FR - Earnings call transcript Q1 2019 | First Industrial Realty Trust, Inc.

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Operator

Good morning. My name is Catherine, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Industrial First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. that is note recorded. Please Instructions] today's being conference [Operator Thank you. to I'd of over turn to like Investor your President call Vice the now Harmon, host, Relations. Art you Sir, your conference. begin may

Art Harmon

to Catherine. everybody lot, a Thanks and welcome our Hello, call.

may plans we only today's our no prospects. factors These provide. guidance, and me from of time-sensitive and on and statements be may XX-K other statements forward-looking are date, remind as XXXX by materially Today's defined XXXX. expectations, Wednesday, filings. call let statements statements in we We our obligation or which based other discuss as our SEC April could and that Federal accurate assume Before our quarter Actual include results information statements our estimates first differ forward-looking of XX, results everyone cause Securities and may to this update management's our described the Laws. are

a in firstindustrial.com release discussed SEC reconciliation Investors report, measures earnings are of and financial report You tab. release. the supplemental earnings at available supplemental can our filings our find The non-GAAP call under our today's in and

after Asset Scott call our President and and Baccile, begin Chief Chief with our and your Our Executive it Officer; the Financial and on Markets remarks Bob Operations; of Peter Officer; call Chief Vice up open will President; by Peter which Officer, for Also of are Senior Jojo Capital we'll Vice Musil, President Investment questions. Chris Walter, today Yap, Schultz, Schneider, Executive Vice President Management. Senior

call turn me Peter. the let Now to over

Peter Baccile

quick those and guidance leases team will per on X.X feet great year's will investments building XXXX our year-to-date. would a morning, flash On start. In we through of and XX before that across thank location achievements building I excellent job do of last new developments predominantly is CBRE of remarks. walk which with at reported shortly, a in facilities product me of are his were value-add to preliminary at I note we of new joining Econometric has of provide level oversupplied, to supply on speaks by strength share that Good feet this have quarter of for an you in array and us. the in everyone are Art. Largely our of in square the signing FFO nine requirements right with the leases square the you excess the market. markets you, markets done for submarkets, and inventory that Thank the equilibrium. demand The let activity update Those its industrial the new for million XX state and million. a seeing Scott consistent an leasing, First increased Industrial in with publication, upon national first importance figures I ranges. net absorption recent is time. million the size but completions detail businesses are off you the Advisors larger which right specific right in you

rate of and was typical change have signed call today, on end our was growth rental same-store you XX%. and X.X% laid we line cash the at Moving expiration update we XX% at for of to with change X%. is This is was on of for Occupancy the rate out shorter-term year, cash that leases. NOI our now as now the of rental To for rate growth you portfolio a year-end. approximately several XXXX for our Cash in rollovers rental what first XXX the quarter. the our from down points we quarter basis results last experienced seasonality XX.X% as quarter

growth. rent for space, choices for significant So limited tenant still with conditions favorable facing the remain

job Our cash and our flow. doing capturing overall drive to team growth incremental a of leasing is good economics optimizing that

continue see signed across long-term our our activity developments leases evidenced recently markets at acquisitions. by as broad-based and tenant value-add to We our new

Per pleased last press week, last biggest XXX,XXX to I-XX/XX our night, release that Let a for I Pennsylvania. just square am First you me Logistics begin tell we lease Central our long-term foot in Center with at signing. our signed

Mints leases well-known third-largest the Hazelnut The number Spread. U.S. and in by the lease will brands with chocolates, Ferrero Our commence the including a the company world, fourth is Ferrero Ferrero of of of USA arm Inc., maker confectionery Rocher the TicTac quarter. Nutella

the XPLs, Empire XXX,XXX Moving one remaining call and serves another by The of now we food square different which leased Inland beverage These our two There leased submarket. we to Southern our footers. a California and six serves customer that XXX,XXX building West and Ranch two with industries. variety a project, and in were buildings

park. cash the stabilized our our for low With entire of efforts our in completion is The This total was underwriting, original exceeded significantly leasing million result yield Ranch, our the investment which Xs. the on of $XX.X at X.X%

Our performance past into years. California gives window you on a few level in rent of project Southern these growth this the

with XXX% our submarket commencement be multi-brand to in shortly Inland scheduled Logistics company. a is pre-leased lease Perry for East fashion also completed First The XXX,XXX-square-foot to Empire We the thereafter. Center third the building in quarter

value-add tool LA acquisition in a square XX,XXX at specialty completed market. our the feet we last year leased also XXX,XXX-square-foot We company to

