- Earnings call transcript Q3 2022

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Operator

Good morning and welcome to the First Industrial Realty Trust, Inc.

Third Quarter Results Conference Call. [Operator Instructions] Please note that this even is being recorded. I would like to turn the conference over to Art Harmon, Vice President of Investor Relations and Marketing. Please go ahead sir.

Arthur Harmon

hello welcome and our Cole you, everybody, to and call. Thank

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

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

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

over Now to turn let Peter. me the call

Peter Baccile

you, today. joining us Art all and for Thank you thank

lease detail the we in including by I delivered XXXX success another our leasing are signings exceptional shortly. portfolio, more expirations, to rate team discuss quarter which rental highlighted growth will related continued Our strong capturing on in

quarter. operating new continued Scott Fundamentals CBRE, share full consecutive upon the the midpoint success the strong third market during at several including rent the his you the Due just started vacancy we're build support FFO the industrial through at where growth. venture Phoenix our to per increasing to X.X% guidance we details market year will quarter. also to of in for XXX estate our our third walk our end continue results, quarter. the of to in buildings logistics further joint real three was remarks. We industrial According developments,

Third net completions square XX absorption XXX was quarter million of feet million. versus

NOI the XXX million feet, XX.X% exceeding For an net of square was of X.X%. finished In with same-store rate quarter of completions we XXX months of first nine core our occupancy absorption growth XXXX, feet. portfolio, million the cash and square

strong renewal with signed with And on rental achieve overall rollovers. we XX% we annual new of approximately commencements, XXXX handful XXXX when increases remaining, rate to rate in our third yesterday, our an and our our new have four combined time continue overall care years. rate rental change We just leasing. taken Through a of rollovers XXXX set is achieve record of growth company to With cash XX%. rental are the for leases

teams fundamentals rates our and renewal the XXXX for rental Given leasing continue new on regional to our strong in business, expirations. push

rental taken a of have we next of at XX% night, last care of of rate lease As cash expirations year's XX%. increase

Our current outlook remainder rollovers the even better. is the for XXXX of

rental We'll XX% of XX% versus from expirations, cash our waiting our California For an approximately review. our on the net in you Southern view of when call have rate give completed overall portfolio. projected lease our rent fourth SoCal remaining quarter change XXXX net XXXX a budget for we is rent updated

rate our in contractual pushing successful leases. We rental have been escalators also in

the foot building, development leasing, building the their is our first and Park X.X%. entire doubling deliver occupy space Our XXX,XXX with First to leases new commencements, at is will at and in our square the XXXX respect one With Miami average renewal quarter. annual escalator tenant which new will

XX,XXX pre-leased Loop feet Logistics four at square in Park foot square our Orlando. of First one also at We buildings XXX,XXX the

Empire, XXX,XXX the completion. new first our is In started development leased we to advance we which the investments. to successfully square in there foot Logistics development that adjacent of Moving our Inland Center First II, Wilson

which estimated investments $XX our in rate our for yield The these adjustment end the investment XX%. million a an of Our of this square million. prior reflects site. an is relative Southern QX. basis reflecting The for development the basis a million calculation approximately XXX sister to rent projected $XXX with attractive with cap we sourced XX.X%, growth this assumptions feet in of X.X X.X%, total overall our process points of expected Including building represents developments cash investments projected and yield the approximately of cash is since margin extraordinary margin now start, California to

three $XXX of spend cost north for The promote. mentioned and of these This Camelback launching that in is the GAAP is I million, is my so feet. our million. incremental developing only totaling construction using portion remarks, venture we joint our of the in new Phoenix. square developments of pocket is targeted approximately three X.X%. projected follows all $XX facilities, buildings cash approximately As for a of financing the in sale million in $XXX about The us total cost, venture speculative share million opening is are project yield XXX and distribution gain total out The we a completed quarter project netted JV last X.X cash land

Southern and of third quarter existing proportion totaling California, in and acquired On were we in even side, acquisition the $XX Miami markets, a Seattle. All million. relatively buildings land sites the coastal including

to development land accommodate well-positioned potential feet. at $X of can XX costs additional new This represents approximately future based that investments and construction today's additions, basis. billion an holdings to on land million our the be growth continue with square With new estimated support these book site we

of update sale $XXX sold holdings derive Lastly, by consistent rate was approximately I'll to income rental that, our guidance. cap remainder performance third our market Cleveland. you XXXX, on a end to XX% place key on million, provide the in on The With objective from sale. strategic of with details it the logistics which and of additional XX turn to Scott over to quarter in the we price X.X% equates

Scott Musil

Thanks Peter.

