First Industrial Realty Trust, Inc. · NYSE:FR
First Industrial Realty Trust — Investor Day (November 2015)
102 slides from First Industrial Realty Trust's investor day presentation, Nov 13, 2015
Slide 1: First Industrial Realty Trust: Transformation. Performance. Opportunity.
FIRST INDUSTRIAL REALTY-TRUST Transformation. Performance. Opportunity. FR LISTED NYSE
Slide 2: Safe Harbor
SAFE HARBOR This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. We intend for such statements to be covered by the safe harbor provisions for forward-looking statements containe
Slide 3: Agenda
AGENDA Real Estate Industry Tenure I. First Industrial: Today 41 Bruce Duncan, President and Chief Executive Officer TRAN S F O R MATI O N II. The Balance Sheet and AFFO Report Card 26 Scott Musil, Chief Financial Officer III. The Portfolio 29 Bob Walter, Senior Vice President – Capital Markets and
Slide 4: Agenda
AGENDA Real Estate Industry Tenure OPPORTUNITY VI. In-Service Developments 30 David Harker, Executive Vice President VII. Growth: New Investments and Market Leaders Peter Schultz, Executive Vice President 31 • Jeff Thomas, Senior Regional Director 25 • Adam Moore, Regional Director 18 • Chris Willso
Slide 5: First Logistics Center @ I-83 – York, PA
First Logistics Center @ I-83 – York, PA
Slide 6: Long-Term Vision
LONG-TERM VISION USING PLATFORM TO DRIVE SHAREHOLDER VALUE Talented people/platform to create/add value Strong balance sheet with available capital Active portfolio management Operational excellence and best-in-class customer service Continual focus on driving AFFO Growth through development and sel
Slide 7: Our Progress – The FR Timeline
OUR PROGRESS – THE FR TIMELINE Today - Drive NOI/AFFO 2013 - Portfolio enhancement - Drive occupancy - Development focused and NOI/AFFO investment - Portfolio refinement - Reduce debt costs 2011 - Expanding - Grow the dividend - Drive occupancy and investment NOI/AFFO - Reduce debt costs - Strengthe
Slide 8: Platform Delivering Strong Performance
PLATFORM DELIVERING STRONG PERFORMANCE TOTAL RETURNS(1) One Year Three Years Five Years 214.4% 75.8% 15.7% 41.5% 41.3% 6.3% 6.7% 88.1% 77.6% (2) (2) (2) First Industrial RMS First Industrial RMS First Industrial RMS Industrial Sector Industrial Sector Industrial Sector Index Index Index (1) Data as
Slide 9: Portfolio and Platform
PORTFOLIO AND PLATFORM SF BY PROPERTY TYPE(1) BROAD MARKET PRESENCE Light R&D/ Seattle Industrial Flex 18% 4% Minneapolis Regional Warehouse Bulk Milwaukee Pennsylvania Warehouse Detroit 12% 66% New Jersey Chicago Salt Lake City Cleveland Indianapolis Baltimore/ Cincinnati Washington Denver St. Loui
Slide 10: Why Industrial Real Estate?
