UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

--------------------------
Commission File Number 1-13102
--------------------------

FIRST INDUSTRIAL REALTY TRUST, INC.
(Exact name of Registrant as specified in its Charter)

MARYLAND 36-3935116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

311 S. WACKER DRIVE, SUITE 4000, CHICAGO, ILLINOIS 60606
(Address of principal executive offices)

(312) 344-4300
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No

Number of shares of Common Stock, $.01 par value, outstanding as of November
11, 1997: 36,431,998

FIRST INDUSTRIAL REALTY TRUST, INC.
FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 1997

INDEX

PAGE
PART I: FINANCIAL INFORMATION ----

Item 1. Financial Statements

Consolidated Balance Sheets as of September 30, 1997 and December 31, 1996............ 2

Consolidated Statements of Operations for the Nine Months Ended September 30,
1997 and September 30, 1996........................................................... 3

Consolidated Statements of Operations for the Three Months Ended September 30,
1997 and September 30, 1996........................................................... 4

Consolidated Statements of Cash Flows for the Nine Months Ended September 30,
1997 and September 30, 1996........................................................... 5

Notes to Financial Statements......................................................... 6-13

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations......................................................... 14-20

PART II: OTHER INFORMATION

Item 1. Legal Proceedings............................................................... 21
Item 2. Changes in Securities........................................................... 21
Item 3. Defaults Upon Senior Securities................................................. 21
Item 4. Submission of Matters to a Vote of Security Holders............................. 21
Item 5. Other Information............................................................... 21
Item 6. Exhibits and Reports on Form 8-K................................................ 22-23

SIGNATURE................................................................................... 24

EXHIBIT INDEX............................................................................... 25

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

September 30, December 31,
1997 1996
-------------- -------------

ASSETS
Assets:
Investment in Real Estate:
Land.............................................................. $ 209,990 $ 153,390
Buildings and Improvements........................................ 1,183,333 880,924
Furniture, Fixtures and Equipment................................. 1,423 1,662
Construction in Progress.......................................... 16,237 14,803
Less: Accumulated Depreciation.................................... (112,107) (91,457)
------------ ------------
Net Investment in Real Estate.................................... 1,298,876 959,322

Cash and Cash Equivalents.......................................... 3,871 7,646
Restricted Cash.................................................... 8,729 11,837
U.S. Government Securities, Net.................................... 307,344 ---
Tenant Accounts Receivable, Net.................................... 7,118 4,667
Deferred Rent Receivable........................................... 9,660 8,290
Interest Rate Protection Agreements, Net........................... 55 8,376
Deferred Financing Costs, Net...................................... 7,032 7,442
Prepaid Expenses and Other Assets, Net............................. 41,353 15,020
------------ ------------
Total Assets..................................................... $ 1,684,038 $ 1,022,600
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage Loans Payable............................................. $ 95,794 $ 392,082
Defeased Mortgage Loan Payable..................................... 300,000 ---
Senior Unsecured Debt, Net......................................... 349,170 ---
Acquisition Facility Payable....................................... 92,600 4,400
Promissory Notes Payable........................................... --- 9,919
Accounts Payable and Accrued Expenses.............................. 40,405 18,374
Rents Received in Advance and Security Deposits.................... 10,448 6,122
Dividends/Distributions Payable.................................... 17,706 16,281
------------ ------------
Total Liabilities................................................ 906,123 447,178
------------ ------------
Minority Interest................................................... 95,683 42,861
Commitments and Contingencies....................................... --- ---
Stockholders' Equity:
Preferred Stock ($.01 par value, 10,000,000 shares authorized,
1,650,000, 40,000 and 20,000 shares of Series A, B and C
Cumulative Preferred Stock, respectively, issued and
outstanding at September 30, 1997 and 1,650,000 shares of
Series A Cumulative Preferred Stock issued and
outstanding at December 31, 1996)................................. 17 17
Common Stock ($.01 par value, 100,000,000 shares authorized,
30,892,739 and 29,939,417 shares issued and outstanding at
September 30, 1997 and December 31, 1996, respectively).... 309 299
Additional Paid-in-Capital......................................... 754,355 584,009
Distributions in Excess of Accumulated Earnings.................... (70,387) (51,764)
Unamortized Value of Restricted Stock Grants....................... (2,062) ---
------------ ------------
Total Stockholders' Equity....................................... 682,232 532,561
------------ ------------
Total Liabilities and Stockholders' Equity....................... $ 1,684,038 $ 1,022,600
============ ============

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
------------- --------------

Revenues:
Rental Income.................................................. $ 115,530 $ 78,054
Tenant Recoveries and Other Income............................. 31,117 23,545
Interest Income on U.S. Government Securities.................. 8,521 ---
---------- -----------
Total Revenues............................................... 155,168 101,599
---------- -----------
Expenses:
Real Estate Taxes.............................................. 24,192 17,061
Repairs and Maintenance........................................ 6,134 4,231
Property Management............................................ 5,075 3,657
Utilities...................................................... 4,095 2,758
Insurance...................................................... 389 824
Other.......................................................... 1,209 736
General and Administrative..................................... 4,264 2,899
Interest....................................................... 34,788 21,600
Amortization of Interest Rate Protection Agreements and
Deferred Financing Costs...................................... 2,093 2,412
Depreciation and Other Amortization............................ 27,468 20,458
---------- -----------
Total Expenses............................................... 109,707 76,636
---------- -----------
Income Before Gain on Disposition of Interest Rate Protection
Agreements, Gain on Sales of Real Estate , Minority Interest
and Extraordinary Loss........................................ 45,461 24,963
Gain on Disposition of Interest Rate Protection Agreements...... 1,430 ---
Gain on Sales of Real Estate.................................... 4,186 4,320
---------- -----------
Income Before Minority Interest and Extraordinary Loss.......... 51,077 29,283
Income Allocated to Minority Interest........................... (3,502) (2,164)
---------- -----------
Income Before Extraordinary Loss................................ 47,575 27,119
Extraordinary Loss.............................................. (12,563) (821)
---------- -----------
Net Income...................................................... 35,012 26,298
Less: Preferred Stock Dividends................................ (7,610) (2,939)
---------- -----------
Net Income Available to Common Stockholders.................... $ 27,402 $ 23,359
========== ===========
Net Income Available to Common Stockholders Before
Extraordinary Loss Per Weighted Average Common
Share Outstanding (30,139,896 and 23,529,280 for
September 30, 1997 and 1996, respectively)..................... $ 1.33 $ 1.03
========== ===========
Extraordinary Loss Per Weighted Average Common Share
Outstanding (30,139,896 and 23,529,280 for September 30,
1997 and 1996, respectively)................................... $ .42 $ .04
========== ===========
Net Income Available to Common Stockholders Per Weighted
Average Common Share Outstanding (30,139,896 and
23,529,280 for September 30, 1997 and 1996, respectively).... $ .91 $ .99
========== ===========

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

Three Months Three Months
Ended Ended
September 30, September 30,
1997 1996
--------------- --------------

Revenues:
Rental Income......................................................... $ 40,821 $ 28,173
Tenant Recoveries and Other Income.................................... 11,192 8,002
Interest Income on U.S. Government Securities......................... 4,364 ---
--------------- -----------
Total Revenues...................................................... 56,377 36,175
--------------- -----------
Expenses:
Real Estate Taxes..................................................... 8,545 6,156
Repairs and Maintenance............................................... 1,848 1,372
Property Management................................................... 1,556 1,330
Utilities............................................................. 1,270 940
Insurance............................................................. 113 286
Other................................................................. 355 187
General and Administrative............................................ 1,574 998
Interest.............................................................. 13,467 7,603
Amortization of Interest Rate Protection Agreements and
Deferred Financing Costs............................................. 713 838
Depreciation and Other Amortization................................... 9,756 7,046
Total Expenses...................................................... 39,197 26,756
--------------- -----------
Income Before Gain on Sales of Real Estate and Minority
Interest.............................................................. 17,180 9,419
Gain on Sales of Real Estate........................................... 187 ---
--------------- -----------
Income Before Minority Interest........................................ 17,367 9,419
Income Allocated to Minority Interest.................................. (1,552) (759)
--------------- -----------
Net Income ............................................................ 15,815 8,660
Less: Preferred Stock Dividends....................................... (4,245) (980)
--------------- -----------
Net Income Available to Common Stockholders........................... $ 11,570 $ 7,680
=============== ===========
Net Income Available to Common Stockholders Per Weighted Average
Common Share Outstanding (30,256,880 and
24,137,881 for September 30, 1997 and 1996, respectively).............. $ .38 $ .32
=============== ===========

