FIRST INDUSTRIAL REALTY TRUST: Discussion and analysis of the financial and earnings position by management (Form 10-Q)

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The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the consolidated financial
statements and notes thereto appearing elsewhere in this Form 10-Q. Unless
stated otherwise or the context otherwise requires, the terms "we," "our" and
"us" refer to First Industrial Realty Trust, Inc. (the "Company") and its
subsidiaries, including First Industrial, L.P. (the "Operating Partnership") and
its consolidated subsidiaries.
Forward-Looking Statements
The following discussion may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, and Section 21E of the
Securities Exchange Act of 1934 (the "Exchange Act"). We intend for such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are based on certain assumptions and
describe our future plans, strategies and expectations, and are generally
identifiable by use of the words "believe," "expect," "plan," "intend,"
"anticipate," "estimate," "project," "seek," "target," "potential," "focus,"
"may," "will," "should" or similar words. Although we believe the expectations
reflected in forward-looking statements are based upon reasonable assumptions,
we can give no assurance that our expectations will be attained or that results
will not materially differ.
Factors which could have a materially adverse effect on our operations and
future prospects include, but are not limited to:
•changes in national, international, regional and local economic conditions
generally and real estate markets specifically;
•changes in legislation/regulation (including changes to laws governing the
taxation of real estate investment trusts) and actions of regulatory
authorities;
•our ability to qualify and maintain our status as a real estate investment
trust;
•the availability and attractiveness of financing (including both public and
private capital) and changes in interest rates;
•the availability and attractiveness of terms of additional debt repurchases;
•our ability to retain our credit agency ratings;
•our ability to comply with applicable financial covenants;
•our competitive environment;
•changes in supply, demand and valuation of industrial properties and land in
our current and potential market areas;
•our ability to identify, acquire, develop and/or manage properties on favorable
terms;
•our ability to dispose of properties on favorable terms;
•our ability to manage the integration of properties we acquire;
•potential liability relating to environmental matters;
•defaults on or non-renewal of leases by our tenants;
•decreased rental rates or increased vacancy rates;
•higher-than-expected real estate construction costs and delays in development
or lease-up schedules;
•the uncertainty and economic impact of pandemics, epidemics or other public
health emergencies or fear of such events, such as the recent outbreak of
COVID-19;
•potential natural disasters and other potentially catastrophic events such as
acts of war and/or terrorism;
•litigation, including costs associated with prosecuting or defending claims and
any adverse outcomes;
•risks associated with our investments in joint ventures, including our lack of
sole decision-making authority; and
•other risks and uncertainties described in this report, in Item 1A, "Risk
Factors" and elsewhere in our annual report on Form 10-K for the year ended
December 31, 2020 as well as those risks and uncertainties discussed from time
to time in our other Exchange Act reports and in our other public filings with
the Securities and Exchange Commission (the "SEC").
We caution you not to place undue reliance on forward-looking statements, which
reflect our outlook only and speak only as of the date of this report. We assume
no obligation to update or supplement forward-looking statements.

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Generally

The Company is a self-administered and fully integrated real estate company
which owns, manages, acquires, sells, develops and redevelops industrial real
estate. The Company is a Maryland corporation organized on August 10, 1993 and a
real estate investment trust ("REIT") as defined in the Internal Revenue Code of
1986 (the "Code"). As of June 30, 2021, we owned 427 industrial properties
located in 20 states, containing an aggregate of approximately 61.8 million
square feet of gross leasable area ("GLA"). Of the 427 properties owned on a
consolidated basis, none of them are directly owned by the Company.
We began operations on July 1, 1994. The Company's operations are conducted
primarily through the Operating Partnership, of which the Company is the sole
general partner (the "General Partner"), with an approximate 97.7% ownership
interest ("General Partner Units") at June 30, 2021. The Operating Partnership
also conducts operations through several other limited partnerships (the "Other
Real Estate Partnerships"), numerous limited liability companies ("LLCs") and
certain taxable REIT subsidiaries ("TRSs"), the operating data of which,
together with that of the Operating Partnership, is consolidated with that of
the Company as presented herein. The Operating Partnership holds at least a 99%
limited partnership interest in each of the Other Real Estate Partnerships. The
general partners of the Other Real Estate Partnerships are separate
corporations, wholly-owned by the Company, each with at least a .01% general
partnership interest in the Other Real Estate Partnerships. The Company does not
have any significant assets or liabilities other than its investment in the
Operating Partnership and its 100% ownership interest in the general partners of
the Other Real Estate Partnerships. The noncontrolling interest in the Operating
Partnership of approximately 2.3% at June 30, 2021 represents the aggregate
partnership interest held by the limited partners thereof ("Limited Partner
Units" and together with the General Partner Units, the "Units").
We also own equity interests in, and provide various services to, two joint
ventures (the "Joint Ventures"), each through a wholly-owned TRS of the
Operating Partnership. The Joint Ventures are each accounted for under the
equity method of accounting. The operating data of the Joint Ventures is not
consolidated with that of the Operating Partnership or the Company as presented
herein.
Available Information
We maintain a website at www.firstindustrial.com. Information on this website
shall not constitute part of this Form 10-Q. Copies of our respective annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to such reports are available without charge on our
website as soon as reasonably practicable after such reports are filed with or
furnished to the SEC. You may also read and copy any document filed at the
public reference facilities of the SEC at 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at (800) SEC-0330 for further information about the
public reference facilities. These documents also may be accessed through the
SEC's Interactive Data Electronic Application via the SEC's home page on the
Internet (www.sec.gov). In addition, the Company's Corporate Governance
Guidelines, Code of Business Conduct and Ethics, Audit Committee Charter,
Compensation Committee Charter and Nominating/Corporate Governance Committee
Charter, along with supplemental financial and operating information prepared by
us, are all available without charge on the Company's website or upon request to
the Company. Amendments to, or waivers from, our Code of Business Conduct and
Ethics that apply to our executive officers or directors will also be posted to
our website. We also post or otherwise make available on our website from time
to time other information that may be of interest to our investors. Please
direct requests as follows:
                      First Industrial Realty Trust, Inc.
                         1 N. Wacker Drive, Suite 4200
                               Chicago, IL 60606
                         Attention: Investor Relations

