First Industrial Realty Trust (FR) Q2 2024 earnings summary

Executive summary

• Achieved significant leasing wins, signing 1.1 million sq ft of speculative development leases since Q2, including major projects in Southern California, Denver, Philadelphia, Seattle, Chicago, and South Florida, plus a 212,000 sq ft partial build-to-suit lease.

• Three new development starts in Q2: two in South Florida (totaling 258,000 sq ft, $65 million investment, 7% yield) and one in Houston (425,000 sq ft, $44 million investment, 7% yield, 50% pre-leased); total of four projects under development at 0.8 million sq ft, $129.4 million investment.

• Disposed of $90 million in assets in Q2 and Q3 to date, bringing year-to-date total to $138 million, including the sale of eight buildings and a seven-building portfolio in New Jersey for $82 million.

• Net income for the six months ended June 30, 2024 was $123.4 million, up from $117.0 million year-over-year.

• Declared quarterly dividends of $0.37 per share/unit, a 15.6% increase from 2023.

Financial highlights

• NAREIT FFO was $0.66 per diluted share in Q2 2024, up from $0.61 in Q2 2023; FFO for H1 2024 was $167.2 million, up from $158.9 million year-over-year.

• Total revenues for H1 2024 were $326.4 million, up 8.2% from $301.6 million year-over-year; Q2 2024 revenues were $164.1 million, up from $152.2 million in Q2 2023.

• Cash same-store NOI growth (excluding termination fees) was 5.6% for Q2 2024; SS NOI for H1 2024 increased 6.2% to $218.7 million.

• In-service occupancy ended at 95.3%, with 2.9 million sq ft of leases commenced (500,000 new, 1.2 million renewals, 1.2 million developments/acquisitions).

• Q2 2024 Adjusted EBITDA was $112.5 million, up from $102.8 million in Q2 2023.

Outlook and guidance

• Updated 2024 FFO guidance to $2.59–$2.67 per share, $0.03 higher at midpoint than prior guidance, primarily due to leasing progress; including $0.02 per share of accelerated equity-based compensation expense, FFO guidance is $2.57–$2.65 per share.

• Assumes quarter-end average occupancy of 95.75%–96.75% and same-store NOI growth of 7.25%–8.25% (cash basis, before termination fees).

• G&A expense guidance: $39.5–$40.5 million, including $3 million in accelerated expense.

• Management expects to meet short-term liquidity needs through operating cash flow and asset dispositions; $450.5 million available under the unsecured credit facility as of June 30, 2024.

• Guidance excludes impact of future investments, property sales, or capital market activities post-release.