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

Nine Months Ended Nine Months Ended
September 30, 1997 September 30, 1996
---------------------- ---------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income............................................................ $ 35,012 $ 26,298
Income Allocated to Minority Interest................................. 3,502 2,164
------------- ----------------
Income Before Minority Interest....................................... 38,514 28,462
Adjustments to Reconcile Net Income to Net Cash Provided
by Operating Activities:
Depreciation.......................................................... 24,461 17,888
Amortization of Interest Rate Protection Agreements and
Deferred Financing Costs.............................................. 2,093 2,412
Other Amortization.................................................... 2,893 2,570
Gain on Disposition of Interest Rate Protection Agreements............ (1,430) ---
Gain on Sales of Real Estate.......................................... (4,186) (4,320)
Extraordinary Loss.................................................... 12,563 821
Provision for Bad Debts............................................... 150 200
Increase in Tenant Accounts Receivable and Prepaid
Expenses and Other Assets............................................ (20,495) (4,536)
Increase in Deferred Rent Receivable.................................. (1,582) (740)
Increase in Accounts Payable and Accrued Expenses
and Rents Received in Advance and Security Deposits................... 11,716 2,408
Organization Costs.................................................... (62) (30)
Decrease in Restricted Cash........................................... 3,243 926
------------- ----------------
Net Cash Provided by Operating Activities............................. 67,878 46,061
------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases and Additions to Investment in Real Estate.................. (313,540) (175,141)
Proceeds from Sales of Investment in Real Estate...................... 23,411 12,119
Funding of Mortgage Loans Receivable.................................. (18,552) ---
Repayment of Mortgage Loans Receivable................................ 3,865 ---
Decrease in Restricted Cash........................................... 1,831 1,239
------------- ----------------
Net Cash Used in Investing Activities................................. (302,985) (161,783)
------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Sale of Common Stock.................................... 20,000 113,850
Common Stock Underwriting Discounts/Offering Costs.................... (1,688) (6,957)
Proceeds from Exercise of Employee Stock Options...................... 1,711 ---
Proceeds from Sale of Preferred Stock................................. 150,000 ---
Preferred Stock Offering Costs........................................ (5,263) (408)
Proceeds from Acquisition Facilities Payable.......................... 280,400 75,197
Repayments on Acquisition Facilities Payable.......................... (192,200) (61,121)
Proceeds from Mortgage Loans Payable.................................. --- 36,750
Repayments on Mortgage Loans Payable.................................. (793) (679)
Proceeds from Defeasance Loan......................................... 309,800 ---
Repayment of Defeasance Loans......................................... (309,800) ---
Proceeds from Senior Unsecured Debt................................... 349,150 ---
Repayments on Construction Loans Payable.............................. --- (4,873)
Repayment of Promissory Notes Payable................................. (9,919) ---
Purchase of Interest Rate Protection Agreements....................... (150) ---
Proceeds from Sale of Interest Rate Protection Agreements............. 9,950 ---
Purchase of U.S. Government Securities................................ (300,000) ---
Increase in Restricted Cash and Accrued Interest on U.S. Government
Securities............................................................ (6,000) ---
Dividends/Distributions............................................... (50,404) (35,190)
Preferred Stock Dividends............................................. (7,610) (3,408)
Other Proceeds from Senior Unsecured Debt............................. 2,246 ---
Debt Issuance Costs................................................... (8,098) (1,806)
------------- ----------
Net Cash Provided by Financing Activities............................. 231,332 111,355
------------- ----------
Net Decrease in Cash and Cash Equivalents............................. (3,775) (4,367)
Cash and Cash Equivalents, Beginning of Period........................ 7,646 8,919
------------- ----------
Cash and Cash Equivalents, End of Period.............................. $ 3,871 $ 4,552
============= ==========

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)

1. ORGANIZATION AND FORMATION OF COMPANY

First Industrial Realty Trust, Inc. (the "Company") was organized in the
state of Maryland on August 10, 1993. The Company is a real estate investment
trust ("REIT") as defined in the Internal Revenue Code. The Company is
continuing and expanding the Midwestern industrial property business of The
Shidler Group and the properties and businesses contributed by three other
contributing businesses (the "Contributing Businesses"). The Company's
operations are conducted primarily through First Industrial, L.P. (the
"Operating Partnership") of which the Company is the sole general partner. As
of September 30, 1997, the Company owned 493 in-service properties located in
18 states, containing an aggregate of approximately 41.6 million square feet of
gross leasable area. Of the 493 properties owned by the Company, 195 are held
by First Industrial Financing Partnership, L.P. (the "Financing Partnership"),
245 are held by the Operating Partnership, 19 are held by First Industrial
Securities, L.P., 23 are held by First Industrial Mortgage Partnership, L.P.,
five are held by First Industrial Pennsylvania, L.P., five are held by First
Industrial Harrisburg, L.P. and one is held by First Industrial Indianapolis,
L.P. First Industrial Realty Trust, Inc. is the sole general partner of the
Operating Partnership, with an approximate 87.9% ownership interest at
September 30, 1997. Minority interest in the Company at September 30, 1997
represents the approximate 12.1% aggregate partnership interest in the
Operating Partnership held by the limited partners thereof.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying interim financial statements have been prepared in
accordance with the accounting policies described in the financial statements
and related notes included in the Company's 1996 Form 10-K. These interim
financial statements should be read in conjunction with the December 31, 1996
audited financial statements and notes thereto included in the Company's 1996
Form 10-K. The following notes to these interim financial statements highlight
significant changes to the notes included in the December 31, 1996 audited
financial statements included in the Company's 1996 Form 10-K and present
interim disclosures as required by the Securities and Exchange Commission.

In order to conform with generally accepted accounting principles,
management, in preparation of the Company's financial statements, is required
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities as of
September 30, 1997 and December 31 1996, and the reported amounts of revenues
and expenses for the nine months and three months ended September 30, 1997 and
1996. Actual results could differ from those estimates.

In the opinion of management, all adjustments consisting of normal
recurring adjustments necessary to present fairly the financial position of the
Company as of September 30, 1997 and the results of operations for the nine
months and three months ended September 30, 1997 and 1996 and the cash flows
for the nine months ended September 30, 1997 and 1996 have been included.

Tenant Accounts Receivable, net:

The Company provides an allowance for doubtful accounts against the
portion of tenant accounts receivable which is estimated to be uncollectible.
Tenant accounts receivable in the consolidated balance sheets are shown net of
an allowance for doubtful accounts of $750 and $600 as of September 30, 1997
and December 31, 1996, respectively.

Earning Per Common Share:

Earnings per share amounts are based on the weighted average amount of
Common Stock and Common Stock equivalents (employee stock options) outstanding.

FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

Recent Accounting Pronouncements:

In February 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standard No. 128 ("FAS 128"),
"Earnings per Share", effective for financial statements issued after December
15, 1997. The Company intends to adopt FAS 128 in fiscal year 1997 and will
include the disclosure of earnings per share in accordance with FAS 128 in the
1997 year end financial statements. The Company has determined the financial
impact to be immaterial for the nine month and three month periods ended
September 30, 1997 and 1996.

In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 129 ("FAS 129"), "Disclosure of Information about Capital
Structure," and is effective for periods ending after December 15, 1997. This
statement establishes standards for disclosing information about an entity's
capital structure. The financial statements of the Company are prepared in
accordance with the requirements of FAS No. 129.

