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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________________________
FORM 10-Q
____________________________________________________________________________
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 1-34907
____________________________________________________________________________
STAG Industrial, Inc.
(Exact name of registrant as specified in its charter)
____________________________________________________________________________

Maryland |  | 27-3099608
(State or other jurisdiction of |  | (IRS Employer Identification No.)
incorporation or organization) |  |
One Federal Street |  |
23rd Floor |  |
Boston, | Massachusetts |  | 02110
(Address of principal executive offices) |  | (Zip code)

(617) 574-4777
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading symbol(s) | Name of each exchange on which registered
Common stock, $0.01 par value per share | STAG | New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of common stock outstanding at May 2, 2022 was 179,213,310.

Table of Contents
STAG Industrial, Inc.
Table of Contents

PART I. | Financial Information | 3
Item 1. | Financial Statements (unaudited) | 3
| Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 | 3
| Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 | 4
| Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021 | 5
| Consolidated Statements of Equity for the Three Months Ended March 31, 2022 and 2021 | 6
| Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 | 7
| Notes to Consolidated Financial Statements | 8
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 40
Item 4. | Controls and Procedures | 41
PART II. | Other Information | 42
Item 1. | Legal Proceedings | 42
Item 1A. | Risk Factors | 42
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 42
Item 3. | Defaults Upon Senior Securities | 43
Item 4. | Mine Safety Disclosures | 43
Item 5. | Other Information | 43
Item 6. | Exhibits | 45
| SIGNATURES | 46

2

Table of Contents
Part I. Financial Information
Item 1. Financial Statements
STAG Industrial, Inc.
Consolidated Balance Sheets
(unaudited, in thousands, except share data)

| March 31, 2022 |  | December 31, 2021
Assets |  |  |
Rental Property: |  |  |
Land | $ | 626,385 |  |  | $ | 617,297 |
Buildings and improvements, net of accumulated depreciation of $650,370 and $611,867, respectively | 4,535,725 |  |  | 4,435,743 |
Deferred leasing intangibles, net of accumulated amortization of $288,640 and $282,038, respectively | 561,267 |  |  | 567,658 |
Total rental property, net | 5,723,377 |  |  | 5,620,698 |
Cash and cash equivalents | 34,830 |  |  | 18,981 |
Restricted cash | 3,175 |  |  | 4,215 |
Tenant accounts receivable | 98,320 |  |  | 93,600 |
Prepaid expenses and other assets | 64,308 |  |  | 60,953 |
Interest rate swaps | 27,696 |  |  | 5,220 |
Operating lease right-of-use assets | 29,151 |  |  | 29,582 |
Total assets | $ | 5,980,857 |  |  | $ | 5,833,249 |
Liabilities and Equity |  |  |
Liabilities: |  |  |
Unsecured credit facility | $ | 384,000 |  |  | $ | 296,000 |
Unsecured term loans, net | 970,925 |  |  | 970,577 |
Unsecured notes, net | 897,058 |  |  | 896,941 |
Mortgage notes, net | 54,190 |  |  | 54,744 |
Accounts payable, accrued expenses and other liabilities | 72,726 |  |  | 76,475 |
Interest rate swaps | 2,298 |  |  | 17,052 |
Tenant prepaid rent and security deposits | 36,062 |  |  | 37,138 |
Dividends and distributions payable | 22,282 |  |  | 21,906 |
Deferred leasing intangibles, net of accumulated amortization of $22,245 and $21,136, respectively | 33,712 |  |  | 35,721 |
Operating lease liabilities | 32,725 |  |  | 33,108 |
Total liabilities | 2,505,978 |  |  | 2,439,662 |
Commitments and contingencies (Note 11) |  |  |
Equity: |  |  |
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized at March 31, 2022 and December 31, 2021; none issued or outstanding | — |  |  | — |
Common stock, par value $0.01 per share, 300,000,000 shares authorized at March 31, 2022 and December 31, 2021, 179,211,305 and 177,769,342 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 1,792 |  |  | 1,777 |
Additional paid-in capital | 4,179,361 |  |  | 4,130,038 |
Cumulative dividends in excess of earnings | (805,400) |  |  | (792,332) |
Accumulated other comprehensive income (loss) | 24,652 |  |  | (11,783) |
Total stockholders’ equity | 3,400,405 |  |  | 3,327,700 |
Noncontrolling interest | 74,474 |  |  | 65,887 |
Total equity | 3,474,879 |  |  | 3,393,587 |
Total liabilities and equity | $ | 5,980,857 |  |  | $ | 5,833,249 |

The accompanying notes are an integral part of these consolidated financial statements.
3

Table of Contents
STAG Industrial, Inc.
Consolidated Statements of Operations
(unaudited, in thousands, except per share data)

| Three months ended March 31, |  |
| 2022 |  | 2021 |  |  |  |
Revenue |  |  |  |  |  |  |
Rental income | $ | 158,601 |  |  | $ | 133,825 |  |  |  |  |
Other income | 608 |  |  | 170 |  |  |  |  |
Total revenue | 159,209 |  |  | 133,995 |  |  |  |  |
Expenses |  |  |  |  |  |  |
Property | 31,775 |  |  | 27,002 |  |  |  |  |
General and administrative | 12,313 |  |  | 12,790 |  |  |  |  |
Depreciation and amortization | 67,366 |  |  | 58,407 |  |  |  |  |
Other expenses | 497 |  |  | 852 |  |  |  |  |
Total expenses | 111,951 |  |  | 99,051 |  |  |  |  |
Other income (expense) |  |  |  |  |  |  |
Interest and other income | 34 |  |  | 32 |  |  |  |  |
Interest expense | (17,259) |  |  | (15,358) |  |  |  |  |
Debt extinguishment and modification expenses | — |  |  | (679) |  |  |  |  |
Gain on the sales of rental property, net | 23,955 |  |  | 6,409 |  |  |  |  |
Total other income (expense) | 6,730 |  |  | (9,596) |  |  |  |  |
Net income | $ | 53,988 |  |  | $ | 25,348 |  |  |  |  |
Less: income attributable to noncontrolling interest after preferred stock dividends | 1,162 |  |  | 473 |  |  |  |  |
Net income attributable to STAG Industrial, Inc. | $ | 52,826 |  |  | $ | 24,875 |  |  |  |  |
Less: preferred stock dividends | — |  |  | 1,289 |  |  |  |  |
Less: redemption of preferred stock | — |  |  | 2,582 |  |  |  |  |
Less: amount allocated to participating securities | 62 |  |  | 73 |  |  |  |  |
Net income attributable to common stockholders | $ | 52,764 |  |  | $ | 20,931 |  |  |  |  |
Weighted average common shares outstanding — basic | 177,827 |  |  | 158,430 |  |  |  |  |
Weighted average common shares outstanding — diluted | 178,065 |  |  | 159,126 |  |  |  |  |
Net income per share — basic and diluted |  |  |  |  |  |  |
Net income per share attributable to common stockholders — basic | $ | 0.30 |  |  | $ | 0.13 |  |  |  |  |
Net income per share attributable to common stockholders — diluted | $ | 0.30 |  |  | $ | 0.13 |  |  |  |  |

The accompanying notes are an integral part of these consolidated financial statements.
4

Table of Contents
STAG Industrial, Inc.
Consolidated Statements of Comprehensive Income
(unaudited, in thousands)

| Three months ended March 31, |  |
| 2022 |  | 2021 |  |  |  |
Net income | $ | 53,988 |  |  | $ | 25,348 |  |  |  |  |
Other comprehensive income: |  |  |  |  |  |  |
Income on interest rate swaps | 37,237 |  |  | 12,150 |  |  |  |  |
Other comprehensive income | 37,237 |  |  | 12,150 |  |  |  |  |
Comprehensive income | 91,225 |  |  | 37,498 |  |  |  |  |
Income attributable to noncontrolling interest after preferred stock dividends | (1,162) |  |  | (473) |  |  |  |  |
Other comprehensive income attributable to noncontrolling interest | (802) |  |  | (268) |  |  |  |  |
Comprehensive income attributable to STAG Industrial, Inc. | $ | 89,261 |  |  | $ | 36,757 |  |  |  |  |

The accompanying notes are an integral part of these consolidated financial statements.
5

Table of Contents
STAG Industrial, Inc.
Consolidated Statements of Equity
(unaudited, in thousands, except share data)

| Preferred Stock |  | Common Stock |  | Additional Paid-in Capital |  | Cumulative Dividends in Excess of Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Total Stockholders’ Equity |  | Noncontrolling Interest - Unit Holders in Operating Partnership |  | Total Equity
|  | Shares |  | Amount |  |  |  |  |  |
Three months ended March 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, December 31, 2021 | $ | — |  |  | 177,769,342 |  |  | $ | 1,777 |  |  | $ | 4,130,038 |  |  | $ | (792,332) |  |  | $ | (11,783) |  |  | $ | 3,327,700 |  |  | $ | 65,887 |  |  | $ | 3,393,587 |
Proceeds from sales of common stock, net | — |  |  | 1,328,335 |  |  | 13 |  |  | 54,963 |  |  | — |  |  | — |  |  | 54,976 |  |  | — |  |  | 54,976 |
Dividends and distributions, net | — |  |  | — |  |  | — |  |  | — |  |  | (65,114) |  |  | — |  |  | (65,114) |  |  | (1,474) |  |  | (66,588) |
Non-cash compensation activity, net | — |  |  | 48,628 |  |  | 1 |  |  | (3,279) |  |  | (780) |  |  | — |  |  | (4,058) |  |  | 5,737 |  |  | 1,679 |
Redemption of common units to common stock | — |  |  | 65,000 |  |  | 1 |  |  | 1,216 |  |  | — |  |  | — |  |  | 1,217 |  |  | (1,217) |  |  | — |
Rebalancing of noncontrolling interest | — |  |  | — |  |  | — |  |  | (3,577) |  |  | — |  |  | — |  |  | (3,577) |  |  | 3,577 |  |  | — |
Other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 36,435 |  |  | 36,435 |  |  | 802 |  |  | 37,237 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | 52,826 |  |  | — |  |  | 52,826 |  |  | 1,162 |  |  | 53,988 |
Balance, March 31, 2022 | $ | — |  |  | 179,211,305 |  |  | $ | 1,792 |  |  | $ | 4,179,361 |  |  | $ | (805,400) |  |  | $ | 24,652 |  |  | $ | 3,400,405 |  |  | $ | 74,474 |  |  | $ | 3,474,879 |
Three months ended March 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, December 31, 2020 | $ | 75,000 |  |  | 158,209,823 |  |  | $ | 1,582 |  |  | $ | 3,421,721 |  |  | $ | (742,071) |  |  | $ | (40,025) |  |  | $ | 2,716,207 |  |  | $ | 54,845 |  |  | $ | 2,771,052 |
Proceeds from sales of common stock, net | — |  |  | 680,276 |  |  | 7 |  |  | 21,559 |  |  | — |  |  | — |  |  | 21,566 |  |  | — |  |  | 21,566 |
Redemption of preferred stock | (75,000) |  |  | — |  |  | — |  |  | 2,573 |  |  | (2,582) |  |  | — |  |  | (75,009) |  |  | — |  |  | (75,009) |
Dividends and distributions, net | — |  |  | — |  |  | — |  |  | — |  |  | (58,828) |  |  | — |  |  | (58,828) |  |  | (1,436) |  |  | (60,264) |
Non-cash compensation activity, net | — |  |  | 95,190 |  |  | 1 |  |  | (3,214) |  |  | (121) |  |  | — |  |  | (3,334) |  |  | 6,607 |  |  | 3,273 |
Redemption of common units to common stock | — |  |  | 97,159 |  |  | 1 |  |  | 1,622 |  |  | — |  |  | — |  |  | 1,623 |  |  | (1,623) |  |  | — |
Rebalancing of noncontrolling interest | — |  |  | — |  |  | — |  |  | (474) |  |  | — |  |  | — |  |  | (474) |  |  | 474 |  |  | — |
Other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11,882 |  |  | 11,882 |  |  | 268 |  |  | 12,150 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | 24,875 |  |  | — |  |  | 24,875 |  |  | 473 |  |  | 25,348 |
Balance, March 31, 2021 | $ | — |  |  | 159,082,448 |  |  | $ | 1,591 |  |  | $ | 3,443,787 |  |  | $ | (778,727) |  |  | $ | (28,143) |  |  | $ | 2,638,508 |  |  | $ | 59,608 |  |  | $ | 2,698,116 |

The accompanying notes are an integral part of these consolidated financial statements.
6

Table of Contents
STAG Industrial, Inc.
Consolidated Statements of Cash Flows
(unaudited, in thousands)

| Three months ended March 31, |  |
| 2022 |  | 2021 |  |
Cash flows from operating activities: |  |  |  |  |
Net income | $ | 53,988 |  |  | $ | 25,348 |  |  |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |
Depreciation and amortization | 67,366 |  |  | 58,407 |  |  |
Non-cash portion of interest expense | 864 |  |  | 487 |  |  |
Amortization of above and below market leases, net | (84) |  |  | 1,474 |  |  |
Straight-line rent adjustments, net | (4,450) |  |  | (4,676) |  |  |
Gain on the sales of rental property, net | (23,955) |  |  | (6,409) |  |  |
Non-cash compensation expense | 3,260 |  |  | 4,615 |  |  |
Change in assets and liabilities: |  |  |  |  |
Tenant accounts receivable | (262) |  |  | 3,281 |  |  |
Prepaid expenses and other assets | (3,371) |  |  | (4,132) |  |  |
Accounts payable, accrued expenses and other liabilities | (3,401) |  |  | (4,613) |  |  |
Tenant prepaid rent and security deposits | (1,076) |  |  | (322) |  |  |
Total adjustments | 34,891 |  |  | 48,112 |  |  |
Net cash provided by operating activities | 88,879 |  |  | 73,460 |  |  |
Cash flows from investing activities: |  |  |  |  |
Acquisitions of land and buildings and improvements | (144,600) |  |  | (81,969) |  |  |
Additions of land and building and improvements | (17,061) |  |  | (10,269) |  |  |
Acquisitions of other assets | (2,134) |  |  | — |  |  |
Proceeds from sales of rental property, net | 35,326 |  |  | 23,884 |  |  |
Acquisition deposits, net | (711) |  |  | 2,008 |  |  |
Acquisitions of deferred leasing intangibles | (19,617) |  |  | (13,156) |  |  |
Net cash used in investing activities | (148,797) |  |  | (79,502) |  |  |
Cash flows from financing activities: |  |  |  |  |
Proceeds from unsecured credit facility | 675,000 |  |  | 393,000 |  |  |
Repayment of unsecured credit facility | (587,000) |  |  | (267,000) |  |  |
Proceeds from unsecured term loans | — |  |  | 300,000 |  |  |
Repayment of unsecured term loans | — |  |  | (300,000) |  |  |
Repayment of mortgage notes | (586) |  |  | (531) |  |  |
Payment of loan fees and costs | (4) |  |  | (2,750) |  |  |
Proceeds from sales of common stock, net | 55,126 |  |  | 21,639 |  |  |
Redemption of preferred stock | — |  |  | (75,000) |  |  |
Dividends and distributions | (66,213) |  |  | (59,996) |  |  |
Repurchase and retirement of share-based compensation | (1,596) |  |  | (1,342) |  |  |
Net cash provided by financing activities | 74,727 |  |  | 8,020 |  |  |
Increase in cash and cash equivalents and restricted cash | 14,809 |  |  | 1,978 |  |  |
Cash and cash equivalents and restricted cash—beginning of period | 23,196 |  |  | 20,339 |  |  |
Cash and cash equivalents and restricted cash—end of period | $ | 38,005 |  |  | $ | 22,317 |  |  |
Supplemental disclosure: |  |  |  |  |
Cash paid for interest, net of capitalized interest | $ | 17,172 |  |  | $ | 13,471 |  |  |
Supplemental schedule of non-cash investing and financing activities |  |  |  |  |
Additions to building and other capital improvements | $ | (539) |  |  | $ | — |  |  |
Transfer of other assets to building and other capital improvements | $ | 539 |  |  | $ | — |  |  |
Acquisitions of land and buildings and improvements | $ | — |  |  | $ | (4,239) |  |  |
Acquisitions of deferred leasing intangibles | $ | — |  |  | $ | (703) |  |  |
Change in additions of land, building, and improvements included in accounts payable, accrued expenses, and other liabilities | $ | 590 |  |  | $ | 4,281 |  |  |
Additions to building and other capital improvements from non-cash compensation | $ | (26) |  |  | $ | — |  |  |
Assumption of mortgage notes | $ | — |  |  | $ | 5,103 |  |  |
Fair market value adjustment to mortgage notes acquired | $ | — |  |  | $ | (161) |  |  |
Change in loan fees, costs, and offering costs included in accounts payable, accrued expenses, and other liabilities | $ | (167) |  |  | $ | 879 |  |  |
Dividends and distributions accrued | $ | 22,282 |  |  | $ | 19,657 |  |  |

The accompanying notes are an integral part of these consolidated financial statements.
7

Table of Contents
STAG Industrial, Inc.
Notes to Consolidated Financial Statements
(unaudited)
1. Organization and Description of Business
STAG Industrial, Inc. (the “Company”) is an industrial real estate operating company focused on the acquisition and operation of single-tenant, industrial properties throughout the United States. The Company was formed as a Maryland corporation and has elected to be treated and intends to continue to qualify as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. The Company is structured as an umbrella partnership REIT, commonly called an UPREIT, and owns substantially all of its assets and conducts substantially all of its business through its operating partnership, STAG Industrial Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”). As of March 31, 2022 and December 31, 2021, the Company owned a 97.9% and 98.1%, respectively, common equity interest in the Operating Partnership. The Company, through its wholly owned subsidiary, is the sole general partner of the Operating Partnership. As used herein, the “Company” refers to STAG Industrial, Inc. and its consolidated subsidiaries, including the Operating Partnership, except where context otherwise requires.
As of March 31, 2022, the Company owned 551 industrial buildings in 40 states with approximately 110.1 million rentable square feet.
COVID-19 Pandemic
The Company and the real estate industry generally continue to face risks and uncertainties related to the ongoing public health crisis of the novel coronavirus disease (“COVID-19”) pandemic.
The Company closely monitors the effect of the COVID-19 pandemic on all aspects of its business, including how the pandemic will affect its tenants and business partners. The Company did not incur significant disruptions from the COVID-19 pandemic or enter into any rent deferral agreements during the three months ended March 31, 2022 and 2021. The Company will continue to evaluate tenant rent relief requests on an individual basis, considering a number of factors. Not all tenant requests will ultimately result in modified agreements, nor is the Company foregoing its contractual rights under its lease agreements.
The Company remains unable to predict the ultimate impact that the pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties. The extent to which the COVID-19 pandemic affects the Company’s operations and those of its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.
2. Summary of Significant Accounting Policies
Interim Financial Information
The accompanying interim financial statements have been presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Regulation S-X for interim financial information. Accordingly, these statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements include all adjustments, consisting of normal recurring items, necessary for their fair statement in conformity with GAAP. Interim results are not necessarily indicative of results for a full year. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Basis of Presentation
The Company’s consolidated financial statements include the accounts of the Company, the Operating Partnership, and their consolidated subsidiaries. Interests in the Operating Partnership not owned by the Company are referred to as “Noncontrolling Common Units.” These Noncontrolling Common Units are held by other limited partners in the form of common units (“Other Common Units”) and long term incentive plan units (“LTIP units”) issued pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”). All significant intercompany balances and transactions have been
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eliminated in the consolidation of entities. The financial statements of the Company are presented on a consolidated basis for all periods presented.
Restricted Cash
The following table presents a reconciliation of cash and cash equivalents and restricted cash reported on the accompanying Consolidated Balance Sheets to amounts reported on the accompanying Consolidated Statements of Cash Flows.