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Management's Overview
Business Objectives and Growth Plans
Our fundamental business objective is to maximize the total return to the
Company's stockholders and the Operating Partnership's partners through an
increase in cash flows and increases in the value of our properties and
operations. Our long-term business growth plans include the following elements:
•Internal Growth. We seek to grow internally by (i) increasing revenues by
renewing or re-leasing spaces subject to expiring leases at higher rental
levels; (ii) contractual rent escalations on our long-term leases;
(iii) increasing occupancy levels at properties where vacancies exist and
maintaining occupancy elsewhere; (iv) controlling and minimizing property
operating expenses, general and administrative expenses and releasing costs; and
(v) renovating existing properties.
•External Growth. We seek to grow externally through (i) the development of
best-in-class industrial properties; (ii) the acquisition of portfolios of
industrial properties or individual properties which meet our investment
parameters within our 15 target logistics markets; (iii) the expansion of our
properties; and (iv) possible additional joint venture investments.
•Portfolio Enhancement. We continually seek to upgrade our overall portfolio via
new investments as well as through the sale of select assets that we believe do
not exhibit favorable characteristics for long-term cash flow growth. We target
new investments located in 15 logistics markets where land is more scarce. We
seek to refine our portfolio over the coming years by focusing on bulk and
regional warehouses properties and downsizing our percentage of light industrial
and R&D/flex buildings.
Our ability to pursue our long-term growth plans is affected by market
conditions and our financial condition and operating capabilities.
Business Strategies
We utilize the following strategies in connection with the operation of our
business:
•Organizational Strategy. We implement our decentralized property operations
strategy through the deployment of experienced regional management teams and
local property managers. We provide acquisition, development and financing
assistance, asset management oversight and financial reporting functions from
our headquarters in Chicago, Illinois to support our regional operations. We
believe the size of our portfolio enables us to realize operating efficiencies
by spreading overhead among many properties and by negotiating purchasing
discounts.
•Market Strategy. Our market strategy is to concentrate on the top 15 industrial
real estate markets in the United States. These markets have one or more of the
following characteristics: (i) favorable industrial real estate fundamentals,
including improving industrial demand and constrained supply that can lead to
long-term rent growth; (ii) favorable economic and business environments that
should benefit from increases in distribution activity driven by growth in
global trade and local consumption; (iii) population growth as it generally
drives industrial demand; (iv) natural barriers to entry and scarcity of land
which are key elements in delivering future rent growth; and (v) sufficient size
to provide ample opportunity for growth through incremental investments as well
as offer asset liquidity.
•Leasing and Marketing Strategy. We have an operational management strategy
designed to enhance tenant satisfaction and portfolio performance. We pursue an
active leasing strategy, which includes broadly marketing available space,
seeking to renew existing leases at higher rents per square foot and seeking
leases which provide for the pass-through of property-related expenses to the
tenant. We also have local and national marketing programs which focus on the
business and real estate brokerage communities and multi-national tenants.
•Acquisition/Development Strategy. Our investment strategy is primarily focused
on developing and acquiring industrial properties in the top 15 key logistics
markets with a coastal orientation in the United States through the deployment
of experienced regional management teams. When evaluating potential industrial
property acquisitions and developments, we consider such factors as: (i) the
geographic area and type of property; (ii) the location, construction quality,
condition and design of the property; (iii) the terms of tenant leases,
including the potential for rent increases; (iv) the potential for economic
growth and the general business, tax and regulatory environment of the area in
which the property is located; (v) the occupancy and demand by tenants for
properties of a similar type in the vicinity; (vi) competition from existing
properties and the potential for the construction of new properties in the area;
(vii) the potential for capital appreciation of the property; (viii) the ability
to improve
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the property's performance through renovation; and (ix) the potential for
expansion of the physical layout of the property and/or the number of sites.
•Disposition Strategy. We continually evaluate local market conditions and
property-related factors in all of our markets for purposes of identifying
assets suitable for disposition. We look to sell assets we believe have lower
rent growth potential and redeploy the capital into assets we believe have
higher rent growth potential in key logistics markets. We also seek to reduce
our percentage of our holdings of light industrial and R&D/flex assets over
time.
•Financing Strategy. To finance acquisitions, developments and debt maturities,
as market conditions permit, we may utilize a portion of proceeds from property
sales, unsecured debt offerings, term loans, mortgage financings and borrowings
under our $725.0 million unsecured revolving credit agreement (the "Unsecured
Credit Facility") (See Subsequent Events), and proceeds from the issuance, when
and as warranted, of additional equity securities. We also evaluate joint
venture arrangements as additional sources of capital to finance acquisitions
and developments.

