- 2022 FFO Guidance Increased $0.04 at the Midpoint to $2.15 to $2.23 Per
Share/Unit
- Occupancy of 98.4%; Cash Rental Rates Up 27.0%; Cash Same
Store NOI Grew 9.4%
- Leased 100% of 1.1 Million Square-Foot First Logistics
Center @ 283 in Central
Pennsylvania and 208,000 Square-Foot First Bordentown
Logistics Center in New
Jersey
- Sold 391 Acres at Camelback 303 Joint Venture in
Phoenix for $255 Million; FR's Share of Gain and Promote
Before Tax of $104 Million
- Started Four Developments in the Second Quarter Totaling
875,000 Square Feet, Estimated Investment of $154 Million
- Closed $425 Million Unsecured
Term Loan Which Refinanced the Prior $260
Million Term Loan
- Paid Off $68 Million Mortgage
Loan at an Interest Rate of 4.03%; Portfolio Now 99.3%
Unencumbered
CHICAGO, July 20,
2022 /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 second quarter of 2022. First Industrial's diluted net income
available to common stockholders per share (EPS) was $0.88, compared to $0.40 a year ago and second quarter FFO was
$0.56 per share/unit on a diluted
basis, compared to $0.48 per
share/unit a year ago.
"Our team delivered another strong performance in the second
quarter reflected in our financial results and portfolio metrics,
including contributions from our development program," said
Peter E. Baccile, First Industrial's
president and chief executive officer. "Industrial real estate
fundamentals remain strong, supported by tenants requiring space to
support efficiency and growth of their supply chains."
Portfolio Performance
- In service occupancy was 98.4% at the end of the second quarter
of 2022, compared to 98.0% at the end of the first quarter of 2022,
and 96.6% at the end of the second quarter of 2021.
- Rental rates increased 27.0% on a cash basis and increased
46.5% on a straight-line basis.
- Same property cash basis net operating income before
termination fees ("SS NOI") increased 9.4% reflecting higher
average occupancy, increases in rental rates on new and renewal
leasing, contractual rent escalations and slightly lower free
rent.
Development Leasing
During the second quarter, the Company:
- Leased 100% of the 1.1 million square-foot First Logistics
Center @ 283 Building A in Central
Pennsylvania. The lease is expected to commence in the third
quarter.
- Leased 100% of the 208,000 square-foot First Bordentown
Logistics Center in New Jersey.
The lease is expected to commence upon completion in fourth
quarter.
- Leased 33,000 square feet at its 200,000 square-foot First Park
Miami Building 11 in South
Florida. The lease is expected to commence in the third
quarter.
Investment and Disposition Activities
In the second quarter, the Company:
- Commenced development of four projects totaling 875,000 square
feet, with an estimated total investment of $154 million comprised of:
-
- First Elm Logistics Center in the Inland Empire - 83,000 square
feet; $21 million estimated
investment.
- First Logistics Center @ 283 Building B in Central Pennsylvania - 699,000 square feet;
$96 million estimated
investment.
- First 92 in Northern
California - 37,000 square feet; $20
million estimated investment.
- First Park Miami Building 13 in South
Florida - 56,000 square feet; $16
million estimated investment.
- Acquired three sites in the Inland Empire for $34 million.
- Acquired five buildings totaling 279,000 square feet in
Northern California, Southern California, Seattle and South
Florida for $65 million.
- Sold 391 acres at its Camelback 303 business park joint venture
in Phoenix; First Industrial's
share of the sales price was $110
million. First Industrial's share of the gain and promote
before tax is $104 million.
In the third quarter, the Company:
- Acquired two buildings totaling 96,000 square feet in
South Florida and Southern California and a 2-acre site in the
Inland Empire for $35 million.
"Our development program continues to deliver high quality
logistics real estate solutions for tenants, while creating
significant value for shareholders," said Peter Schultz, First Industrial's executive vice
president. "We were pleased to lease our largest current
development, the 1.1 million square-foot First Logistics Center @
283 in Pennsylvania. Our tenant is
a leading international e-commerce retailer that will take
occupancy in the third quarter."