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income." This statement, effective for
fiscal years beginning after December 15, 1997, requires the Company to report
components of comprehensive income in a financial statement that is displayed
with the same prominence as other financial statements. Comprehensive income
is defined by Concepts Statement No. 6, "Elements of Financial Statements" as
the change in the equity of a business enterprise during a period from
transactions and other events and circumstances from nonowner sources. It
includes all changes in equity during a period except those resulting from
investments by owners and distributions to owners. The Company has not yet
determined its comprehensive income.

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information."
This statement, effective for financial statements for periods beginning after
December 15, 1997, requires that a public business enterprise report financial
and descriptive information about its reportable operating segments.
Generally, financial information is required to be reported on the basis that
it is used internally for evaluating segment performance and deciding how to
allocate resources to segments. The Company has not yet determined the impact
of this statement on its financial statements.

Reclassification:

Certain 1996 items have been reclassified to conform to the 1997
presentation.

3. MORTGAGE LOANS, SENIOR UNSECURED DEBT, ACQUISITION FACILITY AND
PROMISSORY NOTES PAYABLE

In conjunction with an acquisition of a portfolio of properties on January
31, 1997, the Company assumed two mortgage loans in the amount of $3,800 (the
"Lazarus Burman Mortgage Loan I") and $705 (the "Lazarus Burman Mortgage Loan
II") which are each collateralized by a property located in Long Island, New
York. The Lazarus Burman Mortgage Loan I bears interest at a fixed interest
rate of 10%, provides for interest only payments prior to maturity and matures
on July 11, 1998. The Lazarus Burman Mortgage Loan II is interest free until
February 1998 at which time the mortgage loan bears interest at 8% and provides
for interest only payments prior to maturity. The Lazarus Burman Mortgage Loan
II matures 180 days after the completion of a contingent event relating to the
environmental status of the property collateralizing the loan.

FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)

3. MORTGAGE LOANS, SENIOR UNSECURED DEBT, ACQUISITION FACILITY AND
PROMISSORY NOTES PAYABLE, CONTINUED

On April 4, 1997, the Company, through the Operating Partnership borrowed
$309.8 million from an institutional lender (the "Defeasance Loan"). The
Defeasance Loan was unsecured, bore interest at LIBOR plus 1% and had a
scheduled maturity of July 1, 1999. The gross proceeds from the Defeasance
Loan were used to purchase U.S. Government Securities as substitute collateral
to execute a legal defeasance of the 1994 Mortgage Loan (the "1994 Defeased
Mortgage Loan"). The terms of the legal defeasance require the Company to pay
down and retire the 1994 Defeased Mortgage Loan at the end of 1997. The
Defeasance Loan was retired in May, 1997, with the net proceeds from the
issuance of the 2007 Notes, the 2027 Notes and the 2011 Notes (as defined
below). As a result of the commitment for early retirement of the 1994
Defeased Mortgage Loan and the early retirement of the Defeasance Loan, the
Company has recorded an extraordinary loss in the second quarter of 1997 of
approximately $12.6 million. The extraordinary loss consists of a prepayment
fee on the 1994 Defeased Mortgage Loan and the write off of unamortized
deferred financing fees, legal costs and other expenses incurred in committing
to retire the 1994 Defeased Mortgage Loan and in retiring the Defeasance Loan.

On May 13, 1997, the Company, through the Operating Partnership, issued
$150 million (the "2007 Notes") and $100 million (the "2027 Notes") of senior
unsecured debt which mature on May 15, 2007 and May 15, 2027, respectively.
The 2027 Notes are redeemable, at the option of the holders thereof, on May 15,
2002. The 2007 Notes and the 2027 Notes bear a coupon interest rate of 7.60%
and 7.15%, respectively. Interest is paid semi-annually in arrears on May 15
and November 15. The issue prices of the 2007 Notes and the 2027 Notes were
99.965% and 99.854%, respectively. The Operating Partnership also entered into
interest rate protection agreements which were used to hedge the interest rate
on the 2007 Notes and the 2027 Notes. Including the impact of the offering
discount and the interest rate protection agreements, the Operating
Partnership's effective interest rates on the 2007 Notes and the 2027 Notes are
7.61% and 7.04%, respectively. The 2007 Notes and 2027 Notes contain certain
covenants including limitation on incurrence of debt and debt service coverage.

On May 22, 1997, the Company, through the Operating Partnership, issued
$100 million of senior unsecured debt which matures on May 15, 2011 (the "2011
Notes"). The 2011 Notes bear a coupon interest rate of 7.38%. Interest is
paid semi-annually in arrears on May 15 and November 15. The 2011 Notes are
redeemable at the option of the holder thereof, on May 15, 2004 (the "Put
Option"). The Operating Partnership received approximately $1.7 million of
proceeds from the holder of the 2011 Notes as consideration for the Put Option.
The Operating Partnership will amortize the Put Option proceeds over the life
of the Put Option as an adjustment to interest expense. The issue price of the
2011 Notes was 99.348%. The Operating Partnership also entered into an
interest rate protection agreement which was used to hedge the interest rate on
the 2011 Notes. Including the impact of the offering discount, the proceeds
from the Put Option and the interest rate protection agreement, the Operating
Partnership's effective interest rate on the 2011 Notes is 7.18%. The 2011
Notes contain certain covenants including limitation on incurrence of debt and
debt service coverage.

FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)

3. MORTGAGE LOANS, SENIOR UNSECURED DEBT, ACQUISITION FACILITY AND
PROMISSORY NOTES PAYABLE,
CONTINUED

The following table discloses certain information regarding the Company's
mortgage loans, senior unsecured debt, acquisition facility and promissory
notes payable:

OUTSTANDING BALANCE AT ACCRUED INTEREST PAYABLE AT INTEREST RATE AT
---------------------------- ---------------------------- ----------------

SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, MATURITY
1997 1996 1997 1996 1997 DATE
------------- -------------- ------------- ------------ ------------- ---------

MORTGAGE LOANS PAYABLE
- ----------------------

1994 Mortgage Loan..................... $ --- $ 300,000 $ - $ 1,750 N/A N/A
1995 Mortgage Loan..................... 40,000 40,000 169 168 7.22% 1/11/26
Harrisburg Mortgage Loan............ 6,315 6,504 37 39 7.25% 12/15/00
CIGNA Loan............................. 35,955 36,363 --- --- 7.50% 4/1/03
Assumed Loans.......................... 9,019 9,215 --- --- 9.25% 1/1/13
Lazarus Burman Mortgage
Loan I................................ 3,800 --- 50 --- 10.00% 7/11/98
Lazarus Burman Mortgage
Loan II............................... 705 --- --- --- (1) (1)
--------- ----------- --------- ----------
Total.................................. $ 95,794 $ 392,082 $ 256 $ 1,957
========= =========== ========= ==========
DEFEASED MORTGAGE LOAN
- ----------------------
1994 Defeased Mortgage Loan (formerly
defined as the 1994 Mortgage
Loan)................................. $ 300,000 $ --- $ 1,764 $ --- 7.09% 12/31/97
========= =========== ========= ==========

SENIOR UNSECURED DEBT
- ---------------------
2007 Notes............................. $ 149,949 (2) $ --- $ 4,344 $ --- 7.60% 5/15/07
2011 Notes............................. 99,365 (2) 2,721 --- 7.375% 5/15/11 (3)
2027 Notes ............................ 99,856 (2) --- 2,643 --- 7.15% 5/15/27 (4)
--------- ----------- --------- ----------
Total.................................. $ 349,170 $ --- $ 9,708 $ ---
========= =========== ========= ==========
ACQUISITION FACILITY PAYABLE
- ----------------------------
1996 Unsecured Acquisition
Facility............................... $ 92,600 $ 4,400 $ 450 $ 3 6.63% 4/1/00
========= =========== ========= ==========

PROMISSORY NOTES PAYABLE
- ------------------------
Promissory Notes....................... $ --- $ 9,919 $ --- $ 68 N/A 1/6/97
========= =========== ========= ==========

(1) The Lazarus Burman Mortgage Loan II is interest free until February 1998
at which time the mortgage loan bears interest at 8%. The loan matures as
described above.
(2) The 2007 Notes, 2011 Notes and 2027 Notes are net of unamortized
discounts of $51, $635 and $144, respectively.
(3) The 2011 Notes are redeemable at the option of the holder thereof, on May
15, 2004.
(4) The 2027 Notes are redeemable at the option of the holders thereof, on
May 15, 2002.

