STAG Industrial Inc
NYSE:STAG
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
33.22
40.98
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
STAG Industrial Inc
You don't have any saved screeners yet
Greetings, and welcome to the STAG Industrial First Quarter 2021 Earnings Call. [Operator Instructions]. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Mr. Matts Pinard, Senior Vice President of Investor Relations for STAG Industrial. Thank you. You may begin.
Thank you. Welcome to STAG Industrial's conference call covering the first quarter 2021 results. In addition to the press release distributed yesterday, we have posted an unaudited quarterly supplemental information presentation on the company's website at stagindustrial.com under the Investor Relations section. On today's call, the company's prepared remarks and answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. Examples of forward-looking statements include forecasts of core FFO, same-store NOI, G&A, acquisition and disposition volumes, retention rates and other guidance, leasing prospects, rent collections, industry and economic trends and other matters. We encourage all of our listeners to review the more detailed discussion related to these forward-looking statements contained in the company's filings with the SEC and the definitions and reconciliations of non-GAAP measures contained in the supplemental informational package available on the company's website. As a reminder, forward-looking statements represent management's estimates as of today. STAG Industrial assumes no obligation to update any forward-looking statements. On today's call, you will hear from Ben Butcher, our Chief Executive Officer, and Bill Crooker, our President and Chief Financial Officer.
I will now turn the call over to Ben.
Thank you, Matts. Good morning, everybody, and welcome to the first quarter earnings call for STAG Industrial. We are pleased to have you join us and look forward to telling you about our first quarter results. Let me first start by mentioning our recent action promoting our CFO, Bill Crooker, to the additional title of President. Bill has been an important part of STAG's success as a public company, and this promotion reflects his ongoing maturation as a leader of our company. We are excited to have Bill as our President and CFO, and look forward to the future. In today's call, Bill will discuss the bulk of the financial and operational data. Also with us today are Steve Mecke, our Chief Operating Officer, and Dave King, our Director of Real Estate Operations. They will be available to answer questions specific to their area of focus.
Ten years ago, we entered the public market with a differentiated approach to real estate. Traditional strategies relied on arbitrary decision rules that regularly influence investment decisions. The result was a concentration of similar platforms with a narrow view of the industrial landscape. This created the opportunity for STAG. STAG was built with an emphasis on quantitative analysis unconstrained by decision rules. We focus on cash flow maximization and evaluate returns using our populistic model. Investments in the Inland Empire of California and secondary markets in Ohio can be compared on a risk-neutral basis by using our robust populistic model. This allows STAG to take advantage of relative mispricing of individual assets. This approach provides the largest opportunity set available in the industrial space and one that we have successfully taken advantage of during our tenure as a public company.
The execution of our investment strategy has resulted in our ownership of the third largest portfolio of industrial real estate in the public market. Our 100 million square foot portfolio is spread across almost 500 properties nationwide. Over our 10-year run, we have continually invested in the platform, broadened our use of data, and refined our processes. We have remained consistent in our search for relative value across the industrial sector. Most importantly, we have delivered great returns to our investors along the way.
Without question, we are fortunate as a company to be 100% focused on industrial real estate. Consistent with the past several years, the industrial sector benefits from strong underlying fundamentals and broad-based tenant demand. The pandemic accelerated the pace of e-commerce adoption. This change in the consumer behavior is permanent and has highlighted the importance of warehouse distribution within supply chains. Companies can no longer delay or ignore e-commerce, resulting in sustained demand for functional and fungible industrial real estate.
The strength of our acquisition team and the breadth of our inquiry has allowed us to continue to identify and evaluate a large number of attractive potential investments. Our improved cost of capital has allowed us to maintain our accretive return thresholds across a broader range of potential acquisitions. The large size of our acquisition pipeline reflects the continuing opportunity for STAG.