In of Chicago, a we submarket, we Park square to Center, XXX,XXX-square-foot third XXX,XXX XX,XXX Dallas, and the Triathlon of now XXXXXX-square-foot two-building XX,XXX-square-foot feet company. pleased XXX,XXX-square-foot our goods development bringing lease that forward quarter. leased is slated to survey XX to with XPL were lease for Joliet we the Orchard In at first pre-leased. project our a Completion Business to XX% development First quarter. I-XX consumer that the First to Battery, acquired in signed Switching First XXX, we the Texas. Moving

building automotive now in Lastly, XX,XXX-square-foot at serving signed That is to Houston, at leased. provider week First lease tenant. XXX development Guhn just an logistics our last we two-third Road a an

investments. Turning to new now

environment. this continue opportunities We very competitive to source profitable in

starts broken new three told two Dallas, call; In Southern developments quarter we earnings since addition in first then. about on and pleased to you our ground in California to February are we the have

The first Commerce million estimated scheduled the $XX.X Parkway is with investment in quarter. X.X% in of project Center two-building for and XXX,XXX-square-foot completion an respectively. Houston is fourth First and cash The Grand yield our

The million our one will the our the Out submarket XXX,XXX-square-foot buildings yield projected Crossing County Park portfolio second New this total Central in Jersey. First expanded is is at estimated square cash by complete Central we investment we our four and new is $XX.X feet. Burlington When to totaling million X.X%. facility III year-end, for in building have

Logistics two-building submarket West in California. of is a the Inland estimated Redwood $XX.X X%. investment cash Center with The our forma The yield third is Empire of pro Southern XXX,XXX-square-foot total First million

quarter first We of expect XXXX. delivery the in

two added in development also the We quarter. first new sites

the The completed land building the in and That X.X%. occupied a subsequent our will investment yield call. quarter first site with total XX,XXX-square-foot and build-to-suit cash was February million estimated is be Phoenix and our in on third of outlined $X.X

million feet a Park In additional acquired we The the can on land which rates is of have which purchased cap in that margin adjacent our on X.XX XXX,XXX site entitled. approximately return, million based of XX-acre leased market First currently XXX,XXX XXX development million our At quarter-to-date, average Inland prevailing XX build footer today. a we this second comprised projected we developments cash East as which Empire we under when $X.X for X.X% acres we with of $XXX our on XX% for square build this construction a the of second Dallas was for can batch to square cash approximately square in up Summing leased $X.X projected assets. yield of XX% on million is feet. comparable pipeline,

million. in high-finish Diego the quarter, for a building second $XX.X million. square in feet we sale to in facility of Moving sold San We XX,XXX-square-foot dispositions. quarter-to-date, for one Miami X,XXX had the a In $X.X

the a million corporate reminder, also is target $XXX our Phoenix expect loaded we sales back-end balance As sites I to similar joint years. for prior users. million, like that would which note $XXX two to to our sold sheet land to venture year-to-date be to year

was sale parcel The XX-acre the in first first a quarter.

Our the of million. price sales $X share was

last was originally of acres opportunities In our Just venture our the with site. these invested sales, of the at we remain That and week, new XX% site returned has growth. capital. price Post space XXX sum, acquired second share and XXX acres additional active another million. sale owns the closed $XX.X of sales to now tenants totaled seeking accommodate XXX approximately many

on that, I'll refine execute working we turn profitable redeployment. through to side and to Scott. provide With it our to investments the capital over continue is team to sales Our diligently uncover and portfolio

Scott Musil

Peter. Thanks

diluted year from share $X.XX ago. in for Let EPS FFO operations XQ, quarter. $X.XX me to per of fully with $X.XX the per our versus $X.XX start funds XXXX. NAREIT one share Diluted EPS compared was and

a $X.XX from FFO the ago, Excluding per charge severance year XQ, impairment XXXX, share. and was

