over the trailing ten quarters, meaning STAG retains approximately half of its AFFO after distributions — a meaningful reinvestment buffer that supports acquisitions without diluting coverage. The 2026Q1 ratio of 0.17 reflects an abnormally low dividend payment of $24.3M against the typical $68.8M–$76.3M quarterly pattern; this likely reflects a timing difference in when dividends were recorded rather than an actual reduction, as subsequent quarters return to the higher payout levels. The key concern is whether the AFFO-to-FFO gap continues to widen, as that would compress the retained buffer even if headline FFO grows.

The pattern of predominantly negative capex implies STAG's portfolio recycling activity is significant relative to its gross capital spending, with disposals or capital reimbursements exceeding new investment in most periods. The two quarters of positive capex — 2026Q3 at $42.1M and 2025Q3 at $8.9M — suggest episodic bursts of property improvement or development spending, which may coincide with value-add repositioning or new acquisition due diligence. For a single-tenant REIT, this negative net capex profile is unusual and warrants investigation into whether recurring maintenance costs are being adequately captured within the AFFO calculation or whether disposals are masking underinvestment in building-level capital needs.

GAAP net income has ranged from $41.9M to $91.4M, while FFO has ranged from $114.4M to $165.3M — a spread that reflects the massive non-cash depreciation charge inherent to STAG's industrial real estate base. The volatility in the FFO/NI ratio (from 1.13 to 3.06) suggests that acquisition-related depreciation step-ups and property disposition gains/losses distort period-to-period comparisons, making GAAP earnings an unreliable indicator of operating trend. Based on the reported figures, the depreciation burden appears structurally significant for STAG's asset base, which is consistent with the industrial REIT model of acquiring and holding long-lived assets whose book value declines while their market value typically appreciates.