Reconciliation of cash and cash equivalents and restricted cash (in thousands) |  | March 31, 2022 |  | December 31, 2021 |  |  |  |
Cash and cash equivalents |  | $ | 34,830 |  |  | $ | 18,981 |  |  |  |  |
Restricted cash |  | 3,175 |  |  | 4,215 |  |  |  |  |
Total cash and cash equivalents and restricted cash |  | $ | 38,005 |  |  | $ | 23,196 |  |  |  |  |

Taxes
Federal Income Taxes
The Company’s taxable REIT subsidiary recognized net income of approximately $0.1 million and $0 for the three months ended March 31, 2022 and 2021, respectively.
State and Local Income, Excise, and Franchise Tax
State and local income, excise, and franchise taxes in the amount of approximately $0.5 million and $0.4 million have been recorded in other expenses on the accompanying Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021, respectively.
Uncertain Tax Positions
As of March 31, 2022 and December 31, 2021, there were no liabilities for uncertain tax positions.
Concentrations of Credit Risk
Management believes the current credit risk of the Company’s portfolio is reasonably well diversified and does not contain any unusual concentration of credit risk.
3. Rental Property
The following table summarizes the components of rental property as of March 31, 2022 and December 31, 2021.

Rental Property (in thousands) |  | March 31, 2022 |  | December 31, 2021
Land |  | $ | 626,385 |  |  | $ | 617,297 |
Buildings, net of accumulated depreciation of $433,560 and $406,670, respectively |  | 4,126,324 |  |  | 4,035,210 |
Tenant improvements, net of accumulated depreciation of $27,270 and $26,065, respectively |  | 43,788 |  |  | 43,999 |
Building and land improvements, net of accumulated depreciation of $189,540 and $179,132, respectively |  | 324,917 |  |  | 320,041 |
Construction in progress |  | 40,696 |  |  | 36,493 |
Deferred leasing intangibles, net of accumulated amortization of $288,640 and $282,038, respectively |  | 561,267 |  |  | 567,658 |
Total rental property, net |  | $ | 5,723,377 |  |  | $ | 5,620,698 |

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Acquisitions
The following table summarizes the acquisitions of the Company during the three months ended March 31, 2022. The Company accounted for all of its acquisitions as asset acquisitions.

Market(1) |  | Date Acquired |  | Square Feet |  | Number of Buildings |  | Purchase Price (in thousands)
Kansas City, MO |  | January 6, 2022 |  | 702,000 |  |  | 1 |  |  | $ | 60,428 |
Chicago, IL |  | January 31, 2022 |  | 72,499 |  |  | 1 |  |  | 8,128 |
Columbus, OH |  | February 8, 2022 |  | 138,213 |  |  | 1 |  |  | 11,492 |
Cleveland, OH |  | February 8, 2022 |  | 136,800 |  |  | 1 |  |  | 13,001 |
Nashville, TN |  | March 10, 2022 |  | 109,807 |  |  | 1 |  |  | 12,810 |
Greenville/Spartanburg, SC |  | March 10, 2022 |  | 289,103 |  |  | 1 |  |  | 28,274 |
Memphis, TN |  | March 18, 2022 |  | 195,622 |  |  | 1 |  |  | 15,828 |
Greenville/Spartanburg, SC |  | March 18, 2022 |  | 155,717 |  |  | 1 |  |  | 16,390 |
Three months ended March 31, 2022 |  |  |  | 1,799,761 |  |  | 8 |  |  | $ | 166,351 |

(1) As defined by CoStar Realty Information Inc (“CoStar”). If the building is located outside of a CoStar defined market, the city and state is reflected.
The following table summarizes the allocation of the total purchase price paid (on the closing dates) for the assets and liabilities acquired by the Company during the three months ended March 31, 2022 in connection with the acquisitions identified in the table above.

|  | Three months ended March 31, 2022 |  |
Acquired Assets and Liabilities |  | Purchase Price (in thousands) |  | Weighted Average Amortization Period (years) of Intangibles at Acquisition |  |  |  |
Land |  | $ | 10,746 |  |  | N/A |  |  |  |
Buildings |  | 127,778 |  |  | N/A |  |  |  |
Tenant improvements |  | 692 |  |  | N/A |  |  |  |
Building and land improvements |  | 5,384 |  |  | N/A |  |  |  |
Other assets |  | 2,134 |  |  | N/A |  |  |  |
Deferred leasing intangibles - In-place leases |  | 11,512 |  |  | 5.3 |  |  |  |
Deferred leasing intangibles - Tenant relationships |  | 7,319 |  |  | 9.0 |  |  |  |
Deferred leasing intangibles - Above market leases |  | 959 |  |  | 6.9 |  |  |  |
Deferred leasing intangibles - Below market leases |  | (173) |  |  | 3.7 |  |  |  |
Total purchase price |  | $ | 166,351 |  |  |  |  |  |  |

The following table summarizes the results of operations for the three months ended March 31, 2022 for the buildings acquired during the three months ended March 31, 2022, which are included in the Company’s Consolidated Statements of Operations from the date of acquisition.

Results of Operations (in thousands) |  | Three months ended March 31, 2022 |  |
Total revenue |  | $ | 1,251 |  |  |
Net loss |  | $ | 113 |  |  |

Dispositions
During the three months ended March 31, 2022, the Company sold one building and one land parcel to third parties comprised of approximately 0.2 million rentable square feet with a net book value of approximately $11.3 million. This building contributed approximately $0.2 million and $0.4 million to revenue for the three months ended March 31, 2022 and 2021, respectively. This building contributed approximately $0.2 million and $0.3 million to net income (exclusive of gain on the sales of rental property, net) for the three months ended March 31, 2022 and 2021, respectively. Net proceeds from the sales of rental property were approximately $35.3 million and the Company recognized the full gain on the sales of rental property, net, of approximately $24.0 million for the three months ended March 31, 2022.
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Deferred Leasing Intangibles
The following table summarizes the deferred leasing intangibles on the accompanying Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

|  | March 31, 2022 |  | December 31, 2021
Deferred Leasing Intangibles (in thousands) |  | Gross |  | Accumulated Amortization |  | Net |  | Gross |  | Accumulated Amortization |  | Net
Above market leases |  | $ | 89,747 |  |  | $ | (31,436) |  |  | $ | 58,311 |  |  | $ | 91,565 |  |  | $ | (32,110) |  |  | $ | 59,455 |
Other intangible lease assets |  | 760,160 |  |  | (257,204) |  |  | 502,956 |  |  | 758,131 |  |  | (249,928) |  |  | 508,203 |
Total deferred leasing intangible assets |  | $ | 849,907 |  |  | $ | (288,640) |  |  | $ | 561,267 |  |  | $ | 849,696 |  |  | $ | (282,038) |  |  | $ | 567,658 |
Below market leases |  | $ | 55,957 |  |  | $ | (22,245) |  |  | $ | 33,712 |  |  | $ | 56,857 |  |  | $ | (21,136) |  |  | $ | 35,721 |
Total deferred leasing intangible liabilities |  | $ | 55,957 |  |  | $ | (22,245) |  |  | $ | 33,712 |  |  | $ | 56,857 |  |  | $ | (21,136) |  |  | $ | 35,721 |

The following table summarizes the amortization expense and the net decrease to rental income for the amortization of deferred leasing intangibles during the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31, |  |
Deferred Leasing Intangibles Amortization (in thousands) |  | 2022 |  | 2021 |  |  |  |
Net increase (decrease) to rental income related to above and below market lease amortization |  | $ | 79 |  |  | $ | (1,480) |  |  |  |  |
Amortization expense related to other intangible lease assets |  | $ | 24,077 |  |  | $ | 22,447 |  |  |  |  |

The following table summarizes the amortization of deferred leasing intangibles over the next five calendar years (including the remainder of 2022) as of March 31, 2022.

Year |  | Amortization Expense Related to Other Intangible Lease Assets (in thousands) |  | Net Decrease to Rental Income Related to Above and Below Market Lease Amortization (in thousands)
Remainder of 2022 |  | $ | 67,986 |  |  | $ | 180 |
2023 |  | $ | 80,666 |  |  | $ | 727 |
2024 |  | $ | 69,720 |  |  | $ | 1,361 |
2025 |  | $ | 60,629 |  |  | $ | 1,185 |
2026 |  | $ | 52,145 |  |  | $ | 1,626 |

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4. Debt
The following table summarizes the Company’s outstanding indebtedness, including borrowings under the Company’s unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes as of March 31, 2022 and December 31, 2021.

Loan |  | Principal Outstanding as of March 31, 2022 (in thousands) |  | Principal Outstanding as of December 31, 2021 (in thousands) |  | Interest Rate(1)(2) |  | Maturity Date |  | Prepayment Terms(3)
Unsecured credit facility: |  |  |  |  |  |  |  |  |  |
Unsecured Credit Facility(4) |  | $ | 384,000 |  |  | $ | 296,000 |  |  | L + 0.775% |  | October 23, 2026 |  | i
Total unsecured credit facility |  | 384,000 |  |  | 296,000 |  |  |  |  |  |  |
Unsecured term loans: |  |  |  |  |  |  |  |  |  |
Unsecured Term Loan D |  | 150,000 |  |  | 150,000 |  |  | 2.85 | % |  | January 4, 2023 |  | i
Unsecured Term Loan E |  | 175,000 |  |  | 175,000 |  |  | 3.77 | % |  | January 15, 2024 |  | i
Unsecured Term Loan F |  | 200,000 |  |  | 200,000 |  |  | 2.96 | % |  | January 12, 2025 |  | i
Unsecured Term Loan G |  | 300,000 |  |  | 300,000 |  |  | 1.13 | % |  | February 5, 2026 |  | i
Unsecured Term Loan A |  | 150,000 |  |  | 150,000 |  |  | 3.23 | % |  | March 15, 2027 |  | i
Total unsecured term loans |  | 975,000 |  |  | 975,000 |  |  |  |  |  |  |
Total unamortized deferred financing fees and debt issuance costs |  | (4,075) |  |  | (4,423) |  |  |  |  |  |  |
Total carrying value unsecured term loans, net |  | 970,925 |  |  | 970,577 |  |  |  |  |  |  |
Unsecured notes: |  |  |  |  |  |  |  |  |  |
Series F Unsecured Notes |  | 100,000 |  |  | 100,000 |  |  | 3.98 | % |  | January 5, 2023 |  | ii
Series A Unsecured Notes |  | 50,000 |  |  | 50,000 |  |  | 4.98 | % |  | October 1, 2024 |  | ii
Series D Unsecured Notes |  | 100,000 |  |  | 100,000 |  |  | 4.32 | % |  | February 20, 2025 |  | ii
Series G Unsecured Notes |  | 75,000 |  |  | 75,000 |  |  | 4.10 | % |  | June 13, 2025 |  | ii
Series B Unsecured Notes |  | 50,000 |  |  | 50,000 |  |  | 4.98 | % |  | July 1, 2026 |  | ii
Series C Unsecured Notes |  | 80,000 |  |  | 80,000 |  |  | 4.42 | % |  | December 30, 2026 |  | ii
Series E Unsecured Notes |  | 20,000 |  |  | 20,000 |  |  | 4.42 | % |  | February 20, 2027 |  | ii
Series H Unsecured Notes |  | 100,000 |  |  | 100,000 |  |  | 4.27 | % |  | June 13, 2028 |  | ii
Series I Unsecured Notes |  | 275,000 |  |  | 275,000 |  |  | 2.80 | % |  | September 29, 2031 |  | ii
Series J Unsecured Notes |  | 50,000 |  |  | 50,000 |  |  | 2.95 | % |  | September 28, 2033 |  | ii
Total unsecured notes |  | 900,000 |  |  | 900,000 |  |  |  |  |  |  |
Total unamortized deferred financing fees and debt issuance costs |  | (2,942) |  |  | (3,059) |  |  |  |  |  |  |
Total carrying value unsecured notes, net |  | 897,058 |  |  | 896,941 |  |  |  |  |  |  |
Mortgage notes (secured debt): |  |  |  |  |  |  |  |  |  |
Wells Fargo Bank, National Association CMBS Loan |  | 46,106 |  |  | 46,610 |  |  | 4.31 | % |  | December 1, 2022 |  | iii
Thrivent Financial for Lutherans |  | 3,397 |  |  | 3,430 |  |  | 4.78 | % |  | December 15, 2023 |  | iv
United of Omaha Life Insurance Company |  | 4,894 |  |  | 4,943 |  |  | 3.71 | % |  | October 1, 2039 |  | ii
Total mortgage notes |  | 54,397 |  |  | 54,983 |  |  |  |  |  |  |
Net unamortized fair market value discount |  | (136) |  |  | (136) |  |  |  |  |  |  |
Total unamortized deferred financing fees and debt issuance costs |  | (71) |  |  | (103) |  |  |  |  |  |  |
Total carrying value mortgage notes, net |  | 54,190 |  |  | 54,744 |  |  |  |  |  |  |
Total / weighted average interest rate(5) |  | $ | 2,306,173 |  |  | $ | 2,218,262 |  |  | 2.87 | % |  |  |  |

(1)Interest rate as of March 31, 2022. At March 31, 2022, the one-month LIBOR (“L”) was 0.452%. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums. The spread over the applicable rate for the Company’s unsecured credit facility and unsecured term loans is based on the Company’s debt rating and leverage ratio, as defined in the respective loan agreements.
(2)The unsecured term loans have a stated interest rate of one-month LIBOR plus a spread of 0.85%, with the exception of Unsecured Term Loan D which has a stated interest rate of one-month LIBOR plus a spread of 1.0%. As of March 31, 2022, one-month LIBOR for the Unsecured Term Loans A, D, E, F, and G was swapped to a fixed rate of 2.38%, 1.85%, 2.92%, 2.11%, and 0.28%, respectively. One-month LIBOR for the Unsecured Term Loan A will be swapped to a fixed rate of 1.30% effective April 1, 2022. One-month LIBOR for the Unsecured Term Loan G will be swapped to a fixed rate of 0.94% effective April 18, 2023.
(3)Prepayment terms consist of (i) pre-payable with no penalty; (ii) pre-payable with penalty; (iii) pre-payable without penalty three months prior to the maturity date, subject to defeasance; and (iv) pre-payable without penalty three months prior to the maturity date.
(4)The capacity of the unsecured credit facility is $750.0 million. Deferred financing fees and debt issuance costs, net of accumulated amortization related to the unsecured credit facility of approximately $4.9 million and $5.2 million are included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, respectively. The initial maturity date is October 24, 2025, or such later date
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which may be extended pursuant to two six-month extension options exercisable by the Company in its discretion upon advance written notice. Exercise of each six-month option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension; (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date; and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions.
(5)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $975.0 million of debt, and is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts.
The aggregate undrawn nominal commitment on the unsecured credit facility as of March 31, 2022 was approximately $362.3 million, including issued letters of credit. The Company’s actual borrowing capacity at any given point in time may be less or restricted to a maximum amount based on the Company’s debt covenant compliance. Total accrued interest for the Company’s indebtedness was approximately $8.2 million and $8.6 million as of March 31, 2022 and December 31, 2021, respectively, and is included in accounts payable, accrued expenses and other liabilities on the accompanying Consolidated Balance Sheets.
The following table summarizes the costs included in interest expense related to the Company’s debt arrangements on the accompanying Consolidated Statement of Operations for the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31, |  |
Costs Included in Interest Expense (in thousands) |  | 2022 |  | 2021 |  |  |  |
Amortization of deferred financing fees and debt issuance costs and fair market value premiums/discounts |  | $ | 864 |  |  | $ | 487 |  |  |  |  |
Facility, unused, and other fees |  | $ | 341 |  |  | $ | 386 |  |  |  |  |

Financial Covenant Considerations
The Company was in compliance with all financial and other covenants as of March 31, 2022 and December 31, 2021 related to its unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes. The real estate net book value of the properties that are collateral for the Company’s debt arrangements was approximately $87.8 million and $88.5 million at March 31, 2022 and December 31, 2021, respectively, and is limited to senior, property-level secured debt financing arrangements.
Fair Value of Debt
The following table summarizes the aggregate principal amount outstanding under the Company’s debt arrangements and the corresponding estimate of fair value as of March 31, 2022 and December 31, 2021.

|  | March 31, 2022 |  | December 31, 2021
Indebtedness (in thousands) |  | Principal Outstanding |  | Fair Value |  | Principal Outstanding |  | Fair Value
Unsecured credit facility |  | $ | 384,000 |  |  | $ | 383,927 |  |  | $ | 296,000 |  |  | $ | 296,000 |
Unsecured term loans |  | 975,000 |  |  | 975,015 |  |  | 975,000 |  |  | 975,224 |
Unsecured notes |  | 900,000 |  |  | 880,674 |  |  | 900,000 |  |  | 937,183 |
Mortgage notes |  | 54,397 |  |  | 54,628 |  |  | 54,983 |  |  | 56,323 |
Total principal amount |  | 2,313,397 |  |  | $ | 2,294,244 |  |  | 2,225,983 |  |  | $ | 2,264,730 |
Net unamortized fair market value discount |  | (136) |  |  |  |  | (136) |  |  |
Total unamortized deferred financing fees and debt issuance costs |  | (7,088) |  |  |  |  | (7,585) |  |  |
Total carrying value |  | $ | 2,306,173 |  |  |  |  | $ | 2,218,262 |  |  |

The applicable fair value guidance establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value of the Company’s debt is based on Level 3 inputs.
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5. Derivative Financial Instruments
Risk Management Objective of Using Derivatives
The Company’s use of derivative instruments is limited to the utilization of interest rate swaps to manage interest rate risk exposure on existing and future liabilities and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and related costs associated with the Company’s operating and financial structure.
The following table summarizes the Company’s outstanding interest rate swaps as of March 31, 2022. All of the Company’s interest rate swaps are designated as qualifying cash flow hedges.

