UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _______________________________
Form 10-Q

ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20182019
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to            
Commission File Number: 1-13102 (First Industrial Realty Trust, Inc.)
333-21873 (First Industrial, L.P.)
  _______________________________
FIRST INDUSTRIAL REALTY TRUST, INC.
FIRST INDUSTRIAL, L.P.
(Exact name of Registrant as specified in its Charter)
 
Maryland (First Industrial Realty Trust, Inc.) 36-3935116 (First Industrial Realty Trust, Inc.)
Maryland (First Industrial Realty Trust, Inc.)36-3935116 (First Industrial Realty Trust, Inc.)
Delaware ( First Industrial, L.P.)36-3924586 (First Industrial, L.P.)
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1 N. Wacker Drive,
Suite 4200, Chicago, Illinois
60606
(Address of principal executive offices)(Zip Code)
Delaware (First Industrial, L.P.)36-3924586 (First Industrial, L.P.)
(312) (State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization) Identification No.)
1 N. Wacker Drive,                         60606
Suite 4200, Chicago, Illinois(Zip Code)
(Address of principal executive offices)
(312) 344-4300
(Registrant's telephone number, including area code)
 _______________________________ 
Title of each class:Trading Symbol(s):Name of each exchange on which registered:
Common Stock, par value $.01 per shareFRNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
First Industrial Realty Trust, Inc.
Yesþ
☑Noo☐
First Industrial, L.P.
Yesþ
☑Noo☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
First Industrial Realty Trust, Inc.
Yesþ
☑Noo☐
First Industrial, L.P.
Yesþ
☑Noo☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
First Industrial Realty Trust, Inc.:       
Large accelerated filer þ☑  Accelerated filer o☐
Non-accelerated filer o☐ (Do not check if a smaller reporting company)Smaller reporting company o☐
Emerging growth company o☐     
First Industrial, L.P.:       
Large accelerated filer o☐  Accelerated filer þ☑
Non-accelerated filer o☐ (Do not check if a smaller reporting company)Smaller reporting company o☐
Emerging growth company o☐    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
First Industrial Realty Trust, Inc.
Yeso
☐Noo☐
First Industrial, L.P.
Yeso
☐Noo☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
First Industrial Realty Trust, Inc.
Yeso
☐Noþ☑
First Industrial, L.P.
Yeso
☐Noþ☑
At October 25, 2018, 126,307,928July 26, 2019, 126,487,215 shares of First Industrial Realty Trust, Inc.'s Common Stock, $0.01 par value, were outstanding. 
 









EXPLANATORY NOTE
This report combines the Quarterly Reports on Form 10-Q for the period ended SeptemberJune 30, 20182019 of First Industrial Realty Trust, Inc., a Maryland corporation (the "Company"), and First Industrial, L.P., a Delaware limited partnership (the "Operating Partnership"). Unless stated otherwise or the context otherwise requires, the terms "we," "our" and "us" refer to the Company and its subsidiaries, including the Operating Partnership and its consolidated subsidiaries.
The Company is a real estate investment trust and the general partner of the Operating Partnership. At SeptemberJune 30, 2018,2019, the Company owned an approximate 98.0%97.8% common general partnership interest in the Operating Partnership. The remaining approximate 2.0%2.2% common limited partnership interests in the Operating Partnership are owned by certain limited partners. The limited partners of the Operating Partnership are persons or entities who contributed their direct or indirect interests in properties to the Operating Partnership in exchange for common units of limited partnership interests in the Operating Partnership and/or recipients of LTIP Units (See Note 9) of the Operating Partnership pursuant to the Company's stock incentive plan. As the sole general partner of the Operating Partnership, the Company exercises exclusive and complete discretion over the Operating Partnership's day-to-day management and control and can cause it to enter into certain major transactions, including acquisitions, dispositions and refinancings. The management of the Company consists of the same members as the management of the Operating Partnership.
The Company and the Operating Partnership are managed and operated as one enterprise. The financial results of the Operating Partnership are consolidated into the financial statements of the Company. The Company has no significant assets other than its investment in the Operating Partnership. Substantially all of the Company's assets are held by, and its operations are conducted through, the Operating Partnership and its subsidiaries. Therefore, the assets and liabilities of the Company and the Operating Partnership are substantially the same.
We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how the Company and the Operating Partnership operate as an interrelated, consolidated company. The main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership are:
Stockholders' Equity, Noncontrolling Interest and Partners' Capital. The 2.0% equity interest in the Operating Partnership held by entities other than the Company is classified within partners' capital in the Operating Partnership's financial statements and as a noncontrolling interest in the Company's financial statements.
Relationship to Other Real Estate Partnerships. The Company's operations are conducted primarily through the Operating Partnership and its subsidiaries, although operations are also conducted through eight other limited partnerships, which are referred to as the "Other Real Estate Partnerships." The Operating Partnership is a limited partner, holding at least a 99% interest, and the Company is a general partner, holding at least a .01% general partnership interest through eight separate wholly-owned corporations, in each of the Other Real Estate Partnerships. The Other Real Estate Partnerships are variable interest entities that both the Company and the Operating Partnership consolidate. The Company's direct general partnership interest in the Other Real Estate Partnerships is reflected as noncontrolling interest within the Operating Partnership's financial statements.
Relationship to Service Subsidiary. The Company has a direct wholly-owned subsidiary that does not own any real estate but provides services to various other entities owned by the Company. Since the Operating Partnership does not have an ownership interest in this entity, its operations are reflected in the consolidated results of the Company but not the Operating Partnership. Also, this entity owes certain amounts to the Operating Partnership, for which a receivable is included on the Operating Partnership's balance sheet but is eliminated on the Company's consolidated balance sheet, since both this entity and the Operating Partnership are fully consolidated by the Company.
•
Stockholders' Equity, Noncontrolling Interest and Partners' Capital. The 2.2% equity interest in the Operating Partnership held by entities other than the Company is classified within partners' capital in the Operating Partnership's financial statements and as a noncontrolling interest in the Company's financial statements.
•
Relationship to Other Real Estate Partnerships. The Company's operations are conducted primarily through the Operating Partnership and its subsidiaries, although operations are also conducted through eight other limited partnerships, which are referred to as the "Other Real Estate Partnerships." The Operating Partnership is a limited partner, holding at least a 99% interest, and the Company is a general partner, holding at least a .01% general partnership interest through eight separate wholly-owned corporations, in each of the Other Real Estate Partnerships. The Other Real Estate Partnerships are variable interest entities that both the Company and the Operating Partnership consolidate. The Company's direct general partnership interest in the Other Real Estate Partnerships is reflected as noncontrolling interest within the Operating Partnership's financial statements.
•
Relationship to Service Subsidiary. The Company has a direct wholly-owned subsidiary that does not own any real estate but provides services to various other entities owned by the Company. Since the Operating Partnership does not have an ownership interest in this entity, its operations are reflected in the consolidated results of the Company but not the Operating Partnership. Also, this entity owes certain amounts to the Operating Partnership, for which a receivable is included on the Operating Partnership's balance sheet but is eliminated on the Company's consolidated balance sheet, since both this entity and the Operating Partnership are fully consolidated by the Company.
We believe combining the Company's and Operating Partnership's quarterly reports into this single report results in the following benefits:
enhances investors' understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management views and operates the business;
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports; and
eliminates duplicative disclosures and provides a more streamlined and readable presentation for our investors to review since a substantial portion of the Company's disclosure applies to both the Company and the Operating Partnership.
To help investors understand the differences between the Company and the Operating Partnership, this report provides the following separate disclosures for each of the Company and the Operating Partnership:
consolidated financial statements;
a single set of consolidated notes to such financial statements that includes separate discussions of each entity's stockholders' equity or partners' capital, as applicable; and
a combined Management's Discussion and Analysis of Financial Condition and Results of Operations section that includes distinct information related to each entity.


This report also includes separate Part I, Item 4, Controls and Procedures sections and separate Exhibit 31 and 32 certifications for the Company and the Operating Partnership in order to establish that the requisite certifications have been made and that the Company and the Operating Partnership are both compliant with Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.





FIRST INDUSTRIAL REALTY TRUST, INC. AND FIRST INDUSTRIAL, L.P.
FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBERJUNE 30, 20182019
INDEX
 
  Page
PART I: FINANCIAL INFORMATION
3
Item 1.
Financial Statements
3
 First Industrial Realty Trust, Inc. 
 
Consolidated Balance Sheets as of SeptemberJune 30, 20182019 and December 31, 20172018
3
 
Consolidated Statements of Operations for the Three and NineSix Months Ended SeptemberJune 30, 20182019 and 20172018
4
 
Consolidated Statements of Comprehensive Income for the Three and NineSix Months Ended SeptemberJune 30, 20182019 and 20172018
5
 
Consolidated Statement of Changes in Stockholders' Equity for the NineThree and Six Months Ended SeptemberJune 30, 2019 and 2018
6
 
Consolidated Statements of Cash Flows for the NineSix Months Ended SeptemberJune 30, 20182019 and 20172018
7
 First Industrial, L.P. 
 
Consolidated Balance Sheets as of SeptemberJune 30, 20182019 and December 31, 20172018
8
 
Consolidated Statements of Operations for the Three and NineSix Months Ended SeptemberJune 30, 20182019 and 20172018
9
 
Consolidated Statements of Comprehensive Income for the Three and NineSix Months Ended SeptemberJune 30, 20182019 and 20172018
10
 
Consolidated Statement of Changes in Partners' Capital for the NineThree and Six Months Ended SeptemberJune 30, 2019 and 2018
11
 
Consolidated Statements of Cash Flows for the NineSix Months Ended SeptemberJune 30, 20182019 and 20172018
12
 First Industrial Realty Trust, Inc. and First Industrial, L.P. 
 
Notes to the Consolidated Financial Statements
14
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
2728
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
42
Item 4.
Controls and Procedures
42
PART II: OTHER INFORMATION
43
Item 1.4.
Legal ProceedingsControls and Procedures
43
Item 1A.PART II: OTHER INFORMATION
Risk Factors
4344
Item 2.1.
Legal Proceedings
44
Item 1A.
Risk Factors
44
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
43
Item 3.
Defaults Upon Senior Securities
43
Item 4.
Mine Safety Disclosures
43
Item 5.
Other Information
43
Item 6.
Exhibits
43
EXHIBIT INDEX
44
SIGNATURESItem 3.
Defaults Upon Senior Securities
44
Item 4.
Mine Safety Disclosures
44
Item 5.
Other Information
44
Item 6.
Exhibits
44
EXHIBIT INDEX
45
SIGNATURES
46








PART I: FINANCIAL INFORMATION
Item 1.Financial Statements
FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)


September 30, 2018 December 31, 2017June 30, 2019 December 31, 2018
(Unaudited)  (Unaudited)  
ASSETS      
Assets:      
Investment in Real Estate:      
Land$891,520
 $864,813
$934,398
 $909,318
Buildings and Improvements2,597,344
 2,521,457
2,737,139
 2,704,850
Construction in Progress135,052
 109,475
147,008
 59,476
Less: Accumulated Depreciation(809,191) (789,919)(844,714) (811,784)
Net Investment in Real Estate2,814,725
 2,705,826
2,973,831
 2,861,860
Real Estate and Other Assets Held for Sale, Net of Accumulated Depreciation and Amortization of $2,559 and $07,221
 —
Operating Lease Right-of-Use Assets11,858
 —
Cash and Cash Equivalents52,728
 21,146
33,445
 43,102
Restricted Cash18,981
 25,336
—
 7,271
Tenant Accounts Receivable, Net3,428
 4,873
5,032
 5,185
Investment in Joint Venture23,403
 —
18,132
 23,326
Deferred Rent Receivable, Net70,735
 70,254
77,207
 71,079
Deferred Leasing Intangibles, Net27,900
 30,481
29,110
 29,678
Prepaid Expenses and Other Assets, Net106,206
 83,146
106,286
 101,190
Total Assets$3,125,327
 $2,941,062
$3,254,901
 $3,142,691
LIABILITIES AND EQUITY      
Liabilities:      
Indebtedness:      
Mortgage Loans Payable, Net$298,188
 $450,056
$221,357
 $296,470
Senior Unsecured Notes, Net544,398
 246,673
544,715
 544,504
Unsecured Term Loans, Net456,545
 455,768
457,337
 456,809
Unsecured Credit Facility—
 144,500
158,000
 —
Accounts Payable, Accrued Expenses and Other Liabilities82,399
 86,532
101,054
 78,665
Operating Lease Liabilities12,285
 —
Deferred Leasing Intangibles, Net9,944
 10,355
9,466
 9,560
Rents Received in Advance and Security Deposits42,079
 44,285
46,003
 47,927
Dividends and Distributions Payable28,749
 27,016
30,281
 28,845
Total Liabilities1,462,302
 1,465,185
1,580,498
 1,462,780
Commitments and Contingencies—
 —
—
 —
Equity:      
First Industrial Realty Trust Inc.'s Stockholders' Equity:      
Common Stock ($0.01 par value, 225,000,000 shares authorized and 126,307,928 and 119,883,180 shares issued and outstanding)1,263
 1,199
Common Stock ($0.01 par value, 225,000,000 shares authorized and 126,487,215 and 126,307,431 shares issued and outstanding)1,265
 1,263
Additional Paid-in-Capital2,129,551
 1,967,110
2,129,707
 2,131,556
Distributions in Excess of Accumulated Earnings(514,065) (541,847)(487,370) (490,807)
Accumulated Other Comprehensive Income12,129
 1,338
Accumulated Other Comprehensive (Loss) Income(7,058) 3,502
Total First Industrial Realty Trust, Inc.'s Stockholders' Equity1,628,878
 1,427,800
1,636,544
 1,645,514
Noncontrolling Interest34,147
 48,077
37,859
 34,397
Total Equity1,663,025
 1,475,877
1,674,403
 1,679,911
Total Liabilities and Equity$3,125,327
 $2,941,062
$3,254,901
 $3,142,691
The accompanying notes are an integral part of the consolidated financial statements.




FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share data)


Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
Revenues:              
Rental Income$76,372
 $76,497
 $227,232
 $227,217
Tenant Recoveries and Other Income23,884
 22,813
 71,640
 67,055
Lease Revenue$103,517
 $98,064
 $207,155
 $197,104
Other Revenue578
 781
 1,481
 1,512
Total Revenues100,256
 99,310
 298,872
 294,272
104,095
 98,845
 208,636
 198,616
Expenses:              
Property Expenses28,466
 28,452
 86,430
 83,835
27,379
 28,553
 57,547
 57,964
General and Administrative6,581
 6,492
 21,470
 21,310
6,782
 6,746
 13,584
 14,889
Impairment of Real Estate—
 —
 2,756
 —
—
 —
 —
 2,756
Depreciation and Other Amortization28,645
 29,696
 85,596
 87,230
29,774
 28,636
 59,829
 56,951
Total Expenses63,692
 64,640
 196,252
 192,375
63,935
 63,935
 130,960
 132,560
Other Income (Expense):       
Other (Expense) Income:       
Gain on Sale of Real Estate8,135
 23,271
 53,291
 52,140
1,097
 25,067
 889
 45,156
Interest Expense(12,424) (14,376) (37,818) (43,660)(12,332) (12,603) (25,099) (25,394)
Amortization of Debt Issuance Costs(850) (778) (2,550) (2,336)(794) (845) (1,625) (1,700)
Mark-to-Market Gain on Interest Rate Protection Agreements—
 1,848
 —
 1,848
Loss from Retirement of Debt—
 —
 (39) (1,653)—
 —
 —
 (39)
Total Other Income (Expense)(5,139) 9,965
 12,884
 6,339
Income from Operations Before Equity in Loss of Joint Venture and Income Tax Benefit (Provision)31,425
 44,635
 115,504
 108,236
Equity in Loss of Joint Venture(197) —
 (199) —
Income Tax Benefit (Provision)302
 21
 93
 (1,236)
Total Other (Expense) Income(12,029) 11,619
 (25,835) 18,023
Income from Operations Before Equity in Income (Loss) of Joint Venture and Income Tax Provision28,131
 46,529
 51,841
 84,079
Equity in Income (Loss) of Joint Venture15,516
 (2) 16,360
 (2)
Income Tax Provision(2,934) (123) (3,148) (209)
Net Income31,530
 44,656
 115,398
 107,000
40,713
 46,404
 65,053
 83,868
Less: Net Income Attributable to the Noncontrolling Interest(619) (1,458) (2,986) (3,531)(913) (1,195) (1,450) (2,367)
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities$30,911
 $43,198
 $112,412
 $103,469
$39,800
 $45,209
 $63,603
 $81,501
Basic Earnings Per Share:       
Basic and Diluted Earnings Per Share:       
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$0.24
 $0.36
 $0.91
 $0.88
$0.31
 $0.36
 $0.50
 $0.67
Diluted Earnings Per Share:       
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$0.24
 $0.36
 $0.91
 $0.87
Dividends/Distributions Per Share$0.2175
 $0.2100
 $0.6525
 $0.6300
Weighted Average Shares Outstanding - Basic125,768
 119,446
 123,098
 117,870
126,206
 123,616
 126,200
 121,741
Weighted Average Shares Outstanding - Diluted126,130
 119,990
 123,497
 118,352
126,489
 124,085
 126,472
 122,158
The accompanying notes are an integral part of the consolidated financial statements.






FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in thousands)


Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
Net Income$31,530
 $44,656
 $115,398
 $107,000
$40,713
 $46,404
 $65,053
 $83,868
Mark-to-Market Gain on Interest Rate Protection Agreements1,678
 621
 10,928
 1,364
Amortization of Interest Rate Protection Agreements24
 24
 71
 180
Payments to Settle Derivative Instruments(3,149) —
 (3,149) —
Mark-to-Market (Loss) Gain on Derivative Instruments(1,338) 2,725
 (7,692) 9,250
Amortization of Derivative Instruments24
 23
 48
 47
Comprehensive Income33,232
 45,301
 126,397
 108,544
36,250
 49,152
 54,260
 93,165
Comprehensive Income Attributable to Noncontrolling Interest(641) (1,479) (3,271) (3,582)(812) (1,252) (1,209) (2,630)
Comprehensive Income Attributable to First Industrial Realty Trust, Inc.$32,591
 $43,822
 $123,126
 $104,962
$35,438
 $47,900
 $53,051
 $90,535
The accompanying notes are an integral part of the consolidated financial statements.






FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited; in thousands)thousands, except per share data)


 
Common
Stock
 
Additional
Paid-in-
Capital
 
Distributions
in Excess of
Accumulated
Earnings
 
Accumulated
Other
Comprehensive
Income
 
Noncontrolling
Interest
 Total
Balance as of December 31, 2017$1,199
 $1,967,110
 $(541,847) $1,338
 $48,077
 $1,475,877
Net Income—
 —
 112,412
 —
 2,986
 115,398
Other Comprehensive Income—
 —
 —
 10,791
 208
 10,999
Issuance of Common Stock, Net of Issuance Costs48
 145,360
 —
 —
 —
 145,408
Stock Based Compensation Activity3
 2,894
 (3,282) —
 —
 (385)
Common Stock Dividends and Unit Distributions—
 —
 (81,348) —
 (1,990) (83,338)
Conversion of Limited Partner Units to Common Stock13
 16,496
 —
 —
 (16,509) —
Retirement of Limited Partner Units—
 —
 —
 —
 (934) (934)
Reallocation - Additional Paid-in-Capital—
 (2,309) —
 —
 2,309
 —
Balance as of September 30, 2018$1,263
 $2,129,551
 $(514,065) $12,129
 $34,147
 $1,663,025



Six Months Ended June 30, 2019:
Common
Stock
 
Additional
Paid-in-
Capital
 
Distributions
in Excess of
Accumulated
Earnings
 
Accumulated
Other
Comprehensive
(Loss) Income
 
Noncontrolling
Interest
 Total
Balance as of December 31, 2018$1,263
 $2,131,556
 $(490,807) $3,502
 $34,397
 $1,679,911
Net Income—
 —
 23,803
 —
 537
 24,340
Other Comprehensive Loss—
 —
 —
 (6,190) (140) (6,330)
Stock Based Compensation Activity2
 (611) (1,696) —
 270
 (2,035)
Common Stock Dividends and Unit Distributions ($0.2300 Per Share/Unit)—
 —
 (29,258) —
 (664) (29,922)
Reallocation - Additional Paid-in-Capital—
 (3,238) —
 —
 3,238
 —
Reallocation - Other Comprehensive Income—
 —
 —
 (7) 7
 —
Balance as of March 31, 2019$1,265
 $2,127,707
 $(497,958) $(2,695) $37,645
 $1,665,964
Net Income—
 —
 39,800
 —
 913
 40,713
Other Comprehensive Loss—
 —
 —
 (4,362) (101) (4,463)
Stock Based Compensation Activity—
 1,542
 —
 —
 511
 2,053
Common Stock Dividends and Unit Distributions ($0.2300 Per Share/Unit)—
 —
 (29,212) —
 (652) (29,864)
Reallocation - Additional Paid-in-Capital—
 458
 —
 —
 (458) —
Reallocation - Other Comprehensive Income—
 —
 —
 (1) 1
 —
Balance as of June 30, 2019$1,265
 $2,129,707
 $(487,370) $(7,058) $37,859
 $1,674,403

Six Months Ended June 30, 2018:
           
Balance as of December 31, 2017$1,199
 $1,967,110
 $(541,847) $1,338
 $48,077
 $1,475,877
Net Income—
 —
 36,292
 —
 1,172
 37,464
Other Comprehensive Income—
 —
 —
 6,366
 183
 6,549
Stock Based Compensation Activity3
 (1,106) (3,282) —
 —
 (4,385)
Common Stock Dividends and Unit Distributions ($0.2175 Per Share/Unit)—
 —
 (26,332) —
 (775) (27,107)
Conversion of Limited Partner Units to Common Stock4
 5,005
 —
 —
 (5,009) —
Retirement of Limited Partner Units—
 —
 —
 —
 (934) (934)
Reallocation - Additional Paid-in-Capital—
 (292) —
 —
 292
 —
Balance as of March 31, 2018$1,206
 $1,970,717
 $(535,169) $7,704
 $43,006
 $1,487,464
Net Income—
 —
 45,209
 —
 1,195
 46,404
Other Comprehensive Income—
 —
 —
 2,731
 17
 2,748
Issuance of Common Stock, Net of Issuance Costs48
 145,360
 —
 —
 —
 145,408
Stock Based Compensation Activity—
 1,997
 —
 —
 —
 1,997
Common Stock Dividends and Unit Distributions ($0.2175 Per Share/Unit)—
 —
 (27,566) —
 (643) (28,209)
Conversion of Limited Partner Units to Common Stock6
 7,312
 —
 —
 (7,318) —
Reallocation - Additional Paid-in-Capital—
 (1,926) —
 —
 1,926
 —
Balance as of June 30, 2018$1,260
 $2,123,460
 $(517,526) $10,435
 $38,183
 $1,655,812
The accompanying notes are an integral part of the consolidated financial statements.




FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net Income$115,398
 $107,000
$65,053
 $83,868
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:      
Depreciation69,397
 70,697
48,629
 46,160
Amortization of Debt Issuance Costs2,550
 2,336
1,625
 1,700
Other Amortization, including Stock Based Compensation20,516
 22,059
14,156
 13,638
Impairment of Real Estate2,756
 —
—
 2,756
Provision for Bad Debt267
 181
—
 165
Equity in Loss of Joint Venture199
 —
Equity in (Income) Loss of Joint Venture(16,360) 2
Distributions from Joint Venture16,084
 —
Gain on Sale of Real Estate(53,291) (52,140)(889) (45,156)
Loss from Retirement of Debt39
 1,653
—
 39
Mark-to-Market Gain on Interest Rate Protection Agreements—
 (1,848)
Payments to Settle Derivative Instruments(3,149) —
Straight-line Rental Income and Expense, Net(5,926) (1,016)
Increase in Tenant Accounts Receivable, Prepaid Expenses and Other Assets, Net(5,639) (6,792)(2,839) (3,169)
Increase in Deferred Rent Receivable, Net(1,329) (4,104)
Increase in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance and Security Deposits172
 9,152
Increase (Decrease) in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance and Security Deposits3,734
 (5,170)
Net Cash Provided by Operating Activities151,035
 148,194
120,118
 93,817
CASH FLOWS FROM INVESTING ACTIVITIES:      
Acquisitions of Real Estate(91,799) (160,065)(52,395) (87,733)
Additions to Investment in Real Estate and Non-Acquisition Tenant Improvements and Lease Costs(168,681) (104,658)(119,174) (121,169)
Net Proceeds from Sales of Investments in Real Estate116,166
 95,233
11,179
 95,603
Contributions to and Investments in Joint Venture(25,190) —
—
 (25,190)
Distributions from Joint Venture1,829
 —
8,586
 1,829
Other Investing Activity(4,825) (1,644)(5,758) (2,823)
Net Cash Used in Investing Activities(172,500) (171,134)(157,562) (139,483)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Financing and Equity Issuance Costs(2,975) (1,918)—
 (2,842)
Proceeds from the Issuance of Common Stock, Net of Underwriter's Discount145,584
 74,880
—
 145,584
Repurchase and Retirement of Restricted Stock(6,020) (2,401)
Tax Paid on Shares Withheld(4,384) (6,020)
Common Stock Dividends and Unit Distributions Paid(81,605) (74,508)(57,764) (53,561)
Repayments on Mortgage Loans Payable(163,792) (44,152)(75,336) (161,964)
Prepayments of Penalties Associated with Retirement of Debt—
 (1,453)
Proceeds from Senior Unsecured Notes300,000
 200,000
—
 300,000
Repayments of Senior Unsecured Notes—
 (101,871)
Proceeds from Unsecured Credit Facility217,000
 326,000
187,000
 217,000
Repayments on Unsecured Credit Facility(361,500) (358,500)(29,000) (361,500)
Net Cash Provided by Financing Activities46,692
 16,077
20,516
 76,697
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash25,227
 (6,863)
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash(16,928) 31,031
Cash, Cash Equivalents and Restricted Cash, Beginning of Year46,482
 21,461
50,373
 46,482
Cash, Cash Equivalents and Restricted Cash, End of Period$71,709
 $14,598
$33,445
 $77,513
   
   
   
      
      
      
      
      
FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited; in thousands)
FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited; in thousands)
FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited; in thousands)
Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS:      
Interest Expense Capitalized in Connection with Development Activity$4,867
 $3,014
$2,320
 $3,317
Cash Paid for Operating Lease Liabilities$613
 $—
Supplemental Schedule of Non-Cash Operating Activities:   
Operating Lease Liabilities Arising from Obtaining Right-of-Use Assets$12,400
 $—
Supplemental Schedule of Non-Cash Investing and Financing Activities:      
Common Stock Dividends and Unit Distributions Payable$28,749
 $26,848
$30,281
 $28,771
Exchange of Limited Partnership Units for Common Stock:      
Noncontrolling Interest$(16,509) $(39)$—
 $(12,327)
Common Stock13
 —
—
 10
Additional Paid-in-Capital16,496
 39
—
 12,317
Total$—
 $—
$—
 $—
Assumption of Indebtedness and Other Liabilities in Connection with the Acquisition of Real Estate$11,707
 $1,138
$290
 $11,705
Accounts Payable Related to Construction in Progress and Additions to Investment in Real Estate$31,288
 $23,247
$48,344
 $27,797
Write-off of Fully Depreciated Assets$(33,047) $(27,455)$(19,646) $(22,936)
The accompanying notes are an integral part of the consolidated financial statements.




FIRST INDUSTRIAL, L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands, except Unit data)


September 30, 2018 December 31, 2017June 30, 2019 December 31, 2018
(Unaudited)  (Unaudited)  
ASSETS      
Assets:      
Investment in Real Estate:      
Land$891,520
 $864,813
$934,398
 $909,318
Buildings and Improvements2,597,344
 2,521,457
2,737,139
 2,704,850
Construction in Progress135,052
 109,475
147,008
 59,476
Less: Accumulated Depreciation(809,191) (789,919)(844,714) (811,784)
Net Investment in Real Estate (including $265,089 and $270,708 related to consolidated variable interest entities, see Note 5)2,814,725
 2,705,826
Real Estate and Other Assets Held for Sale, Net of Accumulated Depreciation and Amortization of $2,559 and $07,221
 —
Net Investment in Real Estate (including $255,559 and $260,528 related to consolidated variable interest entities, see Note 5)2,973,831
 2,861,860
Operating Lease Right-of-Use Assets11,858
 —
Cash and Cash Equivalents52,728
 21,146
33,445
 43,102
Restricted Cash18,981
 25,336
—
 7,271
Tenant Accounts Receivable, Net3,428
 4,873
5,032
 5,185
Investment in Joint Venture23,403
 —
18,132
 23,326
Deferred Rent Receivable, Net70,735
 70,254
77,207
 71,079
Deferred Leasing Intangibles, Net27,900
 30,481
29,110
 29,678
Prepaid Expenses and Other Assets, Net116,364
 93,264
116,335
 111,298
Total Assets$3,135,485
 $2,951,180
$3,264,950
 $3,152,799
LIABILITIES AND PARTNERS' CAPITAL      
Liabilities:      
Indebtedness:      
Mortgage Loans Payable, Net (including $20,611 and $61,256 related to consolidated variable interest entities, see Note 5)$298,188
 $450,056
Mortgage Loans Payable, Net (including $13,164 and $20,497 related to consolidated variable interest entities, see Note 5)$221,357
 $296,470
Senior Unsecured Notes, Net544,398
 246,673
544,715
 544,504
Unsecured Term Loans, Net456,545
 455,768
457,337
 456,809
Unsecured Credit Facility—
 144,500
158,000
 —
Accounts Payable, Accrued Expenses and Other Liabilities82,399
 86,532
101,054
 78,665
Operating Lease Liabilities12,285
 —
Deferred Leasing Intangibles, Net9,944
 10,355
9,466
 9,560
Rents Received in Advance and Security Deposits42,079
 44,285
46,003
 47,927
Distributions Payable28,749
 27,016
30,281
 28,845
Total Liabilities1,462,302
 1,465,185
1,580,498
 1,462,780
Commitments and Contingencies—
 —
—
 —
Partners' Capital:      
First Industrial, L.P.'s Partners' Capital:      
General Partner Units (126,307,928 and 119,883,180 units outstanding)1,594,114
 1,401,583
Limited Partners Units (2,631,427 and 4,008,221 units outstanding)65,804
 82,251
Accumulated Other Comprehensive Income12,381
 1,382
General Partner Units (126,487,215 and 126,307,431 units outstanding)1,623,662
 1,619,342
Limited Partners Units (2,908,260 and 2,624,167 units outstanding)67,161
 66,246
Accumulated Other Comprehensive (Loss) Income(7,219) 3,574
Total First Industrial L.P.'s Partners' Capital1,672,299
 1,485,216
1,683,604
 1,689,162
Noncontrolling Interest884
 779
848
 857
Total Partners' Capital1,673,183
 1,485,995
1,684,452
 1,690,019
Total Liabilities and Partners' Capital$3,135,485
 $2,951,180
$3,264,950
 $3,152,799
The accompanying notes are an integral part of the consolidated financial statements.




FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per Unit data)


Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
Revenues:              
Rental Income$76,372
 $76,497
 227,232
 $227,217
Tenant Recoveries and Other Income23,884
 22,813
 71,640
 67,055
Lease Revenue$103,517
 $98,064
 207,155
 $197,104
Other Revenue578
 781
 1,481
 1,512
Total Revenues100,256
 99,310
 298,872
 294,272
104,095
 98,845
 208,636
 198,616
Expenses:              
Property Expenses28,466
 28,452
 86,430
 83,835
27,379
 28,553
 57,547
 57,964
General and Administrative6,581
 6,492
 21,470
 21,310
6,782
 6,746
 13,584
 14,889
Impairment of Real Estate—
 —
 2,756
 —
—
 —
 —
 2,756
Depreciation and Other Amortization28,645
 29,696
 85,596
 87,230
29,774
 28,636
 59,829
 56,951
Total Expenses63,692
 64,640
 196,252
 192,375
63,935
 63,935
 130,960
 132,560
Other Income (Expense):       
Other (Expense) Income:       
Gain on Sale of Real Estate8,135
 23,271
 53,291
 52,140
1,097
 25,067
 889
 45,156
Interest Expense(12,424) (14,376) (37,818) (43,660)(12,332) (12,603) (25,099) (25,394)
Amortization of Debt Issuance Costs(850) (778) (2,550) (2,336)(794) (845) (1,625) (1,700)
Mark-to-Market Gain on Interest Rate Protection Agreements—
 1,848
 —
 1,848
Loss from Retirement of Debt—
 —
 (39) (1,653)—
 —
 —
 (39)
Total Other Income (Expense)(5,139) 9,965
 12,884
 6,339
Income from Operations Before Equity in Loss of Joint Venture and Income Tax Benefit (Provision)31,425
 44,635
 115,504
 108,236
Equity in Loss of Joint Venture(197) —
 (199) —
Income Tax Benefit (Provision)302
 21
 93
 (1,236)
Total Other (Expense) Income(12,029) 11,619
 (25,835) 18,023
Income from Operations Before Equity in Income (Loss) of Joint Venture and Income Tax Provision28,131
 46,529
 51,841
 84,079
Equity in Income (Loss) of Joint Venture15,516
 (2) 16,360
 (2)
Income Tax Provision(2,934) (123) (3,148) (209)
Net Income31,530
 44,656
 115,398
 107,000
40,713
 46,404
 65,053
 83,868
Less: Net Income Attributable to the Noncontrolling Interest(22) (43) (65) (96)(24) (22) (50) (43)
Net Income Available to Unitholders and Participating Securities$31,508
 $44,613
 $115,333
 $106,904
$40,689
 $46,382
 $65,003
 $83,825
Basic Earnings Per Unit:      
Basic and Diluted Earnings Per Unit:      
Net Income Available to Unitholders$0.24
 $0.36
 $0.91
 $0.87
$0.31
 $0.36
 $0.50
 $0.67
Diluted Earnings Per Unit:       
Net Income Available to Unitholders$0.24
 $0.36
 $0.91
 $0.87
Distributions Per Unit$0.2175
 $0.2100
 $0.6525
 $0.6300
Weighted Average Units Outstanding - Basic128,526
 123,483
 126,380
 121,909
128,831
 126,832
 128,824
 125,289
Weighted Average Units Outstanding - Diluted128,888
 124,027
 126,779
 122,391
129,221
 127,301
 129,199
 125,706
The accompanying notes are an integral part of the consolidated financial statements.








FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in thousands)


Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
Net Income$31,530
 $44,656
 $115,398
 $107,000
$40,713
 $46,404
 $65,053
 $83,868
Mark-to-Market Gain on Interest Rate Protection Agreements1,678
 621
 10,928
 1,364
Amortization of Interest Rate Protection Agreements24
 24
 71
 180
Payments to Settle Derivative Instruments(3,149) —
 (3,149) —
Mark-to-Market (Loss) Gain on Derivative Instruments(1,338) 2,725
 (7,692) 9,250
Amortization of Derivative Instruments24
 23
 48
 47
Comprehensive Income$33,232
 $45,301
 $126,397
 $108,544
$36,250
 $49,152
 $54,260
 $93,165
Comprehensive Income Attributable to Noncontrolling Interest(22) (43) (65) (96)(24) (22) (50) (43)
Comprehensive Income Attributable to Unitholders$33,210
 $45,258
 $126,332
 $108,448
$36,226
 $49,130
 $54,210
 $93,122
The accompanying notes are an integral part of the consolidated financial statements.






FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(Unaudited; in thousands)thousands, except per Unit data)


 
General
Partner
Units
 
Limited
Partner
Units
 
Accumulated
Other
Comprehensive
Income
 Noncontrolling Interest Total
Balance as of December 31, 2017$1,401,583
 $82,251
 $1,382
 $779
 $1,485,995
Net Income112,347
 2,986
 —
 65
 115,398
Other Comprehensive Income—
 —
 10,999
 —
 10,999
Contribution of General Partner Units, Net of Issuance Costs145,408
 —
 —
 —
 145,408
Stock Based Compensation Activity(385) —
 —
 —
 (385)
Unit Distributions(81,348) (1,990) —
 —
 (83,338)
Conversion of Limited Partner Units to General Partner Units16,509
 (16,509) —
 —
 —
Retirement of Limited Partner Units—
 (934) —
 —
 (934)
Contributions from Noncontrolling Interest—
 —
 —
 124
 124
Distributions to Noncontrolling Interest—
 —
 —
 (84) (84)
Balance as of September 30, 2018$1,594,114
 $65,804
 $12,381
 $884
 $1,673,183



Six Months Ended June 30, 2019:
General
Partner
Units
 
Limited
Partner
Units
 
Accumulated
Other
Comprehensive
(Loss) Income
 Noncontrolling Interest Total
Balance as of December 31, 2018$1,619,342
 $66,246
 $3,574
 $857
 $1,690,019
Net Income23,777
 537
 —
 26
 24,340
Other Comprehensive Loss—
 —
 (6,330) —
 (6,330)
Stock Based Compensation Activity(2,305) 270
 —
 —
 (2,035)
Unit Distributions ($0.2300 Per Unit)(29,258) (664) —
 —
 (29,922)
Distributions to Noncontrolling Interest—
 —
 —
 (43) (43)
Balance as of March 31, 2019$1,611,556
 $66,389
 $(2,756) $840
 $1,676,029
Net Income39,776
 913
 —
 24
 40,713
Other Comprehensive Loss—
 —
 (4,463) —
 (4,463)
Stock Based Compensation Activity1,542
 511
 —
 —
 2,053
Unit Distributions ($0.2300 Per Unit)(29,212) (652) —
 —
 (29,864)
Contributions from Noncontrolling Interest—
 —
 —
 5
 5
Distributions to Noncontrolling Interest—
 —
 —
 (21) (21)
Balance as of June 30, 2019$1,623,662
 $67,161
 $(7,219) $848
 $1,684,452

Six Months Ended June 30, 2018:
         
Balance as of December 31, 2017$1,401,583
 $82,251
 $1,382
 $779
 $1,485,995
Net Income36,271
 1,172
 —
 21
 37,464
Other Comprehensive Income—
 —
 6,549
 —
 6,549
Stock Based Compensation Activity(4,385) —
 —
 —
 (4,385)
Unit Distributions ($0.2175 Per Unit)(26,332) (775) —
 —
 (27,107)
Conversion of Limited Partner Units to General Partner Units5,009
 (5,009) —
 —
 —
Retirement of Limited Partner Units—
 (934) —
 —
 (934)
Contributions from Noncontrolling Interest—
 —
 —
 116
 116
Distributions to Noncontrolling Interest—
 —
 —
 (21) (21)
Balance as of March 31, 2018$1,412,146
 $76,705
 $7,931
 $895
 $1,497,677
Net Income45,187
 1,195
 —
 22
 46,404
Other Comprehensive Income—
 —
 2,748
 —
 2,748
Contribution of General Partner Units, Net of Issuance Costs145,408
 —
 —
 —
 145,408
Stock Based Compensation Activity1,997
 —
 —
 —
 1,997
Unit Distributions ($0.2175 Per Unit)(27,566) (643) —
 —
 (28,209)
Conversion of Limited Partner Units to General Partner Units7,318
 (7,318) —
 —
 —
Contributions from Noncontrolling Interest—
 —
 —
 5
 5
Distributions to Noncontrolling Interest—
 —
 —
 (43) (43)
Balance as of June 30, 2018$1,584,490
 $69,939
 $10,679
 $879
 $1,665,987
The accompanying notes are an integral part of the consolidated financial statements.






FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net Income$115,398
 $107,000
$65,053
 $83,868
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:      
Depreciation69,397
 70,697
48,629
 46,160
Amortization of Debt Issuance Costs2,550
 2,336
1,625
 1,700
Other Amortization, including Stock Based Compensation20,516
 22,059
14,156
 13,638
Impairment of Real Estate2,756
 —
—
 2,756
Provision for Bad Debt267
 181
—
 165
Equity in Loss of Joint Venture199
 —
Equity in (Income) Loss of Joint Venture(16,360) 2
Distributions from Joint Venture16,084
 —
Gain on Sale of Real Estate(53,291) (52,140)(889) (45,156)
Loss from Retirement of Debt39
 1,653
—
 39
Mark-to-Market Gain on Interest Rate Protection Agreements—
 (1,848)
Increase in Tenant Accounts Receivable, Prepaid Expenses and Other Assets, Net(5,679) (6,537)
Increase in Deferred Rent Receivable, Net(1,329) (4,104)
Increase in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance and Security Deposits172
 9,152
Payments to Settle Derivative Instruments(3,149) —
Straight-line Rental Income and Expense, Net(5,926) (1,016)
Increase in Tenant Accounts Receivable, Prepaid Expenses and Other Assets, Net and Operating Lease Right-of-Use Assets(2,780) (3,226)
Increase (Decrease) in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance and Security Deposits and Operating Lease Liabilities3,734
 (5,170)
Net Cash Provided by Operating Activities150,995
 148,449
120,177
 93,760
CASH FLOWS FROM INVESTING ACTIVITIES:      
Acquisitions of Real Estate(91,799) (160,065)(52,395) (87,733)
Additions to Investment in Real Estate and Non-Acquisition Tenant Improvements and Lease Costs(168,681) (104,658)(119,174) (121,169)
Net Proceeds from Sales of Investments in Real Estate116,166
 95,233
11,179
 95,603
Contributions to and Investments in Joint Venture(25,190) —
—
 (25,190)
Distributions from Joint Venture1,829
 —
8,586
 1,829
Other Investing Activity(4,825) (1,644)(5,758) (2,823)
Net Cash Used in Investing Activities(172,500) (171,134)(157,562) (139,483)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Financing and Equity Issuance Costs(2,975) (1,918)—
 (2,842)
Contribution of General Partner Units145,584
 74,880
—
 145,584
Repurchase and Retirement of Restricted Units(6,020) (2,401)
Tax Paid on Units Withheld(4,384) (6,020)
Unit Distributions Paid(81,605) (74,508)(57,764) (53,561)
Contributions from Noncontrolling Interests124
 29
5
 121
Distributions to Noncontrolling Interests(84) (284)(64) (64)
Repayments on Mortgage Loans Payable(163,792) (44,152)(75,336) (161,964)
Prepayments of Penalties Associated with Retirement of Debt—
 (1,453)
Proceeds from Senior Unsecured Notes300,000
 200,000
—
 300,000
Repayments of Senior Unsecured Notes—
 (101,871)
Proceeds from Unsecured Credit Facility217,000
 326,000
187,000
 217,000
Repayments on Unsecured Credit Facility(361,500) (358,500)(29,000) (361,500)
Net Cash Provided by Financing Activities46,732
 15,822
20,457
 76,754
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash25,227
 (6,863)
Net Increase in Cash, Cash Equivalents and Restricted Cash(16,928) 31,031
Cash, Cash Equivalents and Restricted Cash, Beginning of Year46,482
 21,461
50,373
 46,482
Cash, Cash Equivalents and Restricted Cash, End of Period$71,709
 $14,598
$33,445
 $77,513
      
      
      



   
   
FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited; in thousands)
FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited; in thousands)
FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited; in thousands)
Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS:      
Interest Expense Capitalized in Connection with Development Activity$4,867
 $3,014
$2,320
 $3,317
Cash Paid for Operating Lease Liabilities$613
 $—
Supplemental Schedule of Non-Cash Operating Activities:   
Operating Lease Liabilities Arising from Obtaining Right-of-Use Assets$12,400
 $—
Supplemental Schedule of Non-Cash Investing and Financing Activities:      
General and Limited Partner Unit Distributions Payable$28,749
 $26,848
$30,281
 $28,771
Exchange of Limited Partner Units for General Partner Units:      
Limited Partner Units$(16,509) $(39)$—
 $(12,327)
General Partner Units16,509
 39
—
 12,327
Total$—
 $—
$—
 $—
Assumption of Indebtedness and Other Liabilities in Connection with the Acquisition of Real Estate$11,707
 $1,138
$290
 $11,705
Accounts Payable Related to Construction in Progress and Additions to Investment in Real Estate$31,288
 $23,247
$48,344
 $27,797
Write-off of Fully Depreciated Assets$(33,047) $(27,455)$(19,646) $(22,935)
The accompanying notes are an integral part of the consolidated financial statements.




FIRST INDUSTRIAL REALTY TRUST, INC. AND FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited; dollars in thousands, except per share and Unit data)
1. Organization
First Industrial Realty Trust, Inc. (the "Company") is a self-administered and fully integrated real estate company which owns, manages, acquires, sells, develops and redevelops industrial real estate. The Company is a Maryland corporation organized on August 10, 1993 and a real estate investment trust ("REIT") as defined in the Internal Revenue Code of 1986 (the "Code"). Unless stated otherwise or the context otherwise requires, the terms "we," "our" and "us" refer to the Company and its subsidiaries, including its operating partnership, First Industrial, L.P. (the "Operating Partnership"), and its consolidated subsidiaries.
We began operations on July 1, 1994. The Company's operations are conducted primarily through the Operating Partnership, of which the Company is the sole general partner (the "General Partner"), with an approximate 98.0%97.8% ownership interest ("General Partner Units") at SeptemberJune 30, 2018.2019. The Operating Partnership also conducts operations through eight other limited partnerships (the "Other Real Estate Partnerships"), numerous limited liability companies ("LLCs") and certain taxable REIT subsidiaries ("TRSs"), the operating data of which, together with that of the Operating Partnership, is consolidated with that of the Company as presented herein. The Operating Partnership holds at least a 99% limited partnership interest in each of the Other Real Estate Partnerships. The general partners of the Other Real Estate Partnerships are separate corporations, wholly-owned by the Company, each with at least a .01% general partnership interest in the Other Real Estate Partnerships. The Company does not have any significant assets or liabilities other than its investment in the Operating Partnership and its 100% ownership interest in the general partners of the Other Real Estate Partnerships. NoncontrollingThe Company's noncontrolling interest in the Operating Partnership of approximately 2.0%2.2% at SeptemberJune 30, 20182019 represents the aggregate partnership interest held by the limited partners thereof ("Limited Partner Units" and together with the General Partner Units, the "Units"). The limited partners of the Operating Partnership are persons or entities who contributed their direct or indirect interests in properties to the Operating Partnership in exchange for common Limited Partner Units of the Operating Partnership and/or recipients of LTIP Units of the Operating Partnership pursuant to the Company's stock incentive plan. See Note 9 for more information.
We also own a 49% equity interest in, and provide various services to, a joint venture (the "Joint Venture") through a wholly- owned subsidiaryTRS of the Operating Partnership. The Joint Venture is accounted for under the equity method of accounting. The operating data of the Joint Venture is not consolidated with that of the Company or the Operating Partnership as presented herein. See Note 5 for more information related to the Joint Venture.
Profits, losses and distributions of the Operating Partnership, the LLCs, the Other Real Estate Partnerships, the TRSs and the Joint Venture are allocated to the general partner and the limited partners, the members or the shareholders, as applicable, of such entities in accordance with the provisions contained within their respective organizational documents.
As of SeptemberJune 30, 2018,2019, we owned 468462 industrial properties located in 21 states, containing an aggregate of approximately 61.063.4 million square feet of gross leasable area ("GLA").Of the 468462 properties owned on a consolidated basis, none of them are directly owned by the Company.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the accounting policies described in the consolidated financial statements and related notes included in our annual report on Form 10-K for the year ended December 31, 20172018 ("20172018 Form 10-K") and should be read in conjunction with such consolidated financial statements and related notes. The 20172018 year end consolidated balance sheet data included in this Form 10-Q filing was derived from the audited consolidated financial statements in our 20172018 Form 10-K, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). The following notes to these interim consolidated financial statements highlight significant changes to the notes included in the December 31, 20172018 audited consolidated financial statements included in our 20172018 Form 10-K and present interim disclosures as required by the Securities and Exchange Commission.


Use of Estimates
In order to conform with GAAP, in preparation of our consolidated financial statements we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of SeptemberJune 30, 20182019 and December 31, 2017,2018, and the reported amounts of revenues and expenses for the three and ninesix months ended SeptemberJune 30, 20182019 and 2017.2018. Actual results could differ from those estimates. In our opinion, the accompanying unaudited interim consolidated financial statements reflect all adjustments necessary for a fair statement of our financial position as of SeptemberJune 30, 20182019 and December 31, 2017,2018, the results of our operations and comprehensive income for each of the three and ninesix months ended SeptemberJune 30, 20182019 and 2017,2018, and our cash flows for each of the ninesix months ended SeptemberJune 30, 20182019 and 2017.2018. All adjustments are of a normal recurring nature.

