FIRST INDUSTRIAL REAL ESTATE TRUST: Management’s Discussion and Analysis of Financial Position and Operating Results (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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General

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 March 31, 2021, we owned 428 industrial properties
located in 20 states, containing an aggregate of approximately 62.1 million
square feet of gross leasable area ("GLA"). Of the 428 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 March 31, 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 March 31, 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 line of
credit borrowings under our $725.0 million unsecured revolving credit agreement
(the "Unsecured Credit Facility"), and proceeds from the issuance, when and as
warranted, of additional equity securities. We also evaluate joint venture
arrangements as another source of capital to finance acquisitions and
developments.

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Summary of the Three Months Ended March 31, 2021
Despite the COVID-19 pandemic, our operating results continue to remain strong
in 2021. Our quarter-end in service occupancy was 95.7% and during the three
months ended March 31, 2021 we grew cash rental rates by 10.4% on new and
renewal leases. After resuming speculative development in the fourth quarter of
2020, we started three additional buildings comprising 1.4 million square feet
of GLA in the first quarter of 2021. We continue to position ourselves for
future development activity via the acquisition of land located in our target
markets during the quarter. 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 three months ended March 31, 2021, we completed the following
significant real estate activities:
•We acquired one industrial property comprised of approximately 0.1 million
square feet of GLA located in the Northern California market for an aggregate
purchase price of $12.3 million, excluding transactions costs.
•We acquired approximately 16.6 acres of land for development located in the
Inland Empire, Northern California and Philadelphia markets, for an aggregate
purchase price of $11.8 million, excluding transaction costs.
•We commenced speculative development of three industrial buildings totaling 1.4
million square feet of GLA in our Nashville, Phoenix and Inland Empire markets.
•We sold three industrial properties and two industrial condominium units
comprising approximately 1.1 million square feet of GLA for gross sales proceeds
of $67.2 million.
Our significant financing activities during the three months ended March 31,
2021 were:
•We declared a first quarter cash dividend of $0.27 per common share or Unit per
quarter, an increase of 8.0% from the 2020 quarterly rate.
•At March 31, 2021, we have $724.6 million available for additional borrowings
under our Unsecured Credit Facility and cash and cash equivalents was
approximately $97.7 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 months ended March 31,
2021 and 2020. Same store properties are properties owned prior to January 1,
2020 and held as an in-service property through March 31, 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 March 31, 2021. Sold properties
are properties that were sold subsequent to December 31, 2019. (Re)Developments
include developments and redevelopments 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 Three Months Ended March 31, 2021 to Three Months Ended March 31,
2020
Our net income was $63.6 million and $41.5 million for the three months ended
March 31, 2021 and 2020, respectively.
For the three months ended March 31, 2021 and 2020, the average daily occupancy
rate of our same store properties was 95.8% and 96.8%, respectively.
                               Three Months Ended March 31,
                                   2021                   2020         $ Change      % Change
                                                     ($ in 000's)
REVENUES
Same Store Properties   $       105,903$ 101,442$  4,461           4.4  %
Acquired Properties               3,023                       47         2,976       6,331.9  %
Sold Properties                     998                    6,022        (5,024)        (83.4) %
(Re)Developments                  5,136                    1,524         3,612         237.0  %
Other                             1,199                    1,308          (109)         (8.3) %

Total Revenues          $       116,259$ 110,343$  5,916           5.4  %


Revenues from same store properties increased $4.5 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 $3.0 million due to the nine industrial properties acquired
subsequent to December 31, 2019 totaling approximately 1.6 million square feet
of GLA. Revenues from sold properties decreased $5.0 million due to the 32
industrial properties sold subsequent to December 31, 2019 totaling
approximately 3.0 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 $3.6 million due to an increase in occupancy. Revenues from other
remained relatively unchanged.
                                 Three Months Ended March 31,
                                      2021                    2020        $ Change      % Change
                                                        ($ in 000's)
PROPERTY EXPENSES
Same Store Properties     $        28,256$ 24,504$  3,752          15.3  %
Acquired Properties                   660                        16           644       4,025.0  %
Sold Properties                       138                     1,503        (1,365)        (90.8) %
(Re)Developments                    1,559                       668           891         133.4  %
Other                               2,629                     2,390           239          10.0  %