On April 20th, we participated in the closing bell ceremony at the New York Stock Exchange in commemoration of our 10 years as a public company. I want to thank all of our employees who helped turn what began as an investment thesis on the back of a napkin 20 years ago, into the company we are today. The future for our company is bright indeed. With that, I'll turn it over to Bill, who will discuss our first quarter operational results.
Thank you, Ben. Good morning, everyone. Core FFO was $0.49 for the quarter, an increase of 4.3% as compared to the first quarter of 2020. As discussed on our previous earnings call, $1.5 million related to the implementation of our retirement plan was added back to core FFO. Note that this is a noncash add back with the outstanding shares already included in our diluted share count. Cash available for distribution totaled $72.5 million, an increase of 29.5% as compared to the first quarter of 2020. This impressive growth in cash flow has brought us closer to our targeted payout ratio.
Net debt to run rate adjusted EBITDA increased to 4.8x as we re-lever the balance sheet. Our guidance range reflects a return to normalized leverage levels after operating with very low leverage in response to the pandemic last year. Acquisition volume totaled $100.2 million with stabilized cash and straight-line cap rates of 6.0% and 6.4%, respectively. Consistent with past years, volume in the first quarter is relatively low and is expected to increase as the year progresses. During the quarter, we commenced 20 leases totaling 2.6 million square feet, which generated cash and straight-line leasing spreads of 9.6% and 18.7%, respectively. Our leasing efforts included the successful renewal of 100% of our 2.3 million square feet expiring in the quarter.
Cash same-store NOI grew 2.4% for the quarter. Moving to the capital market activity, as previously discussed, in February we refinanced our $300 million Term Loan G to pre-COVID pricing and extended the maturity to 2026. We also upsized our revolving credit facility capacity to $750 million. We raised gross proceeds of $22 million through our ATM program at a weighted average share price of $32.35 in the first quarter. Subsequent to quarter end, we raised an additional $70.6 million through the ATM program at a weighted average share price of $34.47. $50 million of the amount raised in April was raised on a forward basis. In total, we have $186 million of unfunded forward equity proceeds available to us today.
Finally, in March, we retired our Series C Preferred and no longer have any preferred outstanding. Our guidance is included on Page 21 of our supplemental reporting package. We have updated our guidance related to stabilized acquisition cap rates to a range of 5.5% to 6.0%, a decrease equal to 25 basis points at the midpoint. We have also updated our guidance related to retention to a range of 75% to 80%, and increase to the low end of the range by 5%. Finally, we have updated our guidance related to core FFO per share to a range of $1.96 to $2.00, an increase equal to $0.01 at the midpoint. With that, I will now turn it back over to Ben.
Thanks, Bill. As you can see by our first quarter results and our preceding comments, the future is indeed bright for STAG. I am confident that we will continue to deliver great risk-adjusted returns to our shareholders as we continue to grow in the coming years. Thank you for your time this morning. I'll now turn it back to the Operator for questions.
[Operator Instructions]. Our first question comes from the line of Sheila McGrath with Evercore ISI.
Ben, congratulations on the 10-year anniversary. Just wondering if you could give us big picture thoughts on lessons learned or anything that you shifted in your strategy at STAG along the way? Or just looking at systems infrastructure you may have added? Just some insights there.
Yes. Thanks, Sheila. It's unequivocally been a good run, obviously for us and I think for our shareholders. It's hard to imagine it's been 10 years. I think what we've learned is that the basic investment thesis is valid and can be applied and has been successfully applied to the industrial market. I think what we've learned along the way is it can be continually refined and can be applied probably across a broader range of assets than we originally anticipated. That's reflected, I think, in some of our more recent activity. And then finally, I'd say I've learned the power of the team. We've grown from, at our IPO I think we were around 20 employees, and we've grown to about 80 today. And the interaction among the team and the power of the culture and the innovative attitudes of that team is impressive for me to watch. So learned a few things along the way and it's all been good. But thanks for the question.