Capital
On April 18, 2022, the
Company:
- Closed a $425 million unsecured
term loan facility, the proceeds from which were primarily used to
refinance its prior $260 million
unsecured term loan facility and pay off a $68 million mortgage loan. The new term loan
matures on October 18, 2027 and
provides for interest-only payments currently at an interest rate
of SOFR plus a SOFR adjustment of 10 basis points plus a credit
spread of 85 basis points based on the Company's current credit
ratings and consolidated leverage ratio.
In the second quarter, the Company:
- Entered into forward starting interest rate swaps to
effectively fix the interest rate on the entire $425 million unsecured term loan facility at
3.64%. The new fixed rate is effective in October 2022 once the existing swaps from the
refinanced $260 million unsecured
term loan facility expire.
Outlook for 2022
"We are increasing our FFO per share guidance for 2022 by
four cents at the midpoint to
$2.19, fueled predominantly by our
development leasing ahead of pro forma, quicker lease up in the
in-service portfolio and an increase in capitalized interest due to
our new development starts," added Mr. Baccile.
|
|
Low End of
|
|
High End
of
|
|
|
Guidance for
2022
|
|
Guidance for
2022
|
|
|
(Per
share/unit)
|
|
(Per
share/unit)
|
Net Income
|
|
$
1.76
|
|
$
1.84
|
Add: Real Estate
Depreciation/Amortization
|
|
1.09
|
|
1.09
|
Less: Gain on Sale of
Real Estate, Net of Allocable Income Tax Provision Including Joint
Ventures, Through July 20, 2022
|
|
(0.70)
|
|
(0.70)
|
|
|
|
|
|
FFO (NAREIT
Definition)
|
|
$
2.15
|
|
$
2.23
|
|
|
|
|
|
The following assumptions were used for guidance:
- Average quarter-end in service occupancy of 98.0% to 98.75%, an
increase of 37.5 basis points at the midpoint. This assumes the
lease-up of the 644,000 square-foot facility in Baltimore will occur in 4Q22.
- Same store NOI growth on a cash basis before termination fees
of 8.25% to 9.25% for the full year, an increase of 50 basis points
at the midpoint.
- General and administrative expense of approximately
$34.0 million to $35.0 million, an increase of $0.5 million at the midpoint.
- Includes the incremental costs expected in 2022 related to the
Company's developments completed and under construction as of
June 30, 2022. In total, the Company
expects to capitalize $0.10 per share
of interest in 2022, an increase of $0.01 per share.
- Other than the transactions discussed in this release, guidance
does not include the impact of:
-
- any future debt repurchases prior to maturity or future debt
issuances,
- any future investments or property sales, or
- any future equity issuances.
Conference Call
First Industrial will host its quarterly conference call on
Thursday, July 21, 2022 at
10:00 a.m. CDT (11:00 a.m. EDT). The conference call may be
accessed by dialing (888) 504-7949 and entering the passcode
352927. 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 second quarter 2022 supplemental information can
be viewed at www.firstindustrial.com under the "Investors"
tab.
FFO Definition
In accordance with the NAREIT definition of FFO, 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 unconsolidated 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 69.8 million square feet
of industrial space as of June 30,
2022. 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) 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; the uncertainty and economic impact of
