CHICAGO, April 23, 2019 /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 first quarter of 2019. Diluted net income available
to common stockholders per share (EPS) was $0.19 compared to $0.30 a year ago.
First Industrial's first quarter FFO was $0.41 per share/unit on a diluted basis, compared
to $0.38 per share/unit a year ago.
First quarter 2018 FFO excluding the severance and impairment
charge was $0.40 per share.
"We continue to see broad-based demand for industrial real
estate, reflected in our recent leasing wins at our developments
and value-add acquisitions, as well as our portfolio performance,"
said Peter E. Baccile, First
Industrial's president and chief executive officer. "Given low
national vacancy levels and supply and demand near equilibrium, the
environment for rental rate growth in the sector remains
favorable."
Portfolio Performance
- In service occupancy was 97.3% at the end of the first quarter
of 2019, compared to 98.5% at the end of the fourth quarter of
2018, and 97.1% at the end of the first quarter of 2018. Tenants
were retained in 86.0% of square footage up for renewal.
- Same property cash basis net operating income ("SS NOI")
increased 3.2%, reflecting contractual rent escalations, increased
rental rates on leasing and lower free rent, offset by the negative
impact of tax true-ups in markets where taxes are paid in
arrears.
- Rental rates increased 8.0% on a cash basis and increased 16.7%
on a straight-line basis; leasing costs were $1.35 per square foot.
- Cash rental rate change for 2019 rollovers signed through
April 23rd was 13.0%.
Development and Value-Add Acquisition Leasing
During the first quarter, the Company:
- Pre-leased 100% of its First Perry Logistics Center, a 240,000
square-foot building in the Inland Empire.
- Leased 56,000 square feet of its 173,000 square-foot First
Orchard 88 Business Center development forward in Chicago.
- Pre-leased 63,000 square feet of the two-building, 345,000
square-foot First Park 121 in Dallas.
During the second quarter to date, the Company:
- Leased 100% of its 739,000 square-foot First Logistics Center @
I-78/81 Building A in Central
Pennsylvania to Ferrero U.S.A., Inc., the U.S. arm of the
third-largest confectionery company in the world. The lease will
commence by the fourth quarter.
- Leased 100% of the 221,000 square-foot and 137,000 square-foot
facilities at The Ranch by First Industrial in the Inland Empire,
bringing that six-building park to 100% occupancy.
- Leased 67,000 square feet of a 171,000 square-foot value-add
acquisition in Los Angeles.
- Leased 207,000 square feet of its 356,000 square-foot First Joliet Logistics Center in Chicago.
- Leased 80,000 square feet at First 290 @ Guhn Road, a 126,000
square-foot development in Houston.
Investment and Disposition Activities
In the first quarter of 2019, the Company:
- Commenced development of five projects comprised of seven
buildings totaling 1.1 million square feet with an estimated total
investment of $108.1 million:
-
- First Redwood Logistics Center,
Inland Empire, two buildings, 358,000 square feet and 44,000 square
feet, $47.4 million total estimated
investment.
- First Grand Parkway Commerce Center, Houston, two buildings, 198,000 square feet
and 172,000 square feet, $28.5
million total estimated investment.
- First Fossil Creek Commerce Center, Dallas, 199,000 square feet, $12.4 million estimated investment.
- First Park @ Central Crossing III, New Jersey, 120,000 square feet, $12.1 million estimated investment.
- Build-to-suit, Phoenix, 50,000
square feet, $7.7 million estimated
investment.
- Acquired the aforementioned 173,000 square-foot First Orchard
88 Business Center in Chicago for
$12.3 million.
- Acquired one land parcel for the aforementioned build-to-suit
in Phoenix for $1.8 million; also acquired a 16-acre site in the
Inland Empire East for $4.2 million
developable to 301,000 square feet.
- Sold one building, 67,000 square feet in San Diego, for $10.5
million.
- Sold a 55-acre parcel in its First Park @ PV303 joint venture;
First Industrial's share of the sales price was $5.0 million.
In the second quarter, the Company:
- Acquired a 28-acre site in Dallas adjacent to its First Park 121
development for $7.4 million
developable to 434,000 square feet.