The following is a schedule of maturities of the mortgage loans, senior
unsecured debt and acquisition facility payable for the next five years ending
December 31, and thereafter:

Amount
------

1997 $300,202
1998 5,363
1999 1,710
2000 99,928
2001 1,683
Thereafter 428,803
Total $837,689
========

The above table presents the 1994 Defeased Mortgage Loan maturing in 1997
due to its scheduled prepayment. The 1994 Defeased Mortgage Loan is
collaterallized with U.S. Government securities which will be used to pay down
and retire the 1994 Defeased Mortgage Loan at the end of 1997. The maturity

FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)

3. MORTGAGE LOANS, SENIOR UNSECURED DEBT, ACQUISITION FACILITY AND
PROMISSORY NOTES PAYABLE, CONTINUED

date of the Lazarus Burman Mortgage Loan II is based on a contingent event. As
a result, this loan is not included in the above table.

In September 1997, the Company entered into an interest rate protection
agreement with a notional value of $100,000, a settlement date of January 2,
1998 and a forward yield of 6.13% based on the 10-year treasury note. This
interest rate protection agreement will be used to hedge the interest rate on
an anticipated offering of unsecured debt.

4. STOCKHOLDERS' EQUITY

On May 14, 1997, the Company issued 4,000,000 Depositary Shares, each
representing 1/100 of a share of the Company's 8 3/4% Series B Cumulative
Preferred Stock (the "Series B Preferred Shares"), at an initial offering price
of $25 per Depositary Share. Dividends on the Series B Preferred Shares
represented by the Depositary Shares are cumulative from the date of initial
issuance and are payable quarterly in arrears. With respect to the payment of
dividends and amounts upon liquidation, dissolution or winding up, the Series B
Preferred Shares rank senior to payments on the Company's Common Stock and pari
passu with the Company's Series A Cumulative Preferred Stock and Series C
Cumulative Preferred Stock. The Series B Preferred Shares are not redeemable
prior to May 14, 2002. On or after May 14, 2002, the Series B Shares are
redeemable for cash at the option of the Company, in whole or in part, at a
redemption price equivalent to $25 per Depositary Share, or $100.0 million in
the aggregate, plus dividends accrued and unpaid to the redemption date. The
Series B Preferred Shares have no stated maturity and are not convertible into
any other securities of the Company.

On June 6, 1997, the Company issued 2,000,000 Depositary Shares, each
representing 1/100 of a share of the Company's 8 5/8% Series C Cumulative
Preferred Stock (the "Series C Preferred Shares"), at an initial offering price
of $25 per Depositary Share. Dividends on the Series C Preferred Shares
represented by the Depositary Shares are cumulative from the date of initial
issuance and are payable quarterly in arrears. With respect to the payment of
dividends and amounts upon liquidation, dissolution or winding up, the Series C
Preferred Shares rank senior to payments on the Company's Common Stock and pari
passu with the Company's Series A Cumulative Preferred Stock and Series B
Cumulative Preferred Stock. The Series C Preferred Shares are not redeemable
prior to June 6, 2007. On or after June 6, 2007, the Series C Shares are
redeemable for cash at the option of the Company, in whole or in part, at a
redemption price equivalent to $25 per Depositary Share, or $50.0 million in
the aggregate, plus dividends accrued and unpaid to the redemption date. The
Series C Preferred Shares have no stated maturity and are not convertible into
any other securities of the Company.

On September 4, 1997, the Board of Directors of the Company declared a
dividend distribution of one Preferred Share Purchase Right ("Right") for each
outstanding share of common stock, par value $.01 per share, of the Company
(the "Common Stock"). The dividend distribution was made on October 20, 1997
to stockholders of record as of the close of business on October 19, 1997. In
addition, a Right will attach to each share of Common Stock issued in the
future. Each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Junior Participating Preferred Stock (the
"Junior Preferred Stock"), at a price of $125 per one one-hundredth of a share
(the "Purchase Price"), subject to adjustment. The Rights become exercisable
only if a person or group of affiliated or associated persons (an "Acquiring
Person") acquires, or obtains the right to acquire, beneficial ownership of
Common Stock or other voting securities ("Voting Stock") that have 15% or more
of the voting power of the outstanding shares of Voting Stock, or if an
Acquiring Person commences or makes an announcement of an intention

FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)

4. STOCKHOLDERS' EQUITY, CONTINUED

to commence a tender offer or exchange offer to acquire beneficial ownership of
Voting Stock that have 15% or more of the voting power of the outstanding
shares of Voting Stock. The Rights will expire on October 19, 2007, unless
redeemed earlier by the Company at $.001 per Right, or exchanged by the Company
at an exchange ratio of one share of Common Stock per Right.

In the event that a person becomes an Acquiring Person, each holder of a
Right, other than the Acquiring Person, is entitled to receive, upon exercise,
(1) Common Stock having a value equal to two times the Purchase Price of the
Right or (2) common stock of the acquiring company having a value equal to two
times the Purchase Price of the Right.

The Junior Preferred Stock ranks junior to all other series of the
Company's preferred stock with respect to payment of dividends and as to
distributions of assets in liquidation. Each share of Junior Preferred Stock
has a quarterly dividend rate per share equal to the greater of $1.00 or 100
times the per share amount of any dividend (other than a dividend payable in
shares of Common Stock or a subdivision of the Common Stock) declared on the
Common Stock, subject to certain adjustments. In the event of liquidation, the
holder of the Junior Preferred Stock is entitled to receive a preferred
liquidation payment per share of $1.00 (plus accrued and unpaid dividends) or,
if greater, an amount equal to 100 times the payment to be made per share of
Common Stock, subject to certain adjustments.

On September 16, 1997, the Company issued 637,440 shares of $.01 par value
Common Stock (the "September 1997 Equity Offering"). The price per share in
the September 1997 Equity Offering was $31.38, resulting in gross offering
proceeds of $20,000. Proceeds to the Company, net of underwriters' discount
and total offering expenses, were approximately $18,900. The net proceeds from
the September 1997 Equity Offering were used to pay down the Company's $200
million unsecured revolving credit facility (the "1996 Unsecured Acquisition
Facility").

Under the Company's 1997 Stock Incentive Plan, the Company has reserved
1,500,000 shares of Common Stock to issue to its officers, employees and
Directors of the Company. On September 30, 1997, the Company awarded 67,896
shares of restricted Common Stock which had a fair value at the date of grant
of $2,062. Sale of the restricted Common Stock is restricted for a period from
two to ten years from the date of grant. Compensation expense will be charged
to earnings over the restriction period beginning October 1, 1997.

On January 20, 1997, the Company and the Operating Partnership paid a
fourth quarter 1996 distribution of 50.5 cents per common share/unit, totaling
approximately $16.3 million. On April 21, 1997, the Company and Operating
Partnership paid a first quarter 1997 distribution of 50.5 cents per common
share/unit, totaling approximately $16.9 million. On July 21, 1997, the
Company and the Operating Partnership paid a second quarter 1997 distribution
of 50.5 cents per common share/unit, totaling approximately $17.2 million.