Interest Rate Derivative Counterparty |  | Trade Date |  | Effective Date |  | Notional Amount (in thousands) |  | Fair Value (in thousands) |  | Pay Fixed Interest Rate |  | Receive Variable Interest Rate |  | Maturity Date
Wells Fargo Bank, N.A. |  | Jan-08-2015 |  | Mar-20-2015 |  | $ | 25,000 |  |  | $ | — |  |  | 1.8280 | % |  | One-month L |  | Mar-31-2022
The Toronto-Dominion Bank |  | Jan-08-2015 |  | Feb-14-2020 |  | $ | 25,000 |  |  | $ | — |  |  | 2.4535 | % |  | One-month L |  | Mar-31-2022
Regions Bank |  | Jan-08-2015 |  | Feb-14-2020 |  | $ | 50,000 |  |  | $ | — |  |  | 2.4750 | % |  | One-month L |  | Mar-31-2022
Capital One, N.A. |  | Jan-08-2015 |  | Feb-14-2020 |  | $ | 50,000 |  |  | $ | — |  |  | 2.5300 | % |  | One-month L |  | Mar-31-2022
The Toronto-Dominion Bank |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 25,000 |  |  | $ | (64) |  |  | 1.8485 | % |  | One-month L |  | Jan-04-2023
Royal Bank of Canada |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 25,000 |  |  | $ | (63) |  |  | 1.8505 | % |  | One-month L |  | Jan-04-2023
Wells Fargo Bank, N.A. |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 25,000 |  |  | $ | (63) |  |  | 1.8505 | % |  | One-month L |  | Jan-04-2023
PNC Bank, N.A. |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 25,000 |  |  | $ | (63) |  |  | 1.8485 | % |  | One-month L |  | Jan-04-2023
PNC Bank, N.A. |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 50,000 |  |  | $ | (126) |  |  | 1.8475 | % |  | One-month L |  | Jan-04-2023
The Toronto-Dominion Bank |  | Apr-20-2020 |  | Sep-29-2020 |  | $ | 75,000 |  |  | $ | 1,223 |  |  | 0.2750 | % |  | One-month L |  | Apr-18-2023
Wells Fargo Bank, N.A. |  | Apr-20-2020 |  | Sep-29-2020 |  | $ | 75,000 |  |  | $ | 1,219 |  |  | 0.2790 | % |  | One-month L |  | Apr-18-2023
The Toronto-Dominion Bank |  | Apr-20-2020 |  | Mar-19-2021 |  | $ | 75,000 |  |  | $ | 1,223 |  |  | 0.2750 | % |  | One-month L |  | Apr-18-2023
Wells Fargo Bank, N.A. |  | Apr-20-2020 |  | Mar-19-2021 |  | $ | 75,000 |  |  | $ | 1,218 |  |  | 0.2800 | % |  | One-month L |  | Apr-18-2023
The Toronto-Dominion Bank |  | Jul-24-2018 |  | Jul-26-2019 |  | $ | 50,000 |  |  | $ | (548) |  |  | 2.9180 | % |  | One-month L |  | Jan-12-2024
PNC Bank, N.A. |  | Jul-24-2018 |  | Jul-26-2019 |  | $ | 50,000 |  |  | $ | (549) |  |  | 2.9190 | % |  | One-month L |  | Jan-12-2024
Bank of Montreal |  | Jul-24-2018 |  | Jul-26-2019 |  | $ | 50,000 |  |  | $ | (548) |  |  | 2.9190 | % |  | One-month L |  | Jan-12-2024
U.S. Bank, N.A. |  | Jul-24-2018 |  | Jul-26-2019 |  | $ | 25,000 |  |  | $ | (274) |  |  | 2.9190 | % |  | One-month L |  | Jan-12-2024
Wells Fargo Bank, N.A. |  | May-02-2019 |  | Jul-15-2020 |  | $ | 50,000 |  |  | $ | 280 |  |  | 2.2460 | % |  | One-month L |  | Jan-15-2025
U.S. Bank, N.A. |  | May-02-2019 |  | Jul-15-2020 |  | $ | 50,000 |  |  | $ | 284 |  |  | 2.2459 | % |  | One-month L |  | Jan-15-2025
Regions Bank |  | May-02-2019 |  | Jul-15-2020 |  | $ | 50,000 |  |  | $ | 280 |  |  | 2.2459 | % |  | One-month L |  | Jan-15-2025
Bank of Montreal |  | Jul-16-2019 |  | Jul-15-2020 |  | $ | 50,000 |  |  | $ | 1,008 |  |  | 1.7165 | % |  | One-month L |  | Jan-15-2025
U.S. Bank, N.A. |  | Feb-17-2021 |  | Apr-18-2023 |  | $ | 150,000 |  |  | $ | 6,853 |  |  | 0.9385 | % |  | One-month L |  | Feb-5-2026
Wells Fargo Bank, N.A. |  | Feb-17-2021 |  | Apr-18-2023 |  | $ | 75,000 |  |  | $ | 3,409 |  |  | 0.9365 | % |  | One-month L |  | Feb-5-2026
The Toronto-Dominion Bank |  | Feb-17-2021 |  | Apr-18-2023 |  | $ | 75,000 |  |  | $ | 3,419 |  |  | 0.9360 | % |  | One-month L |  | Feb-5-2026
Regions Bank |  | Oct-26-2021 |  | Apr-01-2022 |  | $ | 50,000 |  |  | $ | 2,419 |  |  | 1.3045 | % |  | One-month L |  | Mar-15-2027
Bank of Montreal |  | Oct-26-2021 |  | Apr-01-2022 |  | $ | 50,000 |  |  | $ | 2,438 |  |  | 1.3045 | % |  | One-month L |  | Mar-15-2027
PNC Bank, N.A. |  | Oct-26-2021 |  | Apr-01-2022 |  | $ | 50,000 |  |  | $ | 2,423 |  |  | 1.3045 | % |  | One-month L |  | Mar-15-2027

The following table summarizes the fair value of the interest rate swaps outstanding as of March 31, 2022 and December 31, 2021.

Balance Sheet Line Item (in thousands) |  | Notional Amount March 31, 2022 |  | Fair Value March 31, 2022 |  | Notional Amount December 31, 2021 |  | Fair Value December 31, 2021
Interest rate swaps-Asset |  | $ | 950,000 |  |  | $ | 27,696 |  |  | $ | 600,000 |  |  | $ | 5,220 |
Interest rate swaps-Liability |  | $ | 325,000 |  |  | $ | (2,298) |  |  | $ | 825,000 |  |  | $ | (17,052) |

Cash Flow Hedges of Interest Rate Risk
The Company’s objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) and subsequently reclassified to interest expense in the same periods during which the hedged transaction affects earnings.
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Amounts reported in accumulated other comprehensive income (loss) related to derivatives designated as qualifying cash flow hedges will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. The Company estimates that approximately $2.2 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense over the next 12 months.
The following table summarizes the effect of cash flow hedge accounting and the location of amounts related to Company’s derivatives in the consolidated financial statements for the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31, |  |
Effect of Cash Flow Hedge Accounting (in thousands) |  | 2022 |  | 2021 |  |  |  |
Income recognized in accumulated other comprehensive income (loss) on interest rate swaps |  | $ | 33,506 |  |  | $ | 7,750 |  |  |  |  |
Loss reclassified from accumulated other comprehensive income (loss) into income as interest expense |  | $ | 3,731 |  |  | $ | 4,400 |  |  |  |  |
Total interest expense presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded |  | $ | 17,259 |  |  | $ | 15,358 |  |  |  |  |

Credit-risk-related Contingent Features
The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.
As of March 31, 2022, the Company had not breached the provisions of these agreements and had not posted any collateral related to these agreements. If the Company had breached any of these provisions at March 31, 2022, it could have been required to settle its obligations under the agreements for any interest rate swaps in a net liability position by counterparty, plus accrued interest of approximately $0.1 million.
Fair Value of Interest Rate Swaps
The Company’s valuation of the interest rate swaps is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs including interest rate curves.
The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company or its counterparties. However, as of March 31, 2022 and December 31, 2021, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
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The following table summarizes the Company’s financial instruments that were recorded at fair value on a recurring basis as of March 31, 2022 and December 31, 2021.

|  |  |  | Fair Value Measurements as of March 31, 2022 Using
Balance Sheet Line Item (in thousands) |  | Fair Value March 31, 2022 |  | Level 1 |  | Level 2 |  | Level 3
Interest rate swaps-Asset |  | $ | 27,696 |  |  | $ | — |  |  | $ | 27,696 |  |  | $ | — |
Interest rate swaps-Liability |  | $ | (2,298) |  |  | $ | — |  |  | $ | (2,298) |  |  | $ | — |

|  |  |  | Fair Value Measurements as of December 31, 2021 Using
Balance Sheet Line Item (in thousands) |  | Fair Value December 31, 2021 |  | Level 1 |  | Level 2 |  | Level 3
Interest rate swaps-Asset |  | $ | 5,220 |  |  | $ | — |  |  | $ | 5,220 |  |  | $ | — |
Interest rate swaps-Liability |  | $ | (17,052) |  |  | $ | — |  |  | $ | (17,052) |  |  | $ | — |

6. Equity
Preferred Stock
The Company is authorized to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share. As of March 31, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.
The following table summarizes the dividends declared on the Company’s outstanding shares of preferred stock during the year ended December 31, 2021.

Quarter Ended 2021 |  | Declaration Date |  | Series C Preferred Stock Per Share |  | Payment Date
March 31 |  | January 11, 2021 |  | $ | 0.4296875 |  |  | March 31, 2021
Total |  |  |  | $ | 0.4296875 |  |  |

Common Stock
The Company is authorized to issue up to 300,000,000 shares of common stock, par value $0.01 per share.
The following table summarizes the terms of the Company’s at-the market (“ATM”) common stock offering program as of March 31, 2022.

ATM Common Stock Offering Program |  | Date |  | Maximum Aggregate Offering Price (in thousands) |  | Aggregate Available as of March 31, 2022 (in thousands)
2022 $750 million ATM |  | February 17, 2022 |  | $ | 750,000 |  |  | $ | 750,000 |

The following tables summarize the activity under the ATM common stock offering program during the three months ended March 31, 2022 and year ended December 31, 2021.

|  | Three months ended March 31, 2022
ATM Common Stock Offering Program |  | Shares Sold |  | Weighted Average Price Per Share |  |  |  |  |  | Net Proceeds (in thousands)
2019 $600 million ATM(1) |  | 128,335 |  |  | $ | 45.03 |  |  |  |  |  |  | $ | 5,721 |
Total/weighted average |  | 128,335 |  |  | $ | 45.03 |  |  |  |  |  |  | $ | 5,721 |

(1)This program ended before March 31, 2022.

|  | Year ended December 31, 2021
ATM Common Stock Offering Program(1) |  | Shares Sold |  | Weighted Average Price Per Share |  | Net Proceeds (in thousands)
2019 $600 million ATM(2) |  | 5,110,002 |  |  | $ | 37.53 |  |  | $ | 189,974 |
Total/weighted average |  | 5,110,002 |  |  | $ | 37.53 |  |  | $ | 189,974 |

(1)Excludes shares of common stock sold under the ATM common stock offering program on a forward basis or issued upon physical settlement of the related forward sale agreements during the period.
(2)This program ended before March 31, 2022.
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In connection with the Company’s underwritten public offering that closed in November 2021, on December 3, 2021, the Company executed a forward sale agreement for the sale of an additional 1,200,000 shares of common stock on a forward basis at a price of $41.87 per share. The Company did not initially receive any proceeds from the sale of shares on a forward basis. On March 29, 2022, the Company physically settled in full the forward sales agreement by issuing 1,200,000 shares of common stock for net proceeds of approximately $49.7 million , or $41.39 per share.
The following tables summarize the dividends declared on the Company’s outstanding shares of common stock during the three months ended March 31, 2022 and the year ended December 31, 2021.

Month Ended 2022 |  | Declaration Date |  | Record Date |  | Per Share |  | Payment Date
March 31 |  | January 10, 2022 |  | March 31, 2022 |  | $ | 0.121667 |  |  | April 18, 2022
February 28 |  | January 10, 2022 |  | February 28, 2022 |  | 0.121667 |  |  | March 15, 2022
January 31 |  | January 10, 2022 |  | January 31, 2022 |  | 0.121667 |  |  | February 15, 2022
Total |  |  |  |  |  | $ | 0.365001 |  |  |

Month Ended 2021 |  | Declaration Date |  | Record Date |  | Per Share |  | Payment Date
December 31 |  | October 13, 2021 |  | December 31, 2021 |  | $ | 0.120833 |  |  | January 18, 2022
November 30 |  | October 13, 2021 |  | November 30, 2021 |  | 0.120833 |  |  | December 15, 2021
October 31 |  | October 13, 2021 |  | October 29, 2021 |  | 0.120833 |  |  | November 15, 2021
September 30 |  | July 13, 2021 |  | September 30, 2021 |  | 0.120833 |  |  | October 15, 2021
August 31 |  | July 13, 2021 |  | August 31, 2021 |  | 0.120833 |  |  | September 15, 2021
July 31 |  | July 13, 2021 |  | July 30, 2021 |  | 0.120833 |  |  | August 16, 2021
June 30 |  | April 12, 2021 |  | June 30, 2021 |  | 0.120833 |  |  | July 15, 2021
May 31 |  | April 12, 2021 |  | May 28, 2021 |  | 0.120833 |  |  | June 15, 2021
April 30 |  | April 12, 2021 |  | April 30, 2021 |  | 0.120833 |  |  | May 17, 2021
March 31 |  | January 11, 2021 |  | March 31, 2021 |  | 0.120833 |  |  | April 15, 2021
February 28 |  | January 11, 2021 |  | February 26, 2021 |  | 0.120833 |  |  | March 15, 2021
January 31 |  | January 11, 2021 |  | January 29, 2021 |  | 0.120833 |  |  | February 16, 2021
Total |  |  |  |  |  | $ | 1.449996 |  |  |

On April 14, 2022, the Company’s board of directors declared dividends of the Company’s outstanding shares of common stock for the months ending April 30, 2022, May 31, 2022, and June 30, 2022 at a monthly rate of $0.121667 per share.
Restricted Shares of Common Stock
The Company granted restricted shares of common stock under the 2011 Plan on January 10, 2022 to certain employees of the Company, which will vest in equal installments on an annual basis over four years (beginning on January 1, 2023), subject to the recipient’s continued employment. The following table summarizes activity related to the Company’s unvested restricted shares of common stock during the three months ended March 31, 2022 and the year ended December 31, 2021.