- Sold an 8,400 square-foot space in Miami for $1.1
million.
- Sold a 147-acre parcel in its First Park @ PV303 joint venture; First Industrial's
share of the sales price was $18.2
million.
"Our team continues to create value for shareholders by sourcing
profitable development and value-add acquisitions and executing on
lease-up," said Johannson Yap, First
Industrial's chief investment officer. "While competition for sites
and buildings remains intense, we are levering the strength of our
platform to replenish our pipeline to grow and further enhance our
portfolio."
Capital
During the first quarter, the Company:
- Paid off $72 million of mortgage
loans at a weighted average interest rate of 7.8%.
- Paid a common dividend of $0.23
per share/unit for the quarter ending March
31, 2019 on April 15, 2019 to
stockholders of record on March 29,
2019, as previously disclosed. The new dividend rate
represented a 5.7% increase from the prior rate of $0.2175 per share/unit.
Outlook for 2019
Mr. Baccile stated, "On the strength of our development and
value-add leasing thus far in 2019, we are increasing the midpoint
of our FFO guidance by $0.01. Through
our investments and our existing portfolio, we are providing
quality logistics real estate that supports our customers' growth
and supply chain initiatives, while delivering long-term cash flow
growth for shareholders."
|
|
Low End
of
|
|
High End
of
|
|
|
Guidance for
2019
|
|
Guidance for
2019
|
|
|
(Per
share/unit)
|
|
(Per
share/unit)
|
|
|
|
|
|
Net Income
|
|
0.80
|
|
0.90
|
Add: Real
Estate Depreciation/Amortization
|
|
0.92
|
|
0.92
|
Less: Net
Gain on Sale of Real Estate Including FR's Share of Joint Venture
Gain, Net of Allocable Income Tax Provision, Through April 23,
2019
|
|
(0.07)
|
|
(0.07)
|
|
|
|
|
|
FFO (NAREIT
Definition)
|
|
$1.65
|
|
$1.75
|
The following assumptions were used:
- Average quarter-end in service occupancy of 96.75% to
97.75%.
- Same-store NOI growth on a cash basis before termination fees
of 1.5% to 3.0% for the full year.
- General and administrative expense of approximately
$27.5 million to $28.5 million.
- Guidance includes the incremental costs expected in 2019
related to the Company's developments completed and under
construction as of March 31, 2019. In
total, the Company expects to capitalize $0.03 per share of interest related to these
development projects in 2019.
- Guidance reflects the expected payoff of an approximately
$33 million secured debt maturity in
the third quarter and an approximately $1
million secured debt maturity in the fourth quarter with a
weighted average interest rate of 7.5%.
- Other than the above, guidance does not include the impact
of:
-
- any other future debt repurchases prior to maturity or future
debt issuances,
- any future investments or property sales after the date of this
earnings release,
- any future gains related to the final settlement of two
insurance claims for damaged properties previously disclosed,
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.
Conference Call
First Industrial will host its quarterly conference call on
Wednesday, April 24, 2019 at
10:00 a.m. CDT (11:00 a.m. EDT). 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 first quarter 2019 supplemental information can be
viewed at www.firstindustrial.com under the "Investors"
tab.
FFO Definition
In accordance with the restated NAREIT definition of FFO adopted
by the Company effective January 1,
2019, First Industrial calculates 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.
First Industrial also excludes the same adjustments from its share
of net income from an unconsolidated joint venture. For the
comparative 2018 period, if applicable, gain and losses from the
sale of non-depreciable real estate as well as impairment of
non-depreciable real estate were not excluded from FFO.