On March 31, 1997, the Company paid a first quarter preferred stock
dividend of 59.375 cents per share on its Series A Cumulative Preferred Stock,
totaling approximately $1.0 million. On June 30, 1997, the Company paid a
second quarter preferred stock dividend of 59.375 cents per share and a period
prorated dividend of 27.95 cents per depositary share on its Series A
Cumulative Preferred Stock and Series B Cumulative Preferred Stock,
respectively, totaling, in the aggregate, approximately $2.1 million. On
September 30, 1997, the Company paid a third quarter preferred stock dividend
of 59.375 cents per share and 54.6875 cents per depositary share on its Series
A Cumulative Preferred Stock and Series B Cumulative Preferred Stock,
respectively. On September 30, 1997, the Company paid a third quarter
preferred stock dividend and a period prorated second quarter preferred stock
dividend totaling, in the

FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)

4. STOCKHOLDERS' EQUITY, CONTINUED

aggregate, 68.123 cents per depositary share on its Series C Cumulative
Preferred Stock. The preferred stock dividends paid on September 30, 1997
totaled, in the aggregate, approximately $4.5 million.

5. ACQUISITION OF REAL ESTATE

During the nine months ended September 30, 1997, the Company acquired 115
existing industrial properties and several land parcels. The aggregate
purchase price for these acquisitions totaled approximately $336.2 million,
excluding costs incurred in conjunction with the acquisition of the properties.

6. GAIN ON DISPOSITION OF THE INTEREST RATE PROTECTION AGREEMENTS

In May, 1997, the Company sold its interest rate protection agreements and
entered into a new interest rate protection agreement at a cost of
approximately $.2 million with a notional value of $300 million which expires
at the end of 1997. This new interest rate protection agreement effectively
limits the interest rate on the 1994 Defeased Mortgage Loan to 7.2%. The gross
proceeds from the sale of the interest rate protection agreements were
approximately $10.0 million. The gain on disposition of the interest rate
protection agreements was approximately $1.4 million.

7. SALES OF REAL ESTATE

In June 1997, the Company sold two properties located in Atlanta, Georgia
and three properties located in Nashville, Tennessee. In September 1997, the
Company sold one property located in Maryland Heights, Missouri and a land
parcel located in Lorain County, Ohio. Gross proceeds from these sales were
approximately $23.4 million. The gain on sales of real estate was
approximately $4.2 million.

8. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Nine Months Ended
---------------------------------
September 30, September 30,
1997 1996
------------ ------------

Interest paid, net of capitalized interest................................. $ 24,638 $ 21,812
======== =========
Interest capitalized....................................................... $ 595 $ 251
======== =========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Distribution payable on Common Stock/units................................ $ 17,706 $ 12,802
IN CONJUNCTION WITH THE PROPERTY ACQUISITIONS, THE FOLLOWING ASSETS
AND LIABILITIES WERE ASSUMED AND OPERATING PARTNERSHIP UNITS EXCHANGED:
Purchase of real estate................................................... $336,180 $ 178,817
Accrued real estate taxes and security deposits.......................... (3,585) (2,128)
Mortgage loans........................................................... (4,505) (9,417)
Promissory Notes ........................................................ --- (9,919)
Operating Partnerships units............................................. (58,518) (15,398)
-------- ---------
$269,572 $ 141,955
======== =========

FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)

9. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company is involved in legal actions
arising from the ownership of its properties. In management's opinion, the
liabilities, if any, that may ultimately result from such legal actions are not
expected to have a materially adverse effect on the consolidated financial
position, operations or liquidity of the Company.

The Company has committed to the construction of 15 industrial properties
and the expansion of three existing industrial properties. The estimated total
costs are approximately $104.8 million.

10. SUBSEQUENT EVENTS

From October 1, 1997 to November 12, 1997, the Company acquired 114
industrial properties and two land parcels. The aggregate purchase price for
these acquisitions totaled approximately $214.0 million, excluding costs
incurred in conjunction with the acquisition of the properties.

On October 15, 1997, the Company issued 5,400,000 shares of $.01 par value
Common Stock (the "October 1997 Equity Offering"). The price per share was
$33.40, resulting in gross offering proceeds of $180,360. Proceeds to the
Company, net of underwriters' discount and total offering expenses, were
approximately $177,210. The net proceeds from the October 1997 Equity Offering
were used to pay down the 1996 Unsecured Acquisition Facility and fund
properties subsequently acquired.

On October 20, 1997, the Company and the Operating Partnership paid a
third quarter 1997 distribution of 50.5 cents per common share/unit, totaling
approximately $17.7 million.

On October 28, 1997, the Company executed a distribution agreement with a
group of agents pursuant to which the Company may issue from time to time,
through the Operating Partnership, up to $300 million in the aggregate
principal amount of medium-term notes due nine months or more from the date of
issue. The Company has not yet issued any medium-term notes under this
medium-term note program.

In October 1997, the Company entered into two interest rate protection
agreements. The first interest rate protection agreement has a notional value
of $100,000, a settlement date of July 2, 1998 and a forward yield of 6.317%
based on the 30-year treasury bond. The second interest rate protection
agreement has a notional value of $100,000, a settlement date of July 2, 1998
and a forward yield of 6.037% based on the ten year treasury note. These
interest rate protection agreements will be used to hedge the interest rate on
an anticipated offering of unsecured debt.

FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)

11. PRO FORMA FINANCIAL INFORMATION

Due to the acquisition of 233 properties between January 1, 1996 and
September 30, 1997 and the issuance of the Series B Preferred Shares, the
Series C Preferred Shares and the September 1997 Equity Offering, the
historical results of operations are not indicative of future results of
operations. The following Pro Forma Condensed Statements of Operations for the
nine months ended September 30, 1997 and 1996 are presented as if such property
acquisitions, the Series B Preferred Shares, Series C Preferred Shares and the
September 1997 Equity Offering had occurred at January 1, 1996, and therefore
include pro forma information. The pro forma information is based upon
historical information and does not purport to present what actual results
would have been had such transactions, in fact, occurred at January 1, 1996, or
to project results for any future period.

PRO FORMA CONDENSED STATEMENTS OF OPERATIONS

Nine Months Ended
--------------------------------------
September 30, 1997 September 30, 1996
------------------ ------------------

Total Revenues.............................................. $ 167,722 $ 150,815
Property Expenses........................................... (44,644) (44,839)
General and Administrative Expense.......................... (4,264) (2,899)
Interest Expense............................................ (36,268) (27,532)
Depreciation and Amortization............................... (31,469) (29,720)
------------------ ------------------
Income Before Gain on Dispostion
of Interest Rate Protection Agreements, Gain on Sales
of Real Estate, Minority Interest and Extraordinary
Item..................................................... 51,077 45,825

Gain on Disposition of Interest Rate
Protection Agreements.................................... 1,430 -
Gain on Sales of Real Estate................................ 4,186 4,320
------------------ ------------------

Income Before Minority Interest
and Extraordinary Loss................................... 56,693 50,145

Income Allocated to Minority Interest....................... (5,371) (4,571)
------------------ ------------------

Income Before Extraordinary Loss............................ 51,322 45,574

Preferred Stock Dividends................................... (12,738) (12,738)
------------------ ------------------

Income Before Extraordinary loss Available
to Common Stockholders................................... $ 38,584 $ 32,836
================== ===================

Inocome Before Extraordinary Loss Available to
Common Stockholders, Per Share........................... $ 1.26 $ 1.08
================== ===================

FIRST INDUSTRIAL REALTY TRUST, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis of First Industrial Realty Trust,
Inc.'s (the "Company") financial condition and results of operations should be
read in conjunction with the financial statements and notes thereto appearing
elsewhere in this Form 10-Q.

RESULTS OF OPERATIONS

At September 30, 1997, the Company owned 493 in-service properties with
approximately 41.6 million square feet of gross leasable area ("GLA"), compared
to 328 in-service properties with approximately 29.9 million square feet of GLA
at September 30, 1996. The addition of 172 properties acquired or developed
between October 1, 1996 and September 30, 1997 included the acquisitions of 165
properties comprising approximately 11.4 million square feet and the completed
construction of seven properties containing a total of approximately 1.1 million
square feet. The sales of seven properties comprised of approximately .8
million square feet were also completed between October 1, 1996 and September
30, 1997.

