PROPERTIES. Smithfield, NC: 191,450 SF. Golden, CO: 227,500 SF. Clear Height: 32 Year Built/Renovated/Expanded: 1999/2006

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1 INVESTOR PRESENTATION SPRING 2016

2 PROPERTIES Smithfield, NC: 191,450 SF Clear Height: 26 Year Built/Renovated/Expanded: 2001 Golden, CO: 227,500 SF Clear Height: 32 Year Built/Renovated/Expanded: 1999/2006 Springfield, OH: 350,500 SF Clear Height: 28 Year Built/Renovated/Expanded: 2001 Hampstead, MD: 1,035,249 SF Clear Height: 32 Year Built/Renovated/Expanded:

3 INVESTMENT THESIS OBSERVATION Individual single tenant properties are persistently mispriced Binary risk of single tenancy creates high potential volatility in individual asset cash flows THEORY Through attention to portfolio composition correlation and binary risk are mitigated TARGET ASSET CLASS U.S. industrial real estate Large, stable, developed market Highly fragmented ownership Granular acquisition opportunity ($5 $15 million average asset size) Assets typically have relatively low individual correlation Low capex and high retention relative to other real estate asset classes (1) STAG HAS AN OPERATING ADVANTAGE BY BRINGING AN INSTITUTIONAL APPROACH TO A NON INSTITUTIONAL MARKET (1) Source: CBRE EA Industrial Outlook 2

4 TARGET MARKET SIZE LARGE TARGET MARKET U.S. industrial market is over $1 trillion in total size (1) STAG s Target Assets: single tenant industrial properties that meet our investment criteria STAG'S SHARE OF TARGET ASSET UNIVERSE IS LESS THAN 1% $1 TRILLION TOTAL INDUSTRIAL MARKET (1) ESTIMATED $500 BILLION SINGLE TENANT ASSET UNIVERSE (1) $250 BILLION TARGET ASSET UNIVERSE (1) LARGE SCALE OPPORTUNITY (1) Based on STAG management s estimates using publicly available data on industrial square footage in the United States and an assumed value per square foot 3

5 INDUSTRIAL MARKET DYNAMICS WAREHOUSE OCCUPANCY (1) 94% 92% Historical Primary and Secondary market occupancy levels are very similar 90% 88% 86% 84% 82% 80% "Super" Primary Primary Secondary Super Primary markets historically operate at an occupancy level above both Primary and Secondary markets Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 WAREHOUSE RENT GROWTH (INDEX: 2005 = 1) (1) Secondary market rent growth has performed in line with Primary market rent growth over the past ten years Dec 05 Dec 06 "Super" Primary Primary Secondary Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Super Primary market rent growth has displayed greater volatility over the past ten years compared to Primary and Secondary markets EMPIRICAL DATA DOES NOT SUPPORT CONVENTIONAL WISDOM (1) Source: CBRE; Super Primary markets include Chicago, Dallas, Los Angeles, Miami, Northern New Jersey, and Riverside; Primary markets contain greater than 200M SF; Secondary markets contain 25M 200M SF 4

6 OPPORTUNITY DISCERNING RELATIVE VALUE Real estate market features inefficiency due to imperfect information Conventional cash flow models are overly simplistic In the face of imperfect information, decision rules influence and ultimately hinder integrity of the investment evaluation process STAG APPROACH Probabilistic assessment of risk Probability adjusted cash flows allow for imperfect nature of information Probabilistic Risk Assessment Model allows for evaluation of cash flows on a risk neutral basis In house experts provide inputs, distributions, and boundaries (standard deviations) Distribution of likely returns analyzed (Monte Carlo analysis) FOCUS ON RELATIVE VALUE LEADS TO THE EVALUATION OF ALL MARKETS, ALL CREDIT PROFILES AND ALL LEASE TERMS 5

7 FINDING RELATIVE VALUE SELECTIVITY DISCIPLINE 1,000+ TRANSACTIONS PASS INITIAL TRIAGE All markets All credit profiles All lease terms 360 UNDERWRITTEN 194 OFFERS MADE 33 CLOSED In 2015, acquired $427 million (24% growth) (1) of industrial real estate at a weighted average cap rate of 8.4% Strict adherence to internal investment return threshold criteria throughout acquisition process PLATFORM DESIGNED TO STREAMLINE ACQUISITION PROCESS WHILE EMPHASIZING INVESTMENT DISCIPLINE (1) 2015 acquisition volume compared to Real Estate Cost Basis at Q