XX.X%, prior points up XX ago. down basis basis a As year from from Peter XXX noted, occupancy the quarter was points and

renewals leasing XX.X% new X.X%. square arrears, On were up real commenced bumps, and new, was and were basis, increase in tax were estate cash acquisitions basis, fees, million XX%. XX%. in X% NOI rental with for X.X Cash up which leases. rates rental was was and termination up rates Lease predominantly driven leasing totaled overall, straight-line million on quarter, paying rate renewals and new was increasing excluding volume Regarding feet termination a for by lower X.X in square lease-up. Denver. Tenant and retention growth up were in $XXX,XXX these footage feet rates This X.X% and XX% Same-store NOI XX.X%. growth by fees free including square rent, overall true-ups partially redevelopment square of and fees Of approximately it were X%. rental leasing offset with a feet XXX,XXX the long-term renewals we same-store up cash XXX,XXX was termination markets leasing with a by rental

now sheet. the Moving to balance

is debt maturity years, stock interest the gross was net of million our secured first the mortgage to adjusted moving end a of on term as EBITDA our and figures loans loans financings paid March rate a credit weighted-average less a X%. X%. sheet interest than times. average of X.X X.X $XX And At off our with XQ, to unsecured These the Quickly weighted-average XX, of to rate weighted of at our X.X%, we a metrics. exclude debt bringing percentage plus secured of at balance quarter, assets few facility. During preferred notes,

evening. Moving on release per guidance XXXX press our to our last

guidance of is capitalize guidance range driven as now mid-point year $X.XX quarter gains follows; the increase the costs our back Our $X.XX earnings quarter, two guidance our debt same-store to million from average we call; key per third primarily in impact initial our or million million guidance total, for are growth of assumptions weighted the leasing $XX.X an developments. our future is any excludes X.X% X.X%; secured with claims share million to XX; it our payoff not impact acquisitions, fourth and the damaged NOI to reflect X%, these G&A secured a outperform completed anticipated related XX.XX%, issuances; any let the guidance, at of equity. related March carry by debt starts about assumptions to debt our NAREIT new me payoffs quarter final to future $XX XXXX, settlement; related developments; includes expect expected ability from insurance does to a of purchases With of properties; XX.XX% our to developments in full approximately end also under-construction that, The $X.XX. over the This an underwritten this to issuance XXXX turn the XXXX guidance is at $X per guidance FFO other than future interest sales, maturity to $X.XX for range of of impact $X.XX potential share or development average interest to of Peter. $XX.X repayments, our approximately the in and any and occupancy of maturity the debt and of of after rate

Peter Baccile

questions? to continues our We're portfolio off in investments. start to growth operator, team from you And as Scott. and it open an fronts Thanks for on please would flow XXXX, drive all execute new incremental with cash that, up excellent to our

Operator

[Operator the from of Instructions] Mailman Your with question Markets. Capital line Craig first comes KeyBanc

Craig Mailman

the Hey, Nice leasing. on job good morning, guys. development

that. on Just

someone could give little a the of And bit potential Ferrero, of color is there. kind from that the facilities Or like how deep consolidation a curious, if in was you other tenants of pool case a on kind of in area? of the expansion? Just pure us is that

Peter Schultz

done they've probably you've them Craig, Ferrero, to some that Hey Peter press on couple of Relative a it's seen Schultz. acquisitions.

space. of So pleased was a growth amount certainly there that And size activity them. for market this that And in for fair the have done. we're is to deal

Bob Walter

So I space ones had multiple and were leasing, for ones the credit. multiple parties, who the we interested the the that and the fit rest inquiries would had of the say who picked best and the most we

Craig Mailman

into the just anything that is pure give on on dynamic, the deals have XQ. or there helpful. driving I in Then I mean particular spreads getting And it new better us rent acceleration? that's done acceleration is That's anything that. or spreads leases the same the some you renewals? in is are that -- on geographic-wise mean particular insight guys here you just versus

Chris Schneider

so completed are script year, about And we're Chris. as great looking is that our there. at for this Craig, Hey XX% renewals for in mentioned the obviously have that the all commencements results the were XXXX we

that's markets Dallas rate spreads California, our those where it's Southern from, far leading the we're Denver. broad-based, rental Houston market As as but seeing are coming where and

board. So across seeing we're the

Art Harmon

Yes. Craig, this is Art.

clear year-to-date in be commencements XQ. will to that be the signed the to quarters just the not Just year, limited of following

Craig Mailman

that least right. Stuff XX. you guys through Quite April at

Art Harmon

date. right, That's the through

Chris Schneider

Correct.