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1997 TO NINE MONTHS ENDED
SEPTEMBER 30, 1996

Rental income and tenant recoveries and other income increased by $45.0
million or 44.3% due primarily to the properties acquired or developed after
September 30, 1996. Revenues from properties owned prior to January 1, 1996,
increased by approximately $1.4 million or 1.7% due to general rent increases.

Interest income on U.S. Government securities in 1997 represents interest
income earned on U.S. Government securities that are pledged as collateral to
legally defease the Company's $300 million mortgage loan (the "1994 Defeased
Mortgage Loan").

Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses,
increased by $11.8 million or 40.4% due primarily to the properties acquired or
developed after September 30, 1996. Expenses from properties owned prior to
January 1, 1996, remained relatively unchanged.

General and administrative expense increased by $1.4 million due primarily
to the additional expenses associated with managing the Company's growing
operations including additional professional fees relating to additional
properties owned and additional personnel to manage and expand the Company's
business.

Interest expense increased by $13.2 million for the nine months ended
September 30, 1997 compared to the nine months ended September 30, 1996 due
primarily to a higher average debt balance to fund the purchase of U.S.
Government securities to legally defease the 1994 Defeased Mortgage Loan and to
fund the acquisition of additional properties.

Amortization of interest rate protection agreements and deferred financing
costs decreased by $.3 million due primarily to an increase in the amortization
period caused by an increase in the average maturity term of debt at September
30, 1997 compared to September 30, 1996.

Depreciation and other amortization increased by $7.0 million due
primarily to the additional depreciation and amortization related to the
properties acquired or developed after September 30, 1996.

The gain on disposition of interest rate protection agreements in 1997
represents the sale of the Company's interest rate protection agreements. The
gain on disposition of interest rate protection agreements was approximately
$1.4 million. The Company entered into a new interest rate protection
agreement at a cost of approximately $.2 million with a notional value of $300
million which expires at the

17
end of 1997. This new interest rate protection agreement effectively limits
the interest rate on the 1994 Defeased Mortgage Loan to 7.2%.

The $4.2 million gain on sales of properties resulted from the sales of
two properties located in Atlanta, Georgia, three properties located in
Nashville, Tennessee, one property located in Maryland Heights, Missouri and a
land parcel located in Lorain County, Ohio. Gross proceeds from these sales
were approximately $23.4 million.

The $12.6 million extraordinary loss in 1997 consists of a prepayment fee
on the 1994 Defeased Mortgage Loan and the write-off of unamortized deferred
financing fees, legal costs and other expenses incurred in committing to retire
the 1994 Defeased Mortgage Loan and in retiring the Company's $309.8 million
unsecured loan from an institutional investor (the "Defeasance Loan").

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1997 TO THREE MONTHS ENDED
SEPTEMBER 30, 1996

Rental income and tenant recoveries and other income increased by $15.8
million or 43.8%, due primarily to the properties acquired or developed after
September 30, 1996. Revenues from properties owned prior to July 1, 1996,
increased by approximately $.8 million or 2.6% due to general rent increases
which were partially offset by a decrease in tenant recovery income charges due
to a decrease in property expenses incurred for the three months ended
September 30, 1997.

Interest income on U.S. Government securities for 1997 represents interest
income earned on U.S. Government securities that are pledged as collateral to
legally defease the 1994 Defeased Mortgage Loan.

Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses,
increased by $3.4 million or 33.3% due primarily to the properties acquired or
developed after September 30, 1996. Expenses from properties owned prior to
July 1, 1996, decreased by approximately $.1 million or 1.6% due to a decrease
in utilities and insurance expenses in the majority of the Company's
geographical markets.

General and administrative expense increased by $.6 million due primarily
to the additional expenses associated with managing the Company's growing
operations including additional professional fees relating to additional
properties owned and additional personnel to manage and expand the Company's
business.

Interest expense increased by $5.9 million for the three month period
ended September 30, 1997 compared to the three month period ended September 30,
1996 due primarily to a higher average debt balance to fund the purchase of
U.S. Government securities to legally defease the 1994 Defeased Mortgage Loan
and to fund the acquisition of additional properties.

Amortization of interest rate protection agreements and deferred financing
costs decreased by $.1 million due primarily to an increase in the amortization
period caused by an increase in the average maturity term of debt at September
30, 1997 compared to September 30, 1996.

Depreciation and other amortization increased by $2.7 million due
primarily to the additional depreciation and amortization related to the
properties acquired after September 30, 1996.

The $.2 million gain on sales of properties resulted from the sale of one
property located in Maryland Heights, Missouri and a parcel of land located in
Lorain County, Ohio. Gross proceeds from this sale were approximately $1.5
million.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 1997, the Company's unrestricted cash and cash
equivalents was $3.9 million and restricted cash was $8.7 million. Included in
restricted cash are reserves required to be set aside under certain of the
Company's loans for payments of security deposit refunds, tenant improvements,
capital expenditures, interest, real estate taxes, insurance and potential
environmental costs. A portion of the cash reserve relating to payments for
potential environmental costs was established at the closing of the 1994
Mortgage Loan and is distributed to the Company as such expenditures are made,
and it is not required to be replenished to its original level. The portion of
the cash reserve on the 1994 Defeased Mortgage Loan relating to payments for
tenant improvements, capital expenditures, interest, real estate taxes and
insurance is established monthly, distributed to the Company as such
expenditures are made and is replenished to a level adequate to make the next
periodic payment of such expenditures. The portion of the cash reserve
relating to payments for capital expenditures, interest, real estate

18
taxes and insurance on the Company's $40 million mortgage loan (the "1995
Mortgage Loan") is established monthly, distributed to the Company as such
expenditures are made and is replenished to a level adequate to make the next
periodic payment of such expenditures. The portion of the cash reserve
relating to security deposit refunds on the 1995 Mortgage Loan is adjusted as
tenants turn over.

Net cash provided by operating activities was $67.9 million for the nine
months ended September 30, 1997 compared to $46.1 million for the nine months
ended September 30, 1996. This increase is due primarily to an increase in net
operating income due to the operations of properties acquired or developed
after September 30, 1996.

Net cash used in investing activities increased to $303.0 million from
$161.8 million due primarily to an increase in the acquisition of properties
which was partially offset by the proceeds from the sale of six properties and
a parcel of land.

Net cash provided by financing activities increased to $231.3 million for
the nine months ended September 30, 1997 from $111.4 million for the nine
months ended September 30, 1996 due to the sale of preferred stock and senior
unsecured debt and an increase in borrowings under the Company's $200 million
revolving credit facility (the "1996 Unsecured Acquisition Facility") during
the nine months ended September 30, 1997. These proceeds were partially offset
by an increase in dividends and distributions for the nine months ended
September 30, 1997 due to the issuance of additional common shares and First
Industrial, L.P. partnership units after September 30, 1996 and an increase in
per common share/unit distributions as well as the purchase of $300 million of
U.S. Government securities that were used to legally defease the 1994 Defeased
Mortgage Loan.

Funds from operations for the nine months ended September 30, 1997 was
$65.1 million, as compared to $42.4 million for the nine months ended September
30, 1996, as a result of the factors discussed in the analysis of operating
results above. Management considers funds from operations to be one measure of
the financial performance of an equity REIT that provides a relevant basis for
comparison among REITs, and it is presented to assist investors in analyzing
the performance of the Company. In accordance with the National Association of
Real Estate Investment Trusts' definition of funds from operations, the Company
calculates funds from operations to be equal to net income, excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation and
amortization, excluding amortization of deferred financing costs and interest
rate protection agreements, and after adjustments for unconsolidated
partnerships and joint ventures. Funds from operations does not represent cash
generated from operating activities in accordance with generally accepted
accounting principles and is not necessarily indicative of cash available to
fund cash needs, including the payment of dividends and distributions. Funds
from operations should not be considered as a substitute for net income as a
measure of results of operations or for cash flow from operating activities
calculated in accordance with generally accepted accounting principles as a
measure of liquidity. Funds from operations as calculated by the Company may
not be comparable to similarly titled, but differently calculated, measures of
other REITs.

