FR - Earnings call transcript Q4 2019 | First Industrial Realty Trust, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the First Industrial Fourth Quarter and Full-Year 2019 Results Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. Instructions]. [Operator

go like Art conference Investor Harmon, Marketing. you. now speaker to Relations hand Thank Mr. today, Vice Please to would over the your and I sir. ahead, President of

Art Harmon

Hello, Maria. to and Thank you, everybody our welcome call.

quarter discuss of that are results, everyone and full-year we prospects. Federal statements today's estimates may call plans, on include guidance, Before management's and sensitive date, as XXXX. as and me Securities defined These Thursday, XXXX by let XXXX statements Today's may based expectations, fourth XX, February our time our remind our initial forward-looking only statements and Laws. be accurate of

statements, obligation our information update results materially SEC Actual and and assume statements or causes forward-looking other differ to are described factors we no XX-K filings. which in provide. the other may We our our from

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

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

to call let Now me the Peter. over turn

Peter Baccile

joining Thank the call you, for today. us everyone to thanks Art, and

successful year. an excellent fourth We to quarter up with finished another cap XXXX

cash value leveraging For the our XXXX, flow we generate same, of more creation. more platform and growth expect to

growth for exciting cash a very number and strong pipeline new space, full-year was demand and record. reflect margins, great tenant the of continued acquisition was developed quality and operations several of of strong Both We of logistics year-end with markets, Miami. target rental a a at metrics leasing particularly these XX.X% our the our work replenished Occupancy and high sites strong company XX.X% professionals. and facilities rate at

our growth increase In shape higher to to our addition, barrier we to we continue as markets. drive capital further portfolio allocation long-term

get and larger we absorption. for net According provide with time let new million. most net to CBRE in absorption Despite overview supply and Econometric that XXX of since you industrial quick a the is to excess concentrated the Dallas, new primarily be of in national new me specifics low quarter, the of into Houston. feet to XXX outlook continues square XXXX was first for XXXX Before that supply to of compared the Atlanta, market. This similar certain exceeded marks Advisors, our million construction Vacancies notably sub-markets, remain this, buildings XXXX. format XXXX

a of requirements new see to industries markets. across our from tenant all continue We of range

So very XXXX more leases rate the case the for for demand our environment at rental our signed of overall growth. than strong also increase We've approximately remains XX% favorable for cash X%. That's of and a portfolio. rollovers rent

XXX,XXX a results, is renewal tenant long-term Included of rollover, foot largest in square Pennsylvania. Central in these the single our building

of XXXX for are expirations balance granular. Our the fairly

full-year, and the new renewal our leasing. rate expect XX% to growth on For of approximately cash XX% we rental

investment million this In the XXX,XXX Included total Turning we seven square few of square development X.X our highlights now million. from First to Commerce is our Center in-service with in in developments $XXX feet a at program. totaling placed footer fourth Denver. total Aurora quarter, a

market, long-term of we signed this XXX% of the which evidence a the lease strength space, of construction. for completion commenced shortly As of after

XX% million. investment represents leased square yield with $X feet little to estimated that buildings accretion. assets in would XX NAV margin the a an with X.X%. XX%. for XXXX, to $XXX over This of At cash an of per total, of share totaling translate XX% In in-service These million estimated we mid-point, are placed an X.X expected

of At and $XXX in cash are totaled both expected total projected and completed lease-up XX% the of yield fourth XX%. and of year-end, leased XX% a million our Dallas. few includes starts have a X.X%. developments investment under a square in new pipeline an estimated construction of quarter to feet X with This pipeline They in approximately million on Coast and margin

Starting Empire Logistics a total a cash of Completion foot set X.X%. Redwood is an Center estimated yield is XX,XXX West II Inland building in Coast, investment $XX.X West, quarter the on of First million. square the with with for third the

Angeles, of for site yield Los leased we acquired in-place lot as an of with X.X%. north Port a one of the surface $X million. It's acre Beach, Long In mile X.X a

In targeted our Park Northwest our with $XX.X This pre-leased. building square Phase on multi-tenant building of ground is we yield X.X%. and a cash broke X XXX XXX,XXX foot investment at estimated XX% Dallas, million an of First of