Craig Mailman

roll looking can that kind relative XX% do as to year, market pull of of at have sustainable? Or did in for stuff well your you forward think do guys the you're mark-to-market balance And of to XXXX? you you was you what is that left from or where the the kind

Chris Schneider

Yes.

care have it's as of said, far XX% been sustainability, As taken our we as about renewals of.

around plus that look throughout the to right or range that in we be year. XX% minus So

Craig Mailman

Great. Thank you.

Operator

next Your Stevenson the comes with line question Rob of Janney. from

Rob Stevenson

pressure tell mean stuff new controllable, land you're seeing inflationary on I the underwriting? me potential morning, little more is impact land, you to terms Can mean in developments? starting that's And there? labor is on a much about seeing Good material guys. bit what on of but how pressures costs I it you're and

Jojo Yap

it's Jojo, Rob. This increasing. still off from leveled is actually It's year, last but

anywhere market-to-market, on So the depending increase -- building But looking underwriting on contractor it is X% X%, we're to from volume, margins. of on market is because part depends so depending are it year-over-year. that we

Rob Stevenson

that year, year does compare the last the to how And before?

Jojo Yap

faster we're the redeveloping. growing -- that number been the overall have on areas in Rents

is So more -- on what's and affecting us competitive margins -- is prices. for land the

I think has costs. said that land you but escalating the construction been price, more than

Rob Stevenson

XXXX does how and cost construction compare that And increase I XXXX? to mean

Jojo Yap

and XXXX. was larger, to XXXX similar

Rob Stevenson

out you markets in mean that that market Okay. anything And from that days in nationally standpoint, either or land? a I of you certain would in pause a today you're have any seeing where starting have there, terms project new these

Peter Baccile

markets There are is there some excess some supply. where

mentioned it's feet-and-up spaces, XXX,XXX and Dallas, Northeast quarter, and South in and call that I PA. largely As it the to in I-XX would Chicago, the be bigger Central our remarks, continue properties Atlanta,

closely the to absorbed. and how So we're watching markets gets see those space when there

Rob Stevenson

stack? markets evolving how for preferred your think And sort the you capital issue is where And the of Okay. your thoughts guys in mean in What's preferred balance And like back next you in could then that Scott on today? of strong. of company's of the terms terms years? funding the sheet, couple splice seems come I do

Scott Musil

credit. to looking got far have room to as that the capital we for $XX have we've in say million of as and needs line of of only XXXX, just the I'd going plenty XXXX, rest debt about in make really we're of payoffs globally

stack But our to or refresher preferreds, or as and might at the say on right XXXX. more had to far I'd rate preference maturities. time debt capital our As look now XX XX last for have I was it back have it We get I'd now think XXXX go every we it. a year than to in the banks then. capital been

Rob Stevenson

Okay. Thanks guys.

Operator

question the comes line John Stifel. of with next Guinee from Your

Joab Dempsey

prior Looks most Hi. morning, on in This everyone. to provide $X color quarters. for rent? on relative like about the Dempsey is rent? Good Joab free it a which some line Could you came -- Is just above that the seems higher John. million, of bit straight-line

Chris Schneider

typically the rents free straight-line the rent mean, with or spread I the Yes. gap is the rent.

primary is impact of that So the that.

Scott Musil

remember up driver year. one X.X of foot you leased think First is end Center I million at to last the And Logistics that Nandina got the we of big square

first rents XXXX. So pushing is of the free quarter that through in

that's the guess one drivers. my probably So bigger of

Joab Dempsey

Got it. of you. probably That's most

at XXXX then And looking those completed when not could great. and into maybe service, yet development you just provide insight the see a Okay, as to in might in assets move little we service?

Peter Baccile

XX/XX, already you then only other just leased, Inland I in leased. an look when Well, XXX,XXX un-leased Joliet and foot First three Ranch the not buildings And Empire is mean First that, I a that's The lease First about at Logistic spoke the our our portion we the at are First so and Road. largest Guhn that already XXX square mean are portion XXX leased to of for a phase -- fully

having inquiries all activity and those. We are in

one-year you downtime As know we a projected in those.

are We they leased. when fully will announce

Joab Dempsey

All Nice right, great. taking for quarter Thanks guys. Thank you. questions. my

Operator

[Operator Instructions] question Street Eric Frankel from the Your Advisors. of Green with line comes next

Eric Frankel

Thank you.

your same-store per of true-ups provide last XQ discussed your impact NOI growth. property on the you that quarter, guidance XXXX growth? you think distorting I tax Can NOI

Scott Musil

Eric its to entire projecting on XXXX XX Scott. was year. for impact about we that's It's were And impact the what the the XQ. be points basis

Eric Frankel

expect for -- of of for for the quarter points So rest XX the basis each the we should consistently rest year? that

Scott Musil

Absolutely, yes.

