CHICAGO, Oct. 27, 2016 /PRNewswire/ -- First
Industrial Realty Trust, Inc. (NYSE: FR), a leading fully
integrated owner, operator and developer of industrial real estate,
today announced results for the third quarter 2016. Diluted net
income available to common stockholders per share (EPS) was
$0.27 in the third quarter, compared
to $0.13 a year ago.
First Industrial's third quarter FFO was $0.37 per share/unit on a diluted basis, compared
to $0.35 per share/unit a year
ago.
"The industrial real estate market continues to experience
broad-based tenant demand that has exceeded new supply," said
Bruce W. Duncan, First Industrial's
chairman and CEO. "Reflective of this healthy environment, our team
delivered excellent rental rate growth during the quarter, along
with key development leasing wins."
Portfolio Performance – Third Quarter 2016
- In service occupancy was 95.4% at the end of the third quarter,
compared to 95.8% at the end of the second quarter of 2016, and
95.5% at the end of the third quarter of 2015. Dispositions helped
occupancy by 15 basis points since the end of the second quarter of
2016.
- Tenants were retained in 63.4% of square footage up for
renewal.
- Same property cash basis net operating income (NOI) increased
3.5%. Including lease termination fees, same property cash basis
NOI increased 3.4%.
- Rental rates increased 11.0% on a cash basis and increased
20.4% on a GAAP basis; leasing costs were $2.00 per square foot.
Development Leasing
In the third quarter, the Company signed:
- A full building 601,000 square-foot lease at First Park 94 -
Building I in the Chicago
market.
- A 69,000 square-foot expansion lease at its First Northwest
Commerce Center in Houston to
bring this 352,000 square-foot development to 100% leased.
In the fourth quarter to date, the Company signed:
- A full building 234,000 square-foot lease at First Arlington
Commerce Center II in Dallas.
Investment and Disposition Activities
In the third quarter, the Company:
- Acquired a 99,000 square-foot building in the San Diego market of Southern California for $11.9 million.
- Acquired a vacant, recently constructed 121,000 square-foot
development in the Chicago market
for $9.0 million.
- Acquired a 26-acre development site in Dallas for $3.0
million that can accommodate a 420,000 square-foot
building.
- Started its second development at First Park 94 - Building II
in the Chicago market, a 602,000
square-foot building with an estimated investment of $29.9 million.
- Started development of a 618,000 square-foot distribution
center in Phoenix with an
estimated investment of $32.8
million.
- Started a 243,000 square-foot development in the Inland Empire
of Southern California with an
estimated investment of $17.8
million.
In the fourth quarter to date, the Company:
- Acquired a 63,000 square-foot building in the Doral submarket of Miami for $8.4
million.
"Using the strength of our platform, we are developing and
acquiring high quality, well-located assets that meet the needs of
a range of tenants and will contribute to long-term cash flow
growth," said Peter Baccile,
president. "We will continue to enhance the competitive position of
our Company through active portfolio management."
Outlook for 2016
Mr. Duncan stated, "Due to the incremental compensation related
to our new CEO hire and an increase in our projected
performance-based compensation, we are reducing by $0.01 the midpoint of our FFO per share guidance
before the impact of acquisition costs. With fundamentals strong,
we are excited about the long-term opportunities to drive cash flow
and value within our development program, new value-add
investments, and throughout our portfolio."
|
|
|
|
Low End
of
|
|
High End
of
|
|
|
|
|
Guidance for
2016
|
|
Guidance for
2016
|
|
|
|
|
(Per
share/unit)
|
|
(Per
share/unit)
|
|
|
|
|
|
|
|
|
Net Income Available
to Common Stockholders
|
|
|
0.96
|
|
1.00
|
|
Add: Real
Estate Depreciation/Amortization
|
|
|
0.97
|
|
0.97
|
|
Less: Non-NAREIT
Compliant Gains Through 3Q16
|
|
|
(0.51)
|
|
(0.51)
|
|
FFO (NAREIT
Definition)
|
|
|
$1.42
|
|
$1.46
|
|
|
|
|
|
|
|
|
FFO Before Impact of
Acquisition Costs
|
|
|
$1.43
|
|
$1.47
|
The following assumptions were used:
- Average quarter-end in service occupancy of 95.25% to 95.75%, a
narrowing of the range.