Let for operations diluted funds quarter. $X.XX were the compared per XXXX. from share to NAREIT our fully XQ in per me share results $X.XX recap

Peter As quarter noted, occupancy XXX of XX.X%, we finished the the points up to with is ago which compared quarter. in-service basis year

Of average the and Summarizing activity rates our termination Our our same-store renewal in X.X million were were NOI of for were retention X.X primarily approximately new, commenced. leases. renewals square these, rental XXX,XXX was lease quarter, growth and developments embedded rental the fees, excluding lease and during cash higher X.X footage on with increases in square by million new XX%. Tenant feet for by was leasing leasing up. driven and bumps X.X%, has million acquisitions occupancy, rate quarter,

term Moving SOFR XX spread we of the proceeds from three of tenor basis of to term up date delayed SOFR one a interest onto complete $XXX rate current draw tenor period. August, extensions, a of of costs remaining plus credit basis closing. XX year from our an or plus to interest closing approximate us new of depending borrow draw years of side. XX allows points adjustment the new this points, delayed which developments. the announced a for has on two on with the The million plus capital facility loan the will to the loan a In feature year one The the

of down not funds have this drawn from As today, we any facility.

Moving our updated earnings onto XXXX guidance our per evening. release last

the the compared for midpoint midpoint as $X.XX our Key with XX.X%. range better In-service XX% follows. and occupancy per prior was performance now XX.X% to our share year-end is increase This for a of due in-service $X.XX NAREIT FFO year occupancy is are to This $X.XX an guidance guidance. due Our share quarter-end at of increase to an primarily guidance portfolio at The increase of per capitalized $X.XX. to interest to XX.X%. implies in average developments. full assumptions of to

with Road a Our same-store at prior our our an in our foot earnings quarter of occupancy having Post will midpoint occupied quarter costs square XXXX developments increase we for in are a NOI related points call. XX prospects. be leasing the our growth the reflects under XXXX based implies Baltimore anticipated cash fees first Guidance includes X.X% termination to on before year quarterly the now completed basis NOI to growth of construction average X% to X.X%, This of compared same-store on of building XXXX basis XXth. conversations full Fourth the and September X.X%. guidance the Old XXX,XXX at to

Other guidance discussed, the For G&A interest, $X.XX of about million capitalize repurchases, to than our debt million. we guidance. to issuance equity. $XX expect sales, future $X.XX remains other prior per of XXXX, previously unchanged guidance not at $XX And development higher or share does than expense our guidance of full the future excludes new any of also reflect debt starts, repayments any potential the impact impact the and or our acquisitions, issuances, year

to Let it turn me back Peter. now over

Peter Baccile

fundamentals through rates, volatility. Thanks sort rising and financial remain inflation interest and Industrial rent while strong high the markets growth supporting even Scott. extreme occupancy high

working and with questions. serve continuing shareholders. and projects day demand is value tenant and team Our night for for flow with to Question-and-Answer that, cash up open Operator, it growth please long-term drive new best-in-class Session

Operator

Please will Kim session. our the Ki ahead. today Bin will And And you. come question-and-answer we question first Thank Instructions] [Operator now Truist. from begin with go

Ki Bin Kim

guidance FFO the about $X.XX? That's and can you on $X.XX can bridge Scott, us XQ. in between just morning. implied the XQ You $X.XX and gap the Good Thanks. the help you reported talk guidance expensive.

Scott Musil

of third per Ki to to to share areas There's penny Bin. of the Yeah. Hope I'll One drop that quarter provide items well. from the main time in three due FFO Absolutely, is that you're doing related our XQ that. NOI. recognize we one that impacting XQ. are Hey,

be So that or easement received ups, tax rebates could we income. tax our draw

a with that September. third penny has Those of items an recognizing time sales. $X.XX of credit. happened late to in XQ. in we line then interest primarily not another our has do of property XQ to $X.XX on So increase quarter in And has are that with one expense do the

to FFO main are the those of from the drop XQ. So, three drivers for our XQ

Ki Bin Kim

some a pull chopping you in start to macro from has guys. We've back estate seen And which credit lending, led bulge some participate banks the banks, some major especially of Great. commercial REIT to bracket, of facilities. question Okay. the for real

and test the stress this how So to some CRE might due -- be treated. of are loans government and

at curious what this been Peter, time, I'm from just background this, out. in you banking all you're I'm great take you've a all for and how on curious your play a a seeing interesting especially But had like your far take, CFO So, at might Morgan. long about JP and Scott,