Unvested Restricted Shares of Common Stock |  | Shares |  | Weighted Average Grant Date Fair Value per Share
Balance at December 31, 2020 |  | 184,890 |  |  | $ | 27.70 |
Granted |  | 90,304 |  |  | $ | 29.77 |
Vested |  | (79,140) |  | (1) | $ | 27.01 |
Forfeited |  | (10,339) |  |  | $ | 30.32 |
Balance at December 31, 2021 |  | 185,715 |  |  | $ | 28.86 |
Granted |  | 58,580 |  |  | $ | 44.19 |
Vested |  | (73,556) |  | (1) | $ | 28.03 |
Forfeited |  | (6,373) |  |  | $ | 34.72 |
Balance at March 31, 2022 |  | 164,366 |  |  | $ | 34.47 |

(1)The Company repurchased and retired 25,836 and 27,706 restricted shares of common stock that vested during the three months ended March 31, 2022 and the year ended December 31, 2021, respectively.
The unrecognized compensation expense associated with the Company’s restricted shares of common stock at March 31, 2022 was approximately $4.9 million and is expected to be recognized over a weighted average period of approximately 2.8 years.
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The following table summarizes the fair value at vesting for the restricted shares of common stock that vested during the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31, |  |
Vested Restricted Shares of Common Stock |  | 2022 |  | 2021 |  |  |  |  |  |
Vested restricted shares of common stock |  | 73,556 |  |  | 72,788 |  |  |  |  |  |  |
Fair value of vested restricted shares of common stock (in thousands) |  | $ | 3,528 |  |  | $ | 2,280 |  |  |  |  |  |  |

7. Noncontrolling Interest
The following table summarizes the activity for noncontrolling interest in the Company during the three months ended March 31, 2022 and the year ended December 31, 2021.

Noncontrolling Interest |  | LTIP Units |  | Other Common Units |  | Total Noncontrolling Common Units |  | Noncontrolling Interest
Balance at December 31, 2020 |  | 1,692,423 |  |  | 1,592,815 |  |  | 3,285,238 |  |  | 2.0 | %
Granted/Issued |  | 405,844 |  |  | — |  |  | 405,844 |  |  | N/A
Forfeited |  | — |  |  | — |  |  | — |  |  | N/A
Conversions from LTIP units to Other Common Units |  | (149,143) |  |  | 149,143 |  |  | — |  |  | N/A
Redemptions from Other Common Units to common stock |  | — |  |  | (171,318) |  |  | (171,318) |  |  | N/A
Balance at December 31, 2021 |  | 1,949,124 |  |  | 1,570,640 |  |  | 3,519,764 |  |  | 1.9 | %
Granted/Issued |  | 470,237 |  |  | — |  |  | 470,237 |  |  | N/A
Forfeited |  | — |  |  | — |  |  | — |  |  | N/A
Conversions from LTIP units to Other Common Units |  | (65,000) |  |  | 65,000 |  |  | — |  |  | N/A
Redemptions from Other Common Units to common stock |  | — |  |  | (65,000) |  |  | (65,000) |  |  | N/A
Balance at March 31, 2022 |  | 2,354,361 |  |  | 1,570,640 |  |  | 3,925,001 |  |  | 2.1 | %

LTIP Units
The Company granted LTIP units under the 2011 Plan on January 10, 2022 to non-employee, independent directors, which will vest on January 1, 2023, subject to the recipient’s continued service. The Company granted LTIP units under the 2011 Plan on January 10, 2022 to certain executive officers and senior employees of the Company, which will vest in equal installments on a quarterly basis over four years (beginning on March 31, 2022), subject to the recipient’s continued employment. Refer to Note 8 for a discussion of the LTIP units granted on January 10, 2022 pursuant to the 2019 performance units.
The fair value of the LTIP units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the LTIP units are based on Level 3 inputs and non-recurring fair value measurements. The following table summarizes the assumptions used in valuing the LTIP units granted during the three months ended March 31, 2022 (excluding the LTIP units granted pursuant to the 2019 performance units discussed in Note 8 below).

LTIP Units |  | Assumptions
Grant date |  | January 10, 2022
Expected term (years) |  | 10
Expected stock price volatility |  | 34.0 | %
Expected dividend yield |  | 4.0 | %
Risk-free interest rate |  | 1.204 | %
Fair value of LTIP units at issuance (in thousands) |  | $ | 4,385 |
LTIP units at issuance |  | 104,241 |
Fair value unit price per LTIP unit at issuance |  | $ | 42.07 |

The expected stock price volatility is based on a mix of the historical and implied volatilities of the Company and certain peer group companies. The expected dividend yield is based on the Company’s average historical dividend yield and the dividend yield as of the valuation date for each award. The risk-free interest rate is based on U.S. Treasury note yields matching a three-year time period.
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The following table summarizes activity related to the Company’s unvested LTIP units during the three months ended March 31, 2022 and the year ended December 31, 2021.

Unvested LTIP Units |  | LTIP Units |  | Weighted Average Grant Date Fair Value per Unit
Balance at December 31, 2020 |  | 211,448 |  |  | $ | 26.54 |
Granted |  | 405,844 |  |  | $ | 28.13 |
Vested |  | (427,184) |  |  | $ | 27.47 |
Forfeited |  | — |  |  | $ | — |
Balance at December 31, 2021 |  | 190,108 |  |  | $ | 27.84 |
Granted |  | 470,237 |  |  | $ | 42.07 |
Vested |  | (414,348) |  |  | $ | 40.39 |
Forfeited |  | — |  |  | $ | — |
Balance at March 31, 2022 |  | 245,997 |  |  | $ | 33.90 |

The unrecognized compensation expense associated with the Company’s LTIP units at March 31, 2022 was approximately $5.5 million and is expected to be recognized over a weighted average period of approximately 2.3 years.
The following table summarizes the fair value at vesting for the LTIP units that vested during the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31, |  |
Vested LTIP units |  | 2022 |  | 2021 |  |  |  |
Vested LTIP units |  | 414,348 |  |  | 183,486 |  |  |  |  |
Fair value of vested LTIP units (in thousands) |  | $ | 18,593 |  |  | $ | 5,683 |  |  |  |  |

8. Equity Incentive Plan
On January 10, 2022, the compensation committee of the board of directors approved and the Company granted performance units under the 2011 Plan to the executive officers and certain key employees of the Company. The terms of the performance units granted on January 10, 2022 are substantially the same as the terms of the performance units granted in January 2021, 2020, and 2019, except that the measuring period commenced on January 1, 2022 and ends on December 31, 2024.
The fair value of the performance units as of the grant date was determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The fair value of the performance units is based on Level 3 inputs and non-recurring fair value measurements. The performance unit equity compensation expense is recognized ratably from the grant date into earnings over the vesting period. The following table summarizes the assumptions used in valuing the performance units granted during the three months ended March 31, 2022.

Performance Units |  | Assumptions
Grant date |  | January 10, 2022
Expected stock price volatility |  | 34.1 | %
Expected dividend yield |  | 4.0 | %
Risk-free interest rate |  | 1.1979 | %
Fair value of performance units grant (in thousands) |  | $ | 6,289 |

The expected stock price volatility is based on a mix of the historical and implied volatilities of the Company and certain peer group companies. The expected dividend yield is based on the Company’s average historical dividend yield and the dividend yield as of the valuation date for each award. The risk-free interest rate is based on U.S. Treasury note yields matching the three-year time period of the performance period.
On December 31, 2021, the measuring period for the 2019 performance units concluded. The compensation committee of the board of directors determined that the Company’s total stockholder return exceeded the threshold percentage and return hurdle and approved the issuance of an aggregate of 365,996 vested LTIP units and 27,934 vested shares of common stock to the participants (of which 8,257 shares of common stock were repurchased and retired), which were issued on January 10, 2022.
The unrecognized compensation expense associated with the Company’s performance units at March 31, 2022 was approximately $10.0 million and is expected to be recognized over a weighted average period of approximately 2.2 years.
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Non-cash Compensation Expense
The following table summarizes the amount recorded in general and administrative expenses in the accompanying Consolidated Statements of Operations for the amortization of restricted shares of common stock, LTIP units, performance units, and the Company’s director compensation for the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31, |  |
Non-Cash Compensation Expense (in thousands) |  | 2022 |  | 2021 |  |  |  |
Restricted shares of common stock |  | $ | 548 |  |  | $ | 651 |  |  |  |  |
LTIP units |  | 1,284 |  |  | 2,408 |  |  |  |  |
Performance units |  | 1,296 |  |  | 1,438 |  |  |  |  |
Director compensation(1) |  | 121 |  |  | 118 |  |  |  |  |
Total non-cash compensation expense |  | $ | 3,249 |  |  | $ | 4,615 |  |  |  |  |

(1)All of the Company’s independent directors elected to receive shares of common stock in lieu of cash for their service during the three months ended March 31, 2022 and 2021. The number of shares of common stock granted was calculated based on the trailing ten day average common stock price on the third business day preceding the grant date.
9. Leases
Lessor Leases
The Company has operating leases in which it is the lessor for its rental property. Certain leases contain variable lease payments based upon changes in the Consumer Price Index (“CPI”). Billings for real estate taxes and other expenses are also considered to be variable lease payments. Certain leases contain options to renew or terminate the lease, and options for the lessee to purchase the rental property, all of which are predominately at the sole discretion of the lessee.
The following table summarizes the components of rental income included in the accompanying Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31, |  |
Rental Income (in thousands) |  | 2022 |  | 2021 |  |  |  |
Fixed lease payments |  | $ | 120,240 |  |  | $ | 101,179 |  |  |  |  |
Variable lease payments |  | 33,778 |  |  | 29,244 |  |  |  |  |
Straight-line rental income |  | 4,504 |  |  | 4,882 |  |  |  |  |
Net increase (decrease) to rental income related to above and below market lease amortization |  | 79 |  |  | (1,480) |  |  |  |  |
Total rental income |  | $ | 158,601 |  |  | $ | 133,825 |  |  |  |  |

The Company evaluates its operating leases to determine if it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term. For those that are not probable of collection, the Company converts to the cash basis of accounting. If the Company subsequently determines that it is probable it will collect substantially all of the lessee’s remaining lease payments under the lease term, the Company will reinstate the accrued rent balance adjusting for the amount related to the period when the lease was accounted for on a cash basis.
As of March 31, 2022 and December 31, 2021, the Company had accrued rental income of approximately $80.2 million and $75.8 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.
As of March 31, 2022 and December 31, 2021, the Company had approximately $28.9 million and $32.9 million, respectively, of total lease security deposits available in the form of existing letters of credit, which are not reflected on the accompanying Consolidated Balance Sheets. As of March 31, 2022 and December 31, 2021, the Company had approximately $0.7 million and $0.7 million, respectively, of lease security deposits available in cash, which are included in restricted cash on the accompanying Consolidated Balance Sheets. The Company’s remaining lease security deposits are commingled in cash and cash equivalents. These funds may be used to settle tenant accounts receivables in the event of a default under the related lease. As of March 31, 2022 and December 31, 2021, the Company’s total liability associated with these lease security deposits was approximately $15.9 million and $15.2 million, respectively, which is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.
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The Company estimates that billings for real estate taxes, which are the responsibility of certain tenants under the terms of their leases and are not reflected on the Company’s consolidated financial statements, was approximately $5.4 million and $5.1 million for the three months ended March 31, 2022 and 2021, respectively. These amounts would have been the maximum real estate tax expense of the Company, excluding any penalties or interest, had the tenants not met their contractual obligations for these periods.
The following table summarizes the maturity of fixed lease payments under the Company’s leases as of March 31, 2022.

Year |  | Maturity of Fixed Lease Payments (in thousands)
Remainder of 2022 |  | $ | 368,223 |
2023 |  | $ | 464,868 |
2024 |  | $ | 413,356 |
2025 |  | $ | 355,130 |
2026 |  | $ | 298,475 |
Thereafter |  | $ | 979,172 |

Lessee Leases
The Company has operating leases in which it is the lessee for its ground leases and corporate office leases. These leases have remaining lease terms of approximately 1.2 years to 47.6 years. Certain ground leases contain options to extend the leases for ten years to 20 years, all of which are reasonably certain to be exercised, and are included in the computation of the Company’s right-of-use assets and operating lease liabilities.
The following table summarizes supplemental information related to operating lease right-of-use assets and operating lease liabilities recognized in the Company’s Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

Operating Lease Term and Discount Rate |  | March 31, 2022 |  | December 31, 2021
Weighted average remaining lease term (years) |  | 29.0 |  | 29.0
Weighted average discount rate |  | 6.6 | % |  | 6.6 | %

The following table summarizes the operating lease cost included in the Company’s Consolidated Statements of Operations the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31, |  |
Operating Lease Cost (in thousands) |  | 2022 |  | 2021 |  |  |  |
Operating lease cost included in property expense attributable to ground leases |  | $ | 533 |  |  | $ | 417 |  |  |  |  |
Operating lease cost included in general and administrative expense attributable to corporate office leases |  | 437 |  |  | 429 |  |  |  |  |
Total operating lease cost |  | $ | 970 |  |  | $ | 846 |  |  |  |  |

The following table summarizes supplemental cash flow information related to operating leases in the Company’s Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31,
Operating Leases (in thousands) |  | 2022 |  | 2021
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows) |  | $ | 900 |  |  | $ | 627 |

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The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office leases as of March 31, 2022.

Year |  | Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2022 |  | $ | 2,727 |
2023 |  | 3,660 |
2024 |  | 3,699 |
2025 |  | 3,744 |
2026 |  | 2,778 |
Thereafter |  | 68,807 |
Total lease payments |  | 85,415 |
Less: Imputed interest |  | (52,690) |
Present value of operating lease liabilities |  | $ | 32,725 |

(1)Operating lease liabilities do not include estimates of CPI rent changes required by certain ground lease agreements. Therefore, actual payments may differ than those presented.
10. Earnings Per Share
During the three months ended March 31, 2022 and 2021, there were 165,259 and 198,812 unvested restricted shares of common stock (on a weighted average basis), respectively, that were considered participating securities for the purposes of computing earnings per share.
The following table reconciles the numerators and denominators in the computation of basic and diluted earnings per share of common stock for the three months ended March 31, 2022 and 2021.

|  | Three months ended March 31, |  |
Earnings Per Share (in thousands, except per share data) |  | 2022 |  | 2021 |  |  |  |
Numerator |  |  |  |  |  |  |  |
Net income attributable to common stockholders |  | $ | 52,764 |  |  | $ | 20,931 |  |  |  |  |
Denominator |  |  |  |  |  |  |  |
Weighted average common shares outstanding — basic |  | 177,827 |  |  | 158,430 |  |  |  |  |
Effect of dilutive securities(1) |  |  |  |  |  |  |  |
Share-based compensation |  | 238 |  |  | 350 |  |  |  |  |
Shares issuable under forward sales agreements |  | — |  |  | 346 |  |  |  |  |
Weighted average common shares outstanding — diluted |  | 178,065 |  |  | 159,126 |  |  |  |  |
Net income per share — basic and diluted |  |  |  |  |  |  |  |
Net income per share attributable to common stockholders — basic |  | $ | 0.30 |  |  | $ | 0.13 |  |  |  |  |
Net income per share attributable to common stockholders — diluted |  | $ | 0.30 |  |  | $ | 0.13 |  |  |  |  |