- Fourth quarter same-store NOI on a cash basis before
termination fees of 2.5% to 4.0%. This implies a quarterly average
same-store NOI range for 2016 of approximately 5.5% to 5.9%,
compared to the midpoint of our prior guidance of 5.0% from our
second quarter results press release.
- General and administrative expense of approximately
$26.5 million to $27.5 million, an
increase of $1.5 million reflecting
increased performance-related compensation and incremental
compensation expense related to our new CEO hire.
- Guidance includes the incremental costs related to the
Company's developments under construction as of September 30, 2016. In total, the Company expects
to capitalize $0.03 per share of
interest related to its development projects in 2016.
- Guidance reflects the aforementioned $8.4 million acquisition in Miami in the fourth quarter to-date.
- Other than the above, guidance does not include the impact of:
- any future debt repurchases or future debt issuances,
- any future investments,
- any future property sales,
- any future impairment gains or losses,
- any future NAREIT-compliant gains or losses, or
- any future equity issuances.
A number of factors could impact our ability to deliver results
in line with our assumptions, such as interest rates, the economy,
the supply and demand of industrial real estate, the availability
and terms of financing to potential acquirers of real estate, the
timing and yields for divestment and investment, and numerous other
variables. There can be no assurance that First Industrial
can achieve such results.
FFO Definition
First Industrial reports FFO in accordance with the NAREIT
definition to provide a comparative measure to other REITs. NAREIT
recommends that REITs define FFO as net income, excluding gains (or
losses) from the sale of previously depreciated property, plus
depreciation and amortization, excluding impairments from
previously depreciated assets, and after adjustments for
unconsolidated partnerships and joint ventures.
About First Industrial Realty Trust, Inc.
First Industrial Realty Trust, Inc. (NYSE: FR) is a leading
fully integrated owner, operator, and developer of industrial real
estate with a track record of providing industry leading customer
service to multinational corporations and regional customers.
Across major markets in the United
States, our local market experts manage, lease, buy,
(re)develop, and sell bulk and regional distribution centers, light
industrial, and other industrial facility types. In total, we own
and have under development approximately 64.9 million square feet
of industrial space as of September 30,
2016. For more information, please visit us at
www.firstindustrial.com.
Forward-Looking Information
This press release and the presentation to which it refers
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. 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; changes in
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; difficulties in identifying
and consummating acquisitions and dispositions; 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;
changes in general accounting principles, policies and guidelines
applicable to real estate investment trusts; and other risks and
uncertainties described under the heading "Risk Factors" and
elsewhere in our annual report on Form 10-K for the year ended
December 31, 2015, 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 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 press release or the dates
indicated in the statements. We assume no obligation to update or
supplement forward-looking statements. For further information on
these and other factors that could impact us and the statements
contained herein, reference should be made to our filings with the
SEC.
A schedule of selected financial information is
attached.
First Industrial will host its quarterly conference call on
Friday, October 28, 2016 at
11:00 a.m. EDT (10:00 a.m. CDT). The conference call may be
accessed by dialing (888) 823-7459, passcode "First Industrial."
The conference call will also be webcast live on the "Investors"
page of the Company's website at www.firstindustrial.com. The
replay will also be available on the website.
The Company's third quarter 2016 supplemental information can be
viewed at www.firstindustrial.com under the "Investors"
tab.
FIRST INDUSTRIAL
REALTY TRUST, INC.