Scott Musil

I Well, up. go drying hey, me is market loan that would first. term Ki Bin, bank say Let the

to going see deal one our a of the think we last in while. that that I for probably inked is August the you're of deals middle

right. I A to undergoing it you're think tests or the with has quarter. that banks are fourth stress in do lot of third

couple So, was increase though guess a be is for would feeling next deal it early that in my if August. probably up to our to market's bit of opens that Maybe quarters. we XXXX. the closed was I I going I what closed have a spreads compared bank a probably the in

So, Peter, to anything add? you do

Peter Baccile

CEOs customers a think macro banks, level, were the their It effectively how requirements capital time express big of these would on market they you at when out them them I if take frustration of high with the most. the to significant are. need a ask

people. to conversations -- frustration finance want Bob, those after And about of point some some know so of I that's of you do I've the a availability construction too? talk had with that's

Robert Walter

would kind new on as of sheets pulling year-end you of alluded lot even pull is that had the say outstanding. lot key clearly right people at availability banks to at of of a business term keep back, We're now. through least frankly they banks and a heard seeing it looking I Yeah. of stories

now. and right key for availability is financing So, construction very difficult

Ki Bin Kim

it. I'll back queue. jump in the Thanks. Got

Operator

question And our with Stevenson will go from next Janney. ahead. come Rob Please

Robert Stevenson

guys. morning, Good

to market back. current or do those while more the how quarters What's environment? few pricing would characterize in sort dispositions you your you quarter what's next over marketed a sold Given the today the and the third today? dispositions asset for appetite of comments, in Presumably the

Peter Baccile

very is Sure. on what pleased additional The we on Cleveland. It do team when This obviously Yeah. investment very end solid. terms real for rapidly estate I what have we mean, go with with It's the changing did dispositions. the the sales we're a market. large in pricing. execution appetite great of got and a job we by of just and good percent at hundred a is assets day. leased. out depends It's find We

not exposure. do know We'll we as new gain cheap. looking this to space the markets are. are going they're size going of to they dollars go there forming forming are this purpose. I sure purchases. stuff weight, not or of but coming there's believe I letting billions not, think that given to the the to for regular we're be I'm weight dollars because see So, be speak We Funds where call into if they have what funds expect the regular distress literally involved, of would

sales lot just capital appetite have to of and what yes, like. we pricing looks there. there's be So, have going We'll a for to we out see the think

Robert Stevenson

Okay. the current bit projects to going And skinnier to today, flush When How's little then, the current you're development average and XX. about alternative going expected to on start current the you do is rate development on likely same, think that six out I bit in costs you the out? little the factor stabilized land the are months rents, guess, in the a here, the to pipeline on cap better yields? costs yields, that a next XX where

Peter Baccile

you comment to Jojo, So, on want that?

Johannson Yap

Well, as thanks quoting projects, we clearly very site because great that the -- well. on about the and number. profitability they pleased margins We're those accretiveness and for our very,

is basis. the we today on done to rates the of as -- are -- mark-to-market function What higher of rising company and the are -- we, don't what what shareholders a We basis. that. not are, have get computation mean, of is we in market done are our basis. But values and of of kind going good real course, based that So, land report we haven't fair actually in I our

So, rate haven't than math. we be to that the lower going cap is done XX, but really

Robert Stevenson

I how when cap that development do mean, a expected that -- cap I same, now, the little you're Okay. mean, the a a pipeline little or any -- land And of on what's start, very less, for softness that costs sitting is you stuff stabilized we're -- as labor pricing and here characterize year looking rate or out? still going not is whether are more, at that cetera? lock-in today if to you're or is to going ability How expensive, bit rate where sort well from increased been about play the bit and your on materials development does there's land et as on whether not that

Johannson Yap

Yeah. forecast hard to Well, it's yield. really

our are to to report we'll So, ready we are. yields you once where start development projected

there's I a I'll holdings, than building you are various are. land variables costs tell and increased more you construction think look rents that's the every you like and increasing mentioned, that have because way, in our accurate rents where thing at But almost market if costs. faster one is

new of attractive. the very the start same, if you so, stays it when we But then would we'll again, And actually be a sense yields projects. give