And then one other question. The pipeline in the supplemental was identified as $3.5 billion. I think that was a record. What's driving that now? And are just sellers hitting the bid given appreciation, or what's making that so large?
Yes. I certainly think that's part of the answer is that there's a lot of sellers are out there looking at the prices that are being paid and thinking this is a good time to bring their assets to market. There's still pent-up seller activity from the pandemic. Our pipeline has probably a little bit more portfolio component to it, but for the most part, it's just more assets. It's also reflective of the fact that we have more acquisition and more seasoned acquisition people out there, and they are identifying, in conjunction with our friends in the brokerage community, off-market transactions, unsolicited transactions that we can approach.
Our next question comes from the line of Emmanuel Korchman with Citi.
[Technical Difficulty] pricing has evolved in certain of your markets?
I'm sorry. Go ahead.
Sorry. And just how pricing has evolved in some of your markets. Do you anticipate another heavy 4Q transaction volumes?
So, I mean that has been our history is that the fourth quarter, and sometimes the third quarter, are our heaviest transaction volumes. That's reflective of sort of how the market works. People tend to look at things wrapping up as the year wraps up and coming back from summer activities and embarking on processes to sell assets. So that continues to be our expectation. We have seen cap rate compression in the markets. We've also seen a mix change in the markets. So our reflect -- that is reflected in our guidance as to slightly lower cap rates is the market compression, probably half of that and probably mix change, probably half of that.
Got it. And then are there any specific tenants or markets that you're more worried about today than others? And how have these conversations adapted following positive vaccine rollout and more recovery potential?
Well, one of the beauties, obviously, of having 500 assets, and I forget what the tenant count is, 400 tenants or something like that, is that we're so well-diversified that we're immune to a lot of concentrated risk issues that other people may face. We are seeing the impact of the reopening and the vaccination, etc., in a reduction in cash basis tenants, in potentially reduction in watch list tenants. So the market and the tenants appear healthy and healthier.
Our next question comes from the line of Elvis Rodriguez with Bank of America.
Congrats on the quarter, and Bill, congrats on your promotion. Just a quick question. So Equity Commonwealth announced that they're going to be acquiring Monmouth. Any read-throughs on the pricing for that portfolio versus your portfolio today?
Well, we're somewhat familiar with the Monmouth portfolio in that we've looked at it from time to time over the last few years. It has a heavy -- well, I'll go to the positive. They are young assets and long lease terms, heavy concentration of FedEx leases. Without underwriting the specific aspects of those leases, FedEx leases tend to be at or above market and flat, which is again, not necessarily in their portfolio, but that's been our experience with FedEx leases. So the pricing that we've heard, as everybody else has in public information, somewhere in the mid- to upper 4s, perhaps. I think that given the -- what I would expect is a relatively flat profile of those, of that income off those assets, it's probably a pretty full price. But without knowing the details of the transaction, without knowing certainly the portfolio in more detail, that's just speculation on my part.
Thanks. And then just a follow-up, so acquisition cap rates lower 25 basis points at the midpoint, and you mentioned some portfolios in the $3.5 billion of pipeline that you have. Is this a reflection that portfolios or you have to pay up to gather a larger amount of assets? And -- or anything you can share on that would be helpful.
Well, I mean, it's always been the case in our experience and our observations that portfolio premiums certainly exist in industrial real estate. As long as there is -- the individual assets are not all 15-year leases to Amazon in Ontario, California. As long as there's some aspect of risk, the aggregation of portfolios has had a decided impact on the cap rate of those portfolios. Our experience, specifically in our sale of portfolios, has been 100 to 150 basis points of compression between the individual cap rates, contemporaneous with that portfolio cap rate. So -- but the cap rate guidance that we're giving you is not necessarily reflective of the pipeline. It's reflective of what we expect to acquire within that pipeline. And as I mentioned earlier in my answer to the prior caller, prior questioner, it's about half due to cap rate compression and about half due to mix change. And I might note also the cap rate compression is reflective of the ever-increasing contractual rent bumps. So it's not only is demand driving market rent growth, but it's also, demand has driven to higher contractual rent bumps, which allows you to pay obviously lower cap rates and still maintain the same returns over time.