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Summary of the Six Months Ended June 30, 2021
Despite the COVID-19 pandemic, our operating results remained strong in the
first half of 2021. Our quarter end in-service occupancy was 96.6%, which is a
90 basis point increase compared to our in-service occupancy at December 31,
2020, and during the six months ended June 30, 2021, we grew cash rental rates
by 13.3% on new and renewal leases (15.7% during the second quarter). After
resuming speculative development in the fourth quarter of 2020, we started seven
additional speculative buildings and one build-to-suit building comprising, in
the aggregate, 4.1 million square feet of GLA in the first six months of 2021.
We continued to position ourselves for future development activity by acquiring
land located in our target markets. On July 7, 2021, we amended and restated our
Unsecured Line of Credit that was scheduled to mature in October 2021 to, among
other things, extend the maturity date to July 7, 2025 and increase our
borrowing capacity thereunder to $750.0 million and we also amended and restated
our $200.0 million unsecured term loan that was maturing in July 2021 to, among
other things, extend the maturity date to July 7, 2026. The credit spreads on
our new $750.0 million revolving line of credit and $200.0 million unsecured
term loan are now 32.5 basis points and 65 basis points, respectively, less than
each prior facility. Although the impact of COVID-19 pandemic has had an overall
minimal impact on us in 2020 and so far in 2021, we cannot predict the future
impact it may have on our business, future financial condition and operating
results.
During the six months ended June 30, 2021, we completed the following
significant real estate activities:
•We acquired three industrial properties comprised of approximately 0.2 million
square feet of GLA located in the Central Florida, Denver and Northern
California markets for an aggregate purchase price of $30.7 million, excluding
transactions costs.
•We acquired approximately 320.6 acres of land for development located in the
Central Pennsylvania, Inland Empire, Northern California, Philadelphia and
Phoenix markets, for an aggregate purchase price of $116.5 million, excluding
transaction costs.
•We commenced speculative development of seven industrial buildings and one
build-to-suit facility totaling 4.1 million square feet of GLA in our Central
Pennsylvania, Dallas, Denver, Inland Empire, Nashville and Phoenix markets.
•We sold six industrial properties and three industrial condominium units
comprising approximately 1.5 million square feet of GLA and one land parcel for
gross sales proceeds of $104.4 million.
•One of the Joint Ventures sold its remaining 138 acres (for which the Company
was the purchaser and such land purchase is included above) for a sale price of
$31.7 million. Additionally, we netted our share of gain on sale and incentive
fees of $10.2 million against the basis of the land.
Our significant financing activities during the six months ended June 30, 2021
were:
•We paid off $57.9 million in mortgage loans payable, bringing the percentage of
our real estate that is unencumbered to 95.5% at June 30, 2021.
•We declared first and second quarter cash dividends of $0.27 per common share
or Unit per quarter, an increase of 8.0% from the 2020 quarterly rate.
•At June 30, 2021, we have $660.9 million available for additional borrowings
under our Unsecured Credit Facility and cash and cash equivalents was $55.6
million.

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Results of Operations
The tables below summarize our revenues, property expenses and depreciation and
other amortization by various categories for the three and six months ended June
30, 2021 and 2020. Same store properties are properties owned prior to
January 1, 2020 and held as an in-service property through June 30, 2021 and
developments and redevelopments that were placed in service prior to January 1,
2020. Properties which are at least 75% occupied at acquisition are placed in
service, unless we anticipate tenant move-outs within two years of ownership
would drop occupancy below 75%. Acquisitions that are less than 75% occupied at
the date of acquisition and developments and redevelopments are placed in
service as they reach the earlier of a) stabilized occupancy (defined as 90%
occupied), or b) one year subsequent to acquisition or development/redevelopment
construction completion. Acquired properties with occupancy greater than 75% at
acquisition, but with tenants that we anticipate will move out within two years
of ownership, will be placed in service upon the earlier of reaching 90%
occupancy or twelve months after move out. Properties are moved from the same
store classification to the redevelopment classification when capital
expenditures for a project are estimated to exceed 25% of the undepreciated
gross book value of the property. Acquired properties are properties that were
acquired subsequent to December 31, 2019 and held as an operating property
through June 30, 2021. Sold properties are properties that were sold subsequent
to December 31, 2019. Developments and redevelopments (collectively referred to
as "(Re)Developments") include (re)developments that were not: a) substantially
complete 12 months prior to January 1, 2020; or b) stabilized prior to
January 1, 2020. Other revenues are derived from the operations of properties
not placed in service under one of the categories discussed above, the
operations of our maintenance company and other miscellaneous revenues. Other
property expenses are derived from the operations of properties not placed in
service under one of the categories discussed above, the operations of our
maintenance company, vacant land expenses and other miscellaneous regional
expenses.
Our future financial condition and results of operations, including rental
revenues, may be impacted by the future acquisition, (re)development and sale of
properties. Our future revenues and expenses may vary materially from historical
rates.
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Comparison of Six Months Ended June 30, 2021 to Six Months Ended June 30, 2020
Our net income was $116.7 million and $78.0 million for the six months ended
June 30, 2021 and 2020, respectively.
For the six months ended June 30, 2021 and 2020, the average daily occupancy
rate of our same store properties was 95.9% and 96.9%, respectively.
                              Six Months Ended June 30,
                                 2021                 2020         $ Change      % Change
                                                   ($ in 000's)
REVENUES
Same Store Properties   $      211,270             $ 201,092      $ 10,178           5.1  %
Acquired Properties              6,598                   496         6,102       1,230.2  %
Sold Properties                  2,351                12,177        (9,826)        (80.7) %
(Re)Developments                10,974                 3,318         7,656         230.7  %
Other                            2,464                 2,462             2           0.1  %

Total Revenues          $      233,657             $ 219,545      $ 14,112           6.4  %


Revenues from same store properties increased $10.2 million primarily due to an
increase in rental rates and tenant recoveries and a decrease in reserves taken
on receivable amounts, offset by a decrease in occupancy and final insurance
settlement proceeds of $1.1 million received and recorded in 2020 as revenue
related to a property that was destroyed by fire in 2016. Revenues from acquired
properties increased $6.1 million due to the 11 industrial properties acquired
subsequent to December 31, 2019 totaling approximately 1.7 million square feet
of GLA. Revenues from sold properties decreased $9.8 million due to the 35
industrial properties sold subsequent to December 31, 2019 totaling
approximately 3.4 million square feet of GLA as well as a lease we reclassified
from an operating lease to a sales-type lease in 2019, for which the sale of
such property subsequently closed in 2020. Revenues from (Re)Developments
increased $7.7 million due to an increase in occupancy. Revenues from other
remained relatively unchanged.
                                Six Months Ended June 30,
                                    2021                 2020        $ Change      % Change
                                                     ($ in 000's)
PROPERTY EXPENSES
Same Store Properties     $      55,434               $ 48,232      $  7,202         14.9  %
Acquired Properties               1,302                    120         1,182        985.0  %
Sold Properties                     220                  2,743        (2,523)       (92.0) %
(Re)Developments                  3,235                  1,577         1,658        105.1  %
Other                             4,799                  4,460           339          7.6  %