WHY INDUSTRIAL REAL ESTATE? • Expanding investment • Increased globalization, • Constrained financing due from new, sophisticated consumption and to Basel III investors urbanization • Non-institutional • Strong capital flows due • Broad-based demand with developers have not re- to under-allocation e
Slide 11: U.S. Net Absorption and New Completions
U.S. NET ABSORPTION AND NEW COMPLETIONS Supply increasing due to: 400 • Catch-up from 2010-2014 • Natural obsolescence • E-commerce 300 Forecast 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -100 -200 Completions Net Absorption -300 Market remains in balan
Slide 12: Growing Cash Flow, Delivering Value
GROWING CASH FLOW, DELIVERING VALUE INVESTOR DAY NOVEMBER 2013 INCREMENTAL RESULTING CASH FLOW AFFO/SHARE OPPORTUNITY BY 2017 2014-2017 $0.46/share $1.11/share 2013 Projected Investor TO TO Day AFFO $0.65/share $0.60/share $1.25/share 12
Slide 13: Strategy for Success
STRATEGY FOR SUCCESS Leasing and Operations Capital Portfolio Management Management Management • 95%+ Average Occupancy • Strong Balance Sheet • Grow Rents/Bumps • Development Focus • Investment Grade • Reduce TI/LC/CapEx • Selective Acquisitions • Capital Availability and • Best-In-Class Customer S
Slide 14: First 36 Logistics Center – Moreno Valley, CA
First 36 Logistics Center – Moreno Valley, CA
Slide 15: Progress Made Since Investor Day
PROGRESS MADE SINCE INVESTOR DAY NOVEMBER 2013 Investment grade by all three rating agencies Grew common dividend 50% with 50-60% AFFO payout Extended $625M credit facility to 2019/2020 Raised $460M of 7-year, unsecured term debt at 3.7% Paid off and retired $170M of debt at 6.2% average interest ra
Slide 16: Improved Ratios
IMPROVED RATIOS Fixed Charge (Debt + Preferred) to Indebtedness Subject to Coverage(1) EBITDA(2) (annualized) Encumbrance(3) 3.0 x 8.0 x 25% 2.77x 21.8% 7.0 6.7x 6.2x 6.1x 20% 18.4% 6.0 17.3% 2.5 2.45x 5.0 15% 4.0 10% 3.0 2.0 1.95x 2.0 5% 1.0 1.5 x 0.0 x 0% 3Q13 4Q14 3Q15 TTM 3Q13 4Q14 3Q15 3Q13 4Q1
Slide 17: Strong Balance Sheet
STRONG BALANCE SHEET AS OF OCTOBER 30, 2015 FIXED VS. FLOATING SUMMARY Amount Interest Weighted Debt Type ($M) % Rate Maturity (Yrs.) (2) Floating Fixed Secured 567 38 5.6% 4.1 6% 94% Unsecured(1) 909 62 4.5% 4.6 Total 1,476 4.9% 4.4 W/A interest rate without LOC 5.1% W/A interest rate without LOC 3
Slide 18: AFFO Recap: Balance Sheet Opportunity
AFFO RECAP BALANCE SHEET OPPORTUNITY OPPORTUNITY POTENTIAL $/SHARE REFINANCING SAVINGS REFINANCING 2014 - 2017 $4.4M $543M @ 5.5% $0.04/share @ 6.3% $9.8M $0.09/share @ 4.5% PROGRESS SOURCE USE ANNUALIZED SAVINGS TO DATE $460M @ 3.7% Repaid $170M debt w/ $4M or 7-year Term Loans 6.2% Int. Rate $0.03
Slide 19: AFFO Recap: Additional Opportunities Scorecard
AFFO RECAP ADDITIONAL OPPORTUNITIES SCORECARD 2013 Stabilized Potential NOI Cash Flow Market ($M) ($M) First Logistics Center @ I-83 Pennsylvania 2.9 3.0 4100 Rock Creek Boulevard Chicago 1.4 1.7 Rust-Oleum Expansion Chicago 0.6 0.6 First 36 Logistics Center Southern CA 2.2 2.3 First Bandini Logisti
Slide 20: AFFO Recap: Summary Since November 2013
AFFO RECAP SUMMARY SINCE NOVEMBER 2013 Rental Rates Debt Additional $/Share 3% Costs Opportunities AFFO 7% from Investor Day 2013 18% 2013 Investor Day Projected $0.65 Declining Primary TI/LC/CapEx 2015 Projected $0.96 Drivers of 15% Bumps 23% Improvement AFFO Increase (2013-2015) $0.31 Increased Oc