Peter Baccile

Yeah. about Don't in got of billion opportunity forget, Rob, we've investment current $X landholdings. our

like are out, Jojo we now. way certainly So, prospects. the our difficult right growing as are, to rents they the with But points yields, project

Robert Stevenson

Scott. Okay. debt in six to going basically looking Or of loan the markets you And removes you then next foreseeable over sort be access calm term one anything the do the down? are until The months future? last need for the to one things to for

Scott Musil

in is I our couple and we next the is need nothing line of development million credit, about term have complete From year, loan, options, line. million. the credit assuming to $XXX $XXX $XXX options. you us due our Extension Well, look it's debt developments when cash for we we of in we spend liquidity a would a flow our million. at undrawn about of And maturity which give say to that you things. have coming the view, XXXX, point The have

double the about to include of complete are developments that it's the any sales what and proceeds. requirements even needed doesn't So,

we're So, in I shape think point very liquidity view. of good from a

Robert Stevenson

Okay.

half more enough fund first of development than to So, starts? of any XXXX's sort

Scott Musil

Absolutely.

Robert Stevenson

guys. Thanks the Okay. Appreciate time.

Operator

And question Dave our with come Rodgers Go will next Baird. from ahead.

David Rodgers

remarks comments your overall in economic I environment the everybody. Yeah. higher and on morning, sorting Peter, inflation for maybe about thoughts type follow your up, of to interest on of wanted recession. out get kind I I any your the and just guess, just financial opening potentially rates. Good wanted positioning market to

or But which or have to kind company about for good cap talk the be the you you as you speculative leasing slowdown more position gets potential more reduced even whether of reasons the any can You to further, whether might to that just forward? obviously want have look Are want taking the slack cap. how or that seeing cap, that to is in in you investment step? a cautious you next activity,

Peter Baccile

There's markets demand. of the we're tight. targeting unmet are that Right now, all pretty

what's we're with of So, the the a economy. keeping remain Clearly, on strong. rest fundamentals on the eye close going

we respect So, the in cap, we're on of that is cap. markets. really the else the the to what is cap and juggling well Remember side capital volatility consumption the way think a our everyone as not target. not just the on as like coming a consumer cap in With we're focused

drive and return of the our Our risk geographic the requirements decisions cap. not investment functionality adjusted level

very we're sheet and return adjusted we're we market. be happens So, the pleased great by growth in But, balance have of opportunity what course, the this risk on broader today. going opportunity driven that that primarily to

fund terms the market solid to going ourselves And and positioning we maintain a rock our sheet. have properly solid balance balance the In adjust we're requires. that We're growth of rock sheet. going company, to as

David Rodgers

slowdown of people time than kind showing a fewer Maybe seeing ago? be that's or as you year maybe that, are gestation or just for to any whether up a negotiations reasons cautious development that point you second of leasing want more those would leases of

Peter Baccile

see new our business. this in days be nine a the Those opportunities we are the Well, months right from excited ago, or prospects comes have comp. it the it. have that say the of there to history any capture we the We're and don't significant coastal tough the in slowdown out to now the value to way growth that per But prospects is what probably we clearly were creation six really this best at of comparing reason se. would in looking rent about opportunities number markets of and tremendous that

David Rodgers

for Is the Old first happening maybe It the just back in like and Post the that quarter? around quarter. was to going is delayed then, first clarity Road. And Or it to just Great. there quarter? fourth more last looks not me

Peter Schultz

Peter It's Sure. David. Schultz. morning. Good

So, our discussions our with continue. prospects

talked we choices the at occupancy fourth expectation last prudent logistics primary about customers the third-party The that quarter, that quarter longer. in all to to it quarter. very is our our are Having continue more their was possibility few would think are we adjustment. estimate and that call, on taking with simply was submarket. And this that, building certainly the in happen providers our occupancy have happens but point this As their prospects the both for discussions in that first said tenants positioned so. it's likely it's or make and immediate There's

us team's the this done, on focused it's it. to very and on get So,

David Rodgers

Thanks everybody.

Peter Schultz

Thanks.

