STAG Industrial, Inc. announced the sale of its one million square foot building in Burlington, New Jersey for $110.5 million.
STAG (STAG) is a real estate investment trust (REIT) which as of September 30, 2020, had a portfolio of 462 buildings in 38 states, with approximately 92.3 million rentable square feet. Its main focus is the acquisition, ownership and operation of single-tenant, industrial properties throughout the U.S.
Over the course of 2020, STAG sold seven other buildings with gross proceeds from the sales amounting to $279.4 million. This is the largest annual disposal of assets in the company’s history. The buildings, which were sold at a cash capitalization rate of 5.4%, were originally bought at a cash cap rate of 8.2%.
“The sale of our Burlington asset was a great outcome for our Company,” said Ben Butcher, Chief Executive Officer of STAG. “We look forward to continuing our growth with the accretive redeployment of these proceeds.” (See STAG stock analysis on TipRanks)
J.P. Morgan analyst Anthony Paolone downgraded his rating on STAG last week from Buy to Hold and lowered his price target from $35 to $33. This implies upside potential of around 6%.
Paolone explained in a note that the downgrade is not related to any negative company-specific factors. In fact, he continues to remain positive on the stock and says the company has taken advantage of favorable capital costs and stepped-up acquisition activity in the second half of 2020. STAG still offers investors above-average dividend yields approximately 200 basis points above the industrial average.
Overall, consensus among analysts is a Moderate Buy based on 2 Buys, 1 Hold and 1 Sell. The average price target of $34.33 suggests upside potential of around 10% over the next 12 months.
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