Overview of the Company’s Financial Performance

First Industrial Realty Trust, Inc. (the “Company”) is a real estate investment trust (REIT) that owns, manages, acquires, sells, develops, and redevelops industrial real estate. The Company reported strong operating results for the nine months ended September 30, 2024, with net income of $225.5 million, up from $194.1 million in the same period of 2023.

The Company’s in-service occupancy rate at the end of the third quarter of 2024 was 95.0%, and it achieved a 52.9% increase in cash rental rates for new and renewal leases that commenced during the nine-month period. The Company also had five development projects totaling 1.3 million square feet of gross leasable area (GLA) under construction as of September 30, 2024, with an estimated total investment of $183.4 million.

Revenue and Profit Trends

The Company’s total revenues increased by 8.2% to $494.1 million for the nine months ended September 30, 2024, compared to $456.8 million in the same period of 2023. This increase was primarily driven by:

• A $18.7 million (4.4%) increase in revenues from same-store properties, due to higher rental rates and tenant recoveries, partially offset by a decrease in occupancy.
• A $2.7 million (347.6%) increase in revenues from acquired properties, due to the addition of nine industrial properties totaling 0.4 million square feet of GLA.
• A $22.3 million (361.1%) increase in revenues from (re)developments, due to higher occupancy and tenant recoveries.

The Company’s net income increased by $31.4 million (16.2%) to $225.5 million for the nine months ended September 30, 2024, compared to $194.1 million in the same period of 2023. This increase was primarily driven by:

• A $37.3 million (8.2%) increase in total revenues.
• A $93.8 million gain on the sale of 17 industrial properties, compared to a $47.4 million gain on the sale of 4 properties and 2 land parcels in the same period of 2023.

These increases were partially offset by:

• A $10.5 million (8.4%) increase in property expenses.
• A $6.9 million (5.7%) increase in depreciation and other amortization.
• An $8.9 million (16.6%) increase in interest expense.

Strengths and Weaknesses

Strengths:

• Strong occupancy and rental rate growth, indicating healthy demand for the Company’s industrial properties.
• Successful development and acquisition activities, expanding the Company’s portfolio in key logistics markets.
• Disciplined capital allocation, with strategic property dispositions and redeployment of capital into higher-growth assets.
• Solid balance sheet, with ample liquidity and manageable debt maturities.

Weaknesses:

• Slight decrease in same-store occupancy, which could put pressure on future revenue growth if not addressed.
• Increasing property expenses and interest costs, which could impact profit margins if not offset by higher rental rates.
• Reliance on joint venture activities, which adds complexity and potential volatility to the Company’s financial results.

Outlook for the Future

The Company’s management is optimistic about the future, citing favorable industrial real estate fundamentals, economic and business environments, and population growth in the Company’s 15 key logistics markets, particularly those with a coastal orientation.

The Company plans to continue its focus on internal growth through lease renewals, rent escalations, occupancy improvements, and cost control. Externally, the Company will seek to grow through strategic development, acquisitions, and joint venture investments in its target markets.

The Company’s financing strategy involves utilizing a mix of property sales proceeds, unsecured debt, mortgage financing, and equity issuances to fund its growth initiatives, while maintaining a strong balance sheet and investment-grade credit ratings.

Overall, the Company appears well-positioned to capitalize on the favorable industrial real estate market conditions and continue its track record of growth and value creation for shareholders.