|
Selected Financial
Data
|
(Unaudited)
|
(In
thousands except per share/Unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Statement of
Operations and Other Data:
|
|
|
|
|
|
|
|
Total Revenues
|
$
93,562
|
|
$
92,159
|
|
$
280,044
|
|
$
272,614
|
|
|
|
|
|
|
|
|
Property Expenses
|
(27,539)
|
|
(28,044)
|
|
(82,781)
|
|
(85,662)
|
General and Administrative
|
(5,983)
|
|
(5,900)
|
|
(20,090)
|
|
(19,026)
|
Acquisition Costs
|
(119)
|
|
(45)
|
|
(338)
|
|
(364)
|
Impairment of Real Estate
|
-
|
|
(626)
|
|
-
|
|
(626)
|
Depreciation of Corporate FF&E
|
(213)
|
|
(179)
|
|
(580)
|
|
(520)
|
Depreciation and Other Amortization of Real Estate
|
(28,602)
|
|
(28,410)
|
|
(88,088)
|
|
(84,419)
|
|
|
|
|
|
|
|
|
Total Expenses
|
(62,456)
|
|
(63,204)
|
|
(191,877)
|
|
(190,617)
|
|
|
|
|
|
|
|
|
Gain on Sale of Real Estate
|
16,802
|
|
2,957
|
|
60,828
|
|
13,084
|
Interest Expense
|
(14,407)
|
|
(16,674)
|
|
(45,255)
|
|
(49,679)
|
Amortization of Deferred Financing Costs
|
(782)
|
|
(781)
|
|
(2,437)
|
|
(2,291)
|
Mark-to-Market and Settlement Loss on Interest Rate Protection
Agreements
|
-
|
|
-
|
|
-
|
|
(11,546)
|
|
|
|
|
|
|
|
|
Income from
Continuing Operations Before Equity in (Loss) Income of
Joint Ventures and Income Tax
(Provision) Benefit
|
|
|
|
|
|
|
|
32,719
|
|
14,457
|
|
101,303
|
|
31,565
|
|
|
|
|
|
|
|
|
Equity in (Loss) Income of Joint Ventures (a)
|
-
|
|
(6)
|
|
-
|
|
61
|
Income Tax (Provision) Benefit
|
(51)
|
|
14
|
|
(232)
|
|
(127)
|
|
|
|
|
|
|
|
|
Net
Income
|
32,668
|
|
14,465
|
|
101,071
|
|
31,499
|
|
|
|
|
|
|
|
|
Net Income Attributable to the Noncontrolling
Interest
|
(1,149)
|
|
(548)
|
|
(3,635)
|
|
(1,197)
|
|
|
|
|
|
|
|
|
Net Income
Available to First Industrial Realty Trust, Inc.'s
Common Stockholders and Participating
Securities
|
|
|
|
|
|
|
|
$
31,519
|
|
$
13,917
|
|
$
97,436
|
|
$
30,302
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET INCOME AVAILABLE TO FIRST INDUSTRIAL REALTY TRUST, INC.'S
COMMON STOCKHOLDERS AND
PARTICIPATING SECURITIES TO FFO (b) AND AFFO (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Available to First Industrial Realty Trust, Inc.'s
Common Stockholders and Participating
Securities
|
|
|
|
|
|
|
|
$
31,519
|
|
$
13,917
|
|
$
97,436
|
|
$
30,302
|
|
|
|
|
|
|
|
|
Depreciation and Other Amortization of Real Estate
|
28,602
|
|
28,410
|
|
88,088
|
|
84,419
|
Impairment of Depreciated Real Estate
|
-
|
|
626
|
|
-
|
|
626
|
Noncontrolling Interest
|
1,149
|
|
548
|
|
3,635
|
|
1,197
|
Equity in Depreciation and Other Amortization of Joint Ventures
(a)
|
-
|
|
-
|
|
-
|
|
17
|
Gain on Sale of Depreciable Real Estate
|
(16,802)
|
|
(2,883)
|
|
(60,828)
|
|
(13,010)
|
Gain on Sale of Depreciable Real Estate from Joint Ventures
(a)
|
-
|
|
-
|
|
-
|
|
(63)
|
|
|
|
|
|
|
|
|
Funds From
Operations (NAREIT) ("FFO") (b)
|
$
44,468
|
|
$
40,618
|
|
$
128,331
|
|
$
103,488
|
|
|
|
|
|
|
|
|