Operator

question Scotiabank. with And [ph] Please go Yuko ahead. our will next Nick from come

Greg McGinniss

morning. This McGinniss Greg is Hey. Good on with Nick.

appreciated. increases? Just this in reflects How could XX comment cap potential versus Cleveland at that XXXX. rates expansion would general looking rate rate And much a just also increase of increase in point QX dispositions, cap there broadly, be more was the if on you market basis versus

Peter Baccile

this jump I'll in. Peter and can start Jojo and

own rates, it's a cap terms of we growing rates submarket-by-submarket rate cap cap And as movement purposes moved looking assumption margins in, When fastest basis fastest in a broadly, we Southern have for a more. in moved by California, it cap of at terms XXX to markets, Jojo, growing i.e., points. say conversation other In they increased remarks, the our submarkets, in in really our you mentioned rate rents comes about the more to? whole want certainly, lot. discussion of haven't opening

Johannson Yap

I Yeah. different mean, it's a mix.

and mix Peter said, different weighted compare occupancies different quarter-to-quarter terms, average really because So, lease there's really, like different submarkets. products it's you can't of and different a

that fact Cleveland markets. in not execution able So, again, quarter-to-quarter But did higher we because rent be pleased in and the it's to I that we'll very wouldn't growth we're with really compare reallocate to efficient.

Greg McGinniss

then, pipeline. And the point XXX elsewhere, what using, those been would that way Inland adjusted basis kind increase besides Empire Thanks. could you be just thinking that you you're Okay. spoke versus underwriting especially And in margins then, about? touching on any of just that actually also, on development Has if cap touch in rates appreciated. other

Peter Baccile

input and really we … downtime XX-month still in hasn't underwriting changed. rent or markets. least in think what at growth Our using We're of conservative Cap conservative the versus same seeing the we're rate what moderated terms is leasing

Johannson Yap

absolutely, the same so, -- underwriting. Basically Yeah.

math, of and If And this investment you mean, it's already there, pipe there it low right I cap development probably a is our seeing nation. it's XX% cap which just and both emphasize, and the rates to know four want margin, lowest terms I do to our XX% that imputes in the right SoCal, Florida just reported has there. of you're to the you because of one About in rate.

had this with the the most we're So, very of We've in pipeline. not of markets this active a in concentration two high U.S. pleased

Greg McGinniss

to I understand. And Sorry. make just sure

So, sorry, that the Florida like be I calculates Inland a of exit and you're XX basically Florida in rate Empire? Southern think would kind rate cap -- it cap that, saying

Johannson Yap

that's lower, because be Yeah. It only equal XX%. price will

SoCal XXXcap rate. Florida and a is in XX% that the So, component low of

of SoCal, or Florida the higher. be would XX% little the rest so, and would XX% be a bit And lower

Greg McGinniss

know but color. mean, the bit for Thank than it market Okay. low a do. the honestly, seems much debt sure guys I I on I'm you cost, better based you

Johannson Yap

cap A maybe of with the those these can couple the those I you that. active especially lot at leverage rates. low growth looking and mentioned, Yeah. to return total lower in return. leverage that total a X.X%. investors, are -- They're And A of markets investors, for given of rent today X.X% points they're ones the clearly, -- looking looking is market the most exceed on

Greg McGinniss

Great. Thank you.

Operator

Thomas with go come And KeyBanc Todd Capital our question Please next ahead. will from Markets.

Todd Thomas

sense on actually expirations where And the and for you spreads progress just indicated last rent I up XXXX would that projecting the of better. update portfolio rent Hi. the quarter of you in the been if to get could sort the there mentioned for from maybe XX% you're year What Southern spreads made touch expirations? a you little what's balance for you're of of on the last projecting change, Any to of wanted book the and Thanks. what the terms XX% signed. bumped end significant sort you're seeing cash California Good morning. bit? in it that what

Peter Baccile

there The pretty is potential significant. uplift

budgets that's can I We why about numbers signed, that out you a that good haven't finished But our and see Jojo we're pretty achieving. leases to not going what there. give is few we're to for the what indication you -- we talk so put think last

Johannson Yap

Yeah. Thanks Peter.

recent range from the over and XXX%, was So, or South from feet Bay leases to the XX% one three to the leases, done, those in that cash. there's range and the in XXX,XXX change we've rent most in -- feet. were rent XX,XXX either LA two footage on square change -- IE leases And

Todd Thomas

indicative that right? that California represents is sort we XX%. should the think which portion expirations, that Is Southern of said then, you what And about Okay. I for of of about think

Peter Baccile

Well, we're examples. give going to not three

have like. look We thoughts it's what on guide up on going that. come own your really You'll to with can't to

Todd Thomas

quarter. in it. then, recoveries Scott, were And Okay. Got meaningfully the tenant up so

I points almost, reimbursement was think, XXX basis or around expense XX%. up XXX ratio Your

the of it, was you call those revert going tax perhaps sustainable? to, XX%, to Or that XX%? some I were increase that true there -- true increase in related back to mentioned solely that Was Or is the ups? is think ups some quarter.