pandemics, epidemics or other public health emergencies or fear of
such events, such as the outbreak of coronavirus disease 2019
(COVID-19); 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;
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 under the heading "Risk
Factors" and elsewhere in our annual report on Form 10-K for
the year ended December 31, 2021, 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
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Statements of
Operations and Other Data:
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
$ 130,049
|
|
$ 117,398
|
|
$ 255,562
|
|
$ 233,657
|
|
|
|
|
|
|
|
|
|
Property Expenses
|
|
(34,860)
|
|
(31,748)
|
|
(70,275)
|
|
(64,990)
|
General and Administrative
|
|
(8,249)
|
|
(8,469)
|
|
(16,990)
|
|
(17,033)
|
Depreciation of Corporate FF&E
|
|
(226)
|
|
(212)
|
|
(456)
|
|
(400)
|
Depreciation and Other Amortization of Real Estate
|
|
(36,244)
|
|
(32,234)
|
|
(69,924)
|
|
(64,021)
|
Total
Expenses
|
|
(79,579)
|
|
(72,663)
|
|
(157,645)
|
|
(146,444)
|
Gain
on Sale of Real Estate
|
|
297
|
|
22,854
|
|
297
|
|
57,499
|
Interest Expense
|
|
(10,374)
|
|
(11,852)
|
|
(20,010)
|
|
(24,525)
|
Amortization of Debt Issuance Costs
|
|
(730)
|
|
(935)
|
|
(1,486)
|
|
(1,884)
|
Income from
Operations Before Equity in Income (Loss)
of
Joint Ventures and Income Tax Provision
|
|
$
39,663
|
|
$
54,802
|
|
$
76,718
|
|
$ 118,303
|
Equity in Income (Loss) of Joint Ventures (a)
|
|
118,211
|
|
(66)
|
|
118,189
|
|
(139)
|
Income Tax Provision (b)
|
|
(24,198)
|
|
(1,575)
|
|
(24,108)
|
|
(1,420)
|
Net
Income
|
|
$ 133,676
|
|
$
53,161
|
|
$ 170,799
|
|
$ 116,744
|
Net
Income Attributable to the Noncontrolling Interests
|
|
(16,685)
|
|
(1,225)
|
|
(17,550)
|
|
(2,610)
|
Net Income
Available to First Industrial Realty Trust, Inc.'s
Common Stockholders and Participating Securities
|
|
$ 116,991
|
|
$
51,936
|
|
$ 153,249
|
|
$ 114,134
|
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
|
|
$ 116,991
|
|
$
51,936
|
|
$ 153,249
|
|
$ 114,134
|
Depreciation and Other
Amortization of Real Estate
|
|
36,244
|
|
32,234
|
|
69,924
|
|
64,021
|
Noncontrolling
Interests
|
|
16,685
|
|
1,225
|
|
17,550
|
|
2,610
|
Gain on Sale of Real
Estate
|
|
(297)
|
|
(22,854)
|
|
(297)
|
|
(57,499)
|
Gain on Sale of Real Estate
from Joint Ventures (a)
|
|
(118,244)
|
|
—
|
|
(118,244)
|
|
—
|
Income Tax Provision -
Allocable to Gain on Sale of Real
Estate, Including
Joint Ventures (b)
|
|
24,243
|
|
1,472
|
|
24,243
|
|
1,551
|
Funds From Operations
("FFO") (NAREIT) (c)
|
|
$
75,622
|
|
$
64,013
|
|
$ 146,425
|
|
$ 124,817
|
Amortization of Equity Based
Compensation
|
|
3,892
|
|
3,451
|
|
8,993
|
|
7,064
|
Amortization of Debt
Discounts and Hedge Costs
|
|
104
|
|
104
|
|
208
|
|
208
|
Amortization of Debt
Issuance Costs
|
|
730
|
|
935
|
|
1,486
|
|
1,884
|
Depreciation of Corporate
FF&E
|
|
226
|
|
212
|
|
456
|
|
400
|
Non-incremental Building
Improvements
|
|
(4,628)
|
|
(2,287)
|
|
(5,349)
|
|
(4,637)
|
Non-incremental Leasing
Costs
|
|
(7,204)
|
|
(9,429)
|
|
(13,533)
|
|
(14,048)
|
Capitalized
Interest
|
|
(4,364)
|
|
(2,413)
|
|
(8,434)
|
|
(4,336)
|
Capitalized
Overhead
|
|
(2,679)
|
|
(1,456)
|
|
(5,292)
|
|
(3,079)
|
Straight-Line Rent,
Amortization of Above (Below) Market
Leases and Lease Inducements
|
|
(5,139)
|
|
(3,752)