Total Property Expenses   $        33,242$ 29,081$  4,161          14.3  %


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 $3.8 million primarily due to an
increase in snow removal costs and real estate tax expense. Property expenses
from acquired properties increased $0.6 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 $1.4 million due to properties sold subsequent to December 31, 2019.
Property expenses from (re)developments increased $0.9 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 $0.7 million, or 7.4%, primarily
due to severance and regional wind-up expenses ($0.9 million) associated with
the closing of our Indianapolis office during the twelve months ended December
31, 2020.
                                                       Three Months Ended March 31,
                                                          2021              2020            $ Change             % Change
                                                                                   ($ in 000's)
DEPRECIATION AND OTHER AMORTIZATION
Same Store Properties                                 $  27,944$ 28,396$   (452)                  (1.6) %
Acquired Properties                                       1,356                 -             1,356                      -
Sold Properties                                             184             1,194            (1,010)                 (84.6) %
(Re) Developments                                         1,938               711             1,227                  172.6  %
Corporate Furniture, Fixtures and Equipment and Other       553               630               (77)                 (12.2) %
Total Depreciation and Other Amortization             $  31,975$ 30,931$  1,044                    3.4  %


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 $1.0 million due to properties sold subsequent to December 31, 2019.
Depreciation and other amortization from (re)developments increased $1.2 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 March 31, 2021, we recognized $34.6 million of gain
on sale of real estate related to the sale of three industrial properties and
two industrial condominium units comprised of approximately 1.1 million square
feet of GLA. For the three months ended March 31, 2020, we recognized $14.0
million of gain on sale of real estate related to the sale of nine industrial
properties comprised of approximately 0.2 million square feet of GLA.
Interest expense remained relatively unchanged. However, the small decrease was
caused by a decrease in the weighted average interest rate for the three months
ended March 31, 2021 (3.70%) as compared to the three months ended March 31,
2020 (3.80%) and an increase in capitalized interest of $0.4 million caused by
an increase in development costs eligible for capitalization during the three
months ended March 31, 2021 as compared to the three months ended March 31,
2020, offset by an increase in the weighted average debt balance outstanding for
the three months ended March 31, 2021 ($1,601.9 million) as compared to the
three months ended March 31, 2020 ($1,520.3 million).
Amortization of debt issuance costs increased by $0.2 million, or 20.4%,
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 March 31, 2021
and 2020 was not significant.
Income tax benefit for both the three months ended March 31, 2021 and 2020 was
not significant.

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Leasing Activity
The following table provides a summary of our commenced leases for the three
months ended March 31, 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                          18                    577             $           6.69                               35.5  %                5.0              $       5.32                                N/A
Renewal Leases                      32                  2,305             $           5.38                               17.6  %                3.0              $       0.92                            76.5  %
Development / Acquisition
Leases                               6                    467             $           9.64                                   N/A                9.6                          N/A                             N/A
Total / Weighted Average            56                  3,349             $           6.20                               21.4  %                4.2              $       1.80                            76.5  %


_______________
(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 months ended March 31, 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                                                         13                        486             $         684
Renewal Leases                                                      2                         35                        39
Development / Acquisition Leases                                    6                        467                     2,090
Total                                                              21                        988             $       2,813


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Liquidity and Capital Resources
At March 31, 2021, our cash and cash equivalents was approximately $97.7 million
and restricted cash was approximately $82.0 million. We also had $724.6 million
available for additional borrowings under our Unsecured Credit Facility as of
March 31, 2021.
We have considered our short-term (through March 31, 2022) liquidity needs and
the adequacy of our estimated cash flow from operations and other expected
liquidity sources to meet these needs. We have a $200.0 million term loan
maturing in July 2021, which has two, one-year extension options which may be
exercised at our election, subject to the satisfaction of certain conditions.
Also, our Unsecured Credit Facility matures in October 2021; however, it is
extendable for one year, at our election, subject to the satisfaction of certain
conditions. Lastly, we have $58.3 million in mortgage loans payable outstanding
at March 31, 2021 that mature in October 2021. We expect to satisfy our payment
obligations under the Unsecured Credit Facility and the $200.0 million term loan
on or prior to the maturity date of each loan by extending the maturity of such
loan, refinancing such loan or repaying such loan with proceeds from the the
issuance of debt or equity securities. We expect to satisfy our payments
obligations for the maturing mortgage loans with proceeds from our Unsecured
Credit Facility. With the exception of the $200.0 million term loan, the
Unsecured Credit Facility and the mortgage maturities, 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 March 31, 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.
As of April 22, 2021, we had approximately $724.6 million available for
additional borrowings under our Unsecured Credit Facility. 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 March 31, 2021, and we anticipate
that we will be able to operate in compliance with our financial covenants for
the next twelve months.
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.
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Cash Flow Activity
The following table summarizes our cash flow activity for the Company for the
three months ended March 31, 2021 and 2020:
                                                                  2021      