Slide 21: Conclusion
CONCLUSION Balance sheet in great shape Metrics continually improving Remaining higher-cost debt opportunities More cash flow growth to come! 21
Slide 22: First Logistics Center – Moreno Valley, CA
First 36 Logistics Center - Moreno Valley ,CA
Slide 23: Disposition Highlights
DISPOSITION HIGHLIGHTS 2010 THROUGH 3Q15 EARNINGS CALL SALES GEOGRAPHY (% BY SALES PRICE) • $569M overall • 14.6 MSF Southeast Southwest 12% – $498M ($34/SF) 23% – 68% occupied What/Why? West Coast • Assets with higher leasing costs 7% • Refine land bank Midwest 45% Northeast 13% • Diversify away fr
Slide 24: Significant Portfolio Transformation
SIGNIFICANT PORTFOLIO TRANSFORMATION Σ of Investment = $799M 300 Dispositions Development (Starts) Acquisitions Land Inventory @ 6.5% 250 16 200 15 119 150 0 67 22 100 17 47 117 117 128 50 31 36 50 ($M) 0 17 (70) (86) (78) (50) (87) (103) (145) (100) Σ of Sales = $569M @ 5.7% (150) (1) 2010 2011 201
Slide 25: Significant Portfolio Transformation
SIGNIFICANT PORTFOLIO TRANSFORMATION Key Portfolio Statistics December 31, 2009 November 12, 2015 (1) Number of Properties 783 613 Gross Leasable Area (MSF) 69.2 66.8 Light Industrial and R&D/Flex (MSF) 23.4 14.8 Average Building Size (SF) 88,934 108,923 Portfolio Vintage by Book Value 1987 1994 TOP
Slide 26: The TI/LC/CapEx Opportunity
THE TI/LC/CAPEX OPPORTUNITY PROGRESS AND UPDATE 60 $52 $7M $6M Savings Savings 50 $45 Opportunity $39 40 ($M) 30 20 10 0 2013 Actual 2015 Projected 2016-2018 Opportunity On pace to achieve 2013 Investor Day opportunity of $8M Opportunity in 2016 - 2018 for additional savings due to portfolio refinem
Slide 27: Peer Portfolio Comparison
PEER PORTFOLIO COMPARISON Occupancy as of End of 3Q15(1) 95.5% 94.5% 95.8% Square Feet (M) 66.8(2) 62(1) 34(1) Portfolio Vintage by Book Value 1994(2) 1995(3) 1998(3) (1) In-service portfolio as reported in the Company’s 10-Qs and Supplemental Reports. (2) Includes roll forward of all sales through
Slide 28: Key Metrics vs. Peers
KEY METRICS VS. PEERS ■ DCT ■ EGP ■ FR Cash Rents 15.0% 5.0% -5.0% -15.0% 2011 2012 2013 2014 2015 YTD Total TI, LC & CapEx as % of NOI 30.0% 20.0% 10.0% 0.0% 2011 2012 2013 2014 2015 YTD Retention 80.0% 60.0% 40.0% 20.0% 0.0% 2011 2012 2013 2014 2015 YTD The key metrics demonstrate FR’s portfolio q
Slide 29: Conclusion
CONCLUSION Significant portfolio transformation Disposition proceeds reinvested with minimal dilution Portfolio transformation driving incremental savings in TI/LC/CapEx Key metrics demonstrate FR’s portfolio quality versus peers 29
Slide 30: Performance: Operational Excellence: The Platform at Work
PERFORMANCE OPERATIONAL EXCELLENCE: THE PLATFORM AT WORK Peter Schultz, EVP
Slide 31: Platform Delivering Strong Operating Results
PLATFORM DELIVERING STRONG OPERATING RESULTS Significant improvement in occupancy, rental rates and same store growth reflects talented platform, repositioned asset base and solid market fundamentals Occupancy % 1 Occupancy (%) (1) Cash Rental Rate Growth (%) (2) SameSame Store Store NOI Growth (%)
Slide 32: FR Cash Rental Rate Trends
FR CASH RENTAL RATE TRENDS 8.0% 6.1% 6.0% 5.1% 4.1% 4.0% 3.0% 2.2% 2.0% 1.2% 0.0% 2013 2014 2015 YTD 2016 Renewals Signed in 2015 -2.0% (4.3 MSF) -4.0% -3.4% Renewal Overall Strong renewal rate trends are indicative of landlord’s market 32