|
|
(9,291)
|
|
(9,180)
|
Adjusted Funds From
Operations ("AFFO") (c)
|
|
$
56,560
|
|
$
49,378
|
|
$ 115,669
|
|
$
99,093
|
|
|
|
RECONCILIATION OF
NET INCOME AVAILABLE TO
FIRST INDUSTRIAL
REALTY TRUST, INC.'S COMMON
STOCKHOLDERS AND
PARTICIPATING SECURITIES TO ADJUSTED EBITDA (c) AND NOI
(c)
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net Income Available
to First Industrial Realty Trust, Inc.'s
Common Stockholders and Participating Securities
|
|
$ 116,991
|
|
$
51,936
|
|
$ 153,249
|
|
$ 114,134
|
Interest Expense
|
|
10,374
|
|
11,852
|
|
20,010
|
|
24,525
|
Depreciation and Other
Amortization of Real Estate
|
|
36,244
|
|
32,234
|
|
69,924
|
|
64,021
|
Income Tax (Benefit)
Provision - Not Allocable to Gain on Sale
of Real Estate
(b)
|
|
(45)
|
|
103
|
|
(135)
|
|
(131)
|
Noncontrolling
Interests
|
|
16,685
|
|
1,225
|
|
17,550
|
|
2,610
|
Amortization of Debt
Issuance Costs
|
|
730
|
|
935
|
|
1,486
|
|
1,884
|
Depreciation of Corporate
FF&E
|
|
226
|
|
212
|
|
456
|
|
400
|
Gain on Sale of Real
Estate
|
|
(297)
|
|
(22,854)
|
|
(297)
|
|
(57,499)
|
Gain on Sale of Real Estate
from Joint Ventures (a)
|
|
(118,244)
|
|
—
|
|
(118,244)
|
|
—
|
Income Tax Provision -
Allocable to Gain on Sale of Real
Estate, Including
Joint Ventures (b)
|
|
24,243
|
|
1,472
|
|
24,243
|
|
1,551
|
Adjusted EBITDA
(c)
|
|
$
86,907
|
|
$
77,115
|
|
$ 168,242
|
|
$ 151,495
|
General and
Administrative
|
|
8,249
|
|
8,469
|
|
16,990
|
|
17,033
|
FFO from Joint Ventures
(a)
|
|
33
|
|
66
|
|
55
|
|
139
|
Net Operating Income
("NOI") (c)
|
|
$
95,189
|
|
$
85,650
|
|
$ 185,287
|
|
$ 168,667
|
Non-Same Store
NOI
|
|
(5,181)
|
|
(2,403)
|
|
(6,052)
|
|
(4,804)
|
Same Store NOI Before
Same Store Adjustments (c)
|
|
$
90,008
|
|
$
83,247
|
|
$ 179,235
|
|
$ 163,863
|
Straight-line
Rent
|
|
(2,255)
|
|
(2,849)
|
|
(5,047)
|
|
(7,724)
|
Above (Below) Market Lease
Amortization
|
|
(232)
|
|
(256)
|
|
(463)
|
|
(542)
|
Lease Termination
Fees
|
|
(25)
|
|
(130)
|
|
(25)
|
|
(249)
|
Same Store NOI (Cash
Basis without Termination Fees) (c)
|
|
$
87,496
|
|
$
80,012
|
|
$ 173,700
|
|
$ 155,348
|
|
|
|
|
|
|
|
|
|
Weighted Avg. Number of
Shares/Units Outstanding - Basic
|
|
134,278
|
|
131,188
|
|
134,176
|
|
131,180
|
Weighted Avg. Number of
Shares Outstanding - Basic
|
|
132,051
|
|
129,098
|
|
131,932
|
|
129,093
|
|
|
|
|
|
|
|
|
|
Weighted Avg. Number of
Shares/Units Outstanding - Diluted
|
|
134,590
|
|
131,704
|
|
134,543
|
|
131,669
|
Weighted Avg. Number of
Shares Outstanding - Diluted
|
|
132,106
|
|
129,187
|
|
131,997
|
|
129,179
|
|
|
|
|
|
|
|
|
|
Per Share/Unit
Data:
|
|
|
|
|
|
|
|
|
Net Income Available to
First Industrial Realty Trust, Inc.'s
Common Stockholders and
Participating Securities
|
|
$ 116,991
|
|
$
51,936
|
|
$ 153,249
|
|
$ 114,134
|
Less: Allocation to
Participating Securities
|
|
(103)
|
|
(61)
|
|
(134)
|
|
(122)
|
Net Income Available to
First Industrial Realty Trust, Inc.'s
Common
Stockholders
|
|
$ 116,888
|
|
$
51,875
|
|
$ 153,115
|
|
$ 114,012
|
|
|
|
|
|
|
|
|
|
Basic Per
Share
|
|
$
0.89
|
|
$
0.40
|
|
$
1.16
|
|
$
0.88
|
Diluted Per
Share
|
|
$
0.88
|
|
$
0.40
|
|
$
1.16
|
|
$
0.88
|
|
|
|
|
|
|
|
|
|
FFO (NAREIT)
(c)
|
|
$
75,622
|
|
$
64,013
|
|
$ 146,425
|
|
$ 124,817
|
Less: Allocation to
Participating Securities
|
|
(178)
|
|
(184)
|
|
(334)
|
|
(337)
|
FFO (NAREIT) Allocable
to Common Stockholders and
Unitholders
|