(1)During the three months ended March 31, 2022 and 2021, there were approximately 165 and 199, unvested restricted shares of common stock (on a weighted average basis), respectively, that were not included in the computation of diluted earnings per share because the allocation of income under the two-class method was more dilutive.
11. Commitments and Contingencies
The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance subject to deductible requirements. Management believes that the ultimate settlement of these actions will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
The Company has letters of credit of approximately $3.7 million as of March 31, 2022 related to construction projects and certain other agreements.
12. Subsequent Events
The following non-recognized subsequent events were noted.
On April 28, 2022, the Company entered into a note purchase agreement for the future private placement by the Operating Partnership of $400.0 million senior unsecured notes, maturing June 28, 2032, with a fixed annual interest rate of 4.12%. The notes are expected to be issued on or around June 28, 2022, subject to conditions.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion with the financial statements and related notes included elsewhere in Item 1 of this report and the audited financial statements and related notes thereto included in our most recent Annual Report on Form 10-K.
As used herein, except where the context otherwise requires, “Company,” “we,” “our” and “us,” refer to STAG Industrial, Inc. and our consolidated subsidiaries and partnerships, including our operating partnership, STAG Industrial Operating Partnership, L.P. (the “Operating Partnership”).
Forward-Looking Statements
This report contains “forward-looking statements” within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). You can identify forward-looking statements by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. Forward-looking statements in this report include, among others, statements about our future financial condition, results of operations, capitalization rates on future acquisitions, our business strategy and objectives, including our acquisition strategy, occupancy and leasing rates and trends, and expected liquidity needs and sources (including capital expenditures and the ability to obtain financing or raise capital). Our forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by our forward-looking statements are reasonable, we can give no assurance that our plans, intentions, expectations, strategies or prospects will be attained or achieved and you should not place undue reliance on these forward-looking statements. Furthermore, actual results may differ materially from those described in the forward-looking statements and may be affected by a variety of risks and factors including, without limitation:
•the factors included in our Annual Report on Form 10-K for the year ended December 31, 2021, as updated elsewhere is this report, including those set forth under the headings “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations;”
•the ongoing adverse effects of the public health crisis of the novel coronavirus disease (“COVID-19”) pandemic, or any future pandemic, epidemic or outbreak of infectious disease, on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets;
•our ability to raise equity capital on attractive terms;
•the competitive environment in which we operate;
•real estate risks, including fluctuations in real estate values, the general economic climate in local markets and competition for tenants in such markets, and the repurposing or redevelopment of retail properties into industrial properties (in part or whole);
•decreased rental rates or increased vacancy rates;
•potential defaults (including bankruptcies or insolvency) on or non-renewal of leases by tenants;
•acquisition risks, including our ability to identify and complete accretive acquisitions and/or failure of such acquisitions to perform in accordance with projections;
•the timing of acquisitions and dispositions;
•technological developments, particularly those affecting supply chains and logistics;
•potential natural disasters, epidemics, pandemics, and other potentially catastrophic events such as acts of war and/or terrorism (including the escalating conflict between Russia and Ukraine and the related impact on macroeconomic conditions as a result of such conflict);
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•international, national, regional and local economic conditions;
•the general level of interest rates and currencies;
•potential changes in the law or governmental regulations and interpretations of those laws and regulations, including changes in real estate and zoning laws or real estate investment trust (“REIT”) or corporate income tax laws, and potential increases in real property tax rates;
•financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
•credit risk in the event of non-performance by the counterparties to the interest rate swaps and revolving and unfunded debt;
•how and when pending forward equity sales may settle;
•lack of or insufficient amounts of insurance;
•our ability to maintain our qualification as a REIT;
•our ability to retain key personnel;
•litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and
•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us.
Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Moreover, you should interpret many of the risks identified in this report, as well as the risks set forth above, as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Certain Definitions
In this report:
“GAAP” means generally accepted accounting principles in the United States.
“Total annualized base rental revenue” means the contractual monthly base rent as of March 31, 2022 (which differs from rent calculated in accordance with GAAP) multiplied by 12. If a tenant is in a free rent period as of March 31, 2022, the total annualized base rental revenue is calculated based on the first contractual monthly base rent amount multiplied by 12.
“Occupancy rate” means the percentage of total leasable square footage for which either revenue recognition has commenced in accordance with GAAP or the lease term has commenced as of the close of the reporting period, whichever occurs earlier.
“Value Add Portfolio” means our properties that meet any of the following criteria: (i) less than 75% occupied as of the acquisition date; (ii) will be less than 75% occupied due to known move-outs within two years of the acquisition date; (iii) out of service with significant physical renovation of the asset; or (iv) development.
“Stabilization” for properties under development or being redeveloped means, the earlier of achieving 90% occupancy or 12 months after completion. With respect to properties acquired and immediately added to the Value Add Portfolio, (i) if acquired with less than 75% occupancy as of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy or 12 months from the acquisition date; or (ii) if acquired and will be less than 75% occupied due to known move-outs within two years of the acquisition date, Stabilization will occur upon the earlier of achieving 90% occupancy after the known move-outs have occurred or 12 months after the known move-outs have occurred.
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“Operating Portfolio” means all warehouse and light manufacturing assets that were acquired stabilized or have achieved Stabilization. The Operating Portfolio excludes non-core flex/office assets, assets contained in the Value Add Portfolio, and assets classified as held for sale.
“Comparable Lease” means a lease in the same space with a similar lease structure as compared to the previous in-place lease, excluding new leases for space that was not occupied under our ownership.
“SL Rent Change” means the percentage change in the average monthly base rent over the term of the lease that commenced during the period compared to the Comparable Lease for assets included in the Operating Portfolio. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses, and this calculation excludes the impact of any holdover rent.
“Cash Rent Change” means the percentage change in the base rent of the lease commenced during the period compared to the base rent of the Comparable Lease for assets included in the Operating Portfolio. The calculation compares the first base rent payment due after the lease commencement date compared to the base rent of the last monthly payment due prior to the termination of the lease, excluding holdover rent. Rent under gross or similar type leases are converted to a net rent based on an estimate of the applicable recoverable expenses.
“New Lease” means a lease that is signed for an initial term equal to or greater than 12 months for any vacant space, including a lease signed by a new tenant or an existing tenant that is expanding into new (additional) space.
“Renewal Lease” means a lease signed by an existing tenant to extend the term for 12 months or more, including (i) a renewal of the same space as the current lease at lease expiration, (ii) a renewal of only a portion of the current space at lease expiration, or (iii) an early renewal or workout, which ultimately does extend the original term for 12 months or more.
Overview
We are a real estate operating company focused on the acquisition, ownership, and operation of industrial properties throughout the United States. We are a Maryland corporation and our common stock is publicly traded on the New York Stock Exchange under the symbol “STAG.”
We are organized and conduct our operations to maintain our qualification as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, and generally are not subject to federal income tax to the extent we currently distribute our income to our stockholders and maintain our qualification as a REIT. We remain subject to state and local taxes on our income and property and to U.S. federal income and excise taxes on our undistributed income.
Factors That May Influence Future Results of Operations
Our ability to increase revenues or cash flow will depend in part on our (i) external growth, specifically our acquisition activity, and (ii) internal growth, specifically our portfolio occupancy and rental rates. A variety of other factors, including those noted below, also may affect our future results of operations.
COVID-19 Pandemic
Since March 2020, the COVID-19 pandemic has severely harmed global economic activity, caused significant volatility and negative pressure in financial markets, and negatively impacted almost every industry, including the real estate industry and the industries of our tenants, directly or indirectly.
We did not incur significant disruptions or enter into any rent deferral agreements from the COVID-19 pandemic during the three months ended March 31, 2022. We will continue to evaluate tenant rent relief requests on an individual basis, considering a number of factors. Not all tenant requests will ultimately result in modified agreements, nor are we foregoing our contractual rights under our lease agreements.
The COVID-19 pandemic or a future pandemic, epidemic or outbreak of infectious disease affecting states or regions in which we or our tenants operate could have material and adverse effects on our business, financial condition, results of operations and cash flows due to, among other factors: health or other government authorities requiring the closure of offices or other businesses or instituting quarantines of personnel as the result of, or in order to avoid, exposure to a contagious disease;
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disruption in supply and delivery chains; a general decline in business activity and demand for real estate; reduced economic activity, general economic decline or recession, which may impact our tenants’ businesses, financial condition and liquidity and may cause one or more of our tenants to be unable to make rent payments to us timely, or at all, or to otherwise seek modifications of lease obligations; difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions, which may affect our access to capital necessary to fund business operations or address maturing liabilities on a timely basis; and the potential negative impact on the health of our personnel, particularly if a significant number of our employees are impacted, which would result in a deterioration in our ability to ensure business continuity during a disruption.
The extent to which the COVID-19 pandemic or any other pandemic, epidemic or disease impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including among others, the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures. Nevertheless, the COVID-19 pandemic (or a future pandemic, epidemic or disease) presents material uncertainty and risk with respect to our business, financial condition, results of operations and cash flows.
Outlook
Since the economic trough from the COVID-19 pandemic in April 2020, the U.S. economy has rebounded and GDP increased by approximately 5.7% in 2021. However, in the first quarter of 2022, this economic growth was overshadowed by continued high inflation rates and supply chain disruptions due to many factors, including, but not limited to, Russia’s invasion of Ukraine and the ongoing COVID-19 pandemic (including periods of rising COVID-19 cases from new or mutated variants). While the macro-economic conditions continue to evolve and impact our tenants, we believe we will continue to benefit from having a well-diversified portfolio across various markets, tenant industries, and lease terms. Additionally, we believe that the COVID-19 pandemic and geopolitical tensions are accelerating a number of trends that positively impact U.S. industrial demand.
Over the course of the COVID-19 pandemic, the U.S. federal and state governments, as well as the Federal Reserve, responded with a series of fiscal and monetary policies to ease the economic burden of COVID-19 closures on businesses and individuals. Given the historically high inflation and strong employment reports in the first quarter of 2022, the Federal Reserve has shifted away from an expansionary monetary policy and raised interest rates 25 basis points to a range between 0.25% to 0.50% in March 2022, which was the first rate increase in over three years. We expect monetary policy to continue to tighten with increasing interest rates and decreasing Federal Reserve balance sheet; provided, that fiscal policy will likely remain accommodative, as needed, to counteract COVID-19 variants.
We believe that the current economic environment, while volatile, will provide us with an opportunity to demonstrate the diversification of our portfolio. Specifically, we believe our existing portfolio should benefit from competitive rental rates and strong occupancy. In addition to our diversified portfolio, we believe that certain characteristics of our business and capital structure should position us well in an uncertain environment, including, among others, our minimal amount of floating rate debt (taking into account our hedging activities) and ample liquidity.
Due to the ongoing COVID-19 pandemic, we expect acceleration in a number of industrial specific trends will continue to support long-term demand for industrial properties, including:
•the rise of e-commerce (as compared to the traditional retail store distribution model) and the concomitant demand by e-commerce industry participants for well-located, functional distribution space;
•the increasing attractiveness of the United States as a manufacturing and distribution location because of the size of the U.S. consumer market, an increase in overseas labor costs, a desire for greater supply chain resilience and redundancy and the overall cost of supplying and shipping goods (i.e. the shortening and fattening of the supply chain); and
•the overall quality of the transportation infrastructure in the United States.
Our portfolio continues to benefit from historically low availability throughout the national industrial market. While the COVID-19 pandemic has caused both positive and negative impacts at varying levels across different industries and geographies, the rise of e-commerce, actions taken by federal and state governments and the Federal Reserve, and the recent economic recovery have resulted in strong demand for industrial space. We believe that the diversification of our portfolio by market, tenant industry, and tenant credit will prove to be a strength in this environment. Industrial development continues to be concentrated in the larger primary markets and, after a brief deceleration, it has returned to and exceeded pre-COVID-19
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pandemic levels. We will continue to monitor the supply and demand fundamentals for industrial real estate and assess its impact on our business.
Conditions in Our Markets
The buildings in our portfolio are located in markets throughout the United States. Positive or negative changes in economic or other conditions, new supply, adverse weather conditions, natural disasters, epidemics, and other factors in these markets may affect our overall performance.
Rental Income
We receive income primarily in the form of rental income from the tenants who occupy our buildings. The amount of rental income generated by the buildings in our portfolio depends principally on occupancy and rental rates. During the three months ended March 31, 2022, the SL Rent Change and the Cash Rent Change on New Leases and Renewal Leases in the Operating Portfolio together grew approximately 25.1% and 15.2%, respectively, during the three months ended March 31, 2022.
Future economic downturns or regional downturns affecting our submarkets that impair our ability to renew or re-lease space and the ability of our tenants to fulfill their lease commitments, as in the case of tenant bankruptcies, including those brought on by the COVID-19 pandemic, could adversely affect our ability to maintain or increase rental rates at our buildings. Our ability to lease our properties and the attendant rental rate is dependent upon, among other things, (i) the overall economy, (ii) the supply/demand dynamic in our markets, (iii) the quality of our properties, including age, clear height, and configuration, and (iv) our tenants’ ability to meet their contractual obligations to us.
The following table summarizes the Operating Portfolio leases that commenced during the three months ended March 31, 2022. Any rental concessions in such leases are accounted for on a straight-line basis over the term of the lease.

Operating Portfolio |  | Square Feet |  | Cash Basis Rent Per Square Foot |  | SL Rent Per Square Foot |  | Total Costs Per Square Foot(1) |  | Cash Rent Change |  | SL Rent Change |  | Weighted Average Lease Term(2) (years) |  | Rental Concessions per Square Foot(3)
Three months ended March 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Leases |  | 1,179,224 |  |  | $ | 6.04 |  |  | $ | 6.44 |  |  | $ | 3.61 |  |  | 25.0 | % |  | 36.4 | % |  | 7.1 |  |  | $ | 1.28 |
Renewal Leases |  | 1,960,672 |  |  | $ | 4.97 |  |  | $ | 5.32 |  |  | $ | 0.95 |  |  | 8.9 | % |  | 17.9 | % |  | 5.9 |  |  | $ | 0.10 |
Total/weighted average |  | 3,139,896 |  |  | $ | 5.37 |  |  | $ | 5.74 |  |  | $ | 1.96 |  |  | 15.2 | % |  | 25.1 | % |  | 6.3 |  |  | $ | 0.54 |

(1)"Total Costs" means the costs for improvements of vacant and renewal spaces, as well as the contingent-based legal fees and commissions for leasing transactions. Total Costs per square foot represent the total costs expected to be incurred on the leases that commenced during the period and do not reflect actual expenditures for the period.
(2)'Weighted average lease term' means the contractual lease term in years, assuming that tenants do not exercise any renewal options, purchase options, or early termination rights, weighted by square footage.
(3)Represents the total rental concessions for the entire lease term.
Additionally, for the three months ended March 31, 2022, leases related to the Value Add Portfolio and first generation leasing, with a total of 511,236 square feet, are excluded from the Operating Portfolio statistics above.
Property Operating Expenses
Our property operating expenses generally consist of utilities, real estate taxes, management fees, insurance, and site repair and maintenance costs. For the majority of our tenants, our property operating expenses are controlled, in part, by the triple net provisions in tenant leases. In our triple net leases, the tenant is responsible for all aspects of and costs related to the building and its operation during the lease term, including utilities, taxes, insurance, and maintenance costs, but typically excluding roof and building structure. However, we also have modified gross leases and gross leases in our building portfolio, which may require us to absorb certain building related expenses of our tenants. In our modified gross leases, we are responsible for certain building related expenses during the lease term, but most of the expenses are passed through to the tenant for reimbursement to us. In our gross leases, we are responsible for all expenses related to the building and its operation during the lease term. Our overall performance will be affected by the extent to which we are able to pass-through property operating expenses to our tenants.
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Scheduled Lease Expirations
Our ability to re-lease space subject to expiring leases impacts our results of operations and will be affected by economic and competitive conditions in our markets and by the desirability of our individual buildings. Leases that comprise approximately 6.8% of our annualized base rental revenue will expire during the period from April 1, 2022 to March 31, 2023, excluding month-to-month leases. We assume, based upon internal renewal probability estimates that some of our tenants will renew and others will vacate and the associated space will be re-let subject to downtime assumptions. Using the aforementioned assumptions, we expect that the rental rates on the respective new leases will be greater than the rates under existing leases expiring during the period April 1, 2022 to March 31, 2023, thereby resulting in an increase in revenue from the same space.
The following table summarizes lease expirations for leases in place as of March 31, 2022, plus available space, for each of the ten calendar years beginning with 2022 and thereafter in our portfolio. The information in the table assumes that tenants do not exercise renewal options or early termination rights.

Lease Expiration Year |  | Number of Leases Expiring |  | Total Rentable Square Feet |  | % of Total Occupied Square Feet |  | Total Annualized Base Rental Revenue (in thousands) |  | % of Total Annualized Base Rental Revenue |  |
Available |  | — |  |  | 3,412,002 |  |  | — |  |  | — |  |  | — |  |  |
Month-to-month leases |  | 3 |  |  | 123,031 |  |  | 0.1 | % |  | $ | 477 |  |  | 0.1 | % |  |
Remainder of 2022 |  | 34 |  |  | 3,559,398 |  |  | 3.3 | % |  | 16,780 |  |  | 3.3 | % |  |
2023 |  | 100 |  |  | 13,138,341 |  |  | 12.3 | % |  | 57,723 |  |  | 11.4 | % |  |
2024 |  | 98 |  |  | 13,767,694 |  |  | 12.9 | % |  | 63,864 |  |  | 12.6 | % |  |
2025 |  | 88 |  |  | 12,901,137 |  |  | 12.1 | % |  | 58,034 |  |  | 11.4 | % |  |
2026 |  | 97 |  |  | 14,658,908 |  |  | 13.7 | % |  | 71,460 |  |  | 14.1 | % |  |
2027 |  | 75 |  |  | 11,979,061 |  |  | 11.2 | % |  | 57,918 |  |  | 11.4 | % |  |
2028 |  | 44 |  |  | 6,886,711 |  |  | 6.6 | % |  | 31,679 |  |  | 6.2 | % |  |
2029 |  | 41 |  |  | 7,039,607 |  |  | 6.6 | % |  | 33,763 |  |  | 6.7 | % |  |
2030 |  | 27 |  |  | 3,763,278 |  |  | 3.5 | % |  | 21,576 |  |  | 4.3 | % |  |
2031 |  | 39 |  |  | 7,182,980 |  |  | 6.7 | % |  | 34,219 |  |  | 6.7 | % |  |
Thereafter |  | 47 |  |  | 11,710,329 |  |  | 11.0 | % |  | 60,082 |  |  | 11.8 | % |  |
Total |  | 693 |  |  | 110,122,477 |  |  | 100.0 | % |  | $ | 507,575 |  |  | 100.0 | % |  |

Portfolio Acquisitions
The following table summarizes our acquisitions during the three months ended March 31, 2022.

Market(1) |  | Date Acquired |  | Square Feet |  | Number of Buildings |  | Purchase Price (in thousands)
Kansas City, MO |  | January 6, 2022 |  | 702,000 |  |  | 1 |  |  | $ | 60,428 |
Chicago, IL |  | January 31, 2022 |  | 72,499 |  |  | 1 |  |  | 8,128 |
Columbus, OH |  | February 8, 2022 |  | 138,213 |  |  | 1 |  |  | 11,492 |
Cleveland, OH |  | February 8, 2022 |  | 136,800 |  |  | 1 |  |  | 13,001 |
Nashville, TN |  | March 10, 2022 |  | 109,807 |  |  | 1 |  |  | 12,810 |
Greenville/Spartanburg, SC |  | March 10, 2022 |  | 289,103 |  |  | 1 |  |  | 28,274 |
Memphis, TN |  | March 18, 2022 |  | 195,622 |  |  | 1 |  |  | 15,828 |
Greenville/Spartanburg, SC |  | March 18, 2022 |  | 155,717 |  |  | 1 |  |  | 16,390 |
Three months ended March 31, 2022 |  |  |  | 1,799,761 |  |  | 8 |  |  | $ | 166,351 |

(1) As defined by CoStar Realty Information Inc (“CoStar”). If the building is located outside of a CoStar defined market, the city and state is reflected.
Portfolio Dispositions
During the three months ended March 31, 2022, we sold one building and one land parcel comprised of approximately 0.2 million rentable square feet with a net book value of approximately $11.3 million to third parties. Net proceeds from the sales of rental property were approximately $35.3 million and we recognized the full gain on the sales of rental property, net, of approximately $24.0 million for the three months ended March 31, 2022.
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Top Markets
The following table summarizes information about the 20 largest markets in our portfolio based on total annualized base rental revenue as of March 31, 2022.