Total Property Expenses   $      64,990               $ 57,132      $  7,858         13.8  %



Property expenses include real estate taxes, repairs and maintenance, property
management, utilities, insurance and other property related expenses. Property
expenses from same store properties increased $7.2 million primarily due to an
increase in real estate tax expense and snow removal costs. Property expenses
from acquired properties increased $1.2 million due to properties acquired
subsequent to December 31, 2019. Property expenses from sold properties
(including expenses related to the lease reclassified as a sales-type lease)
decreased $2.5 million due to properties sold subsequent to December 31, 2019.
Property expenses from (Re)Developments increased $1.7 million primarily due to
the substantial completion of developments. Property expenses from other
remained relatively unchanged.
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General and administrative expense decreased by $0.5 million, or 2.6%, primarily
due to severance and regional wind-up expenses associated with the closing of
our Indianapolis office during the six months ended June 30, 2020.
                                                          Six Months Ended June 30,
                                                            2021                2020            $ Change             % Change
                                                                                     ($ in 000's)
DEPRECIATION AND OTHER AMORTIZATION
Same Store Properties                                 $      55,763          $ 57,338          $ (1,575)                  (2.7) %
Acquired Properties                                           3,286               538             2,748                  510.8  %
Sold Properties                                                 307             2,396            (2,089)                 (87.2) %
(Re) Developments                                             3,940             1,637             2,303                  140.7  %

Company furniture, Factory and office equipment and miscellaneous 1,125

     1,254              (129)                 (10.3) %
Total Depreciation and Other Amortization             $      64,421          $ 63,163          $  1,258                    2.0  %


Depreciation and other amortization from same store properties remained
relatively unchanged. Depreciation and other amortization from acquired
properties increased $2.7 million due to properties acquired subsequent to
December 31, 2019. Depreciation and other amortization from sold properties
decreased $2.1 million due to properties sold subsequent to December 31, 2019.
Depreciation and other amortization from (Re)Developments increased $2.3 million
primarily due to an increase in depreciation and amortization related to
completed developments. Depreciation from corporate furniture, fixtures and
equipment and other remained relatively unchanged.
For the six months ended June 30, 2021, we recognized $57.5 million of gain on
sale of real estate related to the sale of six industrial properties and three
industrial condominium units comprised of approximately 1.5 million square feet
of GLA and one land parcel. For the six months ended June 30, 2020, we
recognized $23.1 million of gain on sale of real estate related to the sale of
12 industrial properties comprised of approximately 0.4 million square feet of
GLA.
Interest expense remained relatively unchanged. However, the small decrease was
caused by an increase in capitalized interest of $0.9 million caused by an
increase in development costs eligible for capitalization during the six months
ended June 30, 2021 as compared to the six months ended June 30, 2020 and
decrease in the weighted average interest rate for the six months ended June 30,
2021 (3.63%) as compared to the six months ended June 30, 2020 (3.64%), offset
by an increase in the weighted average debt balance outstanding for the six
months ended June 30, 2021 ($1,603.0 million) as compared to the six months
ended June 30, 2020 ($1,578.8 million).
Amortization of debt issuance costs increased by $0.3 million, or 19.8%,
primarily due to debt issuance costs incurred related to the refinancing of a
$200.0 million unsecured term loan in July 2020 and the issuance of $300.0
million of private placement notes in September 2020.
Equity in loss of Joint Ventures for both the six months ended June 30, 2021 and
2020 was not significant. However, during the six months ended June 30, 2021, we
deferred $10.2 million of equity in income and incentive fees earned from the
sale of the remaining 138 acres of developable land from one of the Joint
Ventures since the Company was the purchaser of the land. This deferral was
netted against the basis of the land acquired.
Income tax provision increased by $1.3 million, or 886.1%, primarily due to an
increase in our pro-rata share of gain from the sale of real estate by one of
the Joint Ventures as well as incentive fees we earned from one of the Joint
Ventures. Our equity ownership in the Joint Ventures is owned through a
wholly-owned TRS.

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Comparison of Three Months Ended June 30, 2021 to Three Months Ended June 30,
2020
Our net income was $53.2 million and $36.4 million for the three months ended
June 30, 2021 and 2020, respectively.
For the three months ended June 30, 2021 and 2020, the average daily occupancy
rate of our same store properties was 96.1% and 97.0%, respectively.
                              Three Months Ended June 30,
                                  2021                  2020         $ Change      % Change
                                                    ($ in 000's)
REVENUES
Same Store Properties   $      105,795               $ 100,075      $  5,720          5.7  %
Acquired Properties              3,575                     449         3,126        696.2  %
Sold Properties                    925                   5,731        (4,806)       (83.9) %
(Re)Developments                 5,838                   1,792         4,046        225.8  %
Other                            1,265                   1,155           110          9.5  %

Total Revenues          $      117,398               $ 109,202      $  8,196          7.5  %


Revenues from same store properties increased $5.7 million primarily due to an
increase in rental rates and tenant recoveries and a decrease in reserves taken
on receivable amounts, offset by a decrease in occupancy. Revenues from acquired
properties increased $3.1 million due to the 11 industrial properties acquired
subsequent to December 31, 2019 totaling approximately 1.7 million square feet
of GLA. Revenues from sold properties decreased $4.8 million due to the 35
industrial properties sold subsequent to December 31, 2019 totaling
approximately 3.4 million square feet of GLA as well as a lease we reclassified
from an operating lease to a sales-type lease in 2019, for which the sale of
such property subsequently closed in 2020. Revenues from (Re)Developments
increased $4.0 million due to an increase in occupancy. Revenues from other
remained relatively unchanged.
                                 Three Months Ended June 30,
                                     2021                   2020        $ Change      % Change
                                                      ($ in 000's)
PROPERTY EXPENSES
Same Store Properties     $       27,218                 $ 23,750      $  3,468         14.6  %
Acquired Properties                  642                      104           538        517.3  %
Sold Properties                       41                    1,217        (1,176)       (96.6) %
(Re)Developments                   1,672                      864           808         93.5  %
Other                              2,175                    2,116            59          2.8  %