Slide 33: FR GAAP Rental Rate Trends
FR GAAP RENTAL RATE TRENDS 16.0% 14.4% 14.0% 12.7% 11.9% 12.0% 10.9% 10.0% 9.1% 8.7% 8.0% 6.0% 4.0% 2.8% 2.0% 0.0% 2013 2014 2015 YTD 2016 Renewals Signed in 2015 (4.3 MSF) Renewal Overall Strong renewal rate trends are indicative of landlord’s market 33
Slide 34: Rental Rate Bumps Trend
RENTAL RATE BUMPS TREND (1) Leases Annualized $ of Commencement Commenced With Bumps(2) Steps NOI ($M) 2013 79% 2.9% 5.1 2014 87% 2.4% 5.3 2015F 89% 2.7% 5.1 2016F 90% 2.6% 5.6 In place 2017F 4.5 today 2018F 4.5 Imbedded, contractual NOI growth of 2%+ on an annual same store basis from 2016 - 2018 (
Slide 35: Best-in-Class Customer Service
BEST-IN-CLASS CUSTOMER SERVICE Ranked 1st 4.48 out of 5 Outperformed Among Kingsley’s largest Overall satisfaction in 2015 The Kingsley Index of 4.07 U.S. industrial clients vs. 4.42 in 2014 (>30 MSF) Market leading customer service supports higher retention, occupancy and cash flow growth 35
Slide 36: Conclusion
CONCLUSION Platform has and will continue to drive exceptional operational performance Excellent environment to drive strong cash rental rate growth Built-in rental rate bumps are a continuing key cash flow driver Customer service is KING – higher retention, occupancy and cash flow 36
Slide 37: 6150 Sycamore Canyon Blvd - Riverside, CA
6150 Sycamore Canyon Blvd - Riverside, CA
Slide 38: Capital Allocation
CAPITAL ALLOCATION What do we ask in every capital allocation discussion? • Are we enhancing the portfolio? • Are we driving/creating value? • Are we maximizing our platform? • How will this asset perform across cycles? First Park @ Ocean Ranch - Oceanside, CA FR investment strategy going forward pr
Slide 39: What We Acquire
WHAT WE ACQUIRE • Infill markets with good growth prospects • Highly functional distribution product that fits market • Ability to grow rents and/or add value • Bolt-on to existing portfolio • Below replacement cost • Low TI/LC/CapEx 39
Slide 40: Leased Property Acquisitions
935 Aldrin Drive 375 Rivertown Drive 4710 Guasti Road 6150 Sycamore Canyon Boulevard 17825 Indian Street 401 Airport Road 8606-8679 W. Ludlow Drive 750 Gateway Boulevard 145 W. 134th Street 16875 Heacock Street 40
Slide 41: 2014-15 Leased Property Acquisitions
2014-15 LEASED PROPERTY ACQUISITIONS 401 Airport Road | Chicago - 53,260 SF 375 Rivertown Drive | Minneapolis - 251,968 SF 935 Aldrin Drive | Minneapolis - 200,000 SF 750 Gateway Blvd. | Dallas – 79,887 SF 8606-8679 West Ludlow Drive | Phoenix – 220,324 SF (1) (1) Fully leased in 4Q15. 41
Slide 42: 2014-15 Leased Property Acquisitions
2014-15 LEASED PROPERTY ACQUISITIONS 16875 Heacock Street | Inland Empire - 225,450 SF 6150 Sycamore Canyon Blvd. | Inland Empire - 171,619 SF 17825 Indian Street | Inland Empire - 366,117 SF 4710 Guasti Road | Inland Empire - 133,342 SF 145 West 134th Street | Los Angeles – 44,644 SF 42
Slide 43: 2014-15 Leased Property Acquisitions
2014-15 LEASED PROPERTY ACQUISITIONS Purchase Price Expected Name Market SF (M) $/SF Yield 401 Airport Road Chicago 53,260 $3.2 $60 7.1% 375 Rivertown Drive Minneapolis 251,968 $13.4 $53 7.3% 935 Aldrin Drive Minneapolis 200,000 $12.0 $60 6.7% 750 Gateway Blvd. Dallas 79,887 $7.0 $88 6.3% 8606-8679
Slide 44: First Pinnacle Industrial Center – Dallas, TX
First Pinnacle Industrial Center – Dallas, TX
Slide 45: What Is Our Development Strategy?