Top 20 Markets(1) |  |  |  |  |  | % of Total Annualized Base Rental Revenue
Chicago, IL |  |  |  |  |  | 7.8 | %
Philadelphia, PA |  |  |  |  |  | 7.1 | %
Greenville/Spartanburg, SC |  |  |  |  |  | 5.4 | %
Milwaukee/Madison, WI |  |  |  |  |  | 4.5 | %
Detroit, MI |  |  |  |  |  | 4.3 | %
Columbus, OH |  |  |  |  |  | 4.1 | %
Minneapolis/St Paul, MN |  |  |  |  |  | 3.8 | %
Pittsburgh, PA |  |  |  |  |  | 3.8 | %
Houston, TX |  |  |  |  |  | 3.0 | %
West Michigan, MI |  |  |  |  |  | 2.4 | %
Charlotte, NC |  |  |  |  |  | 2.3 | %
Indianapolis, IN |  |  |  |  |  | 2.3 | %
El Paso, TX |  |  |  |  |  | 2.2 | %
Cincinnati/Dayton, OH |  |  |  |  |  | 2.0 | %
Cleveland, OH |  |  |  |  |  | 1.9 | %
Boston, MA |  |  |  |  |  | 1.9 | %
Kansas City, MO |  |  |  |  |  | 1.8 | %
Columbia, SC |  |  |  |  |  | 1.6 | %
Westchester/So Connecticut, CT/NY |  |  |  |  |  | 1.6 | %
Washington, DC |  |  |  |  |  | 1.5 | %
Total |  |  |  |  |  | 65.3 | %

(1) As defined by CoStar.
Top Industries
The following table summarizes information about the 20 largest tenant industries in our portfolio based on total annualized base rental revenue as of March 31, 2022.

Top 20 Tenant Industries(1) |  |  |  |  |  | % of Total Annualized Base Rental Revenue
Air Freight & Logistics |  |  |  |  |  | 10.8 | %
Containers & Packaging |  |  |  |  |  | 8.3 | %
Auto Components |  |  |  |  |  | 7.1 | %
Trading Companies & Distributors (Industrial Goods) |  |  |  |  |  | 5.3 | %
Commercial Services & Supplies |  |  |  |  |  | 5.3 | %
Internet & Direct Mkt Retail |  |  |  |  |  | 4.9 | %
Machinery |  |  |  |  |  | 4.7 | %
Distributors (Consumer Goods) |  |  |  |  |  | 4.6 | %
Household Durables |  |  |  |  |  | 4.5 | %
Food & Staples Retailing |  |  |  |  |  | 3.5 | %
Media |  |  |  |  |  | 3.4 | %
Building Products |  |  |  |  |  | 3.2 | %
Specialty Retail |  |  |  |  |  | 2.9 | %
Chemicals |  |  |  |  |  | 2.3 | %
Road & Rail |  |  |  |  |  | 2.2 | %
Electronic Equip, Instruments |  |  |  |  |  | 2.1 | %
Food Products |  |  |  |  |  | 2.1 | %
Beverages |  |  |  |  |  | 2.0 | %
Textiles, Apparel, Luxury Good |  |  |  |  |  | 2.0 | %
Household Products |  |  |  |  |  | 1.7 | %
Total |  |  |  |  |  | 82.9 | %

(1) Industry classification based on Global Industry Classification Standard methodology.
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Top Tenants
The following table summarizes information about the 20 largest tenants in our portfolio based on total annualized base rental revenue as of March 31, 2022.

Top 20 Tenants(1) |  | Number of Leases |  |  |  |  |  | % of Total Annualized Base Rental Revenue
Amazon |  | 7 |  |  |  |  |  | 3.2 | %
Eastern Metal Supply, Inc. |  | 5 |  |  |  |  |  | 1.0 | %
American Tire Distributors Inc |  | 7 |  |  |  |  |  | 1.0 | %
FedEx Corporation |  | 4 |  |  |  |  |  | 0.9 | %
Tempur Sealy International Inc |  | 2 |  |  |  |  |  | 0.9 | %
Lippert Component Manufact |  | 5 |  |  |  |  |  | 0.8 | %
Kenco Logistic Services, LLC |  | 3 |  |  |  |  |  | 0.8 | %
Penguin Random House LLC |  | 1 |  |  |  |  |  | 0.8 | %
DS Smith North America |  | 2 |  |  |  |  |  | 0.7 | %
Westrock Company |  | 7 |  |  |  |  |  | 0.7 | %
GXO Logistics, Inc. |  | 2 |  |  |  |  |  | 0.7 | %
DHL Supply Chain |  | 4 |  |  |  |  |  | 0.7 | %
LKQ Corporation |  | 4 |  |  |  |  |  | 0.7 | %
Hachette Book Group, Inc. |  | 1 |  |  |  |  |  | 0.7 | %
Yanfeng US Automotive Interior |  | 2 |  |  |  |  |  | 0.7 | %
Ford Motor Company |  | 1 |  |  |  |  |  | 0.7 | %
Carolina Beverage Group |  | 3 |  |  |  |  |  | 0.7 | %
Packaging Corp of America |  | 5 |  |  |  |  |  | 0.6 | %
Schneider Electric USA, Inc. |  | 3 |  |  |  |  |  | 0.6 | %
Costco Wholesale Corporation |  | 1 |  |  |  |  |  | 0.6 | %
Total |  | 69 |  |  |  |  |  | 17.5 | %

(1) Includes tenants, guarantors, and/or non-guarantor parents.
Critical Accounting Policies
See “Critical Accounting Policies” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of our critical accounting policies and estimates.
Results of Operations
The following discussion of the results of our same store (as defined below) net operating income (“NOI”) should be read in conjunction with our consolidated financial statements included in this report. For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below. Same store results are considered to be useful to investors in evaluating our performance because they provide information relating to changes in building-level operating performance without taking into account the effects of acquisitions or dispositions. We encourage the reader to not only look at our same store results, but also our total portfolio results, due to historic and future growth.
We define same store properties as properties that were in the Operating Portfolio for the entirety of the comparative periods presented. The results for same store properties exclude termination fees, solar income, and other income adjustments. Same store properties exclude Operating Portfolio properties with expansions placed into service after December 31, 2020. On March 31, 2022, we owned 463 industrial buildings consisting of approximately 94.6 million square feet and representing approximately 85.9% of our total portfolio, that are considered our same store portfolio in the analysis below. Same store occupancy decreased approximately 0.5% to 97.4% as of March 31, 2022 compared to 97.9% as of March 31, 2021.
Comparison of the three months ended March 31, 2022 to the three months ended March 31, 2021
The following table summarizes selected operating information for our same store portfolio and our total portfolio for the three months ended March 31, 2022 and 2021 (dollars in thousands). This table includes a reconciliation from our same store portfolio to our total portfolio by also providing information for the three months ended March 31, 2022 and 2021 with respect to the buildings acquired and sold after December 31, 2020, Operating Portfolio buildings with expansions placed into service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2020, and our flex/office buildings, Value Add Portfolio, and buildings classified as held for sale.
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| Same Store Portfolio |  | Acquisitions/Dispositions |  | Other |  | Total Portfolio
| Three months ended March 31, |  | Change |  | Three months ended March 31, |  | Three months ended March 31, |  | Three months ended March 31, |  | Change
| 2022 |  | 2021 |  | $ |  | % |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | $ |  | %
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rental income | $ | 133,168 |  |  | $ | 128,952 |  |  | $ | 4,216 |  |  | 3.3 | % |  | $ | 21,043 |  |  | $ | 3,280 |  |  | $ | 4,390 |  |  | $ | 1,593 |  |  | $ | 158,601 |  |  | $ | 133,825 |  |  | $ | 24,776 |  |  | 18.5 | %
Other income | 278 |  |  | 102 |  |  | 176 |  |  | 172.5 | % |  | — |  |  | 68 |  |  | 330 |  |  | — |  |  | 608 |  |  | 170 |  |  | 438 |  |  | 257.6 | %
Total operating revenue | 133,446 |  |  | 129,054 |  |  | 4,392 |  |  | 3.4 | % |  | 21,043 |  |  | 3,348 |  |  | 4,720 |  |  | 1,593 |  |  | 159,209 |  |  | 133,995 |  |  | 25,214 |  |  | 18.8 | %
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property | 26,852 |  |  | 24,932 |  |  | 1,920 |  |  | 7.7 | % |  | 3,813 |  |  | 1,550 |  |  | 1,110 |  |  | 520 |  |  | 31,775 |  |  | 27,002 |  |  | 4,773 |  |  | 17.7 | %
Net operating income(1) | $ | 106,594 |  |  | $ | 104,122 |  |  | $ | 2,472 |  |  | 2.4 | % |  | $ | 17,230 |  |  | $ | 1,798 |  |  | $ | 3,610 |  |  | $ | 1,073 |  |  | 127,434 |  |  | 106,993 |  |  | 20,441 |  |  | 19.1 | %
Other expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
General and administrative |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 12,313 |  |  | 12,790 |  |  | (477) |  |  | (3.7) | %
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 67,366 |  |  | 58,407 |  |  | 8,959 |  |  | 15.3 | %
Other expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 497 |  |  | 852 |  |  | (355) |  |  | (41.7) | %
Total other expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 80,176 |  |  | 72,049 |  |  | 8,127 |  |  | 11.3 | %
Total expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 111,951 |  |  | 99,051 |  |  | 12,900 |  |  | 13.0 | %
Other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and other income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 34 |  |  | 32 |  |  | 2 |  |  | 6.3 | %
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (17,259) |  |  | (15,358) |  |  | (1,901) |  |  | 12.4 | %
Debt extinguishment and modification expenses |  |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  | (679) |  |  | 679 |  |  | (100.0) | %
Gain on the sales of rental property, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 23,955 |  |  | 6,409 |  |  | 17,546 |  |  | 273.8 | %
Total other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,730 |  |  | (9,596) |  |  | 16,326 |  |  | 170.1 | %
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 53,988 |  |  | $ | 25,348 |  |  | $ | 28,640 |  |  | 113.0 | %

(1)For a detailed discussion of NOI, including the reasons management believes NOI is useful to investors, see “Non-GAAP Financial Measures” below.
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Net Income
Net income for our total portfolio increased by approximately $28.6 million, or 113.0%, to approximately $54.0 million for the three months ended March 31, 2022, compared to approximately $25.3 million for the three months ended March 31, 2021.
Same Store Total Operating Revenue
Same store total operating revenue consists primarily of rental income from (i) fixed lease payments, variable lease payments, straight-line rental income, and above and below market lease amortization from our properties (“lease income”), and (ii) other tenant billings for insurance, real estate taxes and certain other expenses (“other billings”).
For a detailed reconciliation of our same store total operating revenue to net income, see the table above.
Same store rental income, which includes lease income and other billings as discussed below, increased by approximately $4.2 million, or 3.3%, to approximately $133.2 million for the three months ended March 31, 2022 compared to approximately $129.0 million for the three months ended March 31, 2021.
Same store lease income increased by approximately $2.1 million, or 2.0%, to approximately $109.4 million for the three months ended March 31, 2022 compared to approximately $107.3 million for the three months ended March 31, 2021. The increase was primarily due to an increase in rental income of approximately $4.3 million from the execution of new leases and lease renewals with existing tenants and a net decrease in the amortization of net above market leases of approximately $0.2 million. These increases were partially offset by the reduction of base rent of approximately $2.4 million due to tenant vacancies.
Same store other billings increased by approximately $2.1 million, or 9.5%, to approximately $23.8 million for the three months ended March 31, 2022 compared to approximately $21.7 million for the three months ended March 31, 2021. The increase was attributable to an increase of approximately $1.7 million related to other expense reimbursements from an increase in corresponding expenses and changes to lease terms where we began paying the operating expenses on behalf of tenants that had previously paid its operating expenses directly to respective vendors. Additionally, there was an increase in real estate taxes levied by the taxing authority and changes to lease terms where we began paying the real estate taxes on behalf of tenants that had previously paid its taxes directly to the taxing authority of approximately $0.4 million.
Same Store Operating Expenses
Same store operating expenses consist primarily of property operating expenses and real estate taxes and insurance.
For a detailed reconciliation of our same store operating expenses to net income, see the table above.
Total same store property operating expenses increased by approximately $1.9 million, or 7.7%, to approximately $26.9 million for the three months ended March 31, 2022 compared to approximately $24.9 million for the three months ended March 31, 2021. This increase was primarily related to an increase in utilities expense of approximately $0.8 million and real estate taxes of approximately $0.7 million levied by the taxing authority and changes to lease terms where we began paying the real estate taxes on behalf of tenants that had previously paid its taxes directly to the taxing authority. The increase was also attributable to increases of approximately $0.2 million in insurance expense and approximately $0.2 million in repairs and maintenance and other expenses.
Acquisitions and Dispositions Net Operating Income
For a detailed reconciliation of our acquisitions and dispositions NOI to net income, see the table above.
Subsequent to December 31, 2020, we acquired 74 buildings consisting of approximately 13.1 million square feet (excluding eight buildings that were included in the Value Add Portfolio at March 31, 2022 or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2020), and sold 23 buildings consisting of approximately 2.9 million square feet and one land parcel. For the three months ended March 31, 2022 and 2021, the buildings acquired after December 31, 2020 contributed approximately $16.9 million and $0.8 million to NOI, respectively. For the three months ended March 31, 2022 and 2021, the buildings sold after December 31, 2020 contributed approximately $0.3 million and $1.0 million to NOI, respectively. Refer to Note 3 in the accompanying Notes to Consolidated Financial Statements for additional discussion regarding buildings acquired or sold.
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Other Net Operating Income
Other assets include our flex/office buildings, Value Add Portfolio, and Operating Portfolio buildings with expansions placed in service or transferred from the Value Add Portfolio to the Operating Portfolio after December 31, 2020. Other NOI also includes termination, solar, and other income adjustments from buildings in our same store portfolio.
For a detailed reconciliation of our other NOI to net income, see the table above.
These buildings contributed approximately $2.7 million and $0.8 million to NOI for the three months ended March 31, 2022 and 2021, respectively. Additionally, there was approximately $0.9 million and $0.3 million of termination, solar, and other income adjustments from certain buildings in our same store portfolio for the three months ended March 31, 2022 and 2021, respectively.
Total Other Expenses
Total other expenses consist of general and administrative expenses, depreciation and amortization, and other expenses.
Total other expenses increased approximately $8.1 million, or 11.3%, for the three months ended March 31, 2022 to approximately $80.2 million compared to approximately $72.0 million for the three months ended March 31, 2021. The increase was primarily a result of an increase in depreciation and amortization of approximately $9.0 million due to an increase in the depreciable asset base from net acquisitions. This increase was partially offset by a decrease in general and administrative expenses of approximately $0.5 million primarily due to the adoption of our retirement vesting program on January 7, 2021 and related acceleration of equity-based compensation expense for certain eligible employees that did not recur during the three months ended March 31, 2022.
Total Other Income (Expense)
Total other income (expense) consists of interest and other income, interest expense, and gain on the sales of rental property, net. Interest expense includes interest incurred during the period as well as adjustments related to amortization of financing fees and debt issuance costs, and amortization of fair market value adjustments associated with the assumption of debt.
Total other income (expense) increased approximately $16.3 million, or 170.1%, for the three months ended March 31, 2022 to a total net other income of approximately $6.7 million compared approximately $9.6 million net other expense for the three months ended March 31, 2021. This increase was primarily a result of an increase in the gain on the sales of rental property, net of approximately $17.5 million. This increase was partially offset by an increase in interest expense of approximately $1.9 million which is primarily attributable to the issuance of $325.0 million of unsecured notes on September 28, 2021.
Non-GAAP Financial Measures
In this report, we disclose funds from operations (“FFO”) and NOI, which meet the definition of “non-GAAP financial measures” as set forth in Item 10(e) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”). As a result, we are required to include in this report a statement of why management believes that presentation of these measures provides useful information to investors.
Funds From Operations
FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further, FFO should be compared with our reported net income (loss) in accordance with GAAP, as presented in our consolidated financial statements included in this report.
We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“Nareit”). FFO represents GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating buildings, land sales, impairment write-downs of depreciable real estate, real estate related depreciation and amortization (excluding amortization of deferred financing costs and fair market value of debt adjustment) and after adjustments for unconsolidated partnerships and joint ventures.
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Management uses FFO as a supplemental performance measure because it is a widely recognized measure of the performance of REITs. FFO may be used by investors as a basis to compare our operating performance with that of other REITs.
However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our buildings that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our buildings, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. In addition, other REITs may not calculate FFO in accordance with the Nareit definition, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. FFO should not be used as a measure of our liquidity, and is not indicative of funds available for our cash needs, including our ability to pay dividends.
The following table sets forth a reconciliation of our FFO attributable to common stockholders and unit holders for the periods presented to net income, the nearest GAAP equivalent.