QX. development in this expect complete We to

active Moving have XXX,XXX We've expanding our on lease. We land very Creek ground broke First a South feet on three a XX-year square which Florida. there. Park in across building pipeline to for totaling country been Center, ground Cypress the our development Commerce we

QX. total building for of the targeted investment yield is estimated X.X% and is $XX.X a completion Our slated with million, cash for

of $XX.X acquired Center, on targeted in million, of also Commerce XXX,XXX is ground First completion a expected County, seven footer a estimated investment Broward Sawgrass land with in X.X%, QX. yield acres is We square broke and

three $XX.X land our On Recall acre South covered X.X%. site call, leases for yielding in XX.X has we that million. this are Florida currently market last ground investment our below discussed

million on can market We also we square added another in Miami feet. nine acre which XXX,XXX develop $X.X site the for

the first of the site to call acquisition we're new very land we announce XXXX, Park First pleased Miami. of quarter a in far, Thus

in Medley, great to a difficult XX where location by. developable acquired acres is We land infill come

build Our on total $XX.X X.X acquisition site. and can million feet price square we was the million in

three buildings first land, construction totaling is these this for with approximately approximately summer, reflecting development and begin costs. XXX,XXX multi-tenant $XX estimated will the Total million We feet. phase investment three square of pre-development, buildings

in stabilized mid-X. target yield the Our is

acquisitions $XX building stabilized square rate feet for an expected year, cap the totaled of with XXX,XXX X.X%. million For

the building is in is in market, Bay Sub yield a Hayward's High So of acquired Northern price our first the the XXX footer first property of East far was we've in square XX,XXX purchase X.X%. The and $X.X expected our market quarter California. million, XXXX,

Moving were to of growth. $XXX million ongoing management support completed dispositions. one We million cash that fourth long-term sales with efforts the parcel. X.X flow and sales better in portfolio our feet square comprising These quarter, land consistent

million market portion With million $XX these our The feet. has portfolio Indianapolis changed. the all our X.X came significantly totaled of from these of sales, substantially dispositions sale which of footprint largest square and

buildings other totaling each million building of $XX square of section XXX,XXX Louis in feet. portfolio reporting sales those included we've With just two in markets, and properties notable our one supplemental. the the category these St. moved to Other remaining in

far, $XX.X Thus just for million. market exited the effectively in now land in first leased with this Tampa we sale, the we've remaining quarter, XXX,XXX square With sold feet Tampa there.

in and Our markets. Florida the South Florida are efforts in focused Orlando now

progress and higher and of felt the these status each rollover exposure the further proceeds our rental right our these of in portfolios time market growth into three simplify to redeploy opportunities. Given leasing was markets, we

on four scheduled to $XXX million that third and purposes square the accounting quarter land in quarter. totaled Phoenix in third sales comprised dispositions close the recognized exclude and the is XXXX, parcels. feet for million of These figures For X.X XXXX

sales for $XXX guidance our XXXX, $XXX is million million. to For

the Note we XXXX the not Phoenix to typical, this just I majority does of is sale mentioned. expect the guidance be As include sales back-end of loaded. asset

per This declared will directors shortly, dividend a Based on per as supplemental. This which our $X ratio approximately defined represents is an in $X.XX board our outlook, AFFO which to of dividend share the XX% of Scott X.X% XXXX increase our XXXX. from strong discuss and our share for of equates of anticipated for XXXX annualized, quarter a performance of first XXXX. level payout

discussed the on we of note opportunity. over Day million X% the If our from opportunity guidance achieve AFFO. November deliver funds $XXX year, of adjusted we Investor will represent of operations mid-point annual Another on growth of XXXX. would our to compound for period. we in our This overall achieve in last the At that XXXX,

quarter that, let it Scott through turn details me additional With walk our guidance. on to and to you the over some XXXX

Scott Musil

Peter. Thanks

ago. quarter, for diluted the EPS $X.XX $X.XX $X.XX one-year In the diluted versus for prior-year. full EPS was was year, the versus $X.XX fourth And

funds diluted to operations fully compared $X.XX $X.XX XXXX. were share NAREIT per XQ per from share in

to for properties settlements of FFO insurance per XQ share. damaged a Excluding $X.XX income related was XXXX penny