Reclassifications

Recent Accounting Pronouncements
Recent Accounting Standards Adopted
In May 2014, theWe adopted Financial Accounting Standards Board ("the FASB") issued Accounting Standards Updates ("ASU") No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). ASU 2014-09 requires entities to recognize revenue when they transfer promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 isCodification 842 Leases effective for annual periods beginning after December 15, 2017. We adoptedJanuary 1, 2019. Upon adoption of the new standard, effective January 1, 2018. The adoption oftenant recovery revenue and fee revenue collected for delinquent lease payments for 2018 has been reclassified to the standard did not impact our financial position or results of operations.
In August 2016 and November 2016, the FASB issued new ASUs impacting the statement of cash flows. ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" intends to reduce the diversityLease Revenue line item in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash" requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. We adopted both standards on January 1, 2018.
The adoption of ASU Nos. 2016-15 and 2016-18 modified our presentation of certain activities within the Consolidated Statements of Cash Flows. Restricted cash is comprisedOperations to conform to the 2019 financial statement presentation. This reclassification had no impact to the 2018 results of gross proceeds from the sales of certain industrial properties that are held by agents to be used for tax-deferred, like-kind exchange transactions under Section 1031 of the Code. For the nine months ended September 30, 2018 and 2017, $18,981 and $5,102 of restricted cash was included in "Cash, Cash Equivalents and Restricted Cash" in our Consolidated Statements of Cash Flows. Additionally, as a result of the adoption of these standards we reclassified $1,453 of prepayment penalties in connection with the payoff of certain mortgage loans from operating activities to financing activities for the nine months ended September 30, 2017.
The following table presents a reconciliation of cash, cash equivalents and restricted cash reported within our Consolidated Balance Sheets to amounts reported within our Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017:
 2018 2017
Cash and Cash Equivalents$52,728
 $9,496
Restricted Cash18,981
 5,102
Total Cash, Cash Equivalents and Restricted Cash$71,709
 $14,598


operations.
Recent Accounting Standards Not Yet AdoptedPronouncements
In February 2016, the FASB issued ASUAccounting Standards Update ("ASU") No. 2016-02, "Leases"Leases (Topic 842) ("ASU 2016-02"), which amendsamended the existing accounting standards for lease accounting. ASU 2016-02 will require lessees, at lease commencementaccounting to record aincrease transparency and comparability among organizations by requiring the recognition of right-of-use assetassets and lease liability for all leases with terms longer than twelve months. liabilities on the balance sheet.
We are a lessee on a limited numberadopted the standard effective January 1, 2019 and have elected to use January 1, 2019 as our date of ground and office leases and expect to record a right-of-use asset and lease liability for these leases upon adoption of this standard. The expense pattern for these leasesinitial application. Consequently, financial information will not be consistent with that of our historical recognition.
The accounting for lessors will remain largely unchanged from existing GAAP standards with the underlying leased asset being reported and recognized as a real estate asset and rental income being recognized on a straight line basis over the lease term. This standard may also impact the timing, recognition, presentationupdated and disclosures related to our rental recoveries from tenants earned from leasing our operating properties, although we dorequired under the new standard will not expect a significant impact.
Additionally, ASU 2016-02 requires that lessors expense certain initial direct costs that are not incremental in negotiating a lease as incurred. Based on our resultsbe provided for the year ended December 31, 2017, we anticipate this change will reduce our EPS/EPU by approximately $0.01 in the year of adoption.
ASU 2016-02 will become effective for us onperiods presented before January 1, 2019.2019 as these prior periods conform to the Accounting Standards Codification 840. We expect to adoptelected the package of practical expedients available for implementationpermitted under the transition guidance within the new standard. By adopting these practical expedients, we wouldwere not be required to reassess (1) whether an expired or existing contract meets the definition of a lease; (2) the lease classification for expired or existing leases; or (3) whether costs previously capitalized as initial direct costs.
As a lessor, our rental revenue remained mainly consistent with previous guidance, apart from the narrower definition of initial direct costs would continuethat can be capitalized. The new standard defines initial direct costs as only the incremental costs of signing a lease. As such, certain compensation and certain external legal fees related to the execution of successful lease agreements no longer meet the definition of initial direct costs under the new standard and will be amortized. While we are well into our analysisaccounted for in the line item General and Administrative Expense. However, the adoption of the adoption, we will continue to evaluate and assess the impactstandard, along with the adoption of ASU 2016-02 will haveNo. 2018-11, Leases - Targeted Improvements which the FASB issued in July 2018, did change our presentation of our results from operations in the Consolidated Statements of Operations. The main changes caused by the adoption of the standards are:
The new standard provided a practical expedient, which allows lessors to combine non-lease components with the related lease components if both the timing and pattern of transfer are the same for the non-lease components(s) and the related lease component, and the lease component would be classified as an operating lease. Lessors are permitted to apply the practical expedient to all existing leases on a retrospective or prospective basis. We elected the practical expedient to combine our lease and non-lease components that meet the defined criteria. The non-lease components of our leases primarily consist of common area maintenance reimbursements from our tenants.
•
The new standard also requires lessors to exclude from variable payments certain lessor costs, such as real estate taxes, that the lessor contractually requires the lessee to pay directly to a third party on its behalf. Several of our leases require tenants to pay real estate taxes directly to taxing authorities. For periods prior to January 1, 2019, we recorded these payments in the line item Property Expenses with an offset in the line item Lease Revenue. For the three and six months ended June 30, 2018, $1,862 and $3,748 of these payments are included in the aforementioned line items.
•
The new standard requires our expected credit loss related to the collectability of lease receivables to be reflected as an adjustment to the line item Lease Revenue. For the three and six months ended June 30, 2018, the credit loss related to the collectibility of lease receivables was recognized in the line item Property Expenses and was not significant.


We are a lessee on a limited number of ground and office leases. Under the new standard, the expense pattern for these leases is generally consistent with that of our historical recognition; however, we are required to record right-of-use assets and lease liabilities on our Consolidated Balance Sheets. Operating lease right-of-use assets and liabilities are recognized at commencement of the lease based on the Consolidated Financial Statementspresent value of the lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at lease commencement to determine the present value of lease payments. For leases that commenced prior to the effective date of the standard, we recognized right-of-use assets and lease liabilities based on the present value of remaining lease payments and the incremental borrowing rate on the date of adoption. We have elected the short term lease exemption for certain qualifying leases with lease terms of twelve months or less and, accordingly, did not record right-of-use assets and lease liabilities. We have also elected the practical expedient to not separate lease and non-lease components. For additional disclosures related disclosures.to leases, refer to Note 13.
In August 2017, the FASB issued ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeting Improvements to Accounting for Hedging Activities" ("ASU 2017-12"). ASU 2017-12 is intended to better align financial reporting for hedging activities with the economic objectives of those activities. As a result of the transition guidance, cumulative ineffectiveness that has been previously recognized on cash flowWe adopted ASU 2017-02 effective January 1, 2019, and net investment hedges that are still outstanding and designated as of the date of adoption will be adjusted and removed from beginning retained earnings and placed in accumulated other comprehensive income. ASU 2017-12 is effective for annual periods beginning after December 15, 2018. We continue to assess all the potential impacts of ASU 2017-12; however, we do not expect the adoption to have andid not impact on our financial condition or results of operations.



3. Investment in Real Estate
Acquisitions
During the ninesix months ended SeptemberJune 30, 2018,2019, we acquired sixfour industrial properties comprised of approximately 0.50.3 million square feet of GLA and severalfour land parcels.parcels, one of which was acquired from our Joint Venture (see Note 5). We considered theseaccounted for the properties and land parcels as asset acquisitions and therefore capitalized acquisitiontransaction costs to the basis of the acquired assets. The following table summarizes the amounts recognized for each major class of asset and liabilityclass for the industrial properties and land parcels acquired during the ninesix months ended SeptemberJune 30, 2018:2019:
 Purchase Price
Land$26,305
Building and Improvements20,092
In-Place Leases2,585
Below Market Leases(656)
Other Assets (leasing commissions)256
Total Purchase Price$48,582
 Purchase Price
Land$54,203
Building and Improvements45,393
Other Assets (leasing commissions)526
In-Place Leases2,483
Above Market Leases73
Below Market Leases(737)
Total Purchase Price$101,941
Assumed Mortgage Loan (Note 4)(11,654)
Total Net Assets Acquired$90,287

The revenue and net income associated with the acquisition of the industrial properties and land parcels, since their respective acquisition dates, are not significant for the ninesix months ended SeptemberJune 30, 2018.2019.
Real Estate Held for SaleSales
As of SeptemberDuring the six months ended June 30, 2018,2019, we hadsold two industrial properties comprised of approximately 0.1 million square feet of GLA and one land parcel held for sale.
Sales
During the nine months ended September 30, 2018, we sold 34 industrial properties comprised of approximately 1.7 million square feet of GLA and several land parcels.GLA. Gross proceeds from the sales of these industrial properties were $120,516.$12,091. The gain on sale of real estate attributable to these sales was $53,291.$889.
Impairment Charges
The impairment charges of $2,756 recorded during the nine months ended September 30, 2018 were due to marketing one industrial property and one land parcel for sale and our assessment of the likelihood and timing of a potential sale transaction. During the nine months ended September 30, 2018, the one industrial property and one land parcel were sold.




4. Indebtedness
The following table discloses certain information regarding our indebtedness:
 Outstanding Balance at Interest
Rate at
June 30, 2019		 
Effective
Interest
Rate at
Issuance
 
Maturity
Date
 June 30, 2019 December 31, 2018 
Mortgage Loans Payable, Gross$222,274
 $297,610
 4.03% – 8.26% 4.03% – 8.26% 
December 2019 –
August 2028
Unamortized Debt Issuance Costs(917) (1,246)      
Unamortized Premiums—
 106
      
Mortgage Loans Payable, Net$221,357
 $296,470
      
Senior Unsecured Notes, Gross         
2027 Notes6,070
 6,070
 7.15% 7.11% 5/15/2027
2028 Notes31,901
 31,901
 7.60% 8.13% 7/15/2028
2032 Notes10,600
 10,600
 7.75% 7.87% 4/15/2032
2027 Private Placement Notes125,000
 125,000
 4.30% 4.30% 4/20/2027
2028 Private Placement Notes150,000
 150,000
 3.86% 3.86% 2/15/2028
2029 Private Placement Notes75,000
 75,000
 4.40% 4.40% 4/20/2029
2030 Private Placement Notes150,000
 150,000
 3.96% 3.96% 2/15/2030
Subtotal$548,571
 $548,571
      
Unamortized Debt Issuance Costs(3,782) (3,990)      
Unamortized Discounts(74) (77)      
Senior Unsecured Notes, Net$544,715
 $544,504
      
Unsecured Term Loans, Gross  

      
2014 Unsecured Term Loan (A)
$200,000
 $200,000
 3.39% N/A 1/29/2021
2015 Unsecured Term Loan (A)
260,000
 260,000
 2.89% N/A 9/12/2022
Subtotal$460,000
 $460,000
 
 
 
Unamortized Debt Issuance Costs(2,663) (3,191)      
Unsecured Term Loans, Net$457,337
 $456,809
      
Unsecured Credit Facility (B)
$158,000
 $—
 3.51% N/A 10/29/2021
 Outstanding Balance at Interest
Rate at
September 30, 2018		 
Effective
Interest
Rate at
Issuance
 
Maturity
Date
 September 30, 2018 December 31, 2017 
Mortgage Loans Payable, Gross$299,464
 $451,602
 4.03% – 8.26% 3.82% – 8.26% 
July 2019 –
August 2028
Unamortized Debt Issuance Costs(1,417) (1,806)      
Unamortized Premiums141
 260
      
Mortgage Loans Payable, Net$298,188
 $450,056
      
Senior Unsecured Notes, Gross         
2027 Notes6,070
 6,070
 7.15% 7.11% 5/15/2027
2028 Notes31,901
 31,901
 7.60% 8.13% 7/15/2028
2032 Notes10,600
 10,600
 7.75% 7.87% 4/15/2032
2027 Private Placement Notes125,000
 125,000
 4.30% 4.30% 4/20/2027
2028 Private Placement Notes150,000
 —
 3.86% 3.86% 2/15/2028
2029 Private Placement Notes75,000
 75,000
 4.40% 4.40% 4/20/2029
2030 Private Placement Notes150,000
 —
 3.96% 3.96% 2/15/2030
Subtotal$548,571
 $248,571
      
Unamortized Debt Issuance Costs(4,094) (1,814)      
Unamortized Discounts(79) (84)      
Senior Unsecured Notes, Net$544,398
 $246,673
      
Unsecured Term Loans, Gross  

      
2014 Unsecured Term Loan (A)
$200,000
 $200,000
 3.39% N/A 1/29/2021
2015 Unsecured Term Loan (A)
260,000
 260,000
 2.89% N/A 9/12/2022
Subtotal$460,000
 $460,000
 
 
 
Unamortized Debt Issuance Costs(3,455) (4,232)      
Unsecured Term Loans, Net$456,545
 $455,768
      
Unsecured Credit Facility (B)
$—
 $144,500
 N/A N/A 10/29/2021

_______________
(A) During the nine months ended September 30, 2018, pursuant to the agreements for our unsecured term loans entered into in 2014 and 2015 (collectively, the "Unsecured Term Loans"), we elected to have the interest spread calculated based on our investment grade rating resulting in a 10 basis point reduction in the credit spread compared to the prior rate. The interest rate at SeptemberJune 30, 20182019 also reflects the interest rate protection agreementsderivative instruments we entered into to effectively convert the variable rate to a fixed rate. See Note 10.
(B) The maturity date may be extended an additional year at our election, subject to certain restrictions. Amounts exclude unamortized debt issuance costs of $3,868$2,927 and $4,781$3,554 as of SeptemberJune 30, 20182019 and December 31, 2017,2018, respectively, which are included in prepaid expensesthe line item Prepaid Expenses and other assets on the consolidated balance sheets.Other Assets, Net.
Mortgage Loans Payable, Net
During the ninesix months ended SeptemberJune 30, 2018, we assumed a mortgage loan in the amount of $11,654 in conjunction with the acquisition of three industrial properties, totaling approximately 0.2 million square feet of GLA. The mortgage loan bears interest at a fixed rate of 4.17%, principal payments are amortized over 30 years and the loan matures in August 2028.
During the nine months ended September 30, 2018,2019, we paid off mortgage loans in the amount of $157,782. In connection with the mortgage loans paid off during the nine months ended September 30, 2018, we recognized $39 as loss from retirement of debt representing the write-off of unamortized debt issuance costs offset by the write off of an unamortized premium.


$72,073.
As of SeptemberJune 30, 2018,2019, mortgage loans payable are collateralized, and in some instances cross-collateralized, by industrial properties with a net carrying value of $460,550.$336,242. We believe the Operating Partnership and the Company were in compliance with all covenants relating to mortgage loans as of SeptemberJune 30, 2018.2019.
Senior Unsecured Notes, Net
During the nine months ended September 30, 2018,On July 23, 2019, the Operating Partnership issued $150,000 of 3.86% Series C Guaranteed Senior Notes due February 15, 2028 (the "2028 Private Placement Notes") and $150,000 of 3.96% Series D Guaranteed Senior Notes due February 15, 2030 (the "2030 Private Placement Notes") (together with the 2027 Private Placement Notes and the 2029 Private Placement Notes (each as described in Note 4), collectively, the "Private Placement Notes")senior unsecured notes in a private placement pursuant to a Note and Guaranty Agreement dated December 12, 2017. The 2028 Private Placement Notes and the 2030 Private Placement Notes are unsecured obligations of the Operating Partnership that are fully and unconditionally guaranteed by the Company and require semi-annual interest payments.placement. See Subsequent Events (Note 14).


Indebtedness
The following is a schedule of the stated maturities and scheduled principal payments of our indebtedness, exclusive of premiums, discounts and debt issuance costs, for the next five years as of SeptemberJune 30, and thereafter:
 Amount
Remainder of 2019$4,264
202059,046
2021425,113
2022341,552
2023321
Thereafter558,549
Total$1,388,845
 Amount
Remainder of 2018$1,854
201979,600
202059,046
2021267,113
2022341,552
Thereafter558,870
Total$1,308,035

Our unsecured credit facility (the "Unsecured Credit Facility"), the Unsecuredour unsecured term loans (the "Unsecured Term Loans, the PrivateLoans"), our private placement notes (the "Private Placement NotesNotes") and the indentures governing our senior unsecured notes contain certain financial covenants, including limitations on incurrence of debt and debt service coverage. Under the Unsecured Credit Facility and the Unsecured Term Loans an event of default can occur if the lenders, in their good faith judgment, determine that a material adverse change has occurred which could prevent timely repayment or materially impair our ability to perform our obligations under the loan agreements. We believe the Operating Partnership and the Company were in compliance with all covenants relating to the Unsecured Credit Facility, the Unsecured Term Loans, the Private Placement Notes and the indentures governing our senior unsecured notes as of SeptemberJune 30, 2018.2019. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our lenders and noteholders in a manner that could impose and cause us to incur material costs.