Eric Frankel

the with as Okay, quarter thank rent second to Nandina, be free there will the in you. continue be the First And then well? free rent --

Scott Musil

out? the -- able free the when when's when's period Jojo to rent we the runs are -- at say Nandina

Jojo Yap

year per No. to year. will range No you, were a from there. market -- month per the -- I tell confidentiality Eric market to it's of I a that month we mean I subject half would ranges

disclose within so at actual the not But free that I'm range. rent. we're liberty to And

Eric Frankel

lease? the was term what And of Okay. the

Jojo Yap

long-term. the tell you disclose can it's sale. That I I cannot

Eric Frankel

I is Thank loaded rest for appreciate you. the Okay, year. of that. your great. disposition understand usually I program backend

to So maybe the your of details that year on you well as bit of funky. the little a sell -- for describe as type the you're planning Diego Obviously rest can sale? assets looks additional San assets some just

Peter Baccile

San talk also we've the handle the the of is buyer I'll similar year the profile in Jojo topic. overall this selling profile about Diego to is years. very last The we're profile assets couple the will the the of and The that of similar. of sold assets

So it's XXXX worth individuals. and going to buyers typically be net users high

two you've backend as last continues program you expect years. talk yes we that to to really Jojo want about loaded. as said seen it be in the So you it? And

Jojo Yap

Sure.

so Eric, a and high building it that with current with is So that tenant. amortization finished building significant was leased

Now reason is the they'll moving to the another totally they're end tenant By out month for that of they be eventually. the that own. is And out. next consolidating building

thought So redevelop looked when either at that, looked product, reason or look the and clear, option have very and when is us. truck would nor sell high we make we redevelopment at we generous ultrahigh redevelopment there for have a We it the with the develop And it. did that not parking. we end redevelop we to capital we did courts put had and always that an was not we sense for quality it ended building meaning in up not would or as amounts of it

it's that capital take that, So and for said given us somewhere all to the else. reinvest we better

exchange market So in who had it property XXXX we per to redeveloper a need. a the for $XXX flex foot sold

Eric Frankel

that a like the really it in cap amortized Was -- trailing take -- just NOI? is included or it… XX% you on Like it we -- rate Or And does would NOI? Okay. look should rent. that

Jojo Yap

That's Yes. It correct. trailing was NOI. in

Eric Frankel

on that property? pretty seems Phoenix. that that. sales actually Final appreciate just anything developing on in on land you're okay. joint-venture the Do question, big Okay, I like you efficiently. plan through cycling It

Peter Baccile

And pricing ready we land go strategy And We've spec has to and pleased we've have as been activity execute evaluate that's on we will all achieve development sales. we pretty the know. soon high to to the opportunities Yes, the development let sold. you something been continuing on land as that very, opportunities very and there. to with the along build-to-suits there are

Eric Frankel

you. Okay, that's Thank it.

Operator

from comes with of question SMBC line the Rich Anderson next [ph]. Your

Rich Anderson

curious if Early little supply between would some morning. that of gap state. Are Hey, thanks a you equilibrium. list on you national you the a four you're is on you is perhaps two that list and would outpacing markets markets the the but markets your is not see call to you to in metrics equilibrium described maybe oversupply see or -- in that four there market why shrinking? bit a where second I'm an in theory have approach. more as happen that other a described secondary And And cautious good those risk. be -- on before absorption

Peter Baccile

first Let part question. the me at of go your

is our cycle plan business is well manage million. entire and through the the today is development cap our meant perform mitigate $XXX through ways of to which So, self-imposed we one or risk

those so we supply, basis. and is markets the we these to evaluating those the earlier, coasts. are market projects. each new are into I most at we're markets significantly. country the grow are as look rapid as we're XX submarkets, go there values other course, whether at across Where pace that that you a not markets outlined won't start in of excess there surprise very have continuing about on know appreciating are And are in offices of where you to very, risk continual that a country on going land It the as markets But and

as other and Denver On Dallas Houston hand, and pretty the doing well. well are

and our be a I not And mitigant. And always forward. there a profitable the So, risk cap assessment evaluating is looking we're on to looking activities. not the in past constantly risk volume it's said We're shot. the as we're target