2020

                                                                    (In 

thousands)

      Net cash provided by operating activities                $ 41,405

$ 40,269

      Net cash used in investing activities                     (22,062)   

(183,052)

Net cash (used in) from financing activities (39,303)

125,069

The following table summarizes our treasury activity for the Operating partnership for the three months ended March 31, 2021 and 2020:

                                                            2021          

2020

                                                              (In 

thousands)

Net cash provided by operating activities                $ 41,400      $  

40 630

Net cash used in investing activities                     (22,062)      

(183,052)

Net cash (used in) from financing activities (39,298) 124,708



Changes in cash flow for the three months ended March 31, 2021, compared to the
prior year comparable period are described as follows:
Operating Activities: Cash provided by operating activities increased $1.1
million for the Company (increased $0.8 million for the Operating Partnership),
primarily due to the following:
•increase in NOI from same store properties, acquired properties and recently
developed properties of $5.8 million offset by a decrease in NOI due to the
disposition of real estate of $3.7 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 $161.0
million, primarily due to the following:
•decrease of $118.5 million related to the acquisition of real estate;
•increase of $39.5 million in net proceeds received from the disposition of real
estate in 2021 as compared to 2020; and
•decrease of $9.7 million in escrow deposits; offset by:
•increase of $6.3 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 $164.4 million
for the Company (increased $164.0 million for the Operating Partnership),
primarily due to the following:
•decrease in net borrowings of our Unsecured Credit Facility of $162.0 million
in 2021 compared to 2020; and
•increase in dividend and unit distributions of $3.1 million due to the Company
increasing the dividend rate in 2021.
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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 March 31, 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 March 31, 2021 and December 31, 2020, our total debt, excluding unamortized
debt issuance costs, was $1,601.4 million and $1,602.7 million, respectively,
and 100% of our total debt, as of each date, was fixed rate debt. At March 31,
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.
In 2020, in anticipation of refinancing our $200.0 million Unsecured Term Loan
that matured in January 2021 (see Note 4), we entered into interest rate swaps
(the "2021 Swaps") with an aggregate notional value of $200.0 million which fix
the one-month LIBOR rate at 0.99%. The 2021 Swap's effective period commenced
February 1, 2021 and matures on February 2, 2026. We designated the 2021 Swaps
as cash flow hedges.
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.
If weighted average interest rates on our weighted average fixed rate debt
during the three months ended March 31, 2021 were to have increased by 10% due
to refinancing, interest expense would have increased by approximately $1.5
million during the three months ended March 31, 2021.
As of March 31, 2021, the estimated fair value of our debt was approximately
$1,677.5 million based on our estimate of the then-current market interest
rates.




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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 months ended
March 31, 2021 and 2020.
                                                                         

Three months ended March, 31st,

                                                                           2021                   2020
                                                                            

(In thousands) Net income available for First Industrial Realty Trust, Inc. ofOrdinary shareholders and participating securities

                    $        62,198$    40,634
Adjustments:
Depreciation and Other Amortization of Real Estate                           31,787               30,737

Gain on Sale of Real Estate                                                 (34,645)             (13,993)

Income Tax Provision - Allocable to Gain on Sale of Real Estate                  79                    -
Noncontrolling Interest Share of Adjustments                                     53                 (364)

Funds from operations available for First Industrial Realty Trust, Inc. ofOrdinary shareholders and participating securities

             $       

59,472 $ 57,014

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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 months ended March 31, 2021 and 2020.
                                                              Three Months Ended March 31,
                                                                2021                   2020               % Change
                                                                     (In thousands)
Same Store Revenues                                      $       105,903$   101,442
Same Store Property Expenses                                     (28,256)   

(24,504)

Same Store Net Operating Income Before Same Store
Adjustments                                              $        77,647$    76,938               0.9%
Same Store Adjustments:

Straight-line Rent                                                (2,342)              (1,639)
Above / Below Market Rent Amortization                              (225)                (281)
Lease Termination Fees                                              (125)                (616)

Same Store Net Operating Income(A)                       $        74,955$    74,402               0.7%


(A) The three months ended March 31, 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%.

Subsequent Events
From April 1, 2021 to April 22, 2021, we sold one land parcel for gross proceeds
of $11.0 million, excluding transaction costs.



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