Total Property Expenses   $       31,748                 $ 28,051      $  3,697         13.2  %


Property expenses include real estate taxes, repairs and maintenance, property
management, utilities, insurance and other property related expenses. Property
expenses from same store properties increased $3.5 million primarily due to an
increase in real estate tax expense and repair and maintenance costs. Property
expenses from acquired properties increased $0.5 million due to properties
acquired subsequent to December 31, 2019. Property expenses from sold properties
(including expenses related to the lease reclassified as a sales-type lease)
decreased $1.2 million due to properties sold subsequent to December 31, 2019.
Property expenses from (Re)Developments increased $0.8 million primarily due to
the substantial completion of developments. Property expenses from other
remained relatively unchanged.

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General administration costs remained relatively unchanged.

                                                          Three Months Ended June 30,
                                                            2021                 2020            $ Change             % Change
                                                                                      ($ in 000's)
DEPRECIATION AND OTHER AMORTIZATION
Same Store Properties                                 $       27,906          $ 29,026          $ (1,120)                  (3.9) %
Acquired Properties                                            1,929               538             1,391                  258.6  %
Sold Properties                                                   36             1,119            (1,083)                 (96.8) %
(Re) Developments                                              2,002               926             1,076                  116.2  %
Corporate Furniture, Fixtures and Equipment and Other            573               623               (50)                  (8.0) %
Total Depreciation and Other Amortization             $       32,446          $ 32,232          $    214                    0.7  %


Depreciation and other amortization from same store properties remained
relatively unchanged. Depreciation and other amortization from acquired
properties increased $1.4 million due to properties acquired subsequent to
December 31, 2019. Depreciation and other amortization from sold properties
decreased $1.1 million due to properties sold subsequent to December 31, 2019.
Depreciation and other amortization from (Re)Developments increased $1.1 million
primarily due to an increase in depreciation and amortization related to
completed developments. Depreciation from corporate furniture, fixtures and
equipment and other remained relatively unchanged.
For the three months ended June 30, 2021, we recognized $22.9 million of gain on
sale of real estate related to the sale of three industrial properties and one
industrial condominium unit comprised of approximately 0.4 million square feet
of GLA and one land parcel. For the three months ended June 30, 2020, we
recognized $9.1 million of gain on sale of real estate related to the sale of
three industrial properties comprised of approximately 0.2 million square feet
of GLA.
Interest expense remained relatively unchanged. However, the small decrease was
caused by an increase in capitalized interest of $0.5 million caused by an
increase in development costs eligible for capitalization during the three
months ended June 30, 2021 as compared to the three months ended June 30, 2020
and a decrease in the weighted average debt balance outstanding for the three
months ended June 30, 2021 ($1,604.2 million) as compared to the three months
ended June 30, 2020 ($1,637.2 million), offset by an increase in the weighted
average interest rate for the three months ended June 30, 2021 (3.57%) as
compared to the three months ended June 30, 2020 (3.48%).
Amortization of debt issuance costs increased by $0.2 million, or 19.3%,
primarily due to debt issuance costs incurred related to the refinancing of a
$200.0 million unsecured term loan in July 2020 and the issuance of $300.0
million of private placement notes in September 2020.
Equity in loss of Joint Ventures for both the three months ended June 30, 2021
and 2020 was not significant. However, during the three months ended June 30,
2021, we deferred $10.2 million of equity in income and incentive fees earned
from the sale of the remaining 138 acres of developable land from one of the
Joint Ventures since the Company was the purchaser of the land. This deferral
was netted against the basis of the land acquired.
Income tax provision increased by $1.4 million, or 612.7%, primarily due to an
increase in our pro-rata share of gain from the sale of real estate by the Joint
Ventures as well as incentive fees we earned from one of the Joint Ventures. Our
equity ownership in the Joint Ventures is owned through a wholly-owned TRS.

                                       36
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Leasing Activity
The following table provides a summary of our commenced leases for the three and
six months ended June 30, 2021. The table does not include month-to-month leases
or leases with terms less than twelve months.
                               Number of             Square Feet                                                                            Weighted               Lease Costs                 Weighted
                                Leases                Commenced              Net Rent Per               Straight Line Basis               Average Lease            Per Square               Average Tenant
Three Months Ended             Commenced             (in 000's)             Square Foot (A)               Rent  Growth (B)                  Term (C)                Foot (D)                 Retention (E)
New Leases                          32                  1,083             $           6.70                               34.4  %                6.8              $       6.54                                N/A
Renewal Leases                      37                  2,015             $           6.40                               27.0  %                5.4              $       1.53                            71.1  %
Development / Acquisition
Leases                               4                    418             $           7.27                                   N/A                6.8                          N/A                            -
Total / Weighted Average            73                  3,516             $           6.60                               29.5  %                6.0              $       3.28                            71.1  %

Six Months Ended
New Leases                          50                  1,660             $           6.70                               34.8  %                6.2              $       6.11                                N/A
Renewal Leases                      69                  4,320             $           5.85                               22.2  %                4.1              $       1.21                            73.9  %
Development / Acquisition
Leases                              10                    885             $           8.52                                   N/A                8.3                          N/A                            -
Total / Weighted Average           129                  6,865             $           6.40                               25.8  %                5.1              $       2.57                            73.9  %


_______________
(A)  Net rent is the average base rent calculated in accordance with GAAP, over
the term of the lease.
(B)  Straight line basis rent growth is a ratio of the change in net rent
(including straight line rent adjustments) on a new or renewal lease compared to
the net rent (including straight line rent adjustments) of the comparable lease.
New leases where there were no prior comparable leases are excluded.
(C)  The lease term is expressed in years. Assumes no exercise of lease renewal
options, if any.
(D)  Lease costs are comprised of the costs incurred or capitalized for
improvements of vacant and renewal spaces, as well as the commissions paid and
costs capitalized for leasing transactions. Lease costs per square foot
represent the total turnover costs expected to be incurred on the leases that
commenced during the period and do not reflect actual expenditures for the
period.
(E)  Represents the weighted average square feet of tenants renewing their
respective leases.