WHAT IS OUR DEVELOPMENT STRATEGY? • Utilize our platform to: – Identify demand/supply imbalances – Navigate local entitlement and construction issues – Employ existing and new opportunistic land holdings • Build for long term hold with highest quality, functionality and flexibility • Service current
Slide 46: In-Service Developments Overview
Rust-Oleum Expansion Interstate North Business Park I First Figueroa First Logistics Logistics Center Center @ I-83 First 36 Logistics Center @ Moreno Valley First Pinnacle Industrial Center I & II First Bandini Logistics Center 46
Slide 47: First Logistics Center @ I-83
FIRST LOGISTICS CENTER @ I-83 YORK, PA Summary Square Feet: 708,000 GAAP Investment: $35.4M / $50/SF Expected Yield: 8.4% Stabilized Cash Flow: $3.0M 47
Slide 48: Rust-Oleum Expansion
RUST-OLEUM EXPANSION KENOSHA, WI Summary Square Feet:(1) 250,243 GAAP Investment:(2) $8.4M / $34/SF Expected Yield:(2) 6.7% Stabilized Cash Flow: $0.6M (1) Existing building was 600,000 SF. (2) Excludes land basis. 48
Slide 49: Interstate North Business Park I
INTERSTATE NORTH BUSINESS PARK I MINNEAPOLIS, MN Summary Square Feet: 96,787 GAAP Investment: $7.4M / $76/SF Expected Yield: 9.6% Stabilized Cash Flow: $0.7M 49
Slide 50: First Pinnacle Industrial Center I & II
FIRST PINNACLE INDUSTRIAL CENTER I & II DALLAS, TX Summary Square Feet: 598,445 GAAP Investment: $26.1M / $44/SF Expected Yield: 8.0% Stabilized Cash Flow: $2.1M 50
Slide 51: First 36 Logistics Center
FIRST 36 LOGISTICS CENTER INLAND EMPIRE, CA Summary Square Feet: 555,670 Moreno Valley GAAP Investment: $33.2M / $60/SF Expected Yield: 6.8% Stabilized Cash Flow: $2.3M 51
Slide 52: First Figueroa Logistics Center
FIRST FIGUEROA LOGISTICS CENTER LOS ANGELES, CA Final map Summary Square Feet: 43,485 GAAP Investment: $8.5M / $195/SF Expected Yield: 4.0% Stabilized Cash Flow: $0.3M 52
Slide 53: First Bandini Logistics Center
FIRST BANDINI LOGISTICS CENTER LOS ANGELES, CA Summary Square Feet: 489,038 GAAP Investment: $55.3M / $113/SF Expected Yield: 6.1% Stabilized Cash Flow: $3.4M 53
Slide 54: Developments Placed In-Service
DEVELOPMENTS PLACED IN-SERVICE 2014 – 2015 GAAP Stabilized Investment Expected Cash Flow Name Market SF ($M) $/SF Yield ($M) % Leased First Logistics Center Pennsylvania 708,000 35.4 50 8.4% 3.0 100% @ I-83 Rust-Oleum Chicago 250,243 8.4 34 6.7% 0.6 100% Expansion(1) Interstate North Minneapolis 96,
Slide 55: First Pinnacle Industrial Center – Dallas, TX
First Pinnacle Industrial Center – Dallas, TX
Slide 56: Market Roundtable Participants
MARKET ROUNDTABLE PARTICIPANTS Jeff Thomas Senior Regional Director Pennsylvania, Maryland Royal Pratt & Virginia Regions Senior Regional Director 25 years of industrial experience Texas Regions 30 years of industrial experience Adam Moore Regional Director Ryan McClean Chicago Region Senior Regiona
Slide 57: Pennsylvania and Maryland Properties
First 33 Commerce Center 3857 Nazareth Highway Easton, PA First Logistics Center @ I-83 20 Leo Lane York, PA 400-500 Old Post Road Aberdeen, MD 57
Slide 58: Market Overview – Pennsylvania
MARKET OVERVIEW – PENNSYLVANIA Key Market Drivers • Access to Population Centers • Transportation Infrastructure • Access to Labor • Lower Operating Costs Supply Demand • 14.6 MSF Under Construction(1) • Record Absorption in 2014 (15 MSF) • Sizes/Projects Diverse across • 6.6 MSF Net Absorption YTD(