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 67.1 million square feet
of industrial space as of March 31,
2019. 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, 2018, 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
REALTY TRUST, INC.
|
Selected Financial
Data
|
(Unaudited)
|
(In
thousands except per share/Unit data)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
March
31,
|
|
|
2019
|
|
2018
|
Statements of
Operations and Other Data:
|
|
|
|
|
Total Revenues (a)
|
|
$
104,541
|
|
$
99,771
|
|
|
|
|
|
Property Expenses (a)
|
|
(30,168)
|
|
(29,411)
|
General and Administrative (b)
|
|
(6,802)
|
|
(8,143)
|
Impairment of Real Estate
|
|
-
|
|
(2,756)
|
Depreciation of Corporate FF&E
|
|
(200)
|
|
(183)
|
Depreciation and Other Amortization of Real Estate
|
|
(29,855)
|
|
(28,132)
|
|
|
|
|
|
Total
Expenses
|
|
(67,025)
|
|
(68,625)
|
|
|
|
|
|
(Loss) Gain on Sale of Real Estate
|
|
(208)
|
|
20,089
|
Interest Expense
|
|
(12,767)
|
|
(12,791)
|
Amortization of Debt Issuance Costs
|
|
(831)
|
|
(855)
|
Loss from Retirement of Debt
|
|
-
|
|
(39)
|
|
|
|
|
|
Income from
Operations Before Equity in Income of
|
|
|
|
|
Joint Venture and Income Tax Provision
|
|
23,710
|
|
37,550
|
|
|
|
|
|
Equity in Income of Joint Venture
|
|
844
|
|
-
|
Income Tax Provision
|
|
(214)
|
|
(86)
|
|
|
|
|
|
Net Income
|
|
24,340
|
|
37,464
|
|
|
|
|
|
Net Income Attributable to the Noncontrolling
Interest
|
|
(537)
|
|
(1,172)
|
|
|
|
|
|
Net Income Available to First Industrial Realty Trust,
Inc.'s
|
|
|
|
|
Common Stockholders and Participating
Securities
|
|
$
23,803
|
|
$
36,292
|
|
|
|
|
|
RECONCILIATION OF NET INCOME AVAILABLE
TO
|
|
|
|
|
FIRST
INDUSTRIAL REALTY TRUST, INC.'S COMMON
|
|
|
|
|
STOCKHOLDERS
AND PARTICIPATING SECURITIES TO
|
|
|
|
|
FFO (c) AND
AFFO (c)
|
|
|
|
|
|
|
|
|
|
Net Income Available to
First Industrial Realty Trust, Inc.'s
|
|
|
|
|
Common Stockholders and Participating
Securities
|
|
$
23,803
|
|
$
36,292
|
|
|
|
|
|
Depreciation and Other
Amortization of Real Estate
|
|
29,855
|
|
28,132
|
Impairment of Depreciable
Real Estate
|
|
-
|
|
2,285
|
Noncontrolling
Interest
|
|
537
|
|
1,172
|
Loss (Gain) on Sale of
Depreciable Real Estate
|
|
208
|
|
(20,073)
|
Gain on Sale of Real Estate
from Joint Venture
|
|
(967)
|
|
-
|
Income Tax Provision - Gain
on Sale of Real Estate from Joint Venture
|
|
218
|
|
-
|
|
|
|
|
|
Funds From Operations
(NAREIT) ("FFO") (c)
|
|
$
53,654
|
|
$
47,808
|
|
|
|
|
|
Loss from Retirement of
Debt
|
|
-
|
|
39
|
Amortization of Stock Based
Compensation
|
|
1,762
|
|
1,689
|
Amortization of Debt
Discounts (Premiums) and Hedge Costs
|
|
25
|
|
(14)
|
Amortization of Debt
Issuance Costs
|
|
831
|
|
855
|
Depreciation of Corporate
FF&E
|
|
200
|
|
183
|
Impairment of
Non-Depreciable Real Estate
|
|
-
|
|
471
|
Gain on Sale of
Non-Depreciable Real Estate
|
|
-
|
|
(16)
|
Non-incremental Building
Improvements
|
|
(1,551)
|
|
(937)
|
Non-incremental Leasing
Costs
|
|
(3,598)
|
|
(5,594)
|
Capitalized
Interest
|
|
(944)
|
|
(1,602)
|
Capitalized
Overhead
|
|
(794)
|
|
(104)
|
Straight-Line Rent,
Amortization of Above (Below) Market Leases
|
|
|
|
|
and Lease
Inducements
|
|
(3,075)
|
|
(775)
|
|
|
|
|
|
Adjusted Funds From
Operations ("AFFO") (c)
|
|
$
46,510
|
|
$
42,003
|
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
|
|
Three Months
Ended
|
STOCKHOLDERS
AND PARTICIPATING SECURITIES TO
|
|
March
31,
|
|
March
31,
|
ADJUSTED
EBITDA (c) AND NOI (c)