Fair Value
At SeptemberJune 30, 20182019 and December 31, 2017,2018, the fair value of our indebtedness was as follows:
 June 30, 2019 December 31, 2018
 
Carrying
Amount (A)
 
Fair
Value
 
Carrying
Amount (A)
 
Fair
Value
Mortgage Loans Payable, Net$222,274
 $227,413
 $297,716
 $304,508
Senior Unsecured Notes, Net548,497
 585,968
 548,494
 546,607
Unsecured Term Loans460,000
 461,106
 460,000
 461,317
Unsecured Credit Facility158,000
 158,177
 —
 —
Total$1,388,771
 $1,432,664
 $1,306,210
 $1,312,432
 September 30, 2018 December 31, 2017
 
Carrying
Amount (A)
 
Fair
Value
 
Carrying
Amount (A)
 
Fair
Value
Mortgage Loans Payable, Net$299,605
 $305,018
 $451,862
 $467,303
Senior Unsecured Notes, Net548,492
 540,952
 248,487
 269,731
Unsecured Term Loans460,000
 461,426
 460,000
 460,000
Unsecured Credit Facility—
 —
 144,500
 144,500
Total$1,308,097
 $1,307,396
 $1,304,849
 $1,341,534

_______________
(A) The carrying amounts include unamortized premiums and discounts and exclude unamortized debt issuance costs.
The fair values of our mortgage loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made based upon similar remaining maturities. The current market rates we utilized were internally estimated. The fair value of the senior unsecured notes were determined by using rates, as advised by our bankers, that are based upon recent trades within the same series of the senior unsecured notes, recent trades for senior unsecured notes with comparable maturities, recent trades for fixed rate unsecured notes from companies with profiles similar to ours, as well as overall economic conditions. The fair value of the Unsecured Credit Facility and the Unsecured Term Loans was determined by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term, assuming no repayment until maturity. We have concluded that our determination of fair value for each of our mortgage loans payable, senior unsecured notes, the Unsecured Term Loans and the Unsecured Credit Facility was primarily based upon Level 3 inputs.



5. Variable Interest Entities
Other Real Estate Partnerships
The Other Real Estate Partnerships are variable interest entities ("VIEs") of the Operating Partnership and the Operating Partnership is the primary beneficiary, thus causing the Other Real Estate Partnerships to be consolidated by the Operating Partnership. In addition, the Operating Partnership is a VIE of the Company and the Company is the primary beneficiary.
The following table summarizes the assets and liabilities of the Other Real Estate Partnerships included in our consolidated balance sheets, net of intercompany amounts:
 June 30, 2019 December 31, 2018
ASSETS   
Assets:   
Net Investment in Real Estate$255,559
 $260,528
Other Assets, Net23,742
 25,059
Total Assets$279,301
 $285,587
LIABILITIES AND PARTNERS' CAPITAL   
Liabilities:   
Mortgage Loans Payable, Net$13,164
 $20,497
Other Liabilities, Net7,520
 9,045
Partners' Capital258,617
 256,045
Total Liabilities and Partners' Capital$279,301
 $285,587
 September 30, 2018 December 31, 2017
ASSETS   
Assets:   
Net Investment in Real Estate$265,089
 $270,708
Other Assets, Net26,408
 23,530
Total Assets$291,497
 $294,238
LIABILITIES AND PARTNERS' CAPITAL   
Liabilities:   
Mortgage Loans Payable, Net$20,611
 $61,256
Other Liabilities, Net8,296
 9,283
Partners' Capital262,590
 223,699
Total Liabilities and Partners' Capital$291,497
 $294,238



Joint Venture
During the second quarter 2018, we entered into the Joint Venture with a third party partner for the purpose of developing, leasing, operating and potentially selling approximately 532 net developable acres of land located in the Phoenix, Arizona metropolitan area. The purchase price of the land was $49,000 and was acquired by the Joint Venture via cash equity contributions from us and our joint venture partner. Through a wholly-owned subsidiaryTRS of the Operating Partnership, we own a 49% interest in the Joint Venture.
During the six months ended June 30, 2019, the Joint Venture sold three land parcels, totaling 236 net developable acres, for gross proceeds of $57,178 and a total gain on sale of real estate of $30,236. Our economic share of the gain on sale is $14,816. However, we were the purchaser of one of the land parcels, acquiring 39 net developable acres from the Joint Venture. Accordingly, we netted our gain on sale pertaining to that sale in the amount of $3,121 against the basis of the land acquired. During the six months ended June 30, 2018, the Joint Venture sold one land parcel, totaling 21 net developable acres, for gross proceeds of $3,973 and total gain on sale of real estate of $181. Net income of the Joint Venture for the six months ended June 30, 2019 and 2018 was $30,148 and $154, respectively.
Under the Joint Venture's operating agreement, we act as the managing member of the Joint Venture and are entitled to receive fees for providing management, leasing, development, construction supervision, disposition and asset management services to the Joint Venture. In addition, the Joint Venture's operating agreement provides us the ability to earn an incentive fee based on the ultimate financial performance of the Joint Venture. In accordance with GAAP, for the three months ended June 30, 2019, we calculated the incentive fee using a hypothetical liquidation basis assuming the remaining net assets of the Joint Venture were distributed at book value. Under this hypothetical liquidation methodology, we recognized an incentive fee of approximately $4,900, which is recorded in the Equity In Income of Joint Venture line item in the statement of operations and as an increase to the Investment in Joint Venture line item on the balance sheet. Any incentive fee earned will be calculated based on the final economic performance of the Joint Venture and will be paid towards the end of the Joint Venture's life.


As part of our assessment of the appropriate accounting treatment for the Joint Venture, we reviewed the operating agreement of the Joint Venture in order to determine our rights and the rights of our joint venture partner, including whether those rights are protective or participating. We found that the operating agreement contains certain protective rights, such as the requirement of both member's approval to sell, finance or refinance the property and to pay capital expenditures and operating expenditures outside of the approved budget. However, we also found that we and our Joint Venture partner jointly (i) approve the annual budget, (ii) approve certain expenditures, (iii) review and approve the Joint Venture's tax return before filing and (iv) approve each lease at a developed property. We consider the latter rights substantive participation rights that result in shared, joint power over the activities that most significantly impact the performance of the Joint Venture. As such, we concluded to account for our investment in the Joint Venture under the equity method of accounting.

6. Stockholders' Equity of the Company and Partners' Capital of the Operating Partnership
Issuance of Shares of Common Stock
During the second quarter 2018, the Company issued 4,800,000 sharesNoncontrolling Interest of the Company's common stock in an underwritten public offering. Proceeds to the Company net

The equity positions of the underwriter's discount, were $145,584. The proceeds werevarious individuals and entities that contributed their properties to the Operating Partnership in exchange for GeneralLimited Partner Units, and are reflected inas well as the financial statements as a general partner contribution.
Noncontrolling Interestequity positions of the Companyholders of LTIP Units, are collectively referred to as the “Noncontrolling Interests.”  Subject to vesting and other certain exceptions (including the “book-up” requirements of LTIP Units - See Note 9 for additional detail), the holders of Noncontrolling Interests may convert their Units into an equal number of shares of Common Stock, or a cash equivalent, at the Company's election. Net income is allocated to the Noncontrolling Interests based on the weighted average ownership percentage during the period.
The following table summarizes the changes in noncontrolling interest for the Company for the ninesix months ended SeptemberJune 30, 2019 and 2018:
 2019 2018
Balance as of December 31$34,397
 $48,077
    Net Income1,450
 2,367
    Amortization of Unearned Compensation related to the Issuance of LTIP Units (A)
781
 —
    Other Comprehensive (Loss) Income(241) 200
    Unit Distributions(1,316) (1,418)
    Conversion of Limited Partner Units to Common Stock (B)
—
 (12,327)
    Retirement of Limited Partner Units (C)
—
 (934)
    Reallocation - Additional Paid-in-Capital2,780
 2,218
    Reallocation - Other Comprehensive Income8
 —
Balance as of June 30$37,859
 $38,183

_______________
(A) During the six months ended June 30, 2019, 297,216 LTIP Units were issued to certain employees and directors.
(B) During the six months ended June 30, 2018, and 2017:
 2018 2017
Balance as of December 31$48,077
 $43,184
    Net Income2,986
 3,531
    Other Comprehensive Income (Including a Reallocation of ($77) and $3)208
 54
    Common Stock Dividends and Unit Distributions(1,990) (2,544)
    Conversion of Limited Partner Units to Common Stock (A)
(16,509) (39)
    Retirement of Limited Partner Units (B)
(934) —
    Reallocation - Additional Paid-in-Capital2,309
 1,569
Balance as of September 30$34,147
 $45,755
_______________
(A) For the nine months ended September 30, 2018 and 2017, 1,343,461 and 3,4371,019,677 Limited Partner Units respectively, were converted into an equivalent number of shares of common stock of the Company.Company, resulting in a reclassification of $12,327 of noncontrolling interest to the Company's stockholders' equity.
(B)(C) During the ninesix months ended SeptemberJune 30, 2018, 33,333 Limited Partner Units were forfeited by a unitholder and were retired by the Operating Partnership.



Noncontrolling Interest of the Operating Partnership
The following table summarizes the changes in noncontrolling interest for the Operating Partnership for the ninesix months ended SeptemberJune 30, 20182019 and 2017:2018:
 2019 2018
Balance as of December 31$857
 $779
    Net Income50
 43
    Contributions5
 121
    Distributions(64) (64)
Balance as of June 30$848
 $879
 2018 2017
Balance as of December 31$779
 $956
    Net Income65
 96
    Contributions124
 29
    Distributions(84) (284)
Balance as of September 30$884
 $797

Dividends/Distributions
During the ninesix months ended SeptemberJune 30, 2018,2019, we declared $83,338$59,786 common stock dividends and Unit distributions.

7. Accumulated Other Comprehensive Income
The following table summarizes the changes in accumulated other comprehensive income by component for the Company and the Operating Partnership for the ninesix months ended SeptemberJune 30, 2018:2019:
 Derivative Instruments Accumulated Other Comprehensive Income (Loss) of the Operating Partnership Comprehensive (Income) Loss Attributable to Noncontrolling Interest of the Company Accumulated Other Comprehensive Income (Loss) of the Company
Balance as of December 31, 2018$3,574
 $3,574
 $(72) $3,502
Other Comprehensive Loss Before Reclassifications(9,715) (9,715) 233
 (9,482)
Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income(1,078) (1,078) —
 (1,078)
Net Current Period Other Comprehensive Loss(10,793) (10,793) 233
 (10,560)
Balance as of June 30, 2019$(7,219) $(7,219) $161
 $(7,058)
 Interest Rate Protection Agreements Accumulated Other Comprehensive Income of the Operating Partnership Comprehensive Income Attributable to Noncontrolling Interest of the Company Accumulated Other Comprehensive Income of the Company
Balance as of December 31, 2017$1,382
 $1,382
 $(44) $1,338
Other Comprehensive Income Before Reclassifications10,470
 10,470
 (208) 10,262
Amounts Reclassified from Accumulated Other Comprehensive Income529
 529
 —
 529
Net Current Period Other Comprehensive Income10,999
 10,999
 (208) 10,791
Balance as of September 30, 2018$12,381
 $12,381
 $(252) $12,129

The following table summarizes the reclassifications out of accumulated other comprehensive income for both the Company and the Operating Partnership for the three and ninesix months ended SeptemberJune 30, 20182019 and 2017:2018:
  
Amounts Reclassified from Accumulated
Other Comprehensive (Loss) Income
  
Details about Accumulated
Other Comprehensive Income Components
 Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 
Affected Line Items in the
Consolidated Statements of Operations
Derivative Instruments:          
Amortization of Previously Settled Derivative Instruments $24
 $23
 $48
 $47
 Interest Expense
Net Settlement (Receipts) Payments to our Counterparties (550) 97
 (1,126) 560
 Interest Expense
Total $(526) $120
 $(1,078) $607
  
  
Amounts Reclassified from Accumulated
Other Comprehensive Income
  
Details about Accumulated
Other Comprehensive Income Components
 Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 
Affected Line Items in the
Consolidated Statements of Operations
Interest Rate Protection Agreements:          
Amortization of Previously Settled Interest Rate Protection Agreements $24
 $24
 $71
 $180
 Interest Expense
Net Settlement (Receipts) Payments from/to our Counterparties (102) 912
 458
 3,486
 Interest Expense
Total $(78) $936
 $529
 $3,666
  

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in other comprehensive income and is subsequently reclassified to earnings through interest expense over the life of the derivative or over the life of the debt. In the next 12 months, we expect to amortize approximately $95$391 into net income by increasing interest expense for interest rate protection agreementsderivative instruments we settled in previous periods. Additionally, recurring settlement amounts on the 2014 Swaps and 2015 Swaps (as defined in Note 10) will also be reclassified to net income. See Note 10 for more information about our derivatives.


8. Earnings Per Share and Earnings Per Unit ("EPS"/"EPU")
The computation of basic and diluted EPS of the Company is presented below:
 Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
Numerator:       
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities$39,800
 $45,209
 $63,603
 $81,501
Net Income Allocable to Participating Securities(89) (151) (149) (248)
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$39,711
 $45,058
 $63,454
 $81,253
Denominator (In Thousands):       
Weighted Average Shares - Basic126,206
 123,616
 126,200
 121,741
Effect of Dilutive Securities:       
        Performance units (See Note 9)283
 469
 272
 417
Weighted Average Shares - Diluted126,489
 124,085
 126,472
 122,158
Basic and Diluted EPS:       
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$0.31
 $0.36
 $0.50
 $0.67
 Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017
Numerator:       
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities$30,911
 $43,198
 $112,412
 $103,469
Net Income Allocable to Participating Securities(101) (145) (349) (327)
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$30,810
 $43,053
 $112,063
 $103,142
Denominator (In Thousands):       
Weighted Average Shares - Basic125,768
 119,446
 123,098
 117,870
Effect of Dilutive Securities:       
        LTIP Unit Awards (As Defined in Note 9)362
 544
 399
 482
Weighted Average Shares - Diluted126,130
 119,990
 123,497
 118,352
Basic EPS:       
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$0.24
 $0.36
 $0.91
 $0.88
Diluted EPS:    
 
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$0.24
 $0.36
 $0.91
 $0.87

The computation of basic and diluted EPU of the Operating Partnership is presented below:
 Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018
Numerator:       
Net Income Available to Unitholders and Participating Securities$40,689
 $46,382
 $65,003
 $83,825
Net Income Allocable to Participating Securities(128) (151) (204) (248)
Net Income Available to Unitholders$40,561
 $46,231
 $64,799
 $83,577
Denominator (In Thousands):       
Weighted Average Units - Basic128,831
 126,832
 128,824
 125,289
Effect of Dilutive Securities:       
Performance units and certain Performance LTIP Units (See Note 9)390
 469
 375
 417
Weighted Average Units - Diluted129,221
 127,301
 129,199
 125,706
Basic and Diluted EPU:       
Net Income Available to Unitholders$0.31
 $0.36
 $0.50
 $0.67

 Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017
Numerator:       
Net Income Available to Unitholders and Participating Securities$31,508
 $44,613
 $115,333
 $106,904
Net Income Allocable to Participating Securities(101) (145) (349) (327)
Net Income Available to Unitholders$31,407
 $44,468
 $114,984
 $106,577
Denominator (In Thousands):       
Weighted Average Units - Basic128,526
 123,483
 126,380
 121,909
Effect of Dilutive Securities that Result in the Issuance of General Partner Units:       
LTIP Unit Awards (As Defined in Note 9)362
 544
 399
 482
Weighted Average Units - Diluted128,888
 124,027
 126,779
 122,391
Basic EPU:       
Net Income Available to Unitholders$0.24
 $0.36
 $0.91
 $0.87
Diluted EPU:       
Net Income Available to Unitholders$0.24
 $0.36
 $0.91
 $0.87
ParticipatingAt June 30, 2019 and 2018, participating securities for the Company include 274,624 and 413,193, and 401,217respectively, of unvested restricted stock, orwhich participate in non-forfeitable distributions. At June 30, 2019 and 2018, participating securities for the Operating Partnership include 400,181 and 413,193, respectively, of restricted Unit awards outstanding at September 30, 2018 and 2017, respectively,certain LTIP Units, which participate in non-forfeitable distributions. Under the two class method, participating security holders are allocated income, in proportion to total weighted average shares or Units outstanding, based upon the greater of net income or common stock dividends or Unit distributions declared.