Our next question comes from the line of Dave Rodgers with Baird.
Bill, maybe want to start with you. Ben had made a couple of comments, I think, about the leasing spreads and as well as the rent bumps in the leases. Talk about cash same-store NOI versus GAAP. It's about a 260-basis point spread currently. Can you give us a sense where the in-place bumps are now and kind of where you're trying to push those? And I guess, how do you see the delta in the gap and the cash same-store NOI trending throughout the year? The current spread seems to be wider than we would typically see.
Sure. Thanks, Dave. And the bumps in the same-store pool right now are averaging about 2.25%. That's up from about 1.75% a few years ago. We're seeing, as Ben mentioned, higher contractual rental escalators in our acquisitions, anywhere 2.5% to 3% as well as higher contractual escalators in the leases we're signing in that same range. So that continues to increase in our portfolio. In terms of the delta between the GAAP and the cash same-store NOI, there was a unique item in the prior period for the GAAP same-store NOI. We did move a tenant to cash basis, which had call it a negative straight-line number because the tenant put a roof on and paid for it. We straight-lined that asset into income, so we accelerated that income stream in the prior quarter, which is why you're seeing a small negative change in your same-store GAAP NOI period-over-period. We don't expect a 2.6% delta between our cash and same-store NOI going forward.
Okay. That's helpful. And then, Ben, maybe just one for you on the competition. I mean, where are you seeing more competition? And how do you continue to have the confidence that you'll continue to kind of win these deals? Is it just the total amount of volume that you're looking at, the systems? I mean, I imagine it's all of that, but just kind of curious on where that competition is coming from.
Well, I certainly would say that it's all of that. We just have the ability and the people systems and processes to look at a large number of deals. Where our hit rate has been a little lower, the percentage of deals that we acquire as a percentage of those we bid on, has been a little lower to start the year. We are seeing competition from sources that we had not seen before. There's a lot more private equity shops have been embarking on industrial asset acquisition. But we're -- one of the beauties that we've always talked about in the industrial real estate market is the very fragmented nature of ownership. And so -- and the lack of perfect information that you need for an efficient market. And so by looking at broadly across the markets and being active in so many markets, we're not only able to identify, i.e., the $3.5 billion pipeline, but acquire, continue to acquire in volume. We haven't been asked the question yet, but we do feel very confident about our ability to meet our guidance for acquisitions for the year despite the fact the first quarter was probably a little bit below what we would have anticipated.
Our next question comes from the line of Michael Carroll with RBC Capital Markets.
I guess, Ben, you were talking in your prepared remarks or earlier about the pipeline having some type of portfolio component to it. I mean, how many portfolios are in that pipeline today? And I know there's a really big increase in the total size between 1Q and 4Q. I mean was that driven by some larger portfolios being added to that?
No. So typically, our portfolios are 10%, 15%. We might be 15% to 20% right now. But that is not the entire increase. The increase is -- comes largely from our typical one-off transactions. So a small increase in portfolio, but it doesn't make up the whole delta for sure.
Okay. How large are those portfolios? Are they just a few assets? Or I guess, when you say portfolio, I mean, can you kind of define that a little bit?
So we're not talking about the $1.5 billion portfolios that you might see at Blackstone or something like that pursuing. These are portfolios that are small enough that we think we have, and the brokers who are representing them believe, that we have a chance to win. So they wouldn't go into our pipeline unless we thought we had a chance to prevail.
Mike, generally, it's just a handful of assets. So you're talking $40 million, $50 million, maybe up to $200 million, but nothing more than that.