Jojo Yap

oversupplied. which we mean -- buildings I of feels it to note feet is square a it'd under is I We've discipline. started Inland load right Again we actually front Worth a Also and -- overbuilt shows building want rear North this don't not but slow. in market that that that just have multi-tenant. pocket just Northwest would've our the leased And load we have XXX,XXX that got not we Empire. in only more, shows wanted now one There not to the that kind that in is certainly Houston. Fort three a in whole that's definitely even we and is start

start. we we to tough tough So, buy but it's it's wish land had, to

So, looking for lot we're a more.

Peter Baccile

I'm was question? sorry what of your the part second

Rich Anderson

Yes.

those have PA Dallas, secondary listed but the there where Chicago, you Atlanta, shrink? but markets supply you list starting oversupplied, are Central is four So, good, is between a conditions spread to demand where

Peter Baccile

focused the markets markets Not But hovers really. at the is When look we I X%, be rate national where you case. where -- in that wouldn't we investment. the don't are for cannot other new speak to targeted still X% vacancy have area. the

So, will still deliveries for it market balance, time. and even landlord's a are absorption and some in though it's be net

Peter Schultz

Rich or submarkets predominantly X markets feet add Peter rather four that's four to to square those to buildings XXX,XXX, or said, And clear, be oversupplied. it's up million what those larger feeling

feel markets So, we continue aren't to within bullish in that broader doesn't mean about. submarkets those opportunities that that there

starts in mentioned our some Jojo as an of Dallas As example.

Peter Baccile

right Yes. right here Building time place is on submarket. matters and depending the in right at the the answer the the size product really

Rich Anderson

of question spaces? your materialize interested bigger -- tenants perhaps taking you activity as Are mile are you sort to rents, Okay, smaller that Amazon facilities that segue. all within closer A my leads me lot which into moving in last seeing about even a to sort smaller of stuff. second talk in starting of where see circle it? that or of but Is paying

Peter Schultz

demand see continue broad-based We of sizes. across range really a to

XXX,XXX XX,XXX XX,XXX several that the to standpoint development the we several of to more the look on across the you activity some we from ranges. that leasing XXX,XXX obviously, we the the signed size all and in a see XXX,XXX-square-foot at And continue in largest one But spread seeing spaces to on XXX,XXX. under than spaces. larger definitely would those traction rent I we're are add If

Jojo Yap

have add -- that spaces. few and what to said much supply very is have they is that tenants for building therefore Peter rents. more choice, and limited And of And less pretty the under but so limited to the fewer there's pay one choices they have in higher reasons a to XXX,XXX-square-foot

Rich Anderson

that the just Right, past that number and described? in a you've change so, that of is sort probable sub-XXX,XXX year, that you noticed

Chris Schneider

Yes.

we even look the -- results, you And feet was about X%. rental at square about square feet XXX,XXX If XXX,XXX saw X%. first rate over under increase was quarter

point a spread the So, basis about XXX in spaces. smaller

Rich Anderson

Thanks very much.

Operator

Your line with of Bin from the next Ki question comes Kim SunTrust.

Ki Bin Kim

Thanks.

capital you most So on you guys you already in million, Phoenix your that, top right already? the back hear have did left? I And of that's land invested in got of that land already XXX

Peter Baccile

true. That's Yes.

Ki Bin Kim

XXX acres, sorry.

Peter Baccile

Yes. XXX The its own And XX% capital the to has back. invested of venture acres. we continue

Jojo Yap

Yes. We're XX% we about still own XX%. about --

Ki Bin Kim

impressive. pretty That's

So, to want more if mean develop you funding anything percentage-wise does parcels? for that versus

Peter Baccile

No.