9. Benefit PlansLong-Term Compensation
Restricted Stock or Restricted Unit Awards of LTIP Units
For the nine months ended September 30,During 2018, the Company awarded 211,890 sharesmodified its stock incentive program to allow for the granting of restricted stock awards to certain officers, certain employees which hadand directors in the form of LTIP units ("LTIP Units"). An LTIP Unit is a class of limited partnership interest of the Operating Partnership that is structured as a “profits interest” for U.S. federal income tax purposes. Generally, LTIP Units entitle the holder to receive distributions from the Operating Partnership that are equivalent to the dividends and distributions that would be made with respect to the number of shares of Common Stock underlying such LTIP Units, though receipt of such distributions may be delayed or made contingent on vesting. Once an aggregate fair valueLTIP Unit has vested and received allocations of $6,068book income sufficient to increase the book capital account balance associated with such LTIP Unit (which will initially be zero) to equal, on a per-unit basis, the date such awards were approvedbook capital account balance associated with a “common” Limited Partner Unit of the Operating Partnership, it automatically becomes a common Limited Partner Unit that is convertible by the Compensation Committeeholder into one share of Common Stock or a cash equivalent, at the Board of Directors. These restricted stock awards were granted based uponCompany’s option.
Awards with Performance Measures
During the achievement of certain corporate performance goals and generally vest over a period of three years. Additionally, during the ninesix months ended SeptemberJune 30, 2018, the Company awarded 15,169 shares of restricted stock to non-employee members of the Board of Directors, which had an aggregate fair value of $490 on the date of approval. These restricted stock awards vest over a one-year period. The Operating Partnership issued restricted Unit awards to the Company in the same amount for both restricted stock awards.
Compensation expense is charged to earnings over the vesting periods for the restricted stock or restricted Unit awards expected to vest except if the recipient is not required to provide future service in exchange for vesting of such restricted stock or restricted Unit awards. If vesting of a recipient's restricted stock or restricted Unit awards is not contingent upon future service, the expense is recognized immediately at the date of grant. During the nine months ended September 30, 2017, we recognized $1,590 of compensation expense related to restricted stock or restricted Unit awards granted to our former Chief Executive Officer for which future service was not required.
LTIP Unit Awards
For the nine months ended September 30, 2018,2019, the Company granted 36,064 performance units ("Performance units") and 166,942 LTIP Units, based on performance-based criteria ("Performance LTIP Units" and, together with the Performance units, collectively the "Performance Awards") to certain employees, 179,288 Long-Term Incentive Program ("LTIP") performance units ("LTIP Unit Awards"), which had a fair value of $2,381$2,527 on the grant date as determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. The LTIP UnitPerformance Awards vest based upon the relative total shareholder return ("TSR") of the Company's common stock compared to thea weighted average TSRsTSR of the MSCI US REIT Index and the NAREIT Industrial Index over a performance period of three years. Compensation expense is charged to earnings on a straight-line basis over the vesting periods for Performance Awards. At the end of the measuring period, vested Performance units convert into shares of common stock.
Service Based Awards
For the six months ended June 30, 2019, the Company awarded 87,606 shares of restricted stock awards and 112,428 of LTIP Units based on service-based criteria ("Service LTIP Units") to certain employees and outside directors, which had an aggregate fair value of $6,727 on the date such awards were approved by the Compensation Committee of the Board of Directors. Both the restricted stock awards and Service LTIP Units granted to employees were based upon the prior achievement of certain corporate performance goals and will vest ratably over a period of three years based on continued employment. Restricted Stock awards and Service LTIP Units granted to outside directors vest after a one year period. The Operating Partnership issues General Partner Unitsissued restricted Unit awards to the Company in the same amountsamount for vestedthe restricted stock awards. Compensation expense is charged to earnings over the vesting periods for both the restricted stock/restricted Unit awards and the Service LTIP Unit Awards.Units.
Outstanding Restricted Stock or Stock/Restricted Unit Awards, Performance Units and LTIP Unit AwardsUnits
We recognized $2,003$2,053 and $1,844$1,997 for the three months ended SeptemberJune 30, 20182019 and 2017,2018, respectively and $5,689$3,815 and $6,767$3,686 for the ninesix months ended SeptemberJune 30, 20182019 and 20172018, respectively, in amortizationcompensation expense related to the amortization of restricted stock or restricted Unit awards, Performance units, and LTIP Unit Awards.Units. Restricted stock or restricted Unit award, Performance unit and LTIP Unit Award amortization capitalized in connection with development activities was $238 and $442 for the three and six months ended June 30, 2019 and was not significant.significant for the comparable 2018 periods. At SeptemberJune 30, 2018,2019, we had $10,450$13,093 in unrecognized compensation related to unvested restricted stock or restricted Unit awards, Performance units and LTIP Unit Awards.Units. The weighted average period that the unrecognized compensation is expected to be recognized is 0.941.02 years.
Severance Expense
During the nine months ended September 30, 2018, we incurred $1,298 of severance costs related to a reduction in personnel as a result of changes in our real estate portfolio. The severance costs are included in general and administrative expense.


10. Derivatives
Our objectives in using derivatives are to add stability to interest expense and to manage our cash flow volatility and exposure to interest rate movements. To accomplish this objective,these objectives, we primarily use interest rate protection agreementsderivative instruments as part of our interest rate risk management strategy. Interest rate protection agreementsDerivative instruments designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.


Fair Value Hedges

During December 2018, in anticipation of issuing long-term debt in the future, we entered into two treasury locks with an aggregate notional value of $100,000 to manage our exposure to changes in the ten-year U.S. Treasury rate (the "2018 Treasury Locks"). During April 2019, we paid $3,149 to settle the 2018 Treasury Locks with our counterparties. The 2018 Treasury Locks fixed the ten-year U.S. Treasury rate at a weighted average of 2.93%. We had designated the 2018 Treasury Locks as cash flow hedges and will amortize the payment made to our counterparties into interest expense over the 10-year period which corresponds to the term of our newly issued private placement debt (see Note 14).
In connection with the originations of the Unsecured Term Loans (see Note 4), we entered into interest rate protection agreementsswaps to manage our exposure to changes in the one month LIBOR rate. The four interest rate protection agreements,swaps, which fix the variable rate of the 2014 Unsecured Term Loan, have an aggregate notional value of $200,000, mature on January 29, 2021 and fix the LIBOR rate at a weighted average rate of 2.29% (the "2014 Swaps"). The six interest rate protection agreements,swaps, which fix the variable rate of the 2015 Unsecured Term Loan, have an aggregate notional value of $260,000, mature on September 12, 2022 and fix the LIBOR rate at a weighted average rate of 1.79% (the "2015 Swaps"). We designated the 2014 Swaps and 2015 Swaps as cash flow hedges.
Our agreements with our derivative counterparties contain provisions where if we default on any of our indebtedness, then we could also be declared in default on our derivative obligations subject to certain thresholds. As of SeptemberJune 30, 2018,2019, we had not posted any collateral related to these agreements and were not in breach of any of the provisions of these agreements. If we had breached these agreements, we could have been required to settle our obligations under the agreements at their termination value.
The following table sets forth our financial assetsliabilities related to the 2015 Swaps and the 2014 Swaps, which are included in prepaid expensesthe line item Accounts Payable, Accrued Expenses and other assets on the consolidated balance sheetsOther Liabilities and which are accounted for at fair value on a recurring basis as of SeptemberJune 30, 2018:2019:
    Fair Value Measurements:
Description Fair Value 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
Derivatives designated as a hedging instrument:        
Liabilities:        
2014 Swaps $(1,789) —
 $(1,789) —
2015 Swaps $(1,421) —
 $(1,421) —
    Fair Value Measurements:
Description Fair Value 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
Derivatives designated as a hedging instrument:        
Assets:        
2014 Swaps $2,512
 —
 $2,512
 —
2015 Swaps $10,803
 —
 $10,803
 —

There was no ineffectiveness recorded on the 2014 Swaps and the 2015 Swaps during the ninesix months ended SeptemberJune 30, 2018.2019. See Note 7 for more information regarding our derivatives.
The estimated fair value of the 2014 Swaps and the 2015 Swaps was determined using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments are incorporated in the fair value to account for potential non-performance risk, including our own non-performance risk and the respective counterparty's non-performance risk. We determined that the significant inputs used to value the 2014 Swaps and the 2015 Swaps fell within Level 2 of the fair value hierarchy.



11. Related Party Transactions
During the ninesix months ended SeptemberJune 30, 2018,2019, we recognized fees of $74$69 from the Joint Venture related to asset management and development services provided to the Joint Venture. At SeptemberJune 30, 2018,2019, we had a receivable from the Joint Venture of $74$46 related to thisthe asset management fee.and development fees. See Note 5 for more information on the Joint Venture.
 At SeptemberJune 30, 20182019 and December 31, 2017,2018, the Operating Partnership had receivable balances of $10,168$10,059 and $10,129,$10,118, respectively, from a direct wholly-owned subsidiary of the Company.



12. Commitments and Contingencies
In the normal course of business, we are involved in legal actions arising from the ownership of our industrial properties. In our opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on our consolidated financial position, operations or liquidity.
In conjunction with the development of industrial properties, we have entered into agreements with general contractors for the construction of industrial properties. At SeptemberJune 30, 2018,2019, we had ninehad 14 industrial properties totaling approximately 3.74.5 million square feet of GLA under construction. The estimated total investment as of SeptemberJune 30, 20182019 is approximately $261,300.$336,500. Of this amount, approximately $127,500$188,400 remains to be funded. There can be no assurance that the actual completion cost will not exceed the estimated total investment.


13. Leases
Lessee Disclosures
We are a lessee on a limited number of ground and office leases (the "Operating Leases"). Our office leases have remaining lease terms of less than one year to seven years and our ground leases have remaining terms of 35 years to 52 years. For the six months ended June 30, 2019, we recognized $927 of operating lease expense, inclusive of short-term and variable lease costs which are not significant.
The following is a schedule of the maturities of operating lease liabilities for the next five years as of June 30, 2019, and thereafter:
Remainder of 2019$792
20201,536
20211,503
20221,465
20231,329
Thereafter29,025
Total Lease Payments35,650
Less Imputed Interest (A)
23,365
Total$12,285
(A) Calculated using the discount rate for each lease.
As of June 30, 2019, our weighted average remaining lease term for the Operating Leases is 34.3 years and the weighted average discount rate is 7.4%.
Future minimum rental payments for the Operating Leases as of December 31, 2018 are as follows:
2019$1,464
20201,536
20211,503
20221,465
20231,329
Thereafter29,025
Total$36,322

A number of the Operating Leases include options to extend the lease term. For purposes of determining our lease term, we excluded periods covered by an option since it was not reasonably certain at lease commencement that we would exercise.


Lessor Disclosures
Our properties and certain land parcels are leased to tenants and classified as operating leases. Future minimum rental receipts, excluding variable payments and tenant reimbursements of expenses, under non-cancelable operating leases executed as of June 30, 2019 are approximately as follows:
Remainder of 2019$161,684
2020322,411
2021282,344
2022240,517
2023201,543
Thereafter573,652
Total$1,782,151

Future minimum rental receipts, excluding tenant reimbursements of expenses, under non-cancelable operating leases executed as of December 31, 2018 were approximately as follows:
2019$305,689
2020288,817
2021244,743
2022205,097
2023169,243
Thereafter451,151
Total$1,664,740

Several of our operating leases include options to extend the lease term. For purposes of determining the lease term, we exclude these option periods unless it is reasonably certain at lease commencement that the option will be exercised.     Also, four leases include options that grant the lessee a right to purchase the property at various times at appraised fair market value or at a fixed price. For purposes of determining lease term, we exclude the impact of a purchase option unless it is reasonably certain at lease commencement that the lessee will exercise the option.

14. Subsequent Events
From OctoberJuly 1, 20182019 to October 25, 2018,July 26, 2019, we acquired onethree industrial propertyproperties and onetwo land parcelparcels for aan aggregate purchase price of approximately $16,606,$31,676, excluding costs incurred in conjunction with the acquisition of the industrial property and land parcel.
From October 1, 2018 to October 25, 2018,transaction costs. In addition, we sold one industrial property and one land parcel for approximately $8,325.$6,244, excluding transaction costs.
On July 23, 2019, the Operating Partnership issued $150,000 of 3.97% Series E Guaranteed Senior Notes due July 23, 2029 (the "2029 II Private Placement Notes") in a private placement pursuant to a Note and Guaranty Agreement dated May 16, 2019. The 2029 II Private Placement Notes are unsecured obligations of the Operating Partnership that are fully and unconditionally guaranteed by the Company and require semi-annual interest payments.






Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q. Unless stated otherwise or the context otherwise requires, the terms "we," "our" and "us" refer to First Industrial Realty Trust, Inc. (the "Company") and its subsidiaries, including First Industrial, L.P. (the "Operating Partnership") and its consolidated subsidiaries.
Forward-Looking Statements
The following discussion may contain 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 (the "Exchange Act"). We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on certain assumptions and describe our future plans, strategies and expectations, and are generally identifiable by use of the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "project," "seek," "target," "potential," "focus," "may," "will," "should" or similar words. Although we believe the expectations reflected in forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that results will not materially differ. Factors which could have a materially adverse effect on our operations and future prospects include, but are not limited to:
changes in national, international, regional and local economic conditions generally and real estate markets specifically;
changes in legislation/regulation (including changes to laws governing the taxation of real estate investment trusts) and actions of regulatory authorities;
our ability to qualify and maintain our status as a real estate investment trust;
the availability and attractiveness of financing (including both public and private capital) and changes in interest rates;
the availability and attractiveness of terms of additional debt repurchases;
changes in our credit agency ratings;
our ability to comply with applicable financial covenants;
our competitive environment;
changes in supply, demand and valuation of industrial properties and land in our current and potential market areas;
difficulties in identifying and consummating acquisitions and dispositions;
our ability to manage the integration of properties we acquire;
potential liability relating to environmental matters;
defaults on or non-renewal of leases by our tenants;
decreased rental rates or increased vacancy rates;
higher-than-expected real estate construction costs and delays in development or lease-up schedules;
changes in general accounting principles, policies and guidelines applicable to real estate investment trusts; and
other risks and uncertainties described in this report, in Item 1A, "Risk Factors" and elsewhere in our annual report on Form 10-K for the year ended December 31, 20172018 as well as those risks and uncertainties discussed from time to time in our other Exchange Act reports and in our other public filings with the Securities and Exchange Commission (the "SEC").
We caution you not to place undue reliance on forward-looking statements, which reflect our outlook only and speak only as of the date of this report. We assume no obligation to update or supplement forward-looking statements.