The following is a reconciliation of net income to funds from operations:

Nine Months Ended Nine Months Ended
September 30, 1997 September 30, 1996
------------------ -------------------

Net Income Available to
Common Stockholders............. $27,402 $23,359
Adjustments:
Depreciation and Other
Amortization.................... 27,274 20,376
Extraordinary Items............... 12,563 821
Minority Interest................. 3,502 2,164
Gain on Sales of Properties....... (4,186) (4,320)
Gain on disposition of IRPA....... (1,430) ---
--------------- --------------
Funds From Operations.......... $65,125 $42,400
=============== ==============

The ratio of earnings to fixed charges and preferred stock dividends was
1.83 for the nine months ended September 30, 1997 compared to 1.80 for the nine
months ended September 30, 1996. The increase is primarily due to increased
net operating income as discussed in the "Results of Operations" above.

Between January 1, 1997 and September 30, 1997, the Company purchased 115
industrial properties comprising approximately 8.6 million square feet and
several land parcels, for an aggregate purchase price of approximately $336.2
million. The acquisition activity was financed with borrowings under the 1996
Unsecured Acquisition Facility, the issuance of approximately 2,000,000
Operating Partnership units and $4.5 million of indebtedness assumed in
connection with property acquisitions.

The Company has committed to the construction of 15 industrial properties
and the expansion of three existing industrial properties. The estimated total
costs are approximately $104.8 million. These developments are expected to be
funded with cash flow from operations as well as borrowings under the Company's
1996 Unsecured Acquisition Facility.

On April 4, 1997, the Company borrowed $309.8 million from an
institutional lender. The Defeasance Loan was unsecured, bore interest at
LIBOR plus 1% and had a scheduled maturity of July 1, 1999. The gross proceeds
from the Defeasance Loan were used to purchase U.S. Government Securities as
substitute collateral to execute a legal defeasance of the 1994 Defeased
Mortgage Loan. The terms of the legal defeasance require the Company to pay
down and retire the 1994 Defeased Mortgage Loan at the end of 1997. The
Defeasance Loan was retired in May 1997, with the net proceeds from the issuance
of the 2007 Notes, the 2027 Notes and the 2011 Notes (as defined below).

On May 13, 1997, the Operating Partnership issued $150 million (the "2007
Notes") and $100 million (the "2027 Notes") of senior unsecured debt which
mature on May 15, 2007 and May 15, 2027, respectively. The 2027 Notes are
redeemable, at the option of the holders thereof, on May 15, 2002. The 2007
Notes and the 2027 Notes bear a coupon interest rate of 7.60% and 7.15%,
respectively. Interest is paid semi-annually in arrears on May 15 and November
15. The issue prices of the 2007 Notes and the 2027 Notes were 99.965% and
99.854%, respectively. The Operating Partnership also entered into interest
rate protection agreements which were used to hedge the interest rate on the
2007 Notes and the 2027 Notes. Including the impact of the offering discount
and the interest rate protection agreements, the Operating Partnership's
effective interest rates on the 2007 Notes and the 2027 Notes are 7.61% and
7.04%, respectively.

On May 22, 1997, the Company, through the Operating Partnership issued
$100 million of senior unsecured debt which matures on May 15, 2011 (the "2011
Notes"). The 2011 Notes bear a coupon interest rate of 7.375%. Interest is
paid semi-annually in arrears on May 15 and November 15. The 2011 Notes are
redeemable at the option of the holder thereof, on May 15, 2004 (the "Put
Option"). The Operating Partnership received approximately $1.7 million from
the holder of the 2011 Notes as consideration for this Put Option. The
Operating Partnership will amortize the Put Option proceeds over the life of
the Put Option as an adjustment to interest expense. The issue price of the
2011 Notes was 99.348%. The Operating Partnership also entered into an
interest rate protection agreement which was used to hedge the interest rate on
the 2011 Notes. Including the impact of the offering discount, the
consideration from the Put Option and the interest rate protection agreement,
the Operating Partnership's effective interest rate on the 2011 Notes is 7.18%.

In September 1997, the company entered into an interest rate protection
agreement with a notional value of $100,000, a settlement date of January 2,
1998 and a forward yield of 6.13% based on the ten year treasury note. This
interest rate protection agreement will be used to hedge the interest rate on
an anticipated offering of unsecured debt. In October 1997, the Company
entered into two interest rate protection agreements. The first interest rate
protection agreement has a notional value of $100,000, a settlement date of
July 2, 1998 and a forward yield of 6.317% based on the 30-year treasury bond.
The

second interest rate protection agreement has a notional value of $100,000,
a settlement date of July 2, 1998 and a forward yield of 6.037% based on the
ten year treasury note. These interest rate protection agreements will be used
to hedge the interest rate on an anticipated offering of unsecured debt.

On October 28, 1997, the Company executed a distribution agreement with a
group of agents pursuant to which the Company may issue from time to time,
through First Industrial, L.P., up to $300 million in the aggregate principal
amount of medium-term notes, due nine months or more from the date of issue.
The Company has not yet issued any medium-term notes under this medium-term
note program.

On May 14, 1997, the Company issued 4,000,000 Depositary Shares, each
representing 1/100 of a share of the Company's 8 3/4% Series B Cumulative
Preferred Stock (the "Series B Preferred Shares"), at an initial offering price
of $25 per Depositary Share. Dividends on the Series B Preferred Shares
represented by the Depositary Shares are cumulative from the date of initial
issuance and are payable quarterly in arrears. With respect to the payment of
dividends and amounts upon liquidation, dissolution or winding up, the Series B
Preferred Shares rank senior to payments on the Company's Common Stock and pari
passu with the Company's Series A Cumulative Preferred Stock and Series C
Cumulative Preferred Stock. The Series B Preferred Shares are not redeemable
prior to May 14, 2002. On or after May 14, 2002, the Series B Shares are
redeemable for cash at the option of the Company, in whole or in part, at a
redemption price equivalent to $25 per Depositary Share, or $100 million in the
aggregate, plus dividends accrued and unpaid to the redemption date. The
Series B Preferred Shares have no stated maturity and are not convertible into
any other securities of the Company.

On June 6, 1997, the Company issued 2,000,000 Depositary Shares, each
representing 1/100 of a share of the Company's 8 5/8% Series C Cumulative
Preferred Stock (the "Series C Preferred Shares"), at an initial offering price
of $25 per Depositary Share. Dividends on the Series C Preferred Shares
represented by the Depositary Shares are cumulative from the date of initial
issuance and are payable quarterly in arrears. With respect to the payment of
dividends and amounts upon liquidation, dissolution or winding up, the Series C
Preferred Shares rank senior to payments on the Company's Common Stock and pari
passu with the Company's Series A Cumulative Preferred Stock and Series B
Cumulative Preferred Stock. The Series C Preferred Shares are not redeemable
prior to June 6, 2007. On or after June 6, 2007, the Series C Shares are
redeemable for cash at the option of the Company, or in whole in or part, at a
redemption price equivalent to $25 per Depositary Share, or $50.0 million in
the aggregate, plus dividends accrued and unpaid to the redemption date. The
Series C Preferred Shares have no stated maturity and are not convertible into
any other securities of the Company.

On October 15, 1997, the Company issued 5,400,000 shares of $.01 par value
Common Stock (the "October 1997 Equity Offering"). The price per share was $
33.40, resulting in gross offering proceeds of $180,360. Proceeds to the
Company, net of underwriters' discount and total offering expenses, were
approximately $177,210. The net proceeds from the October 1997 Equity Offering
were used to pay down the 1996 Unsecured Acquisition Facility and fund
properties subsequently acquired.