Restricted Stock/Unit Amortization
|
1,428
|
|
1,507
|
|
5,898
|
|
5,574
|
Amortization of Debt Discounts / (Premiums) and Hedge
Costs
|
64
|
|
148
|
|
200
|
|
444
|
Amortization of Deferred Financing Costs
|
782
|
|
781
|
|
2,437
|
|
2,291
|
Depreciation of Corporate FF&E
|
213
|
|
179
|
|
580
|
|
520
|
Mark-to-Market and Settlement Loss on Interest Rate Protection
Agreements
|
-
|
|
-
|
|
-
|
|
11,546
|
Gain on Sale of Non-Depreciable Real Estate
|
-
|
|
(74)
|
|
-
|
|
(74)
|
Non-incremental Building Improvements
|
(5,088)
|
|
(4,697)
|
|
(9,034)
|
|
(10,256)
|
Non-incremental Leasing Costs
|
(6,435)
|
|
(6,726)
|
|
(19,556)
|
|
(20,307)
|
Capitalized Interest
|
(960)
|
|
(660)
|
|
(2,279)
|
|
(1,685)
|
Capitalized Overhead
|
(148)
|
|
(73)
|
|
(389)
|
|
(167)
|
Straight-Line Rent, Amortization of Above (Below) Market
Leases
|
|
|
|
|
|
|
|
and Lease
Inducements
|
(1,833)
|
|
(1,303)
|
|
(5,150)
|
|
(5,030)
|
|
|
|
|
|
|
|
|
Adjusted
Funds From Operations ("AFFO") (b)
|
$
32,491
|
|
$
29,700
|
|
$
101,038
|
|
$
86,344
|
FIRST INDUSTRIAL
REALTY TRUST, INC.
|
Selected Financial
Data
|
(Unaudited)
|
(In
thousands except per share/Unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET INCOME AVAILABLE TO FIRST INDUSTRIAL REALTY TRUST, INC.'S
COMMON STOCKHOLDERS AND
PARTICIPATING SECURITIES TO EBITDA (b) AND NOI (b)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Net Income
Available to First Industrial Realty Trust, Inc.'s
Common Stockholders and Participating
Securities
|
|
|
|
|
|
|
|
$
31,519
|
|
$
13,917
|
|
$
97,436
|
|
$
30,302
|
|
|
|
|
|
|
|
|
Interest Expense
|
14,407
|
|
16,674
|
|
45,255
|
|
49,679
|
Depreciation and Other Amortization of Real Estate
|
28,602
|
|
28,410
|
|
88,088
|
|
84,419
|
Impairment of Depreciated Real Estate
|
-
|
|
626
|
|
-
|
|
626
|
Income Tax Provision (Benefit)
|
51
|
|
(14)
|
|
232
|
|
127
|
Mark-to-Market and Settlement Loss on Interest Rate Protection
Agreements
|
-
|
|
-
|
|
-
|
|
11,546
|
Noncontrolling Interest
|
1,149
|
|
548
|
|
3,635
|
|
1,197
|
Amortization of Deferred Financing Costs
|
782
|
|
781
|
|
2,437
|
|
2,291
|
Depreciation of Corporate FF&E
|
213
|
|
179
|
|
580
|
|
520
|
Equity in Depreciation and Other Amortization of Joint Ventures
(a)
|
-
|
|
-
|
|
-
|
|
17
|
Gain on Sale of Non-Depreciable Real Estate
|
-
|
|
(74)
|
|
-
|
|
(74)
|
Gain on Sale of Depreciable Real Estate
|
(16,802)
|
|
(2,883)
|
|
(60,828)
|
|
(13,010)
|
Gain on Sale of Depreciable Real Estate from Joint Ventures
(a)
|
-
|
|
-
|
|
-
|
|
(63)
|
|
|
|
|
|
|
|
|
EBITDA
(b)
|
$
59,921
|
|
$
58,164
|
|
$
176,835
|
|
$
167,577
|
|
|
|
|
|
|
|
|
General and Administrative
|
5,983
|
|
5,900
|
|
20,090
|
|
19,026
|
Acquisition Costs
|
119
|
|
45
|
|
338
|
|
364
|
FFO from Joint Ventures (b)
|
-
|
|
6
|
|
-
|
|
(79)
|
|
|
|
|
|
|
|
|
Net Operating
Income ("NOI") (b)
|
$
66,023
|
|
$
64,115
|
|
$
197,263
|
|
$
186,888
|
|
|
|
|
|
|
|
|
Weighted Avg.