|
$
75,444
|
|
$
63,829
|
|
$ 146,091
|
|
$ 124,480
|
|
|
|
|
|
|
|
|
|
Basic Per
Share/Unit
|
|
$
0.56
|
|
$
0.49
|
|
$
1.09
|
|
$
0.95
|
Diluted Per
Share/Unit
|
|
$
0.56
|
|
$
0.48
|
|
$
1.09
|
|
$
0.95
|
|
|
|
|
|
|
|
|
|
Common
Dividends/Distributions Per Share/Unit
|
|
$
0.295
|
|
$
0.270
|
|
$
0.590
|
|
$
0.540
|
Balance Sheet Data
(end of period):
|
|
June 30,
2022
|
|
December 31,
2021
|
Gross Real Estate
Investment
|
|
$
5,080,902
|
|
$
4,646,444
|
Total
Assets
|
|
4,663,118
|
|
4,179,098
|
Debt
|
|
1,906,788
|
|
1,610,020
|
Total
Liabilities
|
|
2,291,559
|
|
1,930,726
|
Total
Equity
|
|
2,371,559
|
|
2,248,372
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
(a)
|
Equity in Income
(Loss) of Joint Ventures
|
|
|
|
|
|
|
|
|
|
Equity in Income
(Loss) of Joint Ventures per the Form 10-Q
|
|
$ 118,211
|
|
$
(66)
|
|
$ 118,189
|
|
$
(139)
|
|
Gain on
Sale of Real Estate from Joint Ventures
|
|
(118,244)
|
|
—
|
|
(118,244)
|
|
—
|
|
FFO from Joint
Ventures
|
|
$
(33)
|
|
$
(66)
|
|
$
(55)
|
|
$
(139)
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Income Tax
Provision
|
|
|
|
|
|
|
|
|
|
Income Tax Provision
per the Form 10-Q
|
|
$ (24,198)
|
|
$
(1,575)
|
|
$ (24,108)
|
|
$
(1,420)
|
|
Income Tax
Provision - Allocable to Gain on Sale of Real
Estate, Including Joint Ventures
|
|
24,243
|
|
1,472
|
|
24,243
|
|
1,551
|
|
Income Tax Benefit
(Provision) - Not Allocable to Gain on
Sale of Real
Estate
|
|
$
45
|
|
$
(103)
|
|
$
135
|
|
$
131
|
(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 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.
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 from our investment
in joint ventures.
AFFO is defined as adjusted EBITDA minus interest expense, minus
capitalized interest and overhead, (minus)/plus amortization of
debt discounts and hedge costs, minus straight-line rent,
amortization of above (below) market leases and lease inducements,
minus provision for income taxes or plus benefit for income taxes
not allocable to gain on sale of real estate, plus amortization of
equity based compensation and minus non-incremental capital
expenditures. 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, cash
flows (calculated in accordance with GAAP) or 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.
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, 2021 and held as an in service
property through the end of the current reporting period (including
certain income-producing land parcels), and developments and
redevelopments that were placed in service prior to January 1, 2021 (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%. Properties
acquired 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 acquired
that are less than 75% occupied at the date of acquisition are
placed in service as they reach the earlier of reaching 90%
occupancy or one year subsequent to acquisition. Developments,
redevelopments and acquired income-producing land parcels for which
our ultimate intent is to redevelop or develop on the land parcel
are placed in service as they reach the earlier of 90%
occupancy or one year subsequent to 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 lease termination fees, 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 the sale of real estate, equity in income or loss from our joint
ventures, 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.