General
The Company is a self-administered and fully integrated real estate company which owns, manages, acquires, sells, develops and redevelops industrial real estate. The Company is a Maryland corporation organized on August 10, 1993 and a real estate investment trust ("REIT") as defined in the Internal Revenue Code of 1986 (the "Code").
We began operations on July 1, 1994. The Company's operations are conducted primarily through the Operating Partnership, of which the Company is the sole general partner (the "General Partner"), with an approximate 98.0%97.8% ownership interest ("General Partner Units") at SeptemberJune 30, 2018.2019. The Operating Partnership also conducts operations through eight other limited partnerships (the "Other Real Estate Partnerships"), numerous limited liability companies ("LLCs") and certain taxable REIT subsidiaries ("TRSs"), the operating data of which, together with that of the Operating Partnership, is consolidated with that of the Company as presented herein. The Operating Partnership holds at least a 99% limited partnership interest in each of Other Real Estate Partnerships. The general partners of the Other Real Estate Partnerships are separate corporations, wholly-owned by the Company, each with at least a .01% general partnership interest in the Other Real Estate Partnerships. The Company does not have any significant assets or liabilities other than its investment in the Operating Partnership and its 100% ownership interest in the general partners of the Other Real Estate Partnerships. NoncontrollingThe Company's noncontrolling interest in the Operating Partnership of approximately 2.0%2.2% at SeptemberJune 30, 20182019 represents the aggregate partnership interest held by the limited partners thereof ("Limited Partner Units" and together with the General Partner Units, the "Units"). The limited partners of the Operating Partnership are persons or entities who contributed their direct or indirect interests in properties to the Operating Partnership in exchange for common units of the Operating Partnership and/or recipients of LTIP Units of the Operating Partnership pursuant to the Company's stock incentive plan.
We also own a 49% equity interest in, and provide various services to, a joint venture (the "Joint Venture") through a wholly-owned subsidiaryTRS of the Operating Partnership. The Joint Venture is accounted for under the equity method of accounting. The operating data of the Joint Venture is not consolidated with that of the Operating Partnership or the Company as presented herein. See Note 5 to the Consolidated Financial Statements for more information related to the Joint Venture.
Profits, losses and distributions of the Operating Partnership, the LLCs, the Other Real Estate Partnerships, the TRSs and the Joint Venture are allocated to the general partner and the limited partners, the members or the shareholders, as applicable, of such entities in accordance with the provisions contained within their respective organizational documents.
As of SeptemberJune 30, 2018,2019, we owned 468462 industrial properties located in 21 states, containing an aggregate of approximately 61.063.4 million square feet of gross leasable area ("GLA").Of the 468462 properties owned on a consolidated basis, none of them are directly owned by the Company.
Available Information
We maintain a website at www.firstindustrial.com. Information on this website shall not constitute part of this Form 10-Q. Copies of our respective annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports are available without charge on our website as soon as reasonably practicable after such reports are filed with or furnished to the SEC. You may also read and copy any document filed at the public reference facilities of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 for further information about the public reference facilities. These documents also may be accessed through the SEC's Interactive Data Electronic Application via the SEC's home page on the Internet (www.sec.gov). In addition, the Company's Corporate Governance Guidelines, Code of Business Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter and Nominating/Corporate Governance Committee Charter, along with supplemental financial and operating information prepared by us, are all available without charge on the Company's website or upon request to the Company. Amendments to, or waivers from, our Code of Business Conduct and Ethics that apply to our executive officers or directors will also be posted to our website. We also post or otherwise make available on our website from time to time other information that may be of interest to our investors. Please direct requests as follows:
First Industrial Realty Trust, Inc.
1 N. Wacker Drive, Suite 4200
Chicago, IL 60606
Attention: Investor Relations





Management's Overview
We believe our financial condition and results of operations are, primarily, a function of our performance in four key areas: leasing of industrial properties, acquisition and development of additional industrial properties, disposition of industrial properties and access to external capital.
We generate revenue primarily from rental income and tenant recoveries from operating leases of our industrial properties. Such revenue is offset by certain property specific operating expenses, such as real estate taxes, repairs and maintenance, property management, utilities and insurance expenses, along with certain other costs and expenses, such as depreciation and amortization costs and general and administrative and interest expenses. Our revenue growth is dependent, in part, on our ability to: (i) increase rental income, through increasing either or both occupancy rates and rental rates at our properties; (ii) maximize tenant recoveries; and (iii) minimize operating and certain other expenses. Revenues generated from rental income and tenant recoveriesour leases are a significant source of funds, in addition to income generated from gains on the sale of our properties (as discussed below), for our liquidity. The leasing of property, in general, and occupancy rates, rental rates, operating expenses and certain non-operating expenses, in particular, are impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond our control. The leasing of property also entails various risks, including the risk of tenant default. If we were unable to maintain or increase occupancy rates and rental rates at our properties or to maintain tenant recoveries and operating and certain other expenses consistent with historical levels and proportions, our revenue would decline. Further, if a significant number of our tenants were unable to pay rent (including tenant recoveries) or if we were unable to rent our properties on favorable terms, our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and Unitholders, the market price of the Company's common stock and the market value of the Units would be adversely affected.
Our revenue growth is also dependent, in part, on our ability to acquire existing, and develop new industrial properties on favorable terms. We seek to identify opportunities to acquire existing industrial properties on favorable terms, and, when conditions permit, also seek to acquire and develop new industrial properties on favorable terms. Existing properties, as they are acquired, and acquired and developed properties, as they are leased, generate revenue from rental income, tenant recoveries and fees, which, as discussed above, are sources of funds for our distributions to our stockholders and Unitholders. The acquisition and development of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond our control. The acquisition and development of properties also entails various risks, including the risk that our investments may not perform as expected. For example, acquired existing and acquired and developed new properties may not sustain and/or achieve anticipated occupancy and rental rate levels. With respect to acquired and developed new properties, we may not be able to complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties. Also, we face significant competition for attractive acquisition and development opportunities from other well-capitalized real estate investors, including publicly-traded REITs and private investors. Further, as discussed below, we may not be able to finance the acquisition and development opportunities we identify. If we were unable to acquire and develop sufficient additional properties on favorable terms, or if such investments did not perform as expected, our revenue growth would be limited and our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and Unitholders, the market price of the Company's common stock and the market value of the Units would be adversely affected.
We also generate income from the sale of our properties (including existing buildings, buildings which we have developed or re-developed on a merchant basis and land). The gain or loss on, and fees from, the sale of such properties are included in our income and can be a significant source of funds, in addition to revenues generated from rental income and tenant recoveries. Proceeds from sales are used to repay outstanding debt and, market conditions permitting, may be used to fund the acquisition of existing industrial properties, and the acquisition and development of new industrial properties. The sale of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond our control. The sale of properties also entails various risks, including competition from other sellers and the availability of attractive financing for potential buyers of our properties. Further, our ability to sell properties is limited by safe harbor rules applying to REITs under the Code which relate to the number of properties that may be disposed of in a year, their tax bases and the cost of improvements made to the properties, along with other tests which enable a REIT to avoid punitive taxation on the sale of assets. If we are unable to sell properties on favorable terms, our income growth would be limited and our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and Unitholders, the market price of the Company's common stock and the market value of the Units could be adversely affected.



We utilize a portion of the net sales proceeds from property sales, borrowings under our unsecured credit facility (the "Unsecured Credit Facility") and proceeds from the issuance, when and as warranted, of additional debt and equity securities to refinance debt and finance future acquisitions and developments. Access to external capital on favorable terms plays a key role in our financial condition and results of operations, as it impacts our cost of capital and our ability and cost to refinance existing indebtedness as it matures and our ability to fund acquisitions and developments. Our ability to access external capital on favorable terms is dependent on various factors, including general market conditions, interest rates, credit ratings on our debt, the market's perception of our growth potential, our current and potential future earnings and cash distributions and the market price of the Company's common stock. If we were unable to access external capital on favorable terms, our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and Unitholders, the market price of the Company's common stock and the market value of the Units could be adversely affected.




Summary of Significant Transactions During the NineSix Months Ended SeptemberJune 30, 20182019
During the ninesix months ended SeptemberJune 30, 2018,2019, we completed the following significant real estate transactions and financing activities:
We acquired sixfour industrial properties comprised of approximately 0.50.3 million square feet of GLA located in our Orlando, SeattleChicago, Denver, and Southern California markets for an aggregatea purchase price of $71.7$28.4 million, excluding costs incurred in conjunction with these acquisitions.transactions costs.
We acquired 252100 acres of land for development located in our Dallas, Denver, SeattlePhoenix, Southern California and Southern CaliforniaDallas markets for an aggregate purchase price of $30.3$20.2 million, excluding costs incurredtransaction costs. Included in conjunction with these acquisitions.the 100 acres is 39 acres we purchased from our Joint Venture.
We sold 34two industrial properties comprised of approximately 1.70.1 million square feet of GLA and several land parcels for total gross sales proceeds of $120.5$12.1 million.
We entered intoThe Joint Venture sold 236 acres of land (including the 39 acres we purchased from the Joint Venture and, through the Joint Venture acquired,Venture) for aan aggregate purchase price of $49.0 million, approximately 532 net developable acres of land located in Phoenix for the purpose of developing, leasing, operating and potentially selling industrial properties.
We issued $150.0 million of ten-year private placement notes at a rate of 3.86% and $150.0 million of twelve-year private placement notes at a rate of 3.96%.
We issued 4,800,000 shares of the Company's common stock in an underwritten public offering. Proceeds to the Company, net of the underwriter's discount, were $145.6$57.2 million.
We paid off $157.8$72.1 million in mortgage loans payable.
We declared a first second and thirdsecond quarter cash dividenddividends of $0.2175$0.23 per common share or Unit per quarter, an increase of 3.6%5.7% from the 20172018 quarterly rate.
Results of Operations
The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the three and ninesix months ended SeptemberJune 30, 20182019 and 2017.2018. Same store properties are properties owned prior to January 1, 20172018 and held as an in-service property through SeptemberJune 30, 20182019 and developments and redevelopments that were placed in service prior to January 1, 2017.2018. Properties which are at least 75% occupied at acquisition are placed in service, unless we anticipate tenant move-outs within two years of ownership would drop occupancy below 75%. Acquisitions that are less than 75% occupied at the date of acquisition and developments and redevelopments are placed in service as they reach the earlier of a) stabilized occupancy (generally defined as 90% occupied), or b) one year subsequent to acquisition or development/redevelopment construction completion. Acquired properties with occupancy greater than 75% at acquisition, but with tenants that we anticipate will move out in the first yearwithin two years of ownership, will be placed in service upon the earlier of reaching 90% occupancy or twelve months after move out. Properties are moved from the same store classification to the redevelopment classification when capital expenditures for a project are estimated to exceed 25% of the undepreciated gross book value of the property. Acquired properties are properties that were acquired subsequent to December 31, 20162017 and held as an operating property through SeptemberJune 30, 2018.2019. Sold properties are properties that were sold subsequent to December 31, 2016.2017. (Re)Developments include developments and redevelopments that were not: a) substantially complete 12 months prior to January 1, 2017;2018; or b) stabilized prior to January 1, 2017.2018. Other revenues are derived from the operations of properties not placed in service under one of the categories discussed above, the operations of our maintenance company and other miscellaneous revenues. Other property expenses are derived from the operations of properties not placed in service under one of the categories discussed above, the operations of our maintenance company, vacant land expenses and other miscellaneous regional expenses.
During the ninesix months ended SeptemberJune 30, 2018, one industrial property, comprising approximately 0.1 million square feet of GLA, was taken out of service for redevelopment. As a result of taking this industrial property out of service, the results of operations attributable to such property were reclassified from the same store property classification to the re(development) classification. During the year ended December 31, 2018, we completed the redevelopment of this property and the property is 100% occupied. This property will return to the same store classification in the first quarter of 2020.
Our future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition, (re)development and sale of properties. Our future revenues and expenses may vary materially from historical rates.



Comparison of NineSix Months Ended SeptemberJune 30, 20182019 to NineSix Months Ended SeptemberJune 30, 20172018
Our net income was $115.4$65.1 million and $107.0$83.9 million for the ninesix months ended SeptemberJune 30, 20182019 and 2017,2018, respectively.
For the ninesix months ended SeptemberJune 30, 20182019 and 2017,2018, the average daily occupancy ratesrate of our same store properties were 97.2%was 96.9% and 95.6%97.1%, respectively.
Nine Months Ended September 30,    Six Months Ended June 30,    
2018 2017 $ Change % Change2019 2018 $ Change % Change
($ in 000's)($ in 000's)
REVENUES              
Same Store Properties$276,779
 $263,767
 $13,012
 4.9 %$189,753
 $183,252
 $6,501
 3.5 %
Acquired Properties9,081
 1,935
 7,146
 369.3 %3,572
 911
 2,661
 292.1 %
Sold Properties3,998
 24,004
 (20,006) (83.3)%535
 7,765
 (7,230) (93.1)%
(Re)Developments7,020
 3,234
 3,786
 117.1 %13,408
 1,740
 11,668
 670.6 %
Other1,994
 1,332
 662
 49.7 %1,368
 1,035
 333
 32.2 %
Real Estate Tax Reimbursement (A)
—
 3,748
 (3,748) (100.0)%
Provision for Bad Debt (B)
—
 165
 (165) (100.0)%
Total Revenues$298,872
 $294,272
 $4,600
 1.6 %$208,636
 $198,616
 $10,020
 5.0 %
(A) Prior to the adoption of ASU 2016-02 on January 1, 2019, we included reimbursement revenue related to real estate taxes that were paid directly by certain tenants to the taxing authorities in revenues. There was a corresponding expense amount included in property expenses related to this reimbursement income. To facilitate the comparison in the above table, the reimbursement of these amounts, as well as the corresponding expense in the Property Expense table below, for the six months ended June 30, 2018 has been removed from the affected categories and shown separately.
(B) Prior to the adoption of ASU 2016-02, credit losses on lease receivables were included in property expenses. ASU 2016-02 requires credit losses on lease receivables to be netted with lease revenue. To facilitate the comparison in the above table, the provision for bad debt for the six months ended June 30, 2018 has been removed from the affected categories and shown separately.
Revenues from same store properties increased $13.0$6.5 million primarily due to an increase in occupancy and rental rates as well as tenant recoveries.recoveries, slightly offset by a decrease in occupancy. Revenues from acquired properties increased $7.1$2.7 million due to the 14 industrial properties acquired subsequent to December 31, 20162017 totaling approximately 1.61.3 million square feet of GLA. Revenues from sold properties decreased $20.0$7.2 million due to the 9455 industrial properties sold subsequent to December 31, 20162017 totaling approximately 6.42.7 million square feet of GLA. Revenues from (re)developments increased $3.8$11.7 million due to an increase in occupancy. Revenues from other increased $0.7$0.3 million primarily due to an increase in interest income earned on our cash equivalents,maintenance service revenue.
 Six Months Ended June 30,    
 2019 2018 $ Change % Change
 ($ in 000's)
PROPERTY EXPENSES       
Same Store Properties$48,822
 $46,638
 $2,184
 4.7 %
Acquired Properties1,616
 360
 1,256
 348.9 %
Sold Properties74
 2,555
 (2,481) (97.1)%
(Re)Developments3,243
 1,462
 1,781
 121.8 %
Other3,792
 3,036
 756
 24.9 %
Real Estate Tax Expense (A)
—
 3,748
 (3,748) (100.0)%
Provision for Bad Debt (B)
—
 165
 (165) (100.0)%
Total Property Expenses$57,547
 $57,964
 $(417) (0.7)%
(A) Prior to the adoption ASU 2016-02 on January 1, 2019, we included real estate expenses that were paid directly by certain tenants to the taxing authorities within property expenses. There was a corresponding reimbursement amount included in revenues related to this reimbursement income. To facilitate the comparison in the above table, real estate taxes, as well as an increasethe corresponding reimbursement income in occupancy relatedthe preceding table, for the six months ended June 30, 2018 have been removed from the affected categories and shown separately.
(B) Prior to onethe adoption of ASU 2016-02, credit losses on lease receivables were included in property acquiredexpenses. ASU 2016-02 requires credit losses on lease receivables to be netted with lease revenue. To facilitate the comparison in 2016the above table, the provision for bad debt for the six months ended June 30, 2018 has been removed from the affected categories and placed in service during 2017.shown separately.

 Nine Months Ended September 30,    
 2018 2017 $ Change % Change
 ($ in 000's)
PROPERTY EXPENSES       
Same Store Properties$73,889
 $68,871
 $5,018
 7.3 %
Acquired Properties2,741
 468
 2,273
 485.7 %
Sold Properties1,507
 7,878
 (6,371) (80.9)%
(Re)Developments2,740
 852
 1,888
 221.6 %
Other5,553
 5,766
 (213) (3.7)%
Total Property Expenses$86,430
 $83,835
 $2,595
 3.1 %

Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses. Property expenses from same store properties increased $5.0$2.2 million primarily due to increasesan increase in real estate taxes, snow removal costs and insurance expense.taxes. Property expenses from acquired properties increased $2.3$1.3 million due to properties acquired subsequent to December 31, 2016.2017. Property expenses from sold properties decreased $6.4$2.5 million due to properties sold subsequent to December 31, 2016.2017. Property expenses from (re)developments increased $1.9$1.8 million primarily due to the substantial completion of developments. Property expenses from other decreased $0.2increased $0.8 million due to a decrease in certain miscellaneous expenses offset by an increase in real estate taxes.certain maintenance service expenses as well as certain miscellaneous expenses.
General and administrative expense remained relatively unchanged. However, during the nine months ended September 30, 2018, we incurreddecreased by $1.3 million, or 8.8% primarily due to $1.3 million of severance expense. The increase in severance expense is offset by a decrease in amortization of restricted stock, which decrease is primarily due to immediate recognition of $1.6 million of expense related to the issuance of restricted stock to our former CEOthat was incurred during the threesix months ended March 31, 2017.June 30, 2018.
The impairment charge for the ninesix months ended SeptemberJune 30, 2018 of $2.8 million is due to marketing a property and a land parcel for sale and our assessment of the likelihood of potential sales transaction.