Scott Musil

pretty nine-month we recovered occupied Todd, dollar-for-dollar, at to looked were the you When that. same-store What Yeah. months XX%, -- we're is three at due fact expenses months would that up. three almost say, highly and over much I

there been hasn't So, leakage that. on much

as that have last quarter on in we'll to the was again tenants is far taxes, on have that expenses point year a much better our estate in you're see real way recover our net of call. structure. want is some to because of take couple concerned, from But away like I pretty next one lease the idea increase As dollar-for-dollar going the of you fourth up. years the the we probably pressure But think

Todd Thomas

just And NOI same-store sticking NOI I or Okay. with Got quarter. it. the difficult fourth in you have realize then, comp a growth.

couple the here next you're can of some And trajectory difficult But and few of you bit? about of we a same-store sort guess as have the sort be around of not but a maybe up. think Post I XXXX how coming is growth but Road I realize and that talk quarters just You curious guidance, little a NOI comps providing insight potentially? you're may starts the of about volatility year sort you for given the really in Old I'm seeing maybe, out factor, what that

Christopher Schneider

is Chris. Yeah. This

to I to from XQ kind think deceleration of you're first referring the XQ.

that rent burn And refunds XXX on and rent to new look due kind tax really real points to estate XXX third other free -- ups you of Scott and mentioned of leases. the X.XX%, is quarter. some basis off about our XQ, If happened XXX in at the some the free swing points some larger then is midpoint a true which It's really due some given represents about basis on point basis decrease.

swing about XQ XQ that is basis XXX So from to points difference.

Scott Musil

at this is going comment occupancy. Todd, XXXX, not you because still budgets, go to then, to And not when through guidance we about look but got our I'm

in rental fuller about components run increases -- which that, I'm talked we XX% and and bumps for a going at fourth renewal that at you the be Road a it's from rates, how two components rate the and have higher think just So, free if look first Post about works than again, see of go burnout on two increase number year takes to going next just occupancy to And that least rent to on the quarter. up rental cash of that. talked account Old update script, leases, it burn we're our we to you're through We by our rent, off main out. handle you into those other going we call. on same-store. have we'll we'll Free quarter still to new that have rate But using lease roughly

Todd Thomas

Okay. you. Thank Great. helpful. That’s

Operator

ahead. [Operator come Anderson Instructions] with go question will Rich next SMBC. from Our Please

Your line is open.

Richard Anderson

Sorry now? Can headphones working. about that. is I guess you my hear not me

Peter Baccile

Yeah.

Richard Anderson

you. Thank Okay.

So, capital question. the back raising to

Is the went are does I and months And lesser come non-existent horizon, options, while way in some an least did know of for start up months through delayed whatever become XX the dispositions it the prepared story. thinking now say, six, joint you to six, forms So, way maturities our debt spend. sort you sort to on of end. of through development partnerships more assuming draw. these now. lining from But to elements at are the the you world you to XX ran the And of for be come about indeed from capital a venture the might now math, is the

Peter Baccile

plenty that anybody we've I'm And collected our capital in got a thinking across portfolio. going XXXX fact during standpoint, if years We're how the solid won't was rock rock we service the potential COVID balance all end, a opportunistic consider of spectrum. reflective credit rents creating to spent dozen a comes of I all think world not solid about COVID Certainly. sure From of forms debt with to we of be But sheet and be investing terms scenario, else last and did. of this -- the that is year, strong that raising the anyway. Obviously, coverage. have darker we

really forms cheaply to capital sure the to all as ourselves as those capital for make That's of of arbitrate game plan. and access forms It's -- funding we're us. to So trying possible.