Slide 59: First 33 Commerce Center
FIRST 33 COMMERCE CENTER EASTON, PA Final photo shot Will update as we Get closer Summary Square Feet: 584,760 Percent Leased: 0% Estimated GAAP Investment: $43.8M / $75/SF Estimated Yield: 6.4% Stabilized Cash Flow: $2.8M 59
Slide 60: Market Overview – Baltimore
MARKET OVERVIEW – BALTIMORE Key Market Drivers • Government and Related Contractors • Biotechnology, Healthcare and Defense Industries • Transportation Infrastructure • Growing Population and High Household Incomes Supply Demand • Land Constrained Submarkets • 2015 Absorption Comparable to 2014(1) •
Slide 61: 400-500 Old Post Road
400-500 OLD POST ROAD BALTIMORE, MD Summary Square Feet: 992,768 Percent Leased: 65% Estimated GAAP Investment: $62.8M / $63/SF Estimated Yield: 6.1% Stabilized Cash Flow: $3.9M 61
Slide 62: Chicago Area Properties
First Park 94 – Building I 88th Ave and 38th Street Somers, WI Rust-Oleum 8505 50th Street Kenosha, WI 401 Airport Road North Aurora, IL 62
Slide 63: Market Overview – Chicago
MARKET OVERVIEW – CHICAGO Key Market Drivers • Central Location • Transportation Infrastructure: Six Class 1 Railroads, Expressways, O’Hare • Diverse, Regional Economy • Large Consumer Base • E-commerce Distribution Market • Air Cargo Hub • Major Inland Port Supply Demand • 1.2 BSF Market • 15.5 MSF
Slide 64: First Park 94 – Building I
FIRST PARK 94 – BUILDING I SE WISCONSIN / CHICAGO First Park 94 KENOSHA REGIONAL AIRPORT IMS Building AFM Fee Development 64
Slide 65: First Park 94 – Building I
FIRST PARK 94 – BUILDING I SE WISCONSIN / CHICAGO BUILDING I OSI Building 65
Slide 66: First Park 94 – Building I
FIRST PARK 94 – BUILDING I SE WISCONSIN / CHICAGO Summary Square Feet: 600,539 Percent Leased: 0% Estimated GAAP Investment: $29.1M / $48/SF Estimated Yield: 8.1% Estimated Completion: 3Q16 Stabilized Cash Flow: $2.4M 66
Slide 67: Minneapolis Area Properties
7101 Winnetka Avenue North Brooklyn Park, MN 375 Rivertown Drive Woodbury, MN 7035 Winnetka Avenue North 7051 West Broadway Avenue Brooklyn Park, MN Brooklyn Park, MN 7050 Winnetka Avenue North Brooklyn Park, MN 935 Aldrin Drive Eagan, MN 67
Slide 68: Market Overview – Minneapolis
MARKET OVERVIEW – MINNEAPOLIS Key Market Drivers • Diverse Economy • 18 Fortune 500 Headquarters • Talented, Educated Workforce Supply Demand • Short-Term Uptick • 3.0 MSF Net Absorption YTD(1) • 1.2 MSF Delivered YTD(1) • YTD Net Absorption Exceeding 2014 - 50% Are BTS • Highest in a Decade • 3.2 M
Slide 69: Interstate North Business Park II
INTERSTATE NORTH BUSINESS PARK II MINNEAPOLIS, MN Summary Square Feet: 142,290 Percent Leased: 80% Estimated GAAP Investment: $9.4M / $66/SF Estimated Yield: 7.8% Stabilized Cash Flow: $0.7M 69
Slide 70: Winnetka Avenue Buildings
WINNETKA AVENUE BUILDINGS MINNEAPOLIS, MN Summary 221,661 Square Feet: 170,824 Percent Leased: 39% Potential Annual $1.7M NOI Impact: 540 and 40 bps of Minneapolis and FR occupancy, respectively 70
Slide 71: Dallas Area Properties
First Pinnacle Industrial Center 1251 North Cockrell Hill Road Dallas, TX First Pinnacle Industrial Center 1171 North Cockrell Hill Road Dallas, TX First Arlington Commerce Center @ I-20 3996 Scientific Drive Arlington, TX First Arlington Commerce Center II @ I-20 4551 New York Avenue Arlington, TX
Slide 72: Market Overview – Dallas
