FR — First Industrial Realty Trust, Inc.

Summary of First Industrial Realty Trust, Inc. Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• NAREIT Funds from Operations (FFO): $0.68 per fully diluted share, unchanged from Q1 2025. Excluding $0.04 per share in advisory costs related to a proxy campaign, adjusted FFO was $0.72.
• Cash Same-Store NOI Growth: 8.7%, driven by increased rental rates and lower free rent.
• Occupancy Rate: In-service occupancy at 94.3%, consistent with expectations.
• Leasing Activity: 2.4 million square feet of leases commenced, including 300,000 square feet of renewals.
• Guidance: For 2026, FFO guidance remains at $3.05 to $3.15 per share, with an adjusted range of $3.09 to $3.19 excluding advisory costs.

2. Strategic Updates and Business Highlights:

• Development Leasing Success: Signed leases totaling 383,000 square feet, including a full building lease in the Inland Empire.
• Land Sale: A pending sale of 100 acres in Phoenix for $131 million, expected to close in June, which is more than three times the industrial land value in that market.
• Market Conditions: National vacancy rate stable at 6.7% with solid net absorption of 43 million square feet, though new deliveries slightly outpaced absorption.

3. Forward Guidance and Outlook:

• Occupancy Guidance: Expected average quarter-end occupancy of 94% to 95%, factoring in incremental development leasing.
• Cash Same-Store NOI Growth Guidance: Projected at 5% to 6% for the year.
• G&A Expense Guidance: $42 million to $43 million, excluding $5.6 million in advisory costs.
• Development Pipeline: Anticipated 1.3 million square feet of incremental development leasing in the second half of 2026.

4. Bad News, Challenges, or Points of Concern:

• Advisory Costs Impact: $0.04 per share in advisory costs related to the proxy campaign negatively impacted FFO.
• Slow Decision-Making: Larger tenants in markets like Denver are experiencing slow decision-making, which could affect leasing velocity.
• Potential Economic Risks: Ongoing geopolitical tensions, particularly in the Middle East, are being monitored for potential impacts on leasing activity.

5. Notable Q&A Insights:

• Leasing Demand: Most improvements in leasing activity are attributed to broader industrial demand rather than data center-specific needs.
• 3PL Tenant Update: A 3PL tenant on the credit watch list has made a significant payment, with no impact on same-store NOI.
• Market Dynamics: Pennsylvania is highlighted as a strong market for leasing activity, while Denver shows slower decision-making from larger users.
• Development Strategy: The company is evaluating opportunities for new projects but remains cautious about over-concentration in any one market.
• Brokerage Impact of AI: Management does not foresee significant disruption from AI in brokerage services, emphasizing the value brokers bring to negotiations.

Overall, First Industrial Realty Trust demonstrated solid performance in Q1 2026, with strong leasing activity and positive cash NOI growth, while navigating challenges related to advisory costs and market dynamics. The outlook remains stable, with cautious optimism for continued demand across various markets.