Number of Shares/Units Outstanding - Basic
|
120,740
|
|
114,720
|
|
118,781
|
|
114,705
|
Weighted Avg.
Number of Shares Outstanding - Basic
|
116,467
|
|
110,356
|
|
114,491
|
|
110,338
|
|
|
|
|
|
|
|
|
Weighted Avg.
Number of Shares/Units Outstanding - Diluted
|
121,137
|
|
115,212
|
|
119,099
|
|
115,102
|
Weighted Avg.
Number of Shares Outstanding - Diluted
|
116,864
|
|
110,848
|
|
114,809
|
|
110,735
|
|
|
|
|
|
|
|
|
Per Share/Unit
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Available to First Industrial Realty Trust, Inc.'s
|
|
|
|
|
|
|
|
Common
Stockholders and Participating Securities
|
$
31,519
|
|
$
13,917
|
|
$
97,436
|
|
$
30,302
|
Less:
Allocation to Participating Securities
|
(110)
|
|
(50)
|
|
(329)
|
|
(141)
|
Net Income
Available to First Industrial Realty Trust, Inc.'s Common
Stockholders
|
$
31,409
|
|
$
13,867
|
|
$
97,107
|
|
$
30,161
|
Basic/Diluted
Per Share
|
$
0.27
|
|
$
0.13
|
|
$
0.85
|
|
$
0.27
|
|
|
|
|
|
|
|
|
FFO
(NAREIT)
|
$
44,468
|
|
$
40,618
|
|
$
128,331
|
|
$
103,488
|
Less:
Allocation to Participating Securities
|
(150)
|
|
(137)
|
|
(417)
|
|
(330)
|
FFO (NAREIT)
Allocable to Common Stockholders and Unitholders
|
$
44,318
|
|
$
40,481
|
|
$
127,914
|
|
$
103,158
|
Basic Per
Share/Unit
|
$
0.37
|
|
$
0.35
|
|
$
1.08
|
|
$
0.90
|
Diluted Per
Share/Unit
|
$
0.37
|
|
$
0.35
|
|
$
1.07
|
|
$
0.90
|
|
|
|
|
|
|
|
|
Common
Dividends/Distributions Per Share/Unit
|
$
0.1900
|
|
$
0.1275
|
|
$
0.5700
|
|
$
0.3825
|
|
|
|
|
|
|
|
|
Balance Sheet Data
(end of period):
|
|
|
|
|
|
|
|
Gross Real Estate
Investment
|
$
3,364,039
|
|
$
3,268,420
|
|
|
|
|
Total Assets
(c)
|
2,767,563
|
|
2,698,177
|
|
|
|
|
Debt (c)
|
1,325,092
|
|
1,462,341
|
|
|
|
|
Total Liabilities
(c)
|
1,504,722
|
|
1,618,443
|
|
|
|
|
Total
Equity
|
$
1,262,841
|
|
$
1,079,734
|
|
|
|
|
a) Represents our pro rata share of net income (loss),
depreciation and amortization on real estate and gain (loss) on
sale of depreciable real estate, if applicable.
b) Investors in, and analysts following, the real estate
industry utilize funds from operations ("FFO"), net operating
income ("NOI"), EBITDA and adjusted funds from operations ("AFFO"),
variously defined below, as supplemental performance
measures. While we believe net income available to First
Industrial Realty Trust, Inc.'s common stockholders and
participating securities, as defined by GAAP, is the most
appropriate measure, it considers FFO, NOI, EBITDA and AFFO, given
their wide use by, and relevance to investors and analysts,
appropriate supplemental performance measures. FFO,
reflecting the assumption that real estate asset values rise or
fall with market conditions, principally adjusts for the effects of
GAAP depreciation and amortization of real estate assets. NOI
provides a measure of rental operations, and does not factor in
depreciation and amortization and non-property specific expenses
such as general and administrative expenses. EBITDA provides
a tool to further evaluate the ability to incur and service debt
and to fund dividends and other cash needs. AFFO provides a
tool to further evaluate the ability to fund dividends. In
addition, FFO, NOI, EBITDA and AFFO are commonly used in various
ratios, pricing multiples/yields and returns and valuation
calculations used to measure financial position, performance and
value.