MARKET OVERVIEW – DALLAS Key Market Drivers • Large Concentration of Corporate Headquarters • Business-Friendly State and Local Governments • Significant Growing Population Centers • Job Growth • Inland Port Supply Demand • 16.8 MSF Delivered YTD (1) • 12.7 MSF Net Absorption YTD(1) • 18.0 MSF Under
Slide 73: First Arlington Commerce Center @ I-20
FIRST ARLINGTON COMMERCE CENTER @ I-20 DALLAS, TX Summary Square Feet: 153,200 Percent Leased: 67% Estimated GAAP Investment: $9.5M / $62/SF Estimated Yield: 6.5% Stabilized Cash Flow: $0.6M 73
Slide 74: First Arlington Commerce Center II @ I-20
FIRST ARLINGTON COMMERCE CENTER II @ I-20 DALLAS, TX First Arlington CC I First Arlington CC II Summary Square Feet: 231,803 Percent Leased: 0% Estimated GAAP Investment: $14.1M / $61/SF Estimated Yield: 6.5% Estimated Completion: 3Q16 Stabilized Cash Flow: $0.9M 74
Slide 75: First Northwest Commerce Center
First Northwest Commerce Center 4800 W. Greens Road Houston, TX 75
Slide 76: Market Overview – Houston
MARKET OVERVIEW – HOUSTON Key Market Drivers • Pro-Business Environment, Low Taxes and Regulations • Low Cost of Living • Large Consumption Zone • Strong Population Growth • Port Activity • Petrochemical Industry Supply Demand • Vacancy Rate of 4.7% • 4.9 MSF Net Absorption YTD(1) • 7.3 MSF Delivere
Slide 77: First Northwest Commerce Center
FIRST NORTHWEST COMMERCE CENTER HOUSTON, TX Summary Square Feet: 351,672 Percent Leased: 80% Estimated GAAP Investment: $19.7M / $56/SF Estimated Yield: 7.7% Stabilized Cash Flow: $1.5M 77
Slide 78: Southern California Properties
4710 E. Guasti Road Ontario, CA First Bandini Logistics Center 5555 Bandini Boulevard Bell Gardens, CA First 36 Logistics Center 17100 Perris Boulevard Moreno Valley, CA 13413 S. Figueroa Street Los Angeles, CA 6150 Sycamore Canyon Blvd. Riverside, CA First San Michele 24901 San Michele Road Moreno
Slide 79: Market Overview – Southern California
MARKET OVERVIEW – SOUTHERN CALIFORNIA Key Market Drivers • Ports of LA/Long Beach: 40% of Inbound Container Traffic • Transportation Infrastructure: Rail and Highway • Population: CA Largest in the Nation • Large, Diverse Economy with Manufacturing • E-commerce • 1.9 BSF Market Supply Demand • Very
Slide 80: First San Michele Logistics Center
FIRST SAN MICHELE LOGISTICS CENTER INLAND EMPIRE, CA Summary Square Feet: 187,800 Moreno Percent Leased: 0% Valley Estimated GAAP Investment: $12.2M / $65/SF Estimated Yield: 6.3% Estimated Completion: 3Q16 Stabilized Cash Flow: $0.8M 80
Slide 81: First Park @ Ocean Ranch
FIRST PARK @ OCEAN RANCH OCEANSIDE, CA Summary Square Feet: 237,276 Percent Leased: 72% Estimated GAAP Investment: $27.5M / $116/SF Estimated Yield: 6.9% Stabilized Cash Flow: $1.9M 81
Slide 82: DCI – Build-to-Suit
DCI – BUILD-TO-SUIT ATLANTA, GA Summary Square Feet: 402,304 Percent Leased: 100% Estimated GAAP Investment: $23.3M / $58/SF Estimated Yield: 8.0% Estimated Completion: 3Q16 Stabilized Cash Flow: $1.9M 82
Slide 83: First Park Tolleson
FIRST PARK TOLLESON TOLLESON, AZ Summary Square Feet: 386,100 Percent Leased: 81% Estimated GAAP Investment: $21.5M / $56/SF Estimated Yield: 8.4% Stabilized Cash Flow: $1.8M 83
Slide 84: New Investments