For the full-year, NAREIT in $X.XX versus $X.XX FFO was per XXXX. share

As the Peter basis noted, points XX occupancy was XX.X% prior for down quarter.

feet square XX.X%. feet were leases, of were approximately X.X and fourth feet in million new, were Tenant million footage retention square quarter, XXX,XXX by we the lease-up. acquisitions with square million for X.X In renewals, developments square was commenced X.X

growth and termination before excluding termination X.X%. growth NOI full-year cash Same-store was basis XXXX, same-store fees for X.X% the on cash fees was a lease

were new Cash leasing up up new overall, increasing XX.X% straight basis, with X.X% rental XX.X% renewals and XX.X%. a and up On rental XX.X%. rates with up line renewals leasing were rates X.X% overall

the a For were they line up were XX%. up on XX.X% record overall rental is cash basis, company which rates year, a straight and

the our our a our financings December to weighted times of net with preferred interest at was maturity unsecured exclude balance the XQ, Moving stocks debt XX, and These secured weighted average years of a on few of facility. rate X.X to average and term At figures metrics. sheet X.X%. loans, notes, plus adjusted end is X.X EBITDA credit

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

$X.XX to share with $X.XX mid-point Our NAREIT guidance a $X.XX. per FFO is of

of share Excluding costs per is of the retirement Indianapolis a projected related to per from FFO awards office with eligible of our mid-point share for employees, related and a to of $X.XX guidance to $X.XX. penny costs $X.XX equity severance closure vestings

dip, of XX%, first as for assumptions basis which have seasonal in-service the to to typical we occupancy key for a The could as will occupancy XX year XXX points. Quarter-end be quarter anticipate follows. guidance are much average as XX%

expense is with assumption. debt XXXX million assumption bad last Our $X consistent year's for

has tenants the Imports largest our of Pier X news One lately. in been

chain occupy their that entire Our will to they in their of the a the is rent. March X through guidance the critical period XXX,XXX your Also I Pier year-end continue facility year, foot square to information, this and the of for part our for X is facility supply note are as Baltimore $X.X for on that from million. approximately FFO current expected lease Pier assumes

be higher to termination be to X% is same-store expected of benefit X.X%. on Same-store expected than free the of the burn before quarters related cash to developments. to the two to is first off our And year basis the metric remainder for NOI due rent fees a cash, growth

a tilted G&A costs also plan, costs $XX in million to than toward total equity normal guidance a penny committee of closure $XX to and for related increase retirement is Please excludes besides costs incremental of severance to of office Indianapolis related compensation million share place vesting the projected also our employees. more note put per awards which that Our the in eligible new which range XXXX, annual compensation includes return expenses, prior-plan. stock in is the G&A from the

under Guidance per to share also related the to our December XXXX planned our $X.XX the includes First capitalize Park we anticipated interest to plus and the for Miami. at XXXX, XX, total, about developments. construction developments start related In of completed of expect of full-year costs

the Our new secured not repurchases second that to development issuances, of final does an of the of claims the million of future this starts after X.X%. debt at repayments, any Phoenix from issuance $XX start-up two or impact at impact the debt potential properties excludes acquisitions, impact reflect interest Park debt insurance payoff future any also the guidance of and The of just quarter discussed, expected the settlement, equity. than or in sales, Miami gains other we the sale future other First and the rate any related guidance damaged except call

to over Peter. back it turn me Let

Peter Baccile

Scott. Thanks,

to and We're our let about of customers growth Industrial we we Before results and creating up me through new efforts our beyond. delivering expanding our XXXX markets in First their shareholders. for positioning questions, and in the which us the developments key value it team XXXX, while can serve open for entire in tremendous needs outstanding thank logistics for excited portfolio

operator, open it that, please for With you up would questions.

Operator

[Operator Instructions].

