STAG Industrial (STAG) reported solid Q1 leasing activity but it is still navigating a heavy lease roll and portfolio-wide occupancy is expected to decline, RBC Capital Markets said in a note emailed Monday.

The brokerage expects funds from operations of $2.64 per share in 2026, slightly lowered its 2027 estimate to $2.81 per share, and introduced a 2028 estimate at $2.91 per share.

The 2026 FFO estimate reflects the high end of management's guidance range, implying healthy same store net operating income growth and incremental investment activity, the firm said. The 2028 estimate assumes slightly better organic growth and similar external growth, but the anticipated debt refinancing could potentially reduce the overall growth by 100 basis points, according to the note.

The company recently purchased a Dallas land site that will support a $38 million development project spanning 340,000 square feet, which is expected to deliver a 7.4% yield, the brokerage added.

RBC maintained a sector perform rating on STAG Industrial with a price target of $42.

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