8 AGGREGATION REDUCES VOLATILITY FREE CASH FLOW SINGLE ASSET PORTFOLIO ENTERPRISE $1,200 $1,000 $800 $600 $400 $200 $0 $50,000 $40,000 $30,000 $20,000 $10,000 $0 $500,000 $400,000 $300,000 $200,000 $100,000 $0 SINGLE TENANT INDUSTRIAL ASSET ACQUISITION CASH FLOW ($000s) PORTFOLIO CASH FLOW 2014 ACQUISITIONS ($000s) TEN YEAR PRO FORMA CASH FLOW EXAMPLE ($000s) (1) EXTERNAL GROWTH INTERNAL GROWTH DIVERSE PORTFOLIOS ARE WORTH MORE THAN INDIVIDUAL ASSETS (1) Illustrates cash flow from acquiring the 2014 portfolio every year for ten years, and then operating the portfolio for the next ten years 7

9 PORTFOLIO DIVERSIFICATION # GEOGRAPHY ABR % (1) 1 Ohio 8.6% 2 Illinois 8.4% 3 North Carolina 8.0% 4 Pennsylvania 6.3% 5 Texas 5.7% 6 Michigan 5.7% 7 Tennessee 5.1% 8 South Carolina 4.9% 9 Indiana 4.9% 10 Wisconsin 4.9% Other 37.5% Total 100.0% # TENANT ABR % (1) 1 XPO Logistics 2.7% 2 Deckers Outdoor 2.0% 3 Solo Cup 1.9% 4 Exel Logistics 1.9% 5 International Paper 1.5% 6 Generation Brands 1.3% 7 American Tire Distributors 1.2% 8 Perrigo Company 1.2% 9 Spencer Gifts 1.1% 10 Bank of America 1.1% Other 84.1% Total 100.0% # INDUSTRY ABR % (1) 1 Air Freight & Logistics 11.8% 2 Automotive 11.8% 3 Ind Equip., Comp. & Metal 11.3% 4 Food & Beverage 9.3% 5 Containers & Packaging 9.1% 6 Retail 5.6% 7 Personal Products 5.5% 8 Household Durables 5.1% 9 Office Supplies 4.8% 10 Business Services 4.5% Other 21.2% Total 100.0% EMPHASIS ON DIVERSIFICATION ENHANCES STABILITY OF PORTFOLIO CASH FLOWS (1) As of Q3 2015; Annualized Base Rental Revenue; key financial measures defined in Definitions section 8

10 OPERATIONS INSTITUTIONAL ASSET MANAGEMENT PLATFORM STAG operates an institutional quality asset management and leasing platform Capable of addressing every physical aspect and tenant scenario related to real estate ownership Consistently outperform local market owners and operators at all points in the cycle In house construction and engineering professionals oversee value add capital projects including expansions, roof replacements, general site and tenant specific work 20,000 15,000 CUMULATIVE LEASING ACTIVITY SQUARE FEET (000) (1) 11,772 16, % 80% 60% 74% 84% RETENTION 59% 70% 70% 10,000 6,837 40% 5,000 1,889 4,128 20% % IN HOUSE REAL ESTATE EXPERTS DIRECTLY MANAGE TENANT RELATIONSHIPS & LEVERAGE NETWORK OF LOCAL THIRD PARTIES (1) Includes new, renewal and expansion leases executed; excludes temporary leases 9

11 CAPITAL STRUCTURE LIQUIDITY SEPTEMBER 30, 2015 Debt Capacity (1)(2) Immediate Availability (1) $672 mm $479 mm DEBT, 37% COMMON EQUITY, 57% CASH FLOW COVERAGE Net Debt / Run Rate Adj. EBITDA Annualized (1) 5.0x Interest Coverage Ratio 4.6x LEVERAGE Net Debt / Total Real Estate Cost Basis 41.0% Debt / Total Enterprise Value 37.4% INVESTMENT GRADE CREDIT RATING Fitch BBB / Stable Outlook PREFERRED EQUITY, 6% INVESTMENT GRADE BALANCE SHEET (1) See Definitions section (2) Inclusive of $100 million of senior unsecured notes closed December 15,