The following table provides a summary of our leases that commenced during the
three and six months ended June 30, 2021, which included rent concessions during
the lease term.
                                                              Number of
                                                               Leases                   Square Feet          Rent Concessions
Three Months Ended                                      With Rent Concessions           (in 000's)                 ($)
New Leases                                                         23                        911             $       1,769
Renewal Leases                                                      4                        152                       118
Development / Acquisition Leases                                    3                        318                       775
Total                                                              30                      1,381             $       2,662

Six Months Ended
New Leases                                                         36                      1,397             $       2,453
Renewal Leases                                                      6                        187                       157
Development / Acquisition Leases                                    9                        785                     2,865
Total                                                              51                      2,369             $       5,475


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Liquidity and Capital Resources
At June 30, 2021, our cash and cash equivalents was approximately $55.6 million
and restricted cash was approximately $27.0 million. We also had $660.9 million
available for additional borrowings under our Unsecured Credit Facility as of
June 30, 2021.
We have considered our short-term (through June 30, 2022) liquidity needs and
the adequacy of our estimated cash flow from operations and other expected
liquidity sources to meet these needs. At June 30, 2021, we had a $200.0 million
term loan maturing in July 2021 and our Unsecured Credit Facility matured in
October 2021. On July 7, 2021, we amended and restated the $200.0 million term
loan to, among other things, extend its maturity date to July 7, 2026 (see
Subsequent Events). Additionally, on July 7, 2021, we amended and restated our
Unsecured Credit Facility to, among other things, increase our borrowing
capacity to $750.0 million and extend its maturity date to July 7, 2025 (see
Subsequent Events). We believe that our principal short-term liquidity needs are
to fund normal recurring expenses, property acquisitions, developments,
renovations, expansions and other nonrecurring capital improvements, debt
service requirements, the minimum distributions required to maintain the
Company's REIT qualification under the Code and distributions approved by the
Company's Board of Directors. We anticipate that these needs will be met with
cash flows provided by operating activities as well as the disposition of select
assets. These needs may also be met by the issuance of other debt or equity
securities, subject to market conditions or borrowings under our Unsecured
Credit Facility.
We expect to meet long-term (after June 30, 2022) liquidity requirements such as
property acquisitions, developments, scheduled debt maturities, major
renovations, expansions and other nonrecurring capital improvements through the
disposition of select assets, long-term unsecured and secured indebtedness and
the issuance of additional equity securities, subject to market conditions.
Our Unsecured Credit Facility contains certain financial covenants including
limitations on incurrence of debt and debt service coverage. Our access to
borrowings may be limited if we fail to meet any of these covenants. We believe
that we were in compliance with our financial covenants as of June 30, 2021, and
we anticipate that we will be able to operate in compliance with our financial
covenants for the next twelve months.
As of July 23, 2021, we had approximately $606.8 million available for
additional borrowings under our New Credit Facility (see Subsequent Events).
Our senior unsecured notes have been assigned credit ratings from Standard &
Poor's, Moody's and Fitch Ratings of BBB/Stable, Baa2/Stable and BBB/Stable,
respectively. In the event of a downgrade, we believe we would continue to have
access to sufficient capital. However, our cost of borrowing would increase and
our ability to access certain financial markets may be limited.
                                       38
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Cash Flow Activity
The following table summarizes our cash flow activity for the Company for the
six months ended June 30, 2021 and 2020:
                                                                 2021       

2020

                                                                    (In 

Thousands)

     Net cash provided by operating activities                $ 118,484    

$ 117,457

     Net cash used in investing activities                     (161,658)   

(245,772)

Net cash (used in) from financing activities (73,870)

76,440

The following table summarizes our cash flow activities for the Operating partnership for the six months to end June 30, 2021 and 2020:

                                                            2021           

2020

                                                               (In 

Thousands)

Net cash provided by operating activities                $ 118,502      $ 

117,871

Net cash used in investing activities                     (161,658)      

(245,772)

