FIRST INDUSTRIAL REALTY TRUST INC Q4 FY2024 earnings call

• 2024 was successful with strong cash rental rate growth and second highest development lease signings since 2012.
• Expecting ~10% FFO growth in 2025 based on midpoint of guidance.
• Ended 2024 with in-service occupancy of 96.2%.
• Signed ~1 million square feet of signed development leasing in Q4, including a full building lease in Nashville and leasing at other properties.
• Started new developments in Nashville and Lehigh Valley, with cash yield for Q4 starts expected north of 7%.
• Closed final land parcel at First Park Miami project, with land positions accommodating 15 million square feet of growth.
• Sold $25 million of buildings in Q4, with total 2024 dispositions at $163 million, and 2025 disposition guidance up to $75 million.
• Board declared a dividend of 44.5 cents per share, an increase of 20.3%.

In 2024, First Industrial Realty Trust Inc. delivered strong cash rental rate growth on leasing and achieved its second highest volume year for development lease signings since 2012. NAREIT FFO per fully diluted share grew 8.6% to $2.65 compared to $2.44 in 2023. Cash same-store NOI growth for the fourth quarter was 9.3%, and for the full year was 8.1% excluding certain items. Ended the year with in-service occupancy of 96.2%. Leasing activity in Q4 included ~1.9 million square feet of leases commenced, with 600,000 new, 800,000 renewals, and 500,000 for developments acquisitions. Dispositions in Q4 were five buildings totaling 214,000 square feet for $25 million, with total 2024 dispositions at $163 million.

• NAREIT FFO guidance range for 2025 is $2.87 to $2.97 per share, midpoint $2.92 per share, representing 10% growth from 2024.
• Average quarter-end in-service occupancy range 95% to 96%, assuming ~1.6 million square feet of development leasing in 2025, mostly in second half.
• Cash same-store NOI growth before termination fees expected 6% to 7%.
• Expect to capitalize about $0.09 per share of interest in 2025.
• G and A expense guidance range $40.5 to $41.5 million.

• Industrial market vacancy hit 6.1% at year-end 2024, a 30 basis point rise from Q3 2024.
• New construction start volume 62% lower than Q3 2022 peak.
• Sublet space nationally about 1.1% of existing stock, double long-term average.
• Uncertainty around tariffs on China and Mexico, impact on tenant behavior and leasing activity still early and unpredictable.

Q: Refresh views on Los Angeles and Inland Empire markets and demand growth?

A: Touring activity up, port activity year to date up 22%, under construction and completions down quarter to quarter, market should firm up.

Q: Geographies for future development?

A: Focus on Pennsylvania, Texas, and Florida.

Q: Large move outs in 2025? Tenant retention rates?

A: No significant large move outs known, tenant retention rate in 2024 was 77%, expected similar in 2025.

Q: Bad debt in 2024 and outlook for 2025?

A: Bad debt expense $700,000 in 2024, ten basis points of gross revenue; expecting $1 million in 2025, with tenant boohoo paying rent and having a security deposit.

Q: Interest on incremental development, construction costs?

A: Construction costs down in 2024, expected flat to slightly down in 2025; development spend ~$220 million, sources include excess cash flow, sales, and line of credit borrowings.

Q: Market rent growth forecast?

A: Modest rent growth expected, some markets down, some up a point or two, Cal probably flat to down a little.

Q: Tenant behavior regarding tariffs?

A: Too early to tell, no reaction seen in tours or conversations yet.

Q: Tenants with too much space and automation impact?

A: Sublet space in portfolio not impacting revenue, no massive automation impact seen in portfolio generally.

Q: Development starts and spend?

A: Not giving volume on development starts, development spend ~$220 million, with certain opportunities in Pennsylvania, Texas, and Florida.