|  | Three months ended March 31, |  |
Reconciliation of Net Income to FFO (in thousands) |  | 2022 |  | 2021 |  |  |  |
Net income |  | $ | 53,988 |  |  | $ | 25,348 |  |  |  |  |
Rental property depreciation and amortization |  | 67,313 |  |  | 58,339 |  |  |  |  |
Gain on the sales of rental property, net |  | (23,955) |  |  | (6,409) |  |  |  |  |
FFO |  | 97,346 |  |  | 77,278 |  |  |  |  |
Preferred stock dividends |  | — |  |  | (1,289) |  |  |  |  |
Redemption of preferred stock |  | — |  |  | (2,582) |  |  |  |  |
Amount allocated to restricted shares of common stock and unvested units |  | (157) |  |  | (237) |  |  |  |  |
FFO attributable to common stockholders and unit holders |  | $ | 97,189 |  |  | $ | 73,170 |  |  |  |  |

Net Operating Income
We consider NOI to be an appropriate supplemental performance measure to net income (loss) because we believe it helps investors and management understand the core operations of our buildings. NOI is defined as rental income, which includes billings for common area maintenance, real estate taxes and insurance, less property expenses and real estate taxes and insurance. NOI should not be viewed as an alternative measure of our financial performance since it excludes expenses which could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI.
The following table sets forth a reconciliation of our NOI for the periods presented to net income, the nearest GAAP equivalent.

|  | Three months ended March 31, |  |
Reconciliation of Net Income to NOI (in thousands) |  | 2022 |  | 2021 |  |  |  |
Net income |  | $ | 53,988 |  |  | $ | 25,348 |  |  |  |  |
General and administrative |  | 12,313 |  |  | 12,790 |  |  |  |  |
Depreciation and amortization |  | 67,366 |  |  | 58,407 |  |  |  |  |
Interest and other income |  | (34) |  |  | (32) |  |  |  |  |
Interest expense |  | 17,259 |  |  | 15,358 |  |  |  |  |
Debt extinguishment and modification expenses |  | — |  |  | 679 |  |  |  |  |
Other expenses |  | 497 |  |  | 852 |  |  |  |  |
Gain on the sales of rental property, net |  | (23,955) |  |  | (6,409) |  |  |  |  |
Net operating income |  | $ | 127,434 |  |  | $ | 106,993 |  |  |  |  |

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Cash Flows
Comparison of the three months ended March 31, 2022 to the three months ended March 31, 2021
The following table summarizes our cash flows for the three months ended March 31, 2022 compared to the three months ended March 31, 2021.

|  | Three months ended March 31, |  | Change
Cash Flows (dollars in thousands) |  | 2022 |  | 2021 |  | $ |  | %
Net cash provided by operating activities |  | $ | 88,879 |  |  | $ | 73,460 |  |  | $ | 15,419 |  |  | 21.0 | %
Net cash used in investing activities |  | $ | 148,797 |  |  | $ | 79,502 |  |  | $ | 69,295 |  |  | 87.2 | %
Net cash provided by financing activities |  | $ | 74,727 |  |  | $ | 8,020 |  |  | $ | 66,707 |  |  | 831.8 | %

Net cash provided by operating activities increased approximately $15.4 million to approximately $88.9 million for the three months ended March 31, 2022 compared to approximately $73.5 million for the three months ended March 31, 2021. The increase was primarily attributable to incremental operating cash flows from property acquisitions completed after March 31, 2021, and operating performance at existing properties. These increases were partially offset by the loss of cash flows from property dispositions completed after March 31, 2021 and fluctuations in working capital due to the timing of payments and rental receipts.
Net cash used in investing activities increased approximately $69.3 million to approximately $148.8 million for the three months ended March 31, 2022 compared to approximately $79.5 million for the three months ended March 31, 2021. The increase was primarily attributable to the acquisition of eight buildings for a total cash consideration of approximately $166.4 million for the three months ended March 31, 2022 compared to the acquisition of six buildings for a total cash consideration of approximately $95.1 million for the three months ended March 31, 2021.
Net cash provided by financing activities increased approximately $66.7 million to approximately $74.7 million for the three months ended March 31, 2022 compared to approximately $8.0 million for the three months ended March 31, 2021. The increase is primarily attributable to the redemption of preferred stock with an aggregate liquidation value of $75.0 million during the three months ended March 31, 2021 that did not recur, as well as an increase in net proceeds received from the sale of common stock of approximately $33.5 million, during the three months ended March 31, 2022. These increases were partially offset by a net cash outflow of approximately $38.0 million from our unsecured credit facility and an increase of approximately $6.2 million in dividends paid during the three months ended March 31, 2022 compared to the three months ended March 31, 2021.
Liquidity and Capital Resources
We believe that our liquidity needs will be satisfied through cash flows generated by operations, disposition proceeds, and financing activities. Operating cash flow from rental income, expense recoveries from tenants, and other income from operations is our principal source of funds to pay operating expenses, debt service, recurring capital expenditures, and the distributions required to maintain our REIT qualification. We primarily rely on the capital markets (common and preferred equity and debt securities) to fund our acquisition activity. We seek to increase cash flows from our properties by maintaining quality building standards that promote high occupancy rates and permit increases in rental rates, while reducing tenant turnover and controlling operating expenses. We believe that our revenue, together with proceeds from building sales and equity and debt financings, will continue to provide funds for our short-term and medium-term liquidity needs.
Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our buildings, including interest expense, interest rate swap payments, scheduled principal payments on outstanding indebtedness, property acquisitions under contract, general and administrative expenses, and capital expenditures for tenant improvements and leasing commissions.
Our long-term liquidity needs, in addition to recurring short-term liquidity needs as discussed above, consist primarily of funds necessary to pay for property acquisitions, non-recurring capital expenditures, and scheduled debt maturities. We intend to satisfy our long-term liquidity needs through cash flow from operations, the issuance of equity or debt securities, other borrowings, property dispositions, or, in connection with acquisitions of certain additional buildings, the issuance of common units in the Operating Partnership.
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As of March 31, 2022, we had total immediate liquidity of approximately $397.1 million, comprised of $34.8 million of cash and cash equivalents and $362.3 million of immediate availability on our unsecured credit facility.
In addition, we require funds to pay dividends to holders of our common stock and common units in the Operating Partnership. Any future dividends on our common stock are voluntary and declared in the sole discretion of our board of directors, subject to the distribution requirements to maintain our REIT status for federal income tax purposes, and may be reduced or stopped for any reason, including to use funds for other liquidity requirements. The following table summarizes the dividends declared on our outstanding common stock during the three months ended March 31, 2022.

Month Ended 2022 |  | Declaration Date |  | Record Date |  | Per Share |  | Payment Date
March 31 |  | January 10, 2022 |  | March 31, 2022 |  | $ | 0.121667 |  |  | April 18, 2022
February 28 |  | January 10, 2022 |  | February 28, 2022 |  | 0.121667 |  |  | March 15, 2022
January 31 |  | January 10, 2022 |  | January 31, 2022 |  | 0.121667 |  |  | February 15, 2022
Total |  |  |  |  |  | $ | 0.365001 |  |  |

On April 14, 2022, our board of directors declared dividends on our common stock for the months ending April 30, 2022, May 31, 2022, and June 30, 2022 at a monthly rate of $0.121667 per share.
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Indebtedness Outstanding
The following table summarizes certain information with respect to our indebtedness outstanding as of March 31, 2022.

Loan |  | Principal Outstanding as of March 31, 2022 (in thousands) |  | Interest Rate(1)(2) |  | Maturity Date |  | Prepayment Terms(3)
Unsecured credit facility: |  |  |  |  |  |  |  |
Unsecured Credit Facility(4) |  | $ | 384,000 |  |  | L + 0.775% |  | October 23, 2026 |  | i
Total unsecured credit facility |  | 384,000 |  |  |  |  |  |  |
Unsecured term loans: |  |  |  |  |  |  |  |
Unsecured Term Loan D |  | 150,000 |  |  | 2.85 | % |  | January 4, 2023 |  | i
Unsecured Term Loan E |  | 175,000 |  |  | 3.77 | % |  | January 15, 2024 |  | i
Unsecured Term Loan F |  | 200,000 |  |  | 2.96 | % |  | January 12, 2025 |  | i
Unsecured Term Loan G |  | 300,000 |  |  | 1.13 | % |  | February 5, 2026 |  | i
Unsecured Term Loan A |  | 150,000 |  |  | 3.23 | % |  | March 15, 2027 |  | i
Total unsecured term loans |  | 975,000 |  |  |  |  |  |  |
Total unamortized deferred financing fees and debt issuance costs |  | (4,075) |  |  |  |  |  |  |
Total carrying value unsecured term loans, net |  | 970,925 |  |  |  |  |  |  |
Unsecured notes: |  |  |  |  |  |  |  |
Series F Unsecured Notes |  | 100,000 |  |  | 3.98 | % |  | January 5, 2023 |  | ii
Series A Unsecured Notes |  | 50,000 |  |  | 4.98 | % |  | October 1, 2024 |  | ii
Series D Unsecured Notes |  | 100,000 |  |  | 4.32 | % |  | February 20, 2025 |  | ii
Series G Unsecured Notes |  | 75,000 |  |  | 4.10 | % |  | June 13, 2025 |  | ii
Series B Unsecured Notes |  | 50,000 |  |  | 4.98 | % |  | July 1, 2026 |  | ii
Series C Unsecured Notes |  | 80,000 |  |  | 4.42 | % |  | December 30, 2026 |  | ii
Series E Unsecured Notes |  | 20,000 |  |  | 4.42 | % |  | February 20, 2027 |  | ii
Series H Unsecured Notes |  | 100,000 |  |  | 4.27 | % |  | June 13, 2028 |  | ii
Series I Unsecured Notes |  | 275,000 |  |  | 2.80 | % |  | September 29, 2031 |  | ii
Series J Unsecured Notes |  | 50,000 |  |  | 2.95 | % |  | September 28, 2033 |  | ii
Total unsecured notes |  | 900,000 |  |  |  |  |  |  |
Total unamortized deferred financing fees and debt issuance costs |  | (2,942) |  |  |  |  |  |  |
Total carrying value unsecured notes, net |  | 897,058 |  |  |  |  |  |  |
Mortgage notes (secured debt): |  |  |  |  |  |  |  |
Wells Fargo Bank, National Association CMBS Loan |  | 46,106 |  |  | 4.31 | % |  | December 1, 2022 |  | iii
Thrivent Financial for Lutherans |  | 3,397 |  |  | 4.78 | % |  | December 15, 2023 |  | iv
United of Omaha Life Insurance Company |  | 4,894 |  |  | 3.71 | % |  | October 1, 2039 |  | ii
Total mortgage notes |  | 54,397 |  |  |  |  |  |  |
Less: Net unamortized fair market value discount |  | (136) |  |  |  |  |  |  |
Total unamortized deferred financing fees and debt issuance costs |  | (71) |  |  |  |  |  |  |
Total carrying value mortgage notes, net |  | 54,190 |  |  |  |  |  |  |
Total / weighted average interest rate(5) |  | $ | 2,306,173 |  |  | 2.87 | % |  |  |  |

(1)Interest rate as of March 31, 2022. At March 31, 2022, the one-month LIBOR (“L”) was 0.452%. The current interest rate is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums. The spread over the applicable rate for our unsecured credit facility and unsecured term loans is based on the our debt rating and leverage ratio, as defined in the respective loan agreements.
(2)The unsecured term loans have a stated interest rate of one-month LIBOR plus a spread of 0.85%, with the exception of Unsecured Term Loan D which has a stated interest rate of one-month LIBOR plus a spread of 1.0%. As of March 31, 2022, one-month LIBOR for the Unsecured Term Loans A, D, E, F, and G was swapped to a fixed rate of 2.38%, 1.85%, 2.92%, 2.11%, and 0.28%, respectively. One-month LIBOR for the Unsecured Term Loan A will be swapped to a fixed rate of 1.30% effective April 1, 2022. One-month LIBOR for the Unsecured Term Loan G will be swapped to a fixed rate of 0.94% effective April 18, 2023.
(3)Prepayment terms consist of (i) pre-payable with no penalty; (ii) pre-payable with penalty; (iii) pre-payable without penalty three months prior to the maturity date, subject to defeasance; and (iv) pre-payable without penalty three months prior to the maturity date.
(4)The capacity of our unsecured credit facility is $750.0 million. The initial maturity date is October 24, 2025, or such later date which may be extended pursuant to two six-month extension options exercisable by us in our discretion upon advance written notice. Exercise of each six-month option is subject to the following conditions: (i) absence of a default immediately before the extension and immediately after giving effect to the extension, (ii) accuracy of representations and warranties as of the extension date (both immediately before and after the extension), as if made on the extension date, and (iii) payment of a fee. Neither extension option is subject to lender consent, assuming proper notice and satisfaction of the conditions.
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(5)The weighted average interest rate was calculated using the fixed interest rate swapped on the notional amount of $975.0 million of debt, and is not adjusted to include the amortization of deferred financing fees or debt issuance costs incurred in obtaining debt or any unamortized fair market value premiums or discounts.
The aggregate undrawn nominal commitments on our unsecured credit facility and unsecured term loans as of March 31, 2022 was approximately $362.3 million, including issued letters of credit. Our actual borrowing capacity at any given point in time may be less and is restricted to a maximum amount based on our debt covenant compliance.
Our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes are subject to ongoing compliance with a number of financial and other covenants. As of March 31, 2022, we were in compliance with the applicable financial covenants.
Subsequent to March 31, 2022, on April 28, 2022, we entered into a note purchase agreement for the future private placement by the Operating Partnership of $400.0 million senior unsecured notes, maturing June 28, 2032, with a fixed annual interest rate of 4.12%. The unsecured notes are expected to be issued on or around June 28, 2022, subject to conditions. The note purchase agreement contains a number of financial covenants substantially similar to the financial covenants contained in our unsecured credit facility, plus a financial covenant that requires us to maintain a minimum interest coverage ratio of not less than 1.50:1.00. The Company and certain of its subsidiaries will guarantee the obligations under the unsecured notes.
The following table summarizes our debt capital structure as of March 31, 2022.

Debt Capital Structure |  | March 31, 2022
Total principal outstanding (in thousands) |  | $ | 2,313,397 |
Weighted average duration (years) |  | 4.3 |
% Secured debt |  | 2.4 | %
% Debt maturing next 12 months |  | 12.8 | %
Net Debt to Real Estate Cost Basis(1) |  | 34.5 | %

(1)“Net Debt” means amounts outstanding under our unsecured credit facility, unsecured term loans, unsecured notes, and mortgage notes, less cash and cash equivalents. “Real Estate Cost Basis” means the book value of rental property and deferred leasing intangibles, exclusive of the related accumulated depreciation and amortization.
We regularly pursue new financing opportunities to ensure an appropriate balance sheet position. As a result of these dedicated efforts, we are confident in our ability to meet future debt maturities and fund acquisitions. We believe that our current balance sheet is in an adequate position at the date of this filing, despite possible volatility in the credit markets.
Our interest rate exposure on our floating rate debt is managed through the use of interest rate swaps, which fix the rate of our long term floating rate debt. For a detailed discussion on our use of interest rate swaps, see “Interest Rate Risk” below.
Equity
Preferred Stock
We are authorized to issue up to 20,000,000 shares of preferred stock, par value $0.01 per share. As of March 31, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.
C ommon Stock
We are authorized to issue up to 300,000,000 shares of common stock, par value $0.01 per share.
The following table summarizes our at-the-market (“ATM”) common stock offering program as of March 31, 2022. Pursuant to the equity distribution agreements for our ATM common stock offering program, we may from time to time sell common stock through sales agents and their affiliates, including shares sold on a forward basis under forward sale agreements.

ATM Common Stock Offering Program |  | Date |  | Maximum Aggregate Offering Price (in thousands) |  | Aggregate Available as of March 31, 2022 (in thousands)
2022 $750 million ATM |  | February 17, 2022 |  | $ | 750,000 |  |  | $ | 750,000 |

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The following table summarizes the activity under the ATM common stock offering programs during the three months ended March 31, 2022.

|  | Three months ended March 31, 2022
ATM Common Stock Offering Program |  | Shares Sold |  | Weighted Average Price Per Share |  |  |  | Sales Agents’ Fees (in thousands) |  | Net Proceeds (in thousands)
2019 $600 million ATM(1) |  | 128,335 |  |  | $ | 45.03 |  |  |  |  | $ | 58 |  |  | $ | 5,721 |
Total/weighted average |  | 128,335 |  |  | $ | 45.03 |  |  |  |  | $ | 58 |  |  | $ | 5,721 |

(1)This program ended before March 31, 2022.
In connection with our underwritten public offering that closed in November 2021, on December 3, 2021, we executed a forward sale agreement for the sale of an additional 1,200,000 shares of common stock on a forward basis at a price of $41.87 per share. We did not initially receive any proceeds from the sale of shares on a forward basis. On March 29, 2022, we physically settled in full the forward sales agreement by issuing 1,200,000 shares of common stock for net proceeds of approximately $49.7 million, or $41.39 per share.
Noncontrolling Interest
We own our interests in all of our properties and conduct substantially all of our business through the Operating Partnership. We are the sole member of the sole general partner of the Operating Partnership. As of March 31, 2022, we owned approximately 97.9% of the common units in the Operating Partnership, and our current and former executive officers, directors, senior employees and their affiliates, and third parties that contributed properties to us in exchange for common units in the Operating Partnership owned the remaining 2.1%.
Interest Rate Risk
We use interest rate swaps to fix the rate of our variable rate debt. As of March 31, 2022, all of our outstanding variable rate debt, with the exception of our unsecured credit facility, was fixed with interest rate swaps through maturity.
We recognize all derivatives on the balance sheet at fair value. If the derivative is designated as a hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income (loss), which is a component of equity. Derivatives that are not designated as hedges must be adjusted to fair value and the changes in fair value must be reflected as income or expense.
We have established criteria for suitable counterparties in relation to various specific types of risk. We only use counterparties that have a credit rating of no lower than investment grade at swap inception from Moody’s Investor Services, Standard & Poor’s, or Fitch Ratings or other nationally recognized rating agencies.
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The following table details our outstanding interest rate swaps as of March 31, 2022.