I again, an what We because now can think even, was the a time frame I it I'm looking execution to we us going pretty through had we for. And is guess the on it mix that on focus fact on be. that we have the mix knew the idea are word to now thrills rest. of going we the be of not wanted land component quick that

Jojo Yap

and and value, maximization then is focus our sales plan of initial over in again land site development And creation we value, like is build-to-suits. said of spread

Peter Baccile

We into this came we the we what because business. speculation strong very position Phoenix best think is an had the a opportunity to to submarket there all in in not plan. We're have land project working in according and Yes. it's

Ki Bin Kim

do And do better inform more like so Obviously where you have market that playing certain to knows money do in you things question about spread maybe second the investing that get to conviction house that? in the little bigger you attention market is a XX% has picture. get to How you XX% go better systems a can Industrial like how if located? little how processes yourself And than be right? done that better you're your or things now do to -- trying you're well. guys direct really trying better does And bit a in that. a So, and with try people to you market? Everyone

Peter Baccile

Yes.

the talking mix. felt and platform breadth the a of the lot things of there's Ki Bin. go really our strength the of into You're about We platform that

our down to focused Our certainly anticipate mix. and as in us to important. only the terms you on of is well. we're constant very, not coming demand needs. obviously service what's with bit, Being It technology. customer try into allows very mentioned that supply goes road a see contact the in tenants to And but And their and

most real components that's that's business. company. also the but we're a to focus time are And important. estate are our going our other obviously We be going And to of

Ki Bin Kim

thank you. right, All

Operator

Michael [Operator the of question Instructions] next line Muller with JPMorgan. Your comes from

Michael Muller

Hi.

I second I number is, first here, the questions over underwrite little And it the development two gone recall you been lease-up? was I million. thought guess relative And think seem question Just lower. up? you running $XXX us to is so can what said the the year to you of has question cap it that? a course was actually has or that bit for development I past say do remind typically where -- that

Peter Baccile

Okay.

handle I'll first the So the cap. on part

million, under over And $XXX So raise January million XXXX we today in the the got ago. about a did that we've $XXX little so $XXX cap. from of bit of year cap's capacity -- a million in

Jojo Yap

it completion average underwrite terms continue well construction. of we from of a before on And in we And -- lease-up to that. one-year substantial release time we've downtime

Michael Muller

that, months, well nine Okay. rough mean months ballpark? just six I before Is

Jojo Yap

be a Six the months can’t give the that will exact year, the I for range. you number.

Michael Muller

Thank it, That Got you. was it. okay.

Operator

Crow James. Your question Raymond comes with of line from the Bill next

Bill Crow

Hey! Good guys. morning

or Are and rates everybody's set Industrial? development? change me, the in the question pace developers Just any builders to come the parties industrial merchant seeing you from out in the in that new look given success a table at quick you new other there, you aside having when

Peter Baccile

But grow of turn capital impacts of some are home predominance terms pricing to color. is I'll into the amount looking for market. Jojo? we impacts can that we to continues Jojo new come space. it the to for It impacts that pursue. is for Sure, Yes. the but it margins ultimately and earn that in values. And growth projects all capital demand land on the significantly. impacts I'll transaction large It and more the players start There of merchant a in the over -- industrial builders, that then in the the definitely

Jojo Yap

just and additional expense acquisitions to And through in those Yes. foreign of add entities the Peter, investment. and to entities capital foreign

the past a that's acceleration been So to there's -- couple of years, over that.

Bill Crow

thing rates a margins Yes. development up cap much and pushed pushed down good can you And said a of problem. it's as Peter, on that's be too

seeing not new many market. guess, that coming yet, that not to on might that developers just threaten You're I overbuild the

Peter Baccile

on think in where it's the it's I that markets easier put to where Well, money very now. get those pace -- markets participate it's are again, with entitlements. submarket a to don't which analysis. invested. tougher happen oriented We the And get There can that covenant really does in markets a

the prospect thing potential when or a the barrier So again at you that's do. to market, a tougher look of overbuilding, in higher

is higher barrier, definition, there cetera. more land, costs take less it et by Just entitlements longer

much two tale but based. it I So cities, call it's -- submarket of it's a submarket very by

Bill Crow

Appreciate me. Okay. for That’s it. it

Operator

I'd [Operator to call Instructions] And the there time. closing are at no for this over Peter questions Baccile further comments. turn any like back to

Peter Baccile

Please you today. in early Scott all or June. you of for or to at thank free Art to many and a look me reach feel forward follow-up and out one. great NAREIT us Have any operator to joining we questions seeing with you, Thank

Operator

concludes Ladies this and gentlemen, call. today's conference

You disconnect. may now

First Industrial Realty Trust (FR) 24 Apr 192019 Q1 Earnings call transcript