12 COMPARATIVE EQUITY VALUATION METRICS PEER COMPARISON DIVIDEND YIELD (1) IMPLIED CAP RATE Q (2) 10.0% 7.5% 8.8% 10.0% 7.5% 7.8% 6.1% 5.0% 3.9% 5.0% 2.5% 2.5% 0.0% STAG INDUSTRIAL PEER AVERAGE 0.0% STAG INDUSTRIAL PEER AVERAGE 25.0x FFO MULTIPLE 2016 FY (3) 25.0x AFFO MULTIPLE 2016 FY (3) 20.0x 16.5x 20.0x 20.4x 15.0x 15.0x 10.0x 10.2x 10.0x 10.1x 5.0x 5.0x 0.0x STAG INDUSTRIAL PEER AVERAGE 0.0x STAG INDUSTRIAL PEER AVERAGE Peers include DCT, DRE, EGP, FR, MNR, PLD, REXR and TRNO (1) Dividend Yield as of February 18, 2016 (2) Implied Cap Rate reflects SNL Templated Financial Data as of Q (3) FFO and AFFO Multiple reflect SNL Templated Consensus FFO and AFFO and closing share prices as of February 18,

13 SUMMARY VALUE CREATION Relative value acquisition strategy Granular acquisitions result in hand picked portfolio Portfolio Theory valuation Contribution of binary risk cash flows into diversified portfolio enhances stability of cash flow Persisting opportunity to acquire mispriced assets Grown industrial real estate portfolio an average of 36% per year Operating impact Consistently outperform local market owners and operators at all points in the cycle DELIVERING GROWTH AND INCOME TO ITS SHAREHOLDERS 12

14 PROPERTIES Warrendale, PA: 148,065 SF Clear Height: 32 Year Built/Renovated/Expanded: 1999 Winston Salem, NC: 385,000 SF Clear Height: 40 Year Built/Renovated/Expanded: 1996 El Paso, TX: 360,134 SF Clear Height: 28 Year Built/Renovated/Expanded: 1997 Lansing, MI: 231,000 SF Clear Height: 34 Year Built/Renovated/Expanded:

15 DEFINITIONS 14

16 NON GAAP FINANCIAL MEASURES & OTHER DEFINITIONS Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA): We define Adjusted EBITDA as net income (loss) (computed in accordance with GAAP) before interest, tax, depreciation and amortization, property acquisition costs, gain on sales of rental property, termination income, straightline rent adjustments, non cash compensation, intangible amortization in rental income, loss on impairments, loss on extinguishment of debt and other non recurring items. Annualized Adjusted EBITDA: We define Annualized Adjusted EBITDA as Adjusted EBITDA multiplied by four. Annualized Adjusted Run Rate EBITDA: We define Annualized Adjusted Run Rate EBITDA as Annualized Adjusted EBITDA plus incremental Adjusted EBITDA on an annualized basis related to acquisitions acquired in each quarter for which a full quarter s results were not reflected less Adjusted EBITDA related to the quarter s dispositions. Annualized Base Rental Revenue: We define Annualized Base Rental Revenue as the monthly base cash rent for the applicable property or properties (which is different from rent calculated in accordance with GAAP for purposes of our financial statements), multiplied by 12. If a tenant is in a free rent period the annualized rent is calculated based on the first contractual monthly base rent amount multiplied by 12. Capitalization Rate: We define Capitalization Rate as the estimated weighted average cash capitalization rate, calculated by dividing (i) the Company s estimate of year one net cash flow from the applicable property s operations stabilized for occupancy (post lease up for vacant properties), which does not include termination income, miscellaneous other income, capital expenditure, general and administrative costs, reserves, tenant improvements and leasing commissions, credit loss, or vacancy loss, by (ii) the acquisition price, as defined by GAAP. These capitalization rate estimates are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including those risk factors contained in our Annual Report on Form 10 K for the year ended December 31, Debt Capacity: We define Debt Capacity as the aggregate undrawn nominal commitments under the Company s debt instruments. GAAP: U.S. generally accepted accounting principles. Immediate Availability: We define Immediate Availability as the amount of Debt Capacity the Company could borrow consistent with the financial covenants in its debt instruments. Net operating income (NOI), Cash NOI, and Run Rate Cash NOI: We define NOI as rental income, including reimbursements, less property expenses and real estate taxes, which excludes depreciation, amortization, loss on impairments, general and administrative expenses, interest expense, interest income, corporate sub lease rental income, asset management fee income, property acquisition costs, loss on extinguishment of debt, gain on sales of rental property, and other expenses. We define Cash NOI as NOI less straight line rent adjustments and less intangible amortization in rental income. We define Run Rate Cash NOI as Cash NOI plus Cash NOI adjusted for a full period of acquisitions, less termination income, and less Cash NOI from dispositions. 15