|
|
2019
|
|
2018
|
|
|
|
|
|
Net Income Available to
First Industrial Realty Trust, Inc.'s
|
|
|
|
|
Common Stockholders and Participating
Securities
|
|
$
23,803
|
|
$
36,292
|
|
|
|
|
|
Interest
Expense
|
|
12,767
|
|
12,791
|
Depreciation and Other
Amortization of Real Estate
|
|
29,855
|
|
28,132
|
Impairment of Real
Estate
|
|
-
|
|
2,756
|
Severance Expense
(b)
|
|
-
|
|
1,298
|
Income Tax
Provision
|
|
214
|
|
86
|
Noncontrolling
Interest
|
|
537
|
|
1,172
|
Loss from Retirement of
Debt
|
|
-
|
|
39
|
Amortization of Debt
Issuance Costs
|
|
831
|
|
855
|
Depreciation of Corporate
FF&E
|
|
200
|
|
183
|
Loss (Gain) on Sale of Real
Estate
|
|
208
|
|
(20,089)
|
Gain on Sale of Real Estate
from Joint Venture
|
|
(967)
|
|
-
|
|
|
|
|
|
Adjusted EBITDA
(c)
|
|
$
67,448
|
|
$
63,515
|
|
|
|
|
|
General and Administrative
(b)
|
|
6,802
|
|
6,845
|
FFO from Joint
Venture
|
|
123
|
|
-
|
|
|
|
|
|
Net Operating Income
("NOI") (c)
|
|
$
74,373
|
|
$
70,360
|
|
|
|
|
|
Non-Same Store
NOI
|
|
(4,265)
|
|
(2,266)
|
|
|
|
|
|
Same Store NOI Before
Same Store Adjustments (c)
|
|
$
70,108
|
|
$
68,094
|
|
|
|
|
|
Straight-line
Rent
|
|
101
|
|
(594)
|
Above (Below) Market Lease
Amortization
|
|
(251)
|
|
(253)
|
Lease Termination
Fees
|
|
(571)
|
|
(11)
|
|
|
|
|
|
Same Store NOI (Cash
Basis without Termination Fees) (c)
|
|
$
69,387
|
|
$
67,236
|
|
|
|
|
|
Weighted Avg. Number
of Shares/Units Outstanding - Basic
|
|
128,818
|
|
123,729
|
Weighted Avg. Number
of Shares Outstanding - Basic
|
|
126,194
|
|
119,846
|
|
|
|
|
|
Weighted Avg. Number
of Shares/Units Outstanding - Diluted
|
|
129,178
|
|
124,094
|
Weighted Avg. Number
of Shares Outstanding - Diluted
|
|
126,456
|
|
120,211
|
|
|
|
|
|
Per Share/Unit
Data:
|
|
|
|
|
Net Income
Available to First Industrial Realty Trust, Inc.'s
|
|
|
|
|
Common
Stockholders and Participating Securities
|
|
$
23,803
|
|
$
36,292
|
Less:
Allocation to Participating Securities
|
|
(60)
|
|
(97)
|
Net Income
Available to First Industrial Realty Trust, Inc.'s Common
Stockholders
|
|
$
23,743
|
|
$
36,195
|
|
|
|
|
|
Basic and
Diluted Per Share
|
|
$
0.19
|
|
$
0.30
|
|
|
|
|
|
FFO (NAREIT)
(c)
|
|
$
53,654
|
|
$
47,808
|
Less:
Allocation to Participating Securities
|
|
(137)
|
|
(124)
|
FFO (NAREIT)
Allocable to Common Stockholders and Unitholders
|
|
$
53,517
|
|
$
47,684
|
|
|
|
|
|
Basic Per
Share/Unit
|
|
$
0.42
|
|
$
0.39
|
Diluted Per
Share/Unit
|
|
$
0.41
|
|
$
0.38
|
|
|
|
|
|
Common
Dividends/Distributions Per Share/Unit
|
|
$
0.2300
|
|
$
0.2175
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data
(end of period):
|
|
March
31,
|
|
December
31,
|
|
|
2019
|
|
2018
|
Gross Real Estate
Investment
|
|
$
3,724,985
|
|
$
3,673,644
|
Total
Assets
|
|
3,178,654
|
|
3,142,691
|
Debt
|
|
1,326,456
|
|
1,297,783
|
Total
Liabilities
|
|
1,512,690
|
|
1,462,780
|
Total
Equity
|
|
$
1,665,964
|
|
$
1,679,911
|
a) We adopted
Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU
2016-02") effective January 1, 2019. Prior to the adoption of
ASU 2016-02, we included reimbursement revenue related to real
estate taxes paid directly by certain tenants to the taxing
authorities in Total Revenues with a corresponding expense amount
in Property Expenses. Additionally, ASU 2016-02 requires
credit losses on lease receivables be presented within Total
Revenues. Prior to the adoption of ASU 2016-02, we included the
credit losses on lease receivables within Property Expenses.