On March 31, 1997, the Company paid a first quarter preferred stock
dividend of 59.375 cents per share on its Series A Cumulative Preferred Stock,
totaling approximately $1.0 million. On June 30, 1997, the Company paid a
second quarter preferred stock dividend of 59.375 cents per share and period
prorated dividend of 27.95 cents per despositary share on its Series A
Cumulative Preferred Stock and Series B Cumulative Preferred Stock,
respectively, totaling in the aggregate approximately $2.1 million. On
September 30, 1997, the Company paid a third quarter preferred stock dividend
of 59.375 cents per share and 54.6875 cents per depositary share on its Series
A Cumulative Preferred Stock and Series B Cumulative Preferred Stock,
respectively. On September 30, 1997, the Company paid a third quarter
preferred stock dividend and a period prorated second quarter preferred stock
dividend totaling, in the

aggregate, 68.123 cents per depositary share on its Series C Cumulative
Preferred Stock. The preferred stock dividends paid on September 30, 1997,
totaled, in aggregate, approximately $4.5 million.

The Company has considered its short-term (less than one year) liquidity
needs and the adequacy of its estimated cash flow from operations and other
expected liquidity sources to meet these needs. The Company believes that its
principal short-term liquidity needs are to fund normal recurring expenses,
debt service requirements and the minimum distribution required to maintain the
Company's REIT qualification under the Internal Revenue Code. The Company
anticipates that these needs will be met with cash flows provided by operating
activities.

The Company expects to meet long-term (greater than one year) liquidity
requirements such as property acquisitions, scheduled debt maturities, major
renovations, expansions and other nonrecurring capital improvements through
long-term secured and unsecured indebtedness and the issuance of additional
equity securities. The Company may finance the development or acquisition of
additional properties through borrowings under the 1996 Unsecured Acquisition
Facility. At September 30, 1997, borrowings under the 1996 Unsecured
Acquisition Facility bore interest at a weighted average interest rate of
6.63%. As of September 30, 1997, the Company had approximately $105.3 million
available in additional borrowings under the 1996 Unsecured Acquisition
Facility. While the Company may sell properties if property or market
conditions make it desirable, the Company does not expect to sell assets in the
foreseeable future to satisfy its liquidity requirements.

OTHER

In February of 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards No. 128 (FAS 128), "Earnings
per Share", effective for financial statements issued after December 15, 1997.
The Company intends to adopt FAS 128 in fiscal year 1997 and will include the
disclosure of earnings per share in accordance with FAS 128 in the 1997 year
end financial statements. The Company has determined the financial impact to
be immaterial for the nine months and three month periods ended September 30,
1997 and 1996.

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income." This statement, effective for
fiscal years beginning after December 15, 1997, requires the Company to report
components of comprehensive income in a financial statement that is displayed
with the same prominence as other financial statements. Comprehensive income is
defined by Concepts Statement No. 6, "Elements of Financial Statements" as the
change in the equity of a business enterprise during a period from transactions
and other events and circumstances from nonowner sources. It includes all
changes in equity during a period except those resulting from investments by
owners and distributions to owners. The Company has not yet determined its
comprehensive income.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
None.

ITEM 2. CHANGES IN SECURITIES
None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.

ITEM 5. OTHER INFORMATION
Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits

Exhibit No. Description
- ----------- -----------

3.1 Amended and Restated Bylaws of First Industrial Realty
Trust, Inc., dated September 4, 1997 (incorporated by reference
to Exhibit 1 of Form 8-K dated September 4, 1997 as filed on
September 29, 1997, File No. 1-13102).

4.1 Supplemental Indenture No. 3 dated October 28, 1997 between the
Company and First Trust National Association providing for the
issuance of Medium-term Notes due Nine Months or More from Date of
Issue (incorporated by reference to Exhibit 4 of Form 8-K dated
November 3, 1997 as filed on November 3, 1997, File No. 333-21873).

4.2 Rights Agreement between First Industrial Realty Trust,
Inc. and First Chicago Trust Company of New York, dated
September 16, 1997 (incorporated by reference to Exhibit 99.1 of
Form 8-A12B as filed on September 24, 1997, File No. 1-13102).

4.3 Articles Supplementary relating to First Industrial
Realty Trust, Inc.'s Junior Participating Preferred Stock, $.01
par value, dated September 5, 1997 (incorporated by reference to
Exhibit 4.10 of Form S-3 dated September 24, 1997, Registration
No. 333-29879, File No. 1-13102).

10.1 * Third Amendment of the Fourth Amended and Restated Limited
Partnership Agreement of First Industrial, L.P.

10.2 * Fourth Amendment of the Fourth Amended and Restated Limited
Partnership Agreement of First Industrial, L.P.

10.3 * Fifth Amendment of the Fourth Amended and Restated
Limited Partnership Agreement of First Industrial, L.P.

10.4 * Sixth Amendment of the Fourth Amended and Restated
Limited Partnership Agreement of First Industrial, L.P.

10.5 * Seventh Amendment of the Fourth Amended and Restated Limited
Partnership Agreement of First Industrial, L.P.

10.6 * Eighth Amendment of the Fourth Amended and Restated Limited
Partnership Agreement of First Industrial, L.P.

10.7 Distribution Agreement dated October 28, 1997 between the Company
and J. P. Morgan Securities Inc., Donaldson, Lufkin & Jenrette
Securities Corporation, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, First Chicago Capital Market, Inc. and UBS Securities
LLC (incorporated by reference to Exhibit 1 of Form 8-K dated
November 3, 1997 as filed on November 3, 1997, File No. 333-21873.

27 * Financial Data Schedule

* Filed herewith.

Reports on Form 8-K and Form 8-K/A:

Report on Form 8-K dated June 30, 1997, as amended by the report on Form
8-KA No. 1 filed September 4, 1997, as further amended by the report on
Form 8-K/A No. 2 filed October 16, 1997, relating to the acquisition of
68 properties, one parking lot and land parcels for future development.
The reports included Combined Historical Statements of Revenues and
Certain Expenses for the acquired properties and Pro Forma Statements of
Operations for First Industrial Realty Trust, Inc.

Report on Form 8-K filed as of September 11, 1997, dated September 5,
1997, relating to the declaration of a dividend distribution by the Board
of First Industrial Realty Trust, Inc. (the "Company") of one Right for
each outstanding share of Common Stock, par value $.01 per share, of the
Company.

Report on Form 8-K filed as of September 19, 1997, dated September 11,
Agreement dated September 11, 1997 for 637,440 shares of the Company's
Common Stock, par value $.01 per share.

Report on Form 8-K filed as of September 29, 1997, dated September 4,
1997, relating to the Amended and Restated Bylaws of the Company dated
September 4, 1997.

================================================================================

The Company has prepared supplemental financial and operating information
which is available without charge upon request to the Company. Please direct
requests as follows:

First Industrial Realty Trust, Inc.
311 S. Wacker, Suite 4000
Chicago, IL 60606
Attention: Investor Relations

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

FIRST INDUSTRIAL REALTY TRUST, INC.

Date: November 13, 1997 By: /s/ Michael J. Havala
---------------------
Michael J. Havala
Chief Financial Officer
(Principal Financial and Accounting Officer)

EXHIBIT INDEX

10.1 * Third Amendment of the Fourth Amended and Restated Limited
Partnership Agreement of First Industrial, L.P.

10.2 * Fourth Amendment of the Fourth Amended and Restated Limited
Partnership Agreement of First Industrial, L.P.

10.3 * Fifth Amendment of the Fourth Amended and Restated
Limited Partnership Agreement of First Industrial, L.P.

10.4 * Sixth Amendment of the Fourth Amended and Restated
Limited Partnership Agreement of First Industrial, L.P.

10.5 * Seventh Amendment of the Fourth Amended and Restated Limited
Partnership Agreement of First Industrial, L.P.

10.6 * Eighth Amendment of the Fourth Amended and Restated Limited
Partnership Agreement of First Industrial, L.P.

27 * Financial Data Schedule

* Filed herewith.