Richard Anderson

And/or down the would starts be business, obviously, option? the slowing development

Peter Baccile

would case Correct. happen out, if, days come. now. you We don't the that feel that point darker certainly, But as

Richard Anderson

Right.

that this point of and the down XXX% mentioned of of Do this ahead event. Jojo see think something a expectation of that great, question, releasing just also it this start an country, aren't areas spreads? change a as to kind bit trend of few mean, vestige what you over how with the has releasing a their of of renegotiation is like guiding of about past shorter sort on but -- the Or have type multiple little itself so rent of skis Second each may think something monitoring at which over ahead standpoint. terms some system is years. to you communication passing shelf-life flushing from maybe people I that are happened years out cash you I in has of you the well

Scott Musil

I you XXXX are rate as right. -- XXXX. rate increases Run and run cash think decreases in

Johannson Yap

the Well, a economics our job from supply/demand. really of is to a is of properties function with the best get is our lot deal. rent quality growth each And really

continues to you X.X% Empire you forecast whole in and really some to remember, from have of demand anywhere then to rent. be in U.S. only to And options and markets they X% estate now X% what pay today comprised have of so, you that for logistics rate then X% to have in vacancy the is be costs. strong X.X% have don't really tenants very, also long-term, Inland with And is juxtapose at those very real And you strong. if the and then, the and the example, go LA, that lowest

third-party or and labor. transportation But in logistics to estate. ecommerce if comparison other we the real pale users company, So, are cost they still need all service, a need cost the a provider

So, We of to eye course, that that's supply/demand. always what an keep monitor varies to on do. we're charged market-by-market, but

Peter Baccile

We're an than where we Great today started Recession. completely Back And from to don't portfolios different we before is their start were then, were vacant. X.X% today back say X%. at is portfolio closer then. where forget, we industry Everybody's much the better as

flow really it back was from We then assets. the have quotes recurring cash of flow, and sales which cash

So, kind we're markets, that's better Jojo And storm. tenants pointed demand, unmet coastal focused. and especially in any out, as to much don't in still the a there's have alternatives now of right today. And where we're weather position a

Richard Anderson

how using go I you XX, I model FR versus sort more that pointed potential then. I and it obviously, is rates ago just that lesson, where would performed X. XX things now? years look Well, say at back testing the out, history were of do different. mean, in that There just development some X guess, history, was draw conclusions Or stress can of your try to apples-to-oranges there's things the But you opinion? all go much up Using you as substantially at about, are vacancy

Peter Baccile

thoughts couple but It on that. a is apples-to-oranges, of

balance that in low vacancy between that you the things the to that power, of of XXXX/XXXX be kind this landlord And before is the if changed. and One get rate will, back then, saw of is And we would so had tenant portfolio. high that's pretty XXXXs. specific a

we're, a way long obviously, So, from that.

of So of a today the bigger that seeing continue if we're that And going gives to economy equation economy, us was than back for confidence you is some it much, within then. much is time. a an growth ecommerce the component that forget, will. that rent this bit Don't is

Richard Anderson

very Yeah. much. Thanks

Operator

question our Please next will Anthony And Barclays. ahead. with Powell from come go

Anthony Powell

Tennessee have are Good the in aren't are development developments the kind assets? expect couple in bit completion Hi. with tenants downtime morning. yet. Colorado between I And leasing environment and that completed, a on should not of of given service that How but in the leased conversations around generally, more and we that's pipeline, those your a here. questions

Peter Schultz

is So, Schultz. this Peter

across would that multiple good pipeline, as to To that are I be on buildings of questions earlier, and spaces. first commented demand continues most very the Jojo construction, your completed. say on specific prospects under So, our both our development overall completed

in Miami, our exactly we as that only we and in of remaining lastly, And and on have a completed, we're to what's Jojo, RFPs So, in Park talk lease In about up seen completed First Denver, Seattle? feet then our paper as want space at have you Park. there. out Denver And A couple Nashville, experience there. square as is a Miami trading XX,XXX well. do in with and out the picks prospect building our proposals in we've activity fresh that's that.