Okay. Great. And then shifting towards the leasing activity, obviously you had a really good leasing quarter. Can you talk about the cash lease spreads? I mean, it's about 10%, I know that's a pretty volatile number that can bounce around. But going forward, what could we expect the cash lease spreads to be? I mean, is that kind of the top end of the range? Or is that just kind of indicating the health of the market and we can expect spreads in those high single digits going forward?
Yes. Those are strong leasing spreads. We're very happy with the outcome of our operation, of our leases this quarter. We are still expecting mid-single digits for the year, Mike. The 10% was a strong number, the 100% retention we're very happy with. I do want to note that the leases, the new and renewal leases, were spread across 20 leases. There weren't 1 or 2 leases that were driving that leasing spreads, those leasing spreads. So it was broad-based demand, and we're still affirming our mid-single digits leasing spreads for the year.
Okay. And was there any geographic concentration with the leasing activity that could have drove those spreads?
No, it was broad-based. We saw it in a number of markets. And as I said, 20 leases in the mix across new and renewals, as you see, is pretty consistent, 8% for new and 10% for renewals.
Our next question comes from the line of John Massocca with Ladenburg Thalmann.
Does the transaction like the Equity Commonwealth Monmouth transaction change your thinking at all on portfolio sales and capital recycling? I know it's always a balance versus your cost of capital, but does the transaction indicate maybe the pricing environment might be more favorable than you thought earlier?
Well, I mean, this seems like an answer -- we're going to give you the same answer we always give, which is we look at various sources of capitalization of our business moving forward. We believe that continuing to raise common equity at this given current equity pricing remains the best result for our shareholders. An important component of that is operating leverage, where we get to spread our fixed cost across larger portfolios, a larger portfolio. So again, we look at that, we look at the pricing and would say, to the extent that the Monmouth pricing is an implied cap rate inside our implied cap rate, it's interesting, we would believe -- we would perhaps suggest that the pricing for our assets and for our management team as a combined entity, should be more probably be closer to the M&R pricing, but that's only a CEO talking.
Okay. And then in terms of the pipeline for acquisitions, I mean, how indicative do you think that is of maybe where we sit in kind of the broader interest rate cycle? Is it indicating at all that sellers are kind of coming to market may be due to concerns about rising interest rates? Or do you think there's other factors that are kind of driving the size of that pipeline?
Well, we're looking -- we're looking broadly across a market that may be $1 trillion of assets and our pipeline is $3.5 billion. So it's not like everything is for sale. Our pipeline is larger than it has been, which I think is due in part to what you're alluding to, but it's not-- again, it's not like everything is for sale. It's still a relatively small part of the overall market. And certainly, people are looking at the prices being paid. Perhaps they're worried about increases in interest rates. On the other hand, an increase in interest rates probably is indicative of inflation, so rents are probably going to go up too. So maybe they should be looking to hold on and achieve a perhaps a higher NOI and reflected in the higher prices in the future. There's a lot to balance there, but we're certainly seeing more activity.
And then, I mean in terms of the potential inflation impact, have you seen any change in maybe premiums or discounts for duration on in-place leases today as you go out and buy assets in the market?
Nothing material at this point.
Our next question comes from the line of Mike Mueller with JPMorgan.
I guess when you're looking out to the lease expiration schedule in 2022, are there any known kind of speed bumps at this point to be aware of?
No. We're -- last year, when we had 2 million footers in a year is certainly an anomaly. Again, it's a very large diversified portfolio. There's nothing that stands out as a particular issue.
Got it. And then on the CapEx side, I know you call like roofs and everything nonrecurring. But when we look at your nonrecurring CapEx bucket, it's running right now at about half of what it was last year. I guess, was that all just roofs? And just kind of how do you expect the balance of the year spend to be?
Yes. It's a good -- I mean we do call it nonrecurring, but I do want to say it is included in our CAD number as a deduct. But year-over-year, we did replace a large roof last year in Q1. Generally, the roof replacements are seasonal. So you see those more so in Q2 and Q3, which is what we're tracking this year. But last year, we replaced a roof in a warmer climate in Q1. So that's the difference that you saw in the quarter-over-quarter.