Please Markets. from question Mailman Capital will come first question. with with your Your proceed Craig KeyBanc

Craig Mailman

I Scott, FFO $X.X to of I guys. for X there Is Pier you reason why March Hey, you December. XQ? million any excluded think heard say from

Scott Musil

We already collected January payments, and Craig. February's

need still March December. to basically we So through collect

Craig Mailman

you, Got okay.

the we it's rata right that months. for pro wanted two to up So if gross other just

Scott Musil

take by can divided amount. XX. that's monthly $X.X Yes, your And you million

any extrapolate year. the way want You it for can you

Craig Mailman

in your think space And told you what's perfect. are I them? all have with Okay, the indications I the they now they the given of Canada of any been conversations then fulfilled out know, that us you past warehouse? they kind I that using mean

Peter Schultz

occupy fully to they've continue consolidated They Schultz. there. to us building. Peter the it’s And morning, good Craig, operations apparent that more it's in

They additional busy. been have quite people. also hiring they're So

Operator

question. Janney. proceed will question with Rob next come Your Stevenson your Please from with

Rob Stevenson

morning, the did to abnormal on you leases years, growth or the X%, just close three Good versus the lease replicated prior to XXXX XXXX as guys. the are is XX% XXXX that day anything something that three the end was of years rent And you XXXX? Cash the this in XXX at about reflect X% over previous today? again in expecting strength level X% in can be the market of the more range is be of X%, or the XXXX

Chris Schneider

This is Chris.

XXXX, at looking and XX%. We're rate you at yes, it increases If strong. of very was look rental XX%

we're continue a expecting increases in from XXXX. tip down very, still you're XXXX, So rental some strong very

Scott Musil

in the to XX% for that XX% what XXXX. mentioned Yes, And just script. that's we is

but strong two mentioned, Chris levels still as So very XXXX points double-digit. from in percentage down

Rob Stevenson

about nothing though, just market is in there's XXXX the you that sort down, number that's that today. so abnormal where pulls where Okay, of

Scott Musil

is That's strong. market where today. the are Markets

Chris Schneider

[ph] And of mix the X% year.

Rob Stevenson

can you how Okay. talk done backfilling a in closer $XXX so get in have see you land good after buy job time of target And through XXXX, how to million that about process? your you last to then of to and significant entitlement your or back the and pricing in take $XXX in today another guys XXXX, million may these availability again land terms few market are today years land you markets versus willing

Peter Baccile

book about there's Jojo. So question going of higher no up million the it going up I'll to pricing have land that we with is land, barrier take now, at and certainly in $XXX start markets, then over it's Right significantly.

So want the about? we growth focused mitigating costs. some pain higher talk are in And California you far, to unentitled do is rent of from really the land. especially on land Jojo,

Jojo Yap

Sure.

for price of a future In land answered, of land have willingness, appreciation the yes, on We're looking local additional terms our terms team the opportunity, of ground. for boots in so question we Peter always growth.

look when we that land have criteria pricing. these are rents that’s we course, financial will to. plus Of got stick basically to compare the we our and maintain spreads deals, going that's we at to And where our the

the it meet of done in XXX%. for last entitled, taking markets course terms that In time XX years, we've months XX hit of entitlement ratio months our that And XX takes significant, municipalities, process in entitlements. to consultants been for where some the our do those we of the we an meet we on take site before any to areas increase with entitlement is certainty pretty we pre-outprocess, with those has

Operator

Stifel. question. next John Your with proceed with from question will your Guinee come Please

John Guinee

guidance. Good a cap and XXX implied you're raise quarter, good earth equity? Why four-four wouldn't to square. on a over me like you Looks trading at

Scott Musil

at you our When very uses in leverage Scott. it’s John, look Hey we're shape. good sources our in levels, and

the December That's that script. projecting where through million walk stand process in in and me the today. let developments $XXX XXXX mentioned We're Miami at development So of spend. we about start Park we XX. for just First And

proceeds our remember expect then the guidance which Phoenix year, about we in sales is But that close million. quarter, John our And $XX another also sale mid-point the we're $XXX million. to is this third expecting

liquidity excess proceeds from we at so point are So for we're $XX flow very our excess need this And our we're shape after retain what development, view. dividends leverage of in going times, is in good leverage to about year. in CapEx sales X.X cash million of of

a for we XXXX, by I we're be would the equity to consider equity it good back John, last XXXX. consistent just that going we several had spec an in saying, able But development. investments through we've to of mentioned. our we we're lot primarily the and of yields those raised folks in if of call because we of with raising very We And We walked this what sources been a excess margin. cover getting fund And this investment years. glyphs. to pitch were was on thought development the used They XXXX, capital were use

time. in stand at short story now a today, where if So happens, where we as equity pipeline blows point need consider long level we in to a something that good John, will we shape

John Guinee

Well done.