Interest Rate Derivative Counterparty |  | Trade Date |  | Effective Date |  | Notional Amount (in thousands) |  | Fair Value (in thousands) |  | Pay Fixed Interest Rate |  | Receive Variable Interest Rate |  | Maturity Date
Wells Fargo Bank, N.A. |  | Jan-08-2015 |  | Mar-20-2015 |  | $ | 25,000 |  |  | $ | — |  |  | 1.8280 | % |  | One-month L |  | Mar-31-2022
The Toronto-Dominion Bank |  | Jan-08-2015 |  | Feb-14-2020 |  | $ | 25,000 |  |  | $ | — |  |  | 2.4535 | % |  | One-month L |  | Mar-31-2022
Regions Bank |  | Jan-08-2015 |  | Feb-14-2020 |  | $ | 50,000 |  |  | $ | — |  |  | 2.4750 | % |  | One-month L |  | Mar-31-2022
Capital One, N.A. |  | Jan-08-2015 |  | Feb-14-2020 |  | $ | 50,000 |  |  | $ | — |  |  | 2.5300 | % |  | One-month L |  | Mar-31-2022
The Toronto-Dominion Bank |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 25,000 |  |  | $ | (64) |  |  | 1.8485 | % |  | One-month L |  | Jan-04-2023
Royal Bank of Canada |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 25,000 |  |  | $ | (63) |  |  | 1.8505 | % |  | One-month L |  | Jan-04-2023
Wells Fargo Bank, N.A. |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 25,000 |  |  | $ | (63) |  |  | 1.8505 | % |  | One-month L |  | Jan-04-2023
PNC Bank, N.A. |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 25,000 |  |  | $ | (63) |  |  | 1.8485 | % |  | One-month L |  | Jan-04-2023
PNC Bank, N.A. |  | Jul-20-2017 |  | Oct-30-2017 |  | $ | 50,000 |  |  | $ | (126) |  |  | 1.8475 | % |  | One-month L |  | Jan-04-2023
The Toronto-Dominion Bank |  | Apr-20-2020 |  | Sep-29-2020 |  | $ | 75,000 |  |  | $ | 1,223 |  |  | 0.2750 | % |  | One-month L |  | Apr-18-2023
Wells Fargo Bank, N.A. |  | Apr-20-2020 |  | Sep-29-2020 |  | $ | 75,000 |  |  | $ | 1,219 |  |  | 0.2790 | % |  | One-month L |  | Apr-18-2023
The Toronto-Dominion Bank |  | Apr-20-2020 |  | Mar-19-2021 |  | $ | 75,000 |  |  | $ | 1,223 |  |  | 0.2750 | % |  | One-month L |  | Apr-18-2023
Wells Fargo Bank, N.A. |  | Apr-20-2020 |  | Mar-19-2021 |  | $ | 75,000 |  |  | $ | 1,218 |  |  | 0.2800 | % |  | One-month L |  | Apr-18-2023
The Toronto-Dominion Bank |  | Jul-24-2018 |  | Jul-26-2019 |  | $ | 50,000 |  |  | $ | (548) |  |  | 2.9180 | % |  | One-month L |  | Jan-12-2024
PNC Bank, N.A. |  | Jul-24-2018 |  | Jul-26-2019 |  | $ | 50,000 |  |  | $ | (549) |  |  | 2.9190 | % |  | One-month L |  | Jan-12-2024
Bank of Montreal |  | Jul-24-2018 |  | Jul-26-2019 |  | $ | 50,000 |  |  | $ | (548) |  |  | 2.9190 | % |  | One-month L |  | Jan-12-2024
U.S. Bank, N.A. |  | Jul-24-2018 |  | Jul-26-2019 |  | $ | 25,000 |  |  | $ | (274) |  |  | 2.9190 | % |  | One-month L |  | Jan-12-2024
Wells Fargo Bank, N.A. |  | May-02-2019 |  | Jul-15-2020 |  | $ | 50,000 |  |  | $ | 280 |  |  | 2.2460 | % |  | One-month L |  | Jan-15-2025
U.S. Bank, N.A. |  | May-02-2019 |  | Jul-15-2020 |  | $ | 50,000 |  |  | $ | 284 |  |  | 2.2459 | % |  | One-month L |  | Jan-15-2025
Regions Bank |  | May-02-2019 |  | Jul-15-2020 |  | $ | 50,000 |  |  | $ | 280 |  |  | 2.2459 | % |  | One-month L |  | Jan-15-2025
Bank of Montreal |  | Jul-16-2019 |  | Jul-15-2020 |  | $ | 50,000 |  |  | $ | 1,008 |  |  | 1.7165 | % |  | One-month L |  | Jan-15-2025
U.S. Bank, N.A. |  | Feb-17-2021 |  | Apr-18-2023 |  | $ | 150,000 |  |  | $ | 6,853 |  |  | 0.9385 | % |  | One-month L |  | Feb-5-2026
Wells Fargo Bank, N.A. |  | Feb-17-2021 |  | Apr-18-2023 |  | $ | 75,000 |  |  | $ | 3,409 |  |  | 0.9365 | % |  | One-month L |  | Feb-5-2026
The Toronto-Dominion Bank |  | Feb-17-2021 |  | Apr-18-2023 |  | $ | 75,000 |  |  | $ | 3,419 |  |  | 0.9360 | % |  | One-month L |  | Feb-5-2026
Regions Bank |  | Oct-26-2021 |  | Apr-01-2022 |  | $ | 50,000 |  |  | $ | 2,419 |  |  | 1.3045 | % |  | One-month L |  | Mar-15-2027
Bank of Montreal |  | Oct-26-2021 |  | Apr-01-2022 |  | $ | 50,000 |  |  | $ | 2,438 |  |  | 1.3045 | % |  | One-month L |  | Mar-15-2027
PNC Bank, N.A. |  | Oct-26-2021 |  | Apr-01-2022 |  | $ | 50,000 |  |  | $ | 2,423 |  |  | 1.3045 | % |  | One-month L |  | Mar-15-2027

The swaps outlined in the above table were all designated as cash flow hedges of interest rate risk, and all are valued as Level 2 financial instruments. Level 2 financial instruments are defined as significant other observable inputs. As of March 31, 2022, the fair value of 14 of our interest rate swaps were in an asset position of approximately $27.7 million, including any adjustment for nonperformance risk related to these agreements. The remaining nine interest rate swaps were in a liability position of approximately $2.3 million, including any adjustment for nonperformance risk related to these agreements.
As of March 31, 2022, we had approximately $1,359.0 million of variable rate debt. As of March 31, 2022, all of our outstanding variable rate debt, with the exception of our unsecured credit facility, was fixed with interest rate swaps through maturity. To the extent interest rates increase, interest costs on our floating rate debt not fixed with interest rate swaps will increase, which could adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our security holders. From time to time, we may enter into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors. In addition, an increase in interest rates could decrease the amounts third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions.
Off-balance Sheet Arrangements
As of March 31, 2022, we had letters of credit related to development projects and certain other agreements of approximately $3.7 million. As of March 31, 2022, we had no other material off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The primary market risk we are exposed to is interest rate risk. We have used derivative financial instruments to manage, or hedge, interest rate risks related to our borrowings, primarily through interest rate swaps.
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As of March 31, 2022, we had $1,359.0 million of variable rate debt outstanding. As of March 31, 2022, all of our outstanding variable rate debt, with the exception of our unsecured credit facility which had a balance of $384.0 million, was fixed with interest rate swaps through maturity. To the extent we undertake additional variable rate indebtedness, if interest rates increase, then so will the interest costs on our unhedged variable rate debt, which could adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our security holders. Further, rising interest rates could limit our ability to refinance existing debt when it matures or significantly increase our future interest expense. From time to time, we enter into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors. While these agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risk that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges under GAAP. In addition, an increase in interest rates could decrease the amounts third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions. In addition, an increase in interest rates could decrease the amounts third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions. If interest rates increased by 100 basis points and assuming we had an outstanding balance of $384.0 million on our unsecured credit facility for the three months ended March 31, 2022, our interest expense would have increased by approximately $1.0 million for the three months ended March 31, 2022.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by SEC Rule 13a-15(b), we have evaluated, under the supervision of and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of March 31, 2022. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures for the periods covered by this report were effective to provide reasonable assurance that information required to be disclosed by our Company in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Controls
There was no change to our internal control over financial reporting during the quarter ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. Other Information
Item 1. Legal Proceedings
From time to time, we are a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. We are not currently a party, as plaintiff or defendant, to any legal proceedings which, individually or in the aggregate, would be expected to have a material effect on our business, financial condition or results of operations if determined adversely to our company.
Item 1A. Risk Factors
Other than the following, there have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 16, 2022.
Our performance is subject to general economic conditions and risks associated with our real estate assets.
The investment returns available from equity investments in real estate depend on the amount of income earned and capital appreciation generated by the properties, as well as the expenses incurred in connection with the properties. If our properties do not generate income sufficient to meet operating expenses, including debt service and capital expenditures, then our ability to make distributions to stockholders could be adversely affected. In addition, there are significant expenditures associated with an investment in real estate (such as debt payments, real estate taxes and maintenance costs) that generally do not decline when circumstances reduce the income from the property. Income from and the value of our properties may be adversely affected by, among other things:
•a global economic crisis that results in increased budget deficits and weakened financial condition of international, national and local governments, which may lead to reduced governmental spending, tax increases, public sector job losses, increased interest rates, currency devaluations, defaults on debt obligations or other adverse economic events;
•other periods of economic slowdown or recession, rising interest rates or declining demand for real estate, or the public perception that any of these events may occur;
•tenant turnover, the attractiveness of our properties to potential tenants and changes in supply of, or demand for, similar or competing properties in an area (including from general overbuilding or excess supply in the market);
•technological changes, such as reconfiguration of supply chains, autonomous vehicles, drones, robotics, 3D printing, online marketplaces for industrial space, or other developments;
•our ability to control rental rates and changes in operating costs and expenses, including costs of compliance with tax, real estate, environmental and zoning laws, rules and regulations and our potential liability thereunder;
•changes in the cost or availability of insurance, including coverage for mold or asbestos;
•unanticipated changes in costs associated with known adverse environmental conditions or retained liabilities for such conditions;
•periods of high interest rates and tight money supply;
•future terrorist attacks, which may result in declining economic activity, which could reduce the demand for, and the value of, our properties, and may adversely affect our tenants’ business and their ability to continue to honor their existing lease; and
•disruptions in the global supply chain caused by political, regulatory or other factors, including geopolitical developments outside the United States.
In addition, our investments could be materially adversely affected by changes in national and international political, environmental and socioeconomic circumstances, such as the escalating conflict between Russia and Ukraine and the significant sanctions and other restrictive actions taken against Russia by the United States and other countries in response to Russia’s invasion of Ukraine in February 2022, as well as the cessation of all business in Russia by many global companies. As further military conflicts and economic sanctions continue to evolve, it has become increasingly difficult to predict the impact of these events or how long they will last. Depending on direction and timing, the conflict between Russia and Ukraine may significantly adversely affect economic and market conditions, the level and volatility of real estate and securities prices and the liquidity of our investments, which could impair our profitability or result in losses.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Equity Securities
During the quarter ended March 31, 2022, the Operating Partnership issued 65,000 common units in the Operating Partnership upon exchange of outstanding long term incentive plan units issued pursuant to the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”). Subject to certain restrictions, common units in the Operating Partnership may be redeemed for cash in an amount equal to the value of a share of common stock or, at our election, for a share of common stock on a one-for-one basis.
During the quarter ended March 31, 2022, we issued 65,000 shares of common stock upon redemption of 65,000 common units in the Operating Partnership held by various limited partners. The issuance of such shares of common stock was either registered under the Securities Act or effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act and the rules and regulations promulgated thereunder. We relied on the exemption based on representations given by the holders of the common units.
All other issuances of unregistered securities during the quarter ended March 31, 2022, if any, have previously been disclosed in filings with the SEC.
Issuer Purchases of Equity Securities

Period |  | Total Number of Shares Purchased(1) |  | Average Price Paid per Share(1) |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
January 1, 2022 - January 31, 2022 |  | 34,093 |  |  | $ | 47.19 |  |  | — |  |  | $ | — |
February 1, 2022 - February 28, 2022 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
March 1, 2022 - March 31, 2022 |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
Total/weighted average |  | 34,093 |  |  | $ | 47.19 |  |  | — |  |  | $ | — |

(1) Reflects shares surrendered to the Company for payment of tax withholdings obligations in connection with the vesting of shares of common stock issued pursuant to the 2011 Plan. The average price paid reflects the average market value of shares withheld for tax purposes.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
As of the quarter ended March 31, 2022, all items required to be disclosed in a Current Report on Form 8-K were reported.
April 2022 Note Purchase Agreement
On April 28, 2022, we entered into a note purchase agreement (the “April 2022 NPA”) for the future private placement by the Operating Partnership of $400 million of senior unsecured notes, maturing June 28, 2032, with a fixed annual interest rate of 4.12%. The notes are expected to be issued on or around June 28, 2022, subject to conditions.
The April 2022 NPA contains a number of financial covenants substantially similar to the financial covenants contained in our unsecured credit facility, plus a financial covenant that requires us to maintain a minimum interest coverage ratio of not less than 1.50:1.00. Subject to the terms of the April 2022 NPA, upon certain events of default, including, but not limited to, (i) a default in the payment of any principal, interest or the Make-Whole Amount (as defined in the April 2022 NPA), and (ii) a default in the payment of certain other indebtedness, the principal, the accrued and unpaid interest and the Make-Whole Amount on the outstanding notes will become due and payable at the option of the holders. The Company and certain of its subsidiaries will guarantee the obligations under the notes, subject to release pursuant to the terms of the April 2022 NPA.
We intend to use the net proceeds from the issuance of the notes to repay indebtedness outstanding under our unsecured credit facility and for general corporate purposes, including funding future acquisitions. The notes have not been and will not be registered under the Securities Act, and may not be offered or sold absent registration or an applicable exemption from the
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registration requirements. We offered and sold the notes in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
The foregoing description of the April 2022 NPA does not purport to be complete and is qualified in its entirety by reference to the full text of the April 2022 NPA (including the form of note), a copy of which is filed as Exhibit 10.2 to this report and incorporated herein by reference.
Submission of Matters to a Vote of Security Holders
On May 2, 2022, STAG Industrial, Inc. (the “Company”) held its annual meeting of stockholders. The matters on which the stockholders voted, in person or by proxy, were:
1.the election of nine directors to hold office until the 2023 annual meeting of stockholders and until their successors are duly elected and qualified;
2.the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022; and
3.the approval, by non-binding vote, of the Company’s executive compensation.
The nine nominees were elected, the ratification of the appointment of the independent registered public accounting firm was approved and executive compensation was approved. The results of the voting were as follows:
Proposal 1: Election of Directors:

Director |  | Votes For |  | Votes Against |  | Abstentions |  | Broker Non-Votes
Benjamin S. Butcher |  | 134,846,422 |  | 6,298,673 |  | 110,296 |  | 16,904,290
Jit Kee Chin |  | 140,695,586 |  | 445,057 |  | 114,748 |  | 16,904,290
Virgis W. Colbert |  | 136,624,964 |  | 4,510,114 |  | 120,313 |  | 16,904,290
Michelle S. Dilley |  | 137,746,144 |  | 3,400,815 |  | 108,432 |  | 16,904,290
Jeffrey D. Furber |  | 137,455,147 |  | 3,679,693 |  | 120,551 |  | 16,904,290
Larry T. Guillemette |  | 137,728,384 |  | 3,412,704 |  | 114,303 |  | 16,904,290
Francis X. Jacoby III |  | 134,747,665 |  | 6,390,982 |  | 116,744 |  | 16,904,290
Christopher P. Marr |  | 135,560,139 |  | 5,256,309 |  | 438,943 |  | 16,904,290
Hans S. Weger |  | 137,625,735 |  | 3,513,377 |  | 116,279 |  | 16,904,290

Proposal 2: Ratification of Appointment of Independent Registered Public Accountants:

Votes For |  | Votes Against |  | Abstentions |  | Broker Non-Votes
154,474,009 |  | 3,555,243 |  | 130,429 |  | -0-

Proposal 3: Approval of Executive Compensation:

Votes For |  | Votes Against |  | Abstentions |  | Broker Non-Votes
135,321,522 |  | 5,400,365 |  | 533,504 |  | 16,904,290

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Item 6. Exhibits

Exhibit Number |  | Description of Document
10.1 |  | Executive Employment Agreement with Matts S. Pinard, dated January 10, 2022 (incorporated by reference to the Current Report on Form 8-K filed with the SEC on January 12, 2022)
10.2 * |  | Note Purchase Agreement, dated April 28, 2022
31.1 * |  | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 * |  | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 ** |  | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS * |  | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH * |  | Inline XBRL Taxonomy Extension Schema Document
101.CAL * |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF * |  | Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB * |  | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE * |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 * |  | Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|  | STAG INDUSTRIAL, INC.
Date: May 3, 2022 | BY: | /s/ MATTS S. PINARD
|  | Matts S. Pinard
|  | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer)
| BY: | /s/ JACLYN M. PAUL
|  | Jaclyn M. Paul
|  | Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

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