Cash outflow from financing activities (73,888) 76,026



Changes in cash flow for the six months ended June 30, 2021, compared to the
prior year comparable period are described as follows:
Operating Activities: Cash provided by operating activities increased $1.0
million for the Company (increased $0.6 million for the Operating Partnership),
primarily due to the following:
•increase in NOI from same store properties, acquired properties and recently
developed properties of $13.9 million offset by a decrease in NOI due to the
disposition of real estate of $7.3 million; and
•increase in accounts payable, accrued expenses, other liabilities, rents
received in advance and security deposits due to timing of cash payments; offset
by;
•increase in tenant accounts receivable, prepaid expenses and other assets due
to timing of cash receipts.
Investing Activities: Cash used in investing activities decreased $84.1 million,
primarily due to the following:
•increase of $60.6 million in net proceeds received from the disposition of real
estate in 2021 as compared to 2020;
•increase in distributions and a decrease in contributions from our Joint
Ventures of $24.0 million in 2021 as compared to 2020;
•decrease of $7.1 million in escrow deposits; and
•decrease of $8.2 million related to the acquisition of real estate; offset by:
•increase of $14.1 million related to the development of real estate and
payments for improvements and leasing commissions in 2021 as compared to 2020.
Financing Activities: Cash used in financing activities increased $150.3 million
for the Company (increased $149.9 million for the Operating Partnership),
primarily due to the following:
•decrease in net borrowings of our Unsecured Credit Facility of $102.0 million
in 2021 compared to 2020;
•increase in repayments of mortgage loans payable of $42.8 million in 2021
compared to 2020; and
•increase in dividend and unit distributions of $6.3 million due to the Company
increasing the dividend rate in 2021.
                                       39
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Market Risk
The following discussion about our risk-management activities includes
"forward-looking statements" that involve risk and uncertainties. Actual results
could differ materially from those projected in the forward-looking statements.
Our business subjects us to market risk from interest rates, as described below.
Interest Rate Risk
The following analysis presents the hypothetical gain or loss in earnings, cash
flows or fair value of the financial instruments and derivative instruments
which are held by us at June 30, 2021 that are sensitive to changes in interest
rates. While this analysis may have some use as a benchmark, it should not be
viewed as a forecast.
In the normal course of business, we also face risks that are either
non-financial or non-quantifiable. Such risks principally include credit risk
and legal risk and are not represented in the following analysis.
At June 30, 2021, $1,542.4 million or 96.3% of our total debt, excluding
unamortized debt issuance costs, was fixed rate debt. As of the same date, $60.0
million, or 3.7% of our total debt, excluding unamortized debt issuance costs,
was variable rate debt. At December 31, 2020, our total debt, excluding
unamortized debt issuance costs, was $1,602.7 million and 100% was fixed rate
debt. At June 30, 2021 and December 31, 2020, the fixed rate debt amounts
include variable rate debt that has been effectively swapped to a fixed rate
through the use of derivative instruments with an aggregate notional amount
outstanding of $460.0 million, that mitigate our exposure to our Unsecured Term
Loans' variable interest rates, which are based on LIBOR.
The use of derivative financial instruments allows us to manage the risks
increases in interest rates would have on our earnings and cash flows.
Currently, we do not enter into financial instruments for trading or other
speculative purposes.
For fixed rate debt, changes in interest rates generally affect the fair value
of the debt, but not our earnings or cash flows. Conversely, for variable rate
debt, changes in the base interest rate used to calculate the all-in interest
rate generally do not impact the fair value of the debt, but would affect our
future earnings and cash flows. The interest rate risk and changes in fair
market value of fixed rate debt generally do not have a significant impact on us
until we are required to refinance such debt. See Note 4 to the Consolidated
Financial Statements for a discussion of the maturity dates of our various fixed
rate debt.
Our variable rate debt is subject to risk based upon prevailing market interest
rates. If the LIBOR rates relevant to our variable rate debt were to have
increased 10%, we estimate that our interest expense during the six months ended
June 30, 2021 would have increased by approximately $0.001 million based on our
average outstanding floating-rate debt during the six months ended June 30,
2021. Additionally, if weighted average interest rates on our weighted average
fixed rate debt during the six months ended June 30, 2021 were to have increased
by 10% due to refinancing, interest expense would have increased by
approximately $2.9 million during the six months ended June 30, 2021.
On March 5, 2021, the Financial Conduct Authority ("FCA") that regulates LIBOR
announced that USD-LIBOR will no longer be published after June 30, 2023. The
Alternative Reference Rates Committee ("ARRC") has proposed that the Secured
Overnight Financing Rate ("SOFR") is the rate that represents best practice as
the alternative to USD-LIBOR for use in derivatives and other financial
contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced
market transition plan to SOFR from USD-LIBOR and organizations are currently
working on industry wide and company specific transition plans as it relates to
derivatives and cash markets exposed to USD-LIBOR.
We anticipate that LIBOR will continue to be available substantially in its
current form at least until June 30, 2023. Although many of our LIBOR-based
obligations provide for alternative methods of calculating the interest rate
payable if LIBOR is not reported, including the new debt agreements we entered
into and disclosed in subsequent events, the extent and manner of any future
changes with respect to methods of calculating LIBOR or replacing LIBOR with
another benchmark are unknown and impossible to predict at this time and, as
such, may result in interest rates that are materially higher than current
interest rates.We are monitoring this activity and evaluating the related risks.
As of June 30, 2021, the estimated fair value of our debt was approximately
$1,692.4 million based on our estimate of the then-current market interest
rates.




                                       40
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Supplemental Earnings Measure
Investors in and industry analysts following the real estate industry utilize
funds from operations ("FFO") and net operating income ("NOI") as supplemental
operating performance measures of an equity REIT. Historical cost accounting for
real estate assets in accordance with accounting principles generally accepted
in the United States of America ("GAAP") implicitly assumes that the value of
real estate assets diminishes predictably over time through depreciation. Since
real estate values instead have historically risen or fallen with market
conditions, many industry analysts and investors prefer to supplement operating
results that use historical cost accounting with measures such as FFO and NOI,
among others. We provide information related to FFO and same store NOI ("SS
NOI") both because such industry analysts are interested in such information,
and because our management believes FFO and SS NOI are important performance
measures. FFO and SS NOI are factors used by management in measuring our
performance, including for purposes of determining the compensation of our
executive officers under our 2021 incentive compensation plan.
Neither FFO nor SS NOI should be considered as a substitute for net income, or
any other measures derived in accordance with GAAP. Neither FFO nor SS NOI
represents cash generated from operating activities in accordance with GAAP and
neither should be considered as an alternative to cash flow from operating
activities as a measure of our liquidity, nor is either indicative of funds
available for our cash needs, including our ability to make cash distributions.
Funds From Operations
The National Association of Real Estate Investment Trusts ("NAREIT") has
recognized and defined for the real estate industry a supplemental measure of
REIT operating performance, FFO, that excludes historical cost depreciation,
among other items, from net income determined in accordance with GAAP. FFO is a
non-GAAP financial measure. FFO is calculated by us in accordance with the
definition adopted by the Board of Governors of NAREIT and may not be comparable
to other similarly titled measures of other companies. In accordance with the
restated NAREIT definition of FFO, we calculate FFO to be equal to net income
available to First Industrial Realty Trust, Inc.'s common stockholders and
participating securities, plus depreciation and other amortization of real
estate, plus impairment of real estate, minus gain or plus loss on sale of real
estate, net of any income tax provision or benefit associated with the sale of
real estate. We also exclude the same adjustments from our share of net income
from unconsolidated joint ventures.
Management believes that the use of FFO available to common stockholders and
participating securities, combined with net income (which remains the primary
measure of performance), improves the understanding of operating results of
REITs among the investing public and makes comparisons of REIT operating results
more meaningful. Management believes that, by excluding gains or losses related
to sales of real estate assets, impairment of real estate assets and real estate
asset depreciation and amortization, investors and analysts are able to identify
the operating results of the long-term assets that form the core of a REIT's
activity and use these operating results for assistance in comparing these
operating results between periods or to those of different companies.
The following table shows a reconciliation of net income available to common
stockholders and participating securities to the calculation of FFO available to
common stockholders and participating securities for the three and six months
ended June 30, 2021 and 2020.
                                                      Three Months Ended June 30,                 Six Months Ended June 30,
                                                        2021                  2020                 2021                  2020
                                                             (In thousands)                             (In thousands)
Net Income Available to First Industrial Realty
Trust, Inc.'s Common Stockholders and
Participating Securities                          $       51,936          $  35,669          $      114,134          $  76,303
Adjustments:
Depreciation and Other Amortization of Real
Estate                                                    32,234             32,032                  64,021             62,769