Okay.

like It -- Just looks curiosity.

Scott Musil

Thank John. you,

John Guinee

looks math a Louis a $XX foot look Bravo, like bucks welcome. sold bucks XX foot, like at I'm You're it doing correctly. at do What $XX dollars Indianapolis about a St. my assets square those and at XX if you and foot?

Peter Schultz

Schultz. which, Peter a is but you the Indy, market. parts. its those per two a all in pound John, In abated were tax, of So two is in market, the largely price that of rents assets know, And function

a growth did good and minimal, our the heights, and sell. a mix as the remarks, there been job, flow rate for it's it securing is was So and And getting his but cash Peter older, ever time multi-tenant ceiling team term occupancy great thought we were functionality. to in as somewhat these of said as leases growth, to high lower

Peter Baccile

And those got team XX%. them assets been a had for particular the in up challenged occupancy over long time;

a So big help. that was

John Guinee

Were those net? rents $X below

Peter Schultz

In of yes. the one buildings,

Operator

[Operator Instructions].

your next with come Advisors. from Green Please Street proceed question question. with Eric Frankel Our will

Eric Frankel

Thank decisions to you. want on your I just investment quarter. back circle this

on maybe just St. the exits exiting in thinking market year Indianapolis in on potential So and detail through obviously, I a walk exposure, South how two? next more other more about have your me process over kind or but a of coastal market, thought Florida. you're then just want Northeast, Louis you're market little know South to bit you pretty And Florida big making bet

could thinking? through you walk you're what maybe So us

Peter Baccile

Okay.

cases it Indianapolis, lower growth markets in that and did the naturally and go to means that assets manage the our is our some like always higher question, St. and redeploy capital of some Tampa. to shrink footprint in Louis, portfolio going Eric, just divest time, growing and to opportunities over So first and program is in zero to into

as we that the achieved rent assets growth. is, of because for dispose much that and that those it the the we I future to wouldn't were felt leasing of, say the commentary as So were time markets status certain on outlook then

is by. Miami, Medley site, growing very rapidly and very, to fantastic come Miami and in to very rents is land that respect a the market are in With very infill; difficult

about that opportunity. I Jojo, excited we're you else. know So if don't anything got

Jojo Yap

Sure. employment that's I growth at, for. where would we yields, at higher Miami we I consumption what a add little for our products think just will view sell than bit markets, over above which grades like higher would think average drive would And all average yes, long-term and population mid-five to good mean, distribution. we're growth on drive the margin growth, that a which

financial So in a view a we'd that, long-term like in a all for all we basis basis from lot. sub-market, to like invest

Peter Baccile

a four-cap-ish market. that's Now

market So very XX-plus-percent that's a is strong. and that margin

Eric Frankel

Is Okay. obviously, good also you -- explained lower to raising said are more successful. think think of year if to that in talk again, your in correct? it's terms the markets, which you leasing can a just dispositions, that it And opportunistic some seems terms you equity, of some but how funds investment be high activity, we in circling you've your and be maybe before, that growth, and assets it really of targets about back John to also Guinee really to disposition. grow I When good your if So that likely about where be maybe circling, what is some again disposition about again. have could hear

Peter Baccile

leased we're overall. Well, XX.X%

we're are assets well this to year dispose the that leased. of So speaking, generally looking

Scott Musil

Eric. say, would I Yes,

pricing to it think mid-point, right great other figure get other we have million might opportunities, just we our we're to and $XXX sales, than do we're able I out. if and sell more you're see

Peter Baccile

didn't from strong expect them. take users we We'll that get we that are and proposals really

users that to net XXXX buyers many of sales individuals. to In high to fact do and are the worth local we

So in programs.