The 2018 Statement of Operations has not been restated for either
of these changes.
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2018
|
b)
|
|
|
General and
Administrative per the Form 10-Q
|
|
8,143
|
Severance Expense
|
|
(1,298)
|
General and
Administrative per Reconciliation within the Selected Financial
Data
|
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6,845
|
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c) Investors in, and
analysts following, the real estate industry utilize funds from
operations ("FFO"), net operating income ("NOI"), adjusted 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, we consider FFO, NOI, adjusted 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. Adjusted 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, adjusted 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.
In accordance with the restated NAREIT definition of FFO which we
adopted effective January 1, 2019, 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 an unconsolidated joint venture. For the
comparative 2018 period, if applicable, gain and losses from the
sale of non-depreciable real estate as well as impairment of
non-depreciable real estate were not excluded from FFO.
NOI is defined as our revenues, minus property expenses such as
real estate taxes, repairs and maintenance, property management,
utilities, insurance and other expenses.
Adjusted EBITDA is defined as NOI minus general and administrative
expenses and the equity in FFO loss from our investment in a joint
venture. For the three months ended March 31, 2018, $1,298 of
severance expense included in general and administrative expense
was not deducted to arrive at adjusted EBITDA.
AFFO is defined as adjusted EBITDA minus GAAP interest expense,
minus capitalized interest and overhead, (minus)/plus amortization
of debt (premiums)/discounts 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 amortization of stock based compensation,
minus severance expense and minus non-incremental capital
expenditures. Effective with the adoption of the restated NAREIT
definition of FFO on January 1, 2019, we exclude the income tax
provision or benefit related to gain or loss on sale of real
estate. Non-incremental capital expenditures refer to building
improvements and leasing costs required to maintain current
revenues plus tenant improvements amortized back to the tenant over
the lease term. Excluded are first generation leasing costs,
capital expenditures underwritten at acquisition and
development/redevelopment costs.
FFO, NOI, adjusted 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, adjusted 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, adjusted 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,
2018 and held as an in service property through the end of the
current reporting period (including nine land parcels that are
leased under ground lease arrangements), and developments and
redevelopments that were placed in service prior to January 1, 2018
(the "Same Store Pool"). 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%. 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.
Acquisitions that are less than 75% occupied at the date of
acquisition, developments and redevelopments are placed in service
as they reach the earlier of a) stabilized occupancy (generally
defined as 90% occupied), or b) one year subsequent to acquisition
or development/redevelopment construction completion.
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 above (below) market rent and the impact of 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. 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, interest expense, depreciation and
amortization, income tax benefit and expense, gains and losses on
retirement of debt, impairment of real estate, gains and losses on
the sale of real estate, equity in income or loss from our joint
venture, mark-to-market and settlement gains and losses on
derivative instruments, capital expenditures and leasing costs.
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.
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SOURCE First Industrial Realty Trust, Inc.