[Operator Instructions]. Our next question comes from the line of Chris Lucas with Capital One Securities.
Just a couple of quick ones for me. Ben, on the renewals for the quarter, was there anything that stood out in terms of size? I mean, how many deals did that include?
I think there were 16 renewals in the quarter, something like that. Nothing unusual, no anomalies. It was -- the results are broad-based and fairly uniform.
Okay. And then for the -- just to follow-up on Mike's question about sort of for the remainder of the year, what's your sense about fallout? Is there anything that's looming that is particularly large?
Nothing significant. As I discussed, last year had a couple of significant leases. There's a couple in the 300,000 or 400,000 square foot range, but on 100 million square foot portfolio, just not that meaningful.
Yes, Chris, no million square footers. And the 100% retention in Q1 was a driving factor for why we increased our retention guidance for the year.
Sure. And then last question for me, just as it relates to the pipeline, is there any geographic anomalies or concentrations that are reflected in that number?
I don't think so. It's obviously a large and diverse pipeline, nothing unusual in terms of geographic dispersion.
Our next question comes from the line of Jon Petersen with Jefferies.
Congrats on 10 years, and congrats to Bill on the promotion. Just one question for me. With cap rates compressing on acquisitions, do you guys anticipate maybe being a little more proactive in terms of finding development opportunities? Or is that outside of the scope of how you want STAG to be over the next few years, let's say, the next 10 years?
So yes. So we have the capacity to develop, as we demonstrated on our Burlington asset, and we retain that capacity. We're not set up to do hundreds of millions of dollars of development in any year. We haven't staffed for that, and we don't have a land bank for that. But we evaluate opportunities continuously that have excess land that would include the potential for development, either immediately or in the future. I think that we will continue to, obviously continue to look at those and continue to evaluate them on as much of a risk neutral basis as we do simply cash flowing assets. So we're not afraid of development, we just find that we're better able to deploy our capital accretively across cash flow in assets on a risk-adjusted, I should say, on a risk-adjusted basis.
Our next question is from the line of Elvis Rodriguez with Bank of America.
Just a quick follow-up. So you added an Amazon warehouse in the quarter. And I'm just trying to tie that into perhaps the lower cap rates. Are you in the market bidding to have this become a bigger tenant in your portfolio? Or is this just another quarter where you were able to add another asset with that tenant?
Yes, Elvis, thank you for the question. So we're reacting to all opportunities on the basis of the cash flow that we can derive from owning them going forward. This was an opportunity that came to us. It had met our accretion thresholds, and we were successful in bidding and acquiring the asset. So it wasn't a conscious decision to pursue an Amazon asset so much as an opportunity arrived that had an Amazon tenancy in it. So again, not a specific goal of having any particular level of Amazon tenancy within our portfolio, just reacting to opportunities as they present themselves.
Great. And just a quick follow-up. So you mentioned concentration not being an issue in the portfolio, but -- and obviously, this is a great tenant, but how do you feel from a single-tenant perspective, your concentration? Or where would your upper limit would be to this type of tenant?
We're starting to obviously pay attention with Amazon at the current level. I think we'd be comfortable with Amazon probably as high as maybe 10%. But 10% of our portfolio is a pretty big number, and I wouldn't expect us to get there anytime soon.
Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Butcher for any final comments.
Well, thank you all again for joining us this morning. It's certainly been a time for celebration as we achieved our 10-year anniversary. We are at or around 100 million square feet in assets. We crossed the $5 billion equity market cap a few months back. A lot of positive milestones in our journey. And the future, as I've mentioned a couple of times in the script, is indeed bright as we move forward. So thank you again for joining us, and we look forward to providing, continuing to provide great returns to our shareholders going forward.
Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.