Gain on Sale of Real Estate                              (22,854)            (9,076)                (57,499)           (23,069)

Income Tax Provision - Allocable to Gain on Sale
of Real Estate, including Joint Ventures                   1,472                  -                   1,551                  -
Noncontrolling Interest Share of Adjustments                (247)              (484)                   (194)              (848)
Funds from Operations Available to First
Industrial Realty Trust, Inc.'s Common
Stockholders and Participating Securities         $       62,541          $ 

58.141 $ 122,013 $ 115,155

                                       41
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Same Store Net Operating Income
SS NOI is a non-GAAP financial measure that provides a measure of rental
operations and, as calculated by us, that does not factor in depreciation and
amortization, general and administrative expense, interest expense, income tax
benefit and expense, and equity in income or loss from our joint ventures. We
define SS NOI as revenues minus property expenses such as real estate taxes,
repairs and maintenance, property management, utilities, insurance and other
expenses, minus the NOI of properties that are not same store properties and
minus the impact of straight-line rent, above and below market rent amortization
and lease termination fees. We exclude straight-line rent and above (below)
market rent in calculating SS NOI because we believe it provides a better
measure of actual cash basis rental growth for a year-over-year comparison. As
so defined, SS NOI may not be comparable to same store net operating income or
similar measures reported by other REITs that define same store properties or
NOI differently. The major factors influencing SS NOI are occupancy levels,
rental rate increases or decreases and tenant recoveries increases or decreases.
Our success depends largely upon our ability to lease space and to recover the
operating costs associated with those leases from our tenants.
The following table shows a reconciliation of the same store revenues and
property expenses disclosed in the results of operations (and reconciled to
revenues and expenses reflected on the statements of operations) to SS NOI for
the three and six months ended June 30, 2021 and 2020.
                                         Three Months Ended June 30,                                    Six Months Ended June 30,
                                           2021                  2020             % Change               2021                  2020             % Change
                                                (In thousands)                                                (In thousands)
Same Store Revenues                  $      105,795          $ 100,075                             $      211,270          $ 201,092
Same Store Property Expenses                (27,218)           (23,750)                                   (55,434)           (48,232)
Same Store Net Operating Income
Before Same Store Adjustments        $       78,577          $  76,325              3.0%           $      155,836          $ 152,860              1.9%
Same Store Adjustments:

Straight-line Rent                           (2,044)            (1,393)                                    (4,387)            (3,038)
Above / Below Market Rent
Amortization                                   (220)              (249)                                      (445)              (530)
Lease Termination Fees                         (130)               (86)                                      (255)              (702)

Net operating income of the same business (A) $ 76,183 $ 74,597

         2.1%           $      150,749          $ 148,590              1.5%


(A) The six months ended June 30, 2020 includes $1.1 million of insurance
settlement gain related to a building destroyed by fire in 2016. Excluding this
gain, the percent increase to Same Store Net Operating Income would be 2.2% for
the six months ended June 30, 2020.
Subsequent Events
From July 1, 2021 to July 23, 2021, we acquired one land parcel for a purchase
price of $26.6 million, excluding transaction costs.
On July 7, 2021, we amended and restated our Unsecured Credit Facility to, among
other things, extend the maturity date and increase the borrowing capacity
thereunder to $750.0 million (as amended and restated, the "New Credit
Facility"). The New Credit Facility provides for interest-only payments
initially at LIBOR plus 77.5 basis points and a facility fee of 15 basis points.
The interest rate and facility fee are each subject to adjustment based on our
leverage and investment grade rating. The New Credit Facility matures on July 7,
2025, unless extended at our option pursuant to two six-month extension options,
subject to certain conditions. We may request the borrowing capacity under the
New Credit Facility be increased to $1.0 billion, subject to certain
restrictions.
Also on July 7, 2021, we amended and restated our 2020 Unsecured Term Loan to,
among other things, extend the maturity date of this $200.0 million unsecured
term loan (as amended and restated, the "2021 Unsecured Term Loan"). The 2021
Unsecured Term Loan provides for interest-only payments initially at LIBOR plus
85 basis points. The interest rate is subject to adjustment based on our
leverage and investment grade rating. The 2021 Unsecured Term Loan matures on
July 7, 2026. We may request the borrowing capacity under the 2021 Unsecured
Term Loan to be increased to $460.0 million, subject to certain restrictions.


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