Jojo Yap

that. as and see, that know asset-by-asset something on can this assets year higher to we we an Eric management sell do and capital we it’s Yes, we we is lower about talked and will we growth continue this do portfolio you will every when do gross reinvest

Operator

SMBC. your with is proceed Our Anderson Rich from next Please with question. question

Rich Anderson

it where particularly high coming of Thank XXXX. you with significant function. off And of, rent impressed of how burn off is I you I'm from that's occupancy? curious much growth of real, coming was a as XXXX, and a great free the good much of guidance very for how and mentioned, good real quarter. it rent morning acceleration sort is same-store just

Scott Musil

a Rich, bit it's little this Same-store it year. was is Hey than easier year last Scott.

we to little bumps. and little So X% little rate do increase the that XX with of of of has X% is rates First that Logistics in-service X% on development free of burn from the over And rental an a basis of be at over Nandina increase end debt expense. a in in new off. general, our do to placed slight going our construct is projected has is A with XXXX. that big then about to points A a rental piece that rent offset Center amount leasing, over to is bad renewal in

we X.XX% pace mid-point. in keep So the our of that in Pier XXXX that gets And script. mind, you that the it again, X space then stays around reiterate to in assumes until that the I want discussed in end

Rich Anderson

Okay, great.

out thing little terms one California. bit, the you about of becomes rest dispositions, somewhat to of Miami. the interesting sort in now Southern relative of is because strengths concentration that California, the striking you're to to true Southern balance monetize if budding an portfolio despite interest wondering sort I'm And is of a markets? In its concentration your place in guys that's

Jojo Yap

Yes.

all, Our very about first very, California. we're view excited to of our allocation

allow continue the U.S. now, product. in California that right the things, So-Cal boasts homogeneous U.S. in in hardest We the in of rent One that largest and largest the think is of also of entitlement market consumption the highest U.S. is process one terms the zones that of the continue. has industrial that things the growth one And will will the It

as but demographics is very getting much continue lot growth. it's close. see as And that you the very, And continued Miami constraint like we higher or a Southern constraint in so land and rent Miami a will apply together, to California, good. put share it not as entitlement We because if does

we continue in to So have make. in we California but and like we it want at our investment sure asset-by-asset, overall, we look additional again, exposure we every make to will the margin

Rich Anderson

Hey sorry rising -- recollection great. I'm to there. tenants compare what's thoughts also, if leave? driven the of that more of businesses? can are sort me. to that of turnover? guess How about is How do a for Is not I Last choose reason it XXXX? question you And If the why it? our mindset by XXXX does does a Or their of it What in your necessarily get investors, that's them rents? to own and the rounding else about sort just in issue they go someplace can growth

Chris Schneider

Chris; XX% XX% in been to the XXXX, I'll around XX%. retention. or three we're four it's something to averaging right touch similar on years, the last XX% Yes, expecting We've in just

And we've so past. consistent the very that's in done

turn it will retention. about to the Jojo I over So comments

Jojo Yap

structure In amount costs. a small terms of of our businesses overall the any rent, very cost logistics still comprises

well. X%. to range costs rising Despite labor rents, costs increased costs, transportation as still and they trucking eventually X% So

real as So moved proportion has not a percentage. as a estate significantly higher

because methods because they a chain fulfillment when because and/or distribution usually usually move of of is supply So in growth. market today's change -- of and of it's their

Operator

proceed Our with Rodgers Dave Baird. question. with from your next is Please question

Dave Rodgers

Personally, should call just John you that's have after well I Guinee think done, the me. but ended said

Peter Baccile

now take right if we think we break can more want, as questions. you Dave, you Hey

Dave Rodgers

by feel are that to tenant an you that credit you build loss have or really kind the that The the spread talk cash seeing more about guys you size, that side kind guidance And you when which XX% range. breakdown? talk you you side? of to, about large you XX% gave can experience, on tenant about do small that how And in the of

Peter Baccile

increases year a overall bit square last XX%, we're about in you If saw bit you the rental points basis rate so size. look the smaller, we're size, XXX higher XXX,XXX increases little little under we higher, smaller tenants look that at if seeing on rent at by feet, about

Scott Musil

last then, per bucks bad And bad it's the year. debt And the on smaller causing that been million on that's Dave, about expense. average expense; debt mostly the years tenants $X.X think several it's

it foot or might smaller So I'd say XXX,XXX and be that. square less, than even

Dave Rodgers

then cap think obviously, you for Thanks you? any compressed. detailed acquisitions where anywhere quite rates and have I And Peter that. see for didn't sense don't really the a guess acquisitions guidance I I Is in small acquisition there make and potential see direction? be the is Bay funded to into in and East anywhere that of about just you the Or $X just capital will enter use that million in development? where everything market. land But acquisitions there