NEW INVESTMENTS PLATFORM AT WORK Estimated GAAP Stabilized Estimated Investment Estimated Cash Flow % Completion/ Name Market SF ($M) $/SF Yield ($M) Leased Acquisition First 33 Commerce Center Pennsylvania 584,760 43.8 $75 6.4% 2.8 0% 4Q15 400-500 Old Post Road Balt./Wash. 992,768 62.8 $63 6.1% 3.9
Slide 85: First Arlington Commerce Center II @ I-20 – Arlington, TX
First Arlington Commerce Center II @ I-20 – Arlington, TX
Slide 86: Strategically Located Land Positions
STRATEGICALLY LOCATED LAND POSITIONS LAND HOLDINGS Useable Book Developable Key Sites Area Value MSF (Acres) ($M) Inland Empire 69.2 1,450,000 18.4 Pennsylvania Houston 46.7 676,000 12.8 Chicago Chicago 233 4,000,000 11.9 Stockton Stockton 57.9 1,200,000 6.3 Nashville Dallas 104.5 1,200,000 4.2 Inla
Slide 87: Covington Build-to-Suit Site
COVINGTON BUILD-TO-SUIT SITE COVINGTON, PA 501,600 SF DEVELOPABLE 35.9 acres 87
Slide 88: First Park Fairburn Build-to-Suit Site
FIRST PARK FAIRBURN BUILD-TO-SUIT SITE ATLANTA, GA 88
Slide 89: Rockdale Build-to-Suit Site
ROCKDALE BUILD-TO-SUIT SITE NASHVILLE, TN 700,000 SF 500,000 SF 89
Slide 90: First Grand Parkway Commerce Center
FIRST GRAND PARKWAY COMMERCE CENTER HOUSTON, TX Phase I - A Phase I - B 90
Slide 91: First Grand Parkway Commerce Center
FIRST GRAND PARKWAY COMMERCE CENTER HOUSTON, TX 91
Slide 92: Mountain Creek @ I-20 Build-to-Suit Site
MOUNTAIN CREEK @ I-20 BUILD-TO-SUIT SITE DALLAS, TX 1,200,000 SF 92
Slide 93: Stockton Build-to-Suit Site
STOCKTON BUILD-TO-SUIT SITE STOCKTON, CA 1,200,000 SF 93
Slide 94: First Nandina Logistics Center
FIRST NANDINA LOGISTICS CENTER INLAND EMPIRE, CA Moreno Valley 1,450,000 SF 94
Slide 95: First Nandina Logistics Center
FIRST NANDINA LOGISTICS CENTER INLAND EMPIRE, CA First San Michele First Nandina Logistics Center 95
Slide 96: Investment Risk Management
INVESTMENT RISK MANAGEMENT $325M INTERNAL REVOLVING CAP AS OF NOVEMBER 12, 2015 Estimated GAAP Percent Pro-rated Name Market SF Investment ($M) Leased Exposure ($M) First 33 Commerce Center Pennsylvania 584,760 43.8 0% 43.8 First Park 94 – Building I Chicago 600,539 29.1 0% 29.1 400 Old Post Road Ba
Slide 97: First Logistics Center @ I-83 – York, PA
First Logistics Center @ I-83 – York, PA
Slide 98: Recent Private Peer Group Trades
RECENT PRIVATE PEER GROUP TRADES Square Feet (M) 30 117 64(1) 58 64(2) Occupancy (%) 89 90 89 93 95 Cap Rate (%) 6.2 6.0 5.5 5.6 6.5(3) $/SF 53 69 92 79 62 Total Value ($B) 1.6 8.1 5.9 4.6 3.9 $20B of private market trades average $75/SF and 5.8% stabilized cap rate Source: Company filings, company
Slide 99: Conclusion
CONCLUSION Transformation • Strong balance sheet Creating stability for future • Refined portfolio economic cycles with • Tested platform Performance • Bumps, increasing market rents and lower On-going cash flow growth TI/LC/CapEx opportunity via • Lease up of development portfolio • Best-in-class c
Slide 100: What Does It Mean?
WHAT DOES IT MEAN? New Investment/ Reinvestment of Excess CF Lower Rental TI/LC/CapEx Increases Opportunity for ±$1.45/share AFFO by YE18 Average Occupancy/ Rent Bumps Lease-up of Investments Debt Costs The FR Platform Drives It All! 100
Slide 101: First Bandini Logistics Center – Los Angeles, CA
First Bandini Logistics Center – Los Angeles, CA
Slide 102: Appendix
APPENDIX Legend Acquisitions Developments Placed In-Service Developments Not In-Service Land Holdings Lease-up Opportunity 102
First Industrial Realty Trust — Investor Day (November 2015) on 6ix