As used herein, 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 depreciable
real estate, minus gain on sale of depreciable real estate.
NOI is defined as our revenues, minus property expenses such as
real estate taxes, repairs and maintenance, property management,
utilities, insurance and other expenses.
EBITDA is defined as NOI plus the equity in FFO of our joint
ventures, which were accounted for under the equity method of
accounting, minus general and administrative expenses and
acquisition costs.
AFFO is defined as EBITDA minus GAAP interest expense, minus
capitalized interest and overhead, plus amortization of debt
discounts / (premiums) and hedge costs, minus straight-line rental
income, amortization of above (below) market leases and lease
inducements, minus provision for income taxes or plus benefit for
income taxes, plus restricted stock amortization, minus
non-incremental capital expenditures. Non-incremental capital
expenditures are building improvements and leasing costs required
to maintain current revenues.
FFO, NOI, EBITDA and AFFO do not represent cash generated from
operating activities in accordance with GAAP and are not
necessarily indicative of cash available to fund cash needs,
including the repayment of principal on debt and payment of
dividends and distributions. FFO, NOI, EBITDA and AFFO should
not be considered as substitutes for net income available to common
stockholders and participating securities (calculated in accordance
with GAAP) as a measure of results of operations or cash flows
(calculated in accordance with GAAP) as a measure of
liquidity. FFO, NOI, EBITDA and AFFO as currently calculated
by us may not be comparable to similarly titled, but variously
calculated, measures of other
REITs.
In addition, we consider cash-basis same store NOI ("SS NOI") to
be a useful supplemental measure of our operating performance. Same
store properties include all properties owned prior to January 1, 2015 and held as an in service
property through the end of the current reporting period, and
developments and redevelopments that were placed in service or were
substantially completed for 12 months prior to January 1, 2015 (the "Same Store Pool"). We
define SS NOI as NOI, less NOI of properties not in the Same Store
Pool, less the impact of straight-line rent, the amortization of
lease inducements and the amortization of above/below market rent.
For the quarters ended September 30,
2016 and 2015, SS NOI before same store adjustments was
$61,248 and $59,705, respectively; the impact of
straight-line rent, the amortization of lease inducements and the
amortization of above/below market rent was $38 and $(407),
respectively. Lease termination fees of $(11) and $(77) for
the quarters ended September 30, 2016
and 2015, respectively, should also be excluded in order to
calculate SS NOI w/o Termination Fees. We exclude straight-line
rent, amortization of lease inducements 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. In addition, we believe that SS NOI helps the investing
public compare the operating performance of a company's real estate
as compared to other companies. While SS NOI is a relevant and
widely used measure of operating performance of real estate
investment trusts, it does not represent cash flow from operations
or net income as defined by GAAP and should not be considered as an
alternative to those measures in evaluating our liquidity or
operating performance. SS NOI also does not reflect general and
administrative expense, acquisition costs, interest expense,
depreciation and amortization, impairment charges, equity in income
and loss from joint ventures, income tax benefit and expense, sale
of real estate, mark-to-market and settlement loss on interest rate
protection agreements, capital expenditures and leasing costs, or
trends in development and construction activities that could
materially impact our results from operations. Further, our
computation of SS NOI may not be comparable to that of other real
estate companies, as they may use different methodologies for
calculating SS NOI.
c) Effective January 1, 2016, we
adopted Accounting Standards Update ("ASU") No. 2015-03,
"Simplifying the Presentation of Debt Issuance Costs" ("ASU
2015-03"), which amended the presentation of debt issuance costs on
the consolidated balance sheet. ASU 2015-03 requires that debt
issuance costs related to a recognized debt liability be presented
in the balance sheet as a direct deduction from the carrying amount
of that debt liability, consistent with debt discounts, instead of
as an asset. The adoption of ASU 2015-03 was applied
retrospectively. The debt issuance costs related to the Unsecured
Credit Facility remain classified as an asset and are included in
prepaid expenses and other assets, net on the consolidated balance
sheets.
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SOURCE First Industrial Realty Trust, Inc.