Peter Schultz

Acquisitions definitely to of not go set investment have in us, you'll still are bulk the we development. of our But for new part our into opportunity do the but huge new see continue numbers, looking boots on the acquisition ground isn't reason country. they the across another, do eBay to one where haven't great the faired out opportunities the And asset. some we from owner or time-to-time for

acquisitions option that situation not So we're we marketed. are time-to-time, a find good broadly broadly but from typically can going to be really competitive in

Dave Rodgers

but don't you know of you are of buying today? guys talk kind where of versus that in terms typically that development I spread, spread in margin, terms comfortable

Peter Schultz

been the it acquisitions values return. really that just the we still basis, capital, development or certainly depends a to it targeting in XXX an land the I on rent the at XXX on the We've on depends spread, on is And portfolio say initial on we're invest not only achieving we're basis, doing opportunity annual some markets average. market but in are because package. achieving on profitability, On growth, looking but it points. It and tougher, should we're for what basis total

Dave Rodgers

I one the you then May quarter? First Joliet second And Thanks. Got for severance there? me, activity it? in missed cleanups you. did guys was one the first Then leasing two be comment on

Scott Musil

-- first to I'll the is quarter, Dave, it Severance and over turn

Chris Schneider

remaining feet got building. foot out In we've square XXX,XXX that Joliet of XXX,XXX

we have don't anything have yet. to We activity report showings but and

Jojo Yap

one-year know Yes leasing to development. in budget usually as leased I today. a you downtime. And in it's highlight that just basically that want came XX% early We

So XX% there early. pretty leasing came that in

Operator

We question a with your from with KeyBanc Please do follow-up proceed question. have Mailman Craig Capital Markets.

Craig Mailman

sales Hey, looking years. at activity over just last guys, three the

about million cap about I rate $XXX cap. average think of you're seven in

assets next of rate you curious much do the Just going of portfolio how you're to those cap that the rid get to years? over higher in couple more of need have

Jojo Yap

I hi Craig, performing mean, Jojo. are is well. Well, this our assets all

that at do and of value for our of all rent year, part we markets what we we cash it every reinvest still. will that in growth continue fund and project will is we But proceeds look is are source find portfolio portfolio new and you management hey, something us sell we If you'll doing business, every what look last will XX the investments. asset, growth been we that is years use and this that premium rent occupancy the in, a growth these and as flow we've at great to to so see, at our project can we're

So sales. we committed have management part the do. of portfolio mean, always to that's we I will have

Peter Baccile

So decision we're come bucket a assets on year, dispose and we with our going that how new to we of. investment that's every take up the

Craig Mailman

I development But standpoint, if much I'm these at primarily to of Great. a guess these we're assets vintage, it looking that you transition cap some how of have get are older kind are in at rate from kind trying because of cases. finance used done to just portfolio guys of higher what kind left,

there's and cap, seven some cap right. If Miami at selling dilution, X.X you're building initial to a

Peter Baccile

our supplemental, the I -- to in more real be -- higher keep rate important first would assets tend estate intensive. of see can where own cap obviously as capital all say but we you

for don't it is assets in the cash in plus AFFO at developments new from fourth the and those that new into example, in so taking we're quarter, and and mid-fours, this the putting require time. we're capital -- X, a the capital for X.X And long developments flow or

make actually enough that exchange. to and value accretive it's So flow accretive cash

Operator

Instructions]. [Operator

a John with Please follow-up question your have Stifel. do We proceed with Guinee from question.