Johannson Yap

comfort it terms back and giving In adjusting, inside closer terms your on see underwriting our a in of of XXXX. the that. will of forecast in half of prospects. completed proposals not well pipeline, of Yes. not year. underwriting we've to to until dollar have we you year, terms be about are up, volume we to our we've will one that. end forth And mention to we beating will to And with of where downtime, in Sure. scheduled changed just of that in multiple development Seattle, been not it comment but you'll XX% is responding a On year. average, We're I But

inquiries So, pipeline we have mentioned, that. about of time. again, -- on Florida And our and in of IE. plenty I getting already, we're tight that is have what mentioned the markets of like remember, And we -- team XX% mentioned

Anthony Powell

the and Has obviously, positive pretty the that. Thanks outlook. or tenant anything generally, you And maybe it. broader changed commentary several of but seems like think the how weeks? the for know maybe the past a things that may demand, demand on you're put about XXX%, Got just good. in are like things but sounds over it next that. And discussion added, in around It its evolve months just can three terms you tenant? I still tours future pretty

Peter Baccile

the is. into Getting time take trying the the know mood what long have micro just or way, The we changed. to big That's that assets By given companies long get at. to decisions. tone pretty timeframe way make I life it a here, you're the hasn't

still didn't grow grow of XXXX I on in of that -- of mood. supply the in who now. change tone the now. XXXX There's the grow And urgency either. and but to So a the part changed sense footprint seen chain to we anyone a hasn't mean, and haven't their

robust. conversations are And the so

Peter Schultz

part, to need cases have able for you The out given high spaces very, our think quickly those of to And that, accommodate space Anthony, because occupancy much thing as I'd they level. not very add many that we're moved our most higher more it's tenants we've, is at the portfolio, backfill that other in about rents.

Anthony Powell

you. Thank Right.

Operator

ahead. from Mueller with question our come Michael will And next JPMorgan. Please go

Michael Mueller

Hi. Yeah.

mentioned lease achieved to on And rent overall compare the where getting that does what How of signings? signings. on about today? X.X% you does put the that think you XXXX bumps were you kind portfolio I your XXXX then,

Scott Musil

Yeah.

If you compare XXXX, we get X.X%.

basis about up XX to XXXX. that's points So

If at you the X.X%. look at overall about the we're right now portfolio, in-place in

definitely up. obviously, numbers increasing So, are going those and

Michael Mueller

it. was Thank That you. Okay.

Operator

come Crow And James. our go ahead. Bill Please next with question Raymond will from

William Crow

on side, reserve on for Thanks. tenant Good year? Any thoughts morning, the to debt the guys. next watchlist changes bad

Scott Musil

$XXX,XXX, was for Year-to-date, Hey, balance. by expense payment low. a $XX,XXX. Bill. quarter It's a the $XXX,XXX the third Scott. reserve very bad on for watchlist. was The so material tenants That debt it's No prior aided

As of but plans far where the we're next through our and is concern. all depends material year on we stand credit budgets, as issues no going our economy, concerned, today,

William Crow

Thanks.

out? those markets those next to do supply/demand in about Southern we What How playing look good see talked as Texas You've balance? Seattle. the for like a Phoenix in lot reason some markets about of California, you of kind Florida, markets and year

Peter Baccile

Jojo, want you take to that?

Johannson Yap

It's Bill. Jojo. Sure,

of Vacancy in XX of the They is this being four XX there, and years, XX never never rate been has business X.X%. the And in actually this absorption. Dallas million. year. terms top of markets brought In really, XX terms Phoenix really Phoenix, absorption square low, year-to-date actually in lower and of performed in years vacancy Phoenix. low-- they've last in my in feet X.X% Dallas record below Dallas, in year-to-date, million this well the five Phoenix net

and have markets in low two migration with So, that robust vacancy have now you rates. right

Phoenix, Dallas in if Phoenix product are First out building. the reason is have best have building, market there, building go supply buildings why The Corridor. our robust is XXX one everyone we out and we There note and to there who coming have active in. the So on And continued the three there growth. that's most we're rent out that best ask none. And the is has if you Industrial think project

and and to interchange. how from From very space of XX were high point we of plan of view XXX view, point a access a is So, close it proud it. exposure to

the be demand and vacancy supply. we'll So, keeping the and favorable rates right the supply the Dallas now, on an are Phoenix. large, But by and for and eye all

William Crow

End That’s color. of me. Q&A the for for it Thanks Great.

Operator

to I'd And to like conference closing back there turn this questions are the remarks. no for further over time. any at Baccile Peter

Peter Baccile

you call And with for our look to the in-person many connecting operator. well. on to you, thanks participating Thank today. forward in everyone Be of coming months. We

Operator

The now Thank today's presentation. attending you conference for has concluded.

You time. may now disconnect this your lines at

First Industrial Realty Trust (FR) 20 Oct 222022 Q3 Earnings call transcript