John Guinee

and at XXXX can of your you think it question do dispositions have Chicago? in XX status your to age, this or Tactical day into the land Great. do Park second assets? producing development into up of you you North income the then And what's exchange on do

Scott Musil

can your take the part Scott. first the of piece it. Hey sales I'll John, land it's you it; of XXXX into

intermediary offset where and full properties you you start just operating to, you land also in the that, that developing to a from we've you definitely more the we've get set when you doing an it, past, it do done way. if can reverse land can So title But gains sales. the in wanted with XXXXs value can up exchange done

Peter Baccile

have foot leased. And we basis build buildings land discussions basis XXX% report right is about anything about at regular suit that The to now. are Park that just a to buck you don't entertaining a know, have cetera, we on there a as et XX, in up First we're two and

John Guinee

to market that go suit? something Is a or a only you'd do would is back build sub you that

Peter Baccile

both. would We consider

Operator

question is James. next Bill question. with your from with Raymond proceed Our Please Crow

Bill Crow

say there is a spread I low because which morning, point deals assets. at mid become and fives Good stabilized you're the point is too a guys. important there existing which to more that than just the about Peter the risk great? the absolute development would developing at talking is

Peter Baccile

building development building a or do same Well leasing risk in we an have close-in. shopping obviously a the office because you in our in risk space that is the biggest center typically, don't

if So environmental risk and I a cap, It's on but answer to at at what leasing. gee, side, trading that -- question. that build something high know get a certainly do that's you're the you're mostly -- don't it's it's three asking three is If capital, challenges we you the

Bill Crow

risk think could right? mean second could I as everything is about Well mean little the a how else ecommerce, we I we evolve, in the bit, lease, change risk also as

Peter Baccile

And in rent willing a time. on we spend other have terms Well, growth. bet some certainly Absolutely we're much of than how that's a different a players of where you're take. and making in of growth views to bet we on lot rent cases

don't So is build low be that to going the rent not a growth return the expected you you get that total yield, there. you on yes, really

risk. a definitely that's So

Peter Schultz

Well Bill, the thing other Schultz. is I'd add, Peter this

Aside long-term the from attributes the rent very as we're that and these growth flexibility and including in focused on buildings. owner, a the features we're

you if the we is compare longer-term. existing those superior buildings, to that a some this So product feel for

these right, down, year-in, may they're and and assets up year-out, lease yields while are So go going and fluctuate rents perform. to

Jojo Yap

are into heavy in view you a we your allocation a land the situation, the end our is really markets, the at to that have is rents to we in lower. increase of high that be average. the to lot barrier entitlement the constraint. in supply long-term day national constraint better supply to But much fundamentals we're markets. situation, markets mean And what one And building supply/demand that invest best Again, where I overall, of try than drives look in the

Bill Crow

Yes, okay. tenants other Pier That's besides helpful. Any X your on list? watch

Peter Baccile

and referenced. good pretty shape Scott other granular seems in everybody that be smaller we're than to No, tenants the

Scott Musil

I think expense. very went of bad debt our review bad recognized so we debt January we still through and low $XX,XXX, And

Bill Crow

more their exit from me, And that in are markets finally entirety? you Yes. left many how could

Peter Baccile

asset-by-asset an is this Again, decision.

own seen selling. to growth by back we and you And in it's future question. what it's last tell been which about all all You've about supplemental. again; rent the your opportunity, relates And we've where can

it, depends on don't view If we really at it growth. it our on asset-by-asset. market-by-market, rent look look at So we

Bill Crow

entirely advantage maybe as in There's margin exiting opposed no advantage, the to asset one advantage, economic keeping one from markets market.

Peter Baccile

not real suppose I is no. difference our XX% there. But would mean exit really, be we're California. estate there Not I of looking in to a California,

Operator

And our Sam from Companies. your with Development Please Shamie Shamie question. come with proceed will final question

Sam Shamie

you Thank opportunity. for the

Orlando mentioned in Florida, region and going any why? that Tampa development about on South what Bay and You but

Peter Schultz

the characteristics rent, us. for market now. you We not Jojo, the growth and to right the to have We're add better. on focused Orlando Tampa Florida of Not any South do like that?

Jojo Yap

our this No, choice sub-market at -- that would be that's of point.

Operator

in queue. this time, questions further no at are And there Great.

this turn now at closing it will time. any Peter to Baccile We for over back remarks

Peter Baccile

weeks. follow-up me few some on South Thank questions to our seeing free you, today. Please call forward to out participating and to with Florida or any thanks of Scott for and we look operator to in reach you to in a everyone feel

Operator

call. participating. this and today's Thank Ladies you gentlemen, concludes for conference

may You disconnect. now

First Industrial Realty Trust (FR) 13 Feb 202019 Q4 Earnings call transcript