Nine Months Ended September 30,    Six Months Ended June 30,    
2018 2017 $ Change % Change2019 2018 $ Change % Change
($ in 000's)($ in 000's)
DEPRECIATION AND OTHER AMORTIZATION              
Same Store Properties$75,835
 $77,958
 $(2,123) (2.7)%$51,839
 $52,440
 $(601) (1.1)%
Acquired Properties5,282
 1,081
 4,201
 388.6 %2,276
 826
 1,450
 175.5 %
Sold Properties869
 6,341
 (5,472) (86.3)%127
 2,127
 (2,000) (94.0)%
(Re) Developments2,621
 1,056
 1,565
 148.2 %5,136
 1,106
 4,030
 364.4 %
Corporate Furniture, Fixtures and Equipment and Other989
 794
 195
 24.6 %451
 452
 (1) (0.2)%
Total Depreciation and Other Amortization$85,596
 $87,230
 $(1,634) (1.9)%$59,829
 $56,951
 $2,878
 5.1 %
Depreciation and other amortization from same store properties decreased $2.1 million primarily due to certain leasing intangibles becoming fully amortized in 2017.properties remained relatively unchanged. Depreciation and other amortization from acquired properties increased $4.2$1.5 million due to properties acquired subsequent to December 31, 2016.2017. Depreciation and other amortization from sold properties decreased $5.5$2.0 million due to properties sold subsequent to December 31, 2016.2017. Depreciation and other amortization from (re)developments increased $1.6$4.0 million primarily due to an increase in depreciation and amortization related to completed developments. Depreciation from corporate furniture, fixtures and equipment and other increased $0.2 million primarily due to capital expenditures incurred at one property that was acquired in 2016 and placed in service in 2017.remained relatively unchanged.
For the ninesix months ended SeptemberJune 30, 2018,2019, we recognized $53.3$0.9 million of gain on sale of real estate related to the sale of 34two industrial properties comprised of approximately 1.70.1 million square feet of GLA and several land parcels.GLA. For the ninesix months ended SeptemberJune 30, 2017,2018, we recognized $52.1$45.2 million of gain on sale of real estate related to the sale of 30 industrial properties comprising approximately 1.91.3 million square feet of GLA.
Interest expense decreased $5.8 million, or 13.4%, primarily due toremained relatively unchanged. However, the small decrease was caused by a decrease in the weighted average interest rate for the ninesix months ended SeptemberJune 30, 2018 (4.25%2019 (4.12%) as compared to the ninesix months ended September 30, 2017 (4.47%), an increase in development activities resulting in an increase in capitalized interest of $1.9 million for the nine months ended SeptemberJune 30, 2018 as compared to the nine months ended September 30, 2017(4.25%), and a decrease in the weighted average debt balance outstanding for the ninesix months ended SeptemberJune 30, 20182019 ($1,343.71,342.5 million) as compared to the ninesix months ended SeptemberJune 30, 20172018 ($1,396.21,361.5 million). substantially offset by a decrease in capitalized interest of $1.0 million caused by a decrease in development costs eligible for capitalization during the six months ended June 30, 2019 as compared to the six months ended June 30, 2018.
Amortization of debt issuance costs remained relatively unchanged.
In September 2017, we entered into two interest rate protection agreements (the “Treasury Locks”) in order to fixFor the interest rate on an anticipated unsecured debt offering. Due to the strict requirements surrounding the application of hedge accounting, we elected not to designate the Treasury Locks as hedges. As such, the full change in the fair value of the Treasury Locks during the third quarter of 2017 was recorded as a mark-to-market gain on interest rate protection agreements within the income statement as opposed to being recorded in other comprehensive income. Mark-to-market gain was $1.8 million for the ninesix months ended September 30, 2017.
For the nine months ended SeptemberJune 30, 2018, we recognized a loss from retirement of debt of $0.04 million due to the early payoff of certain mortgage loans which resulted in the write-off of unamortized debt issuance costs partially offset by the write off of an unamortized premium. For the nine months ended September 30, 2017, we recognized a loss from retirement of debt of $1.7 million, due to the early payoff of certain mortgage loans which resulted in the payment of prepayment penalties and the write-off of unamortized debt issuance costs.
Equity in lossincome of Joint Venture was not significant.of $16.4 million includes our pro-rata share of gain related to the sale of real estate from the Joint Venture and $4.9 million of accrued incentive fees.
ForIncome tax expense increased by $2.9 million, or 1,406.2% during the ninesix months ended SeptemberJune 30, 2019 as compared to the six months ended June 30, 2018 income tax benefits were not significant. For the nine months ended September 30, 2017, we recognizedprimarily due to an income tax provisionincrease in our pro-rata share of $1.2 million primarily related to taxable gain from the sale of real estate from one of our TRSs.the Joint Venture as well as accrued incentive fees we earned from the Joint Venture.




Comparison of Three Months Ended SeptemberJune 30, 20182019 to Three Months Ended SeptemberJune 30, 20172018
Our net income was $31.5$40.7 million and $44.7$46.4 million for the three months ended SeptemberJune 30, 20182019 and 2017,2018, respectively.
For the three months ended SeptemberJune 30, 20182019 and 2017,2018, the average daily occupancy ratesrate of our same store properties were 97.5%was 96.7% and 95.7%97.0%, respectively.
Three Months Ended September 30,    Three Months Ended June 30,    
2018 2017 $ Change % Change2019 2018 $ Change % Change
($ in 000's)($ in 000's)
REVENUES              
Same Store Properties$92,919
 $88,495
 $4,424
 5.0 %$94,286
 $91,401
 $2,885
 3.2 %
Acquired Properties3,227
 1,507
 1,720
 114.1 %2,062
 772
 1,290
 167.1 %
Sold Properties223
 7,128
 (6,905) (96.9)%33
 3,163
 (3,130) (99.0)%
(Re)Developments3,040
 1,629
 1,411
 86.6 %7,169
 998
 6,171
 618.3 %
Other847
 551
 296
 53.7 %545
 572
 (27) (4.7)%
Real Estate Tax Reimbursement (A)
—
 1,862
 (1,862) (100.0)%
Provision for Bad Debt (B)
—
 77
 (77) (100.0)%
Total Revenues$100,256
 $99,310
 $946
 1.0 %$104,095
 $98,845
 $5,250
 5.3 %
(A) Prior to the adoption of ASU 2016-02 on January 1, 2019, we included reimbursement revenue related to real estate taxes that were paid directly by certain tenants to the taxing authorities in revenues. There was a corresponding expense amount included in property expenses related to this reimbursement income. To facilitate the comparison in the above table, the reimbursement of these amounts, as well as the corresponding expense in the Property Expense table below, for the three months ended June 30, 2018 has been removed from the affected categories and shown separately.
(B) Prior to the adoption of ASU 2016-02, credit losses on lease receivables were included in property expenses. ASU 2016-02 requires credit losses on lease receivables to be netted with lease revenue. To facilitate the comparison in the above table, the provision for bad debt for the three months ended June 30, 2018 has been removed from the affected categories and shown separately.
Revenues from same store properties increased $4.4$2.9 million primarily due to an increase in occupancy and rental rates as well as tenant recoveries.recoveries, slightly offset by a decrease in occupancy. Revenues from acquired properties increased $1.7$1.3 million due to the 14 industrial properties acquired subsequent to December 31, 20162017 totaling approximately 1.61.3 million square feet of GLA. Revenues from sold properties decreased $6.9$3.1 million due to the 9455 industrial properties sold subsequent to December 31, 20162017 totaling approximately 6.42.7 million square feet of GLA. Revenues from (re)developments increased $1.4$6.2 million due to an increase in occupancy. Revenues from other increased $0.3 million primarily dueremained relatively unchanged.
 Three Months Ended June 30,    
 2019 2018 $ Change % Change
 ($ in 000's)
PROPERTY EXPENSES       
Same Store Properties$23,450
 $22,871
 $579
 2.5 %
Acquired Properties874
 313
 561
 179.2 %
Sold Properties11
 1,060
 (1,049) (99.0)%
(Re)Developments1,514
 911
 603
 66.2 %
Other1,530
 1,459
 71
 4.9 %
Real Estate Tax Expense (A)
—
 1,862
 (1,862) (100.0)%
Provision for Bad Debt (B)
—
 77
 (77) (100.0)%
Total Property Expenses$27,379
 $28,553
 $(1,174) (4.1)%
(A) Prior to an increasethe adoption ASU 2016-02 on January 1, 2019, we included real estate expenses that were paid directly by certain tenants to the taxing authorities within property expenses. There was a corresponding reimbursement amount included in interest income earned on our cash equivalents,revenues related to this reimbursement income. To facilitate the comparison in the above table, real estate taxes, as well as an increasethe corresponding reimbursement income in occupancy relatedthe preceding table, for the three months ended June 30, 2018 have been removed from the affected categories and shown separately.
(B) Prior to onethe adoption of ASU 2016-02, credit losses on lease receivables were included in property acquiredexpenses. ASU 2016-02 requires credit losses on lease receivables to be netted with lease revenue. To facilitate the comparison in 2016the above table, the provision for bad debt for the three months ended June 30, 2018 has been removed from the affected categories and placed in service during 2017.shown separately.

 Three Months Ended September 30,    
 2018 2017 $ Change % Change
 ($ in 000's)
PROPERTY EXPENSES       
Same Store Properties$24,198
 $23,603
 $595
 2.5 %
Acquired Properties1,063
 364
 699
 192.0 %
Sold Properties17
 2,264
 (2,247) (99.2)%
(Re)Developments1,155
 418
 737
 176.3 %
Other2,033
 1,803
 230
 12.8 %
Total Property Expenses$28,466
 $28,452
 $14
 — %

Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses. Property expenses from same store properties increased $0.6 million primarily due to an increase in insurance expense.real estate taxes. Property expenses from acquired properties increased $0.7$0.6 million due to properties acquired subsequent to December 31, 2016.2017. Property expenses from sold properties decreased $2.2$1.0 million due to properties sold subsequent to December 31, 2016.2017. Property expenses from (re)developments increased $0.7$0.6 million primarily due to the substantial completion of developments.developments. Property expenses from other increased $0.2 million due to an increase in certain miscellaneous expenses.remained relatively unchanged.
General and administrative expense remained relatively unchanged.


Three Months Ended September 30,    Three Months Ended June 30,    
2018 2017 $ Change % Change2019 2018 $ Change % Change
($ in 000's)($ in 000's)
DEPRECIATION AND OTHER AMORTIZATION              
Same Store Properties$25,222
 $26,074
 $(852) (3.3)%$25,791
 $26,151
 $(360) (1.4)%
Acquired Properties1,869
 931
 938
 100.8 %1,114
 763
 351
 46.0 %
Sold Properties3
 1,851
 (1,848) (99.8)%—
 777
 (777) (100.0)%
(Re) Developments1,201
 576
 625
 108.5 %2,658
 718
 1,940
 270.2 %
Corporate Furniture, Fixtures and Equipment and Other350
 264
 86
 32.6 %211
 227
 (16) (7.0)%
Total Depreciation and Other Amortization$28,645
 $29,696
 $(1,051) (3.5)%$29,774
 $28,636
 $1,138
 4.0 %
Depreciation and other amortization from same store properties decreased $0.9 million primarily due to certain leasing intangibles becoming fully amortized in 2017.remained relatively unchanged. Depreciation and other amortization from acquired properties increased $0.9$0.4 million due to properties acquired subsequent to December 31, 2016.2017. Depreciation and other amortization from sold properties decreased $1.8$0.8 million due to properties sold subsequent to December 31, 2016.2017. Depreciation and other amortization from (re)developments increased $0.6$1.9 million primarily due to an increase in depreciation and amortization related to completed developments. Depreciation from corporate furniture, fixtures and equipment and other increased $0.1 million due to capital expenditures incurred at one property that was acquired in 2016 and placed in service in 2017.remained relatively unchanged.
For the three months ended SeptemberJune 30, 2018,2019, we recognized $8.1$1.1 million of gain on sale of real estate related to the sale of fourone industrial propertiesproperty comprised of approximately 0.40.01 million square feet of GLA and several land parcels.GLA. For the three months ended SeptemberJune 30, 2017,2018, we recognized $23.3$25.1 million of gain on sale of real estate related to the sale of 1022 industrial properties comprising approximately 0.90.8 million square feet of GLA.
Interest expense decreased $2.0 million, or 13.6%, primarily due toremained relatively unchanged. However, the small decrease was caused by a decrease in the weighted average interest rate for the three months ended SeptemberJune 30, 2018 (4.24%2019 (4.02%) as compared to the three months ended September 30, 2017 (4.44%), an increase in development activities resulting in an increase in capitalized interest of $0.4 million for the three months ended SeptemberJune 30, 2018 as compared to the three months ended September 30, 2017 and a decrease(4.23%), partially offset by an increase in the weighted average debt balance outstanding for the three months ended SeptemberJune 30, 20182019 ($1,308.81,367.7 million) as compared to the three months ended SeptemberJune 30, 20172018 ($1,384.31,357.9 million). and a decrease in capitalized interest of $0.3 million caused by a decrease in development costs eligible for capitalization for the three months ended June 30, 2019 as compared to the three months ended June 30, 2018.
Amortization of debt issuance costs remained relatively unchanged.
Mark-to-marketEquity in income of Joint Venture of $15.5 million includes our pro-rata share of gain on interest rate protection agreements relatesrelated to the Treasury Lockssale of real estate from the Joint Venture and was $1.8$4.9 million forof accrued incentive fees.
Income tax expense increased by $2.8 million, or 2,285.4%, during the three months ended SeptemberJune 30, 2017.
Equity2019 as compared to the three months ended June 30, 2018 primarily due to an increase in lossour pro-rata share of gain from the sale of real estate from the Joint Venture and income tax benefits were not significant.as well as accrued incentive fees we earned from the Joint Venture.










Leasing Activity
The following table provides a summary of our commenced leases for the three and ninesix months ended SeptemberJune 30, 2018.2019. The table does not include month-to-month leases or leases with terms less than twelve months.
Three Months Ended
Number of
Leases
Commenced
 
Square Feet
Commenced
(in 000's)
 
Net Rent Per
Square Foot (A)
 
Straight Line Basis
Rent  Growth (B)
 
Weighted
Average Lease
Term (C)
 
Lease Costs
Per Square
Foot (D)
 
Weighted
Average Tenant
Retention (E)
Number of
Leases
Commenced
 
Square Feet
Commenced
(in 000's)
 
Net Rent Per
Square Foot (A)
 
Straight Line Basis
Rent  Growth (B)
 
Weighted
Average Lease
Term (C)
 
Lease Costs
Per Square
Foot (D)
 
Weighted
Average Tenant
Retention (E)
New Leases25
 512
 $5.38
 21.5% 5.6
 $4.32
 N/A
26
 446
 $5.56
 17.7% 5.5
 $4.63
 N/A
Renewal Leases36
 904
 $6.07
 18.8% 4.2
 $1.08
 84.3%43
 1,891
 $6.37
 29.5% 5.3
 $1.90
 73.1%
Development / Acquisition Leases4
 415
 $6.35
 N/A
 6.1
 N/A
 N/A
6
 724
 $6.32
 N/A
 4.6
 N/A
 N/A
Total / Weighted Average65
 1,831
 $5.94
 19.7% 5.0
 $2.25
 84.3%75
 3,061
 $6.24
 27.3% 5.2
 $2.42
 73.1%
                          
Nine Months Ended             
Six Months Ended             
New Leases88
 1,628
 $5.57
 22.5% 5.6
 $5.25
 N/A
40
 662
 $5.80
 19.8% 5.5
 $4.73
 N/A
Renewal Leases141
 6,199
 $5.01
 21.3% 4.6
 $1.53
 83.0%91
 4,949
 $5.26
 21.9% 4.9
 $1.40
 80.8%
Development / Acquisition Leases9
 876
 $6.10
 N/A
 5.6
 N/A
 N/A
10
 936
 $6.37
 N/A
 4.8
 N/A
 N/A
Total / Weighted Average238
 8,703
 $5.23
 21.6% 4.9
 $2.30
 83.0%141
 6,547
 $5.48
 21.6% 4.9
 $1.79
 80.8%
_______________
(A) 
Net rent is the average base rent calculated in accordance with GAAP, over the term of the lease.
(B) 
Straight Line basis rent growth is a ratio of the change in net rent (including straight line rent adjustments) on a new or renewal lease compared to the net rent (including straight line rent adjustments) of the comparable lease. New leases where there were no prior comparable leases are excluded.
(C) 
The lease term is expressed in years. Assumes no exercise of lease renewal options, if any.
(D) 
Lease costs are comprised of the costs incurred or capitalized for improvements of vacant and renewal spaces, as well as the commissions paid and costs capitalized for leasing transactions. Lease costs per square foot represent the total turnover costs expected to be incurred on the leases that commenced during the period and do not reflect actual expenditures for the period.
(E) 
Represents the weighted average square feet of tenants renewing their respective leases.


The following table provides a summary of our leases that commenced during the three and ninesix months ended SeptemberJune 30, 2018,2019, which included rent concessions during the lease term.
Three Months Ended
Number of
Leases
With Rent Concessions
 
Square Feet
(in 000's)
 Rent Concessions ($)
Number of
Leases
With Rent Concessions
 
Square Feet
(in 000's)
 Rent Concessions ($)
New Leases15
 297
 $342
16
 315
 $430
Renewal Leases2
 38
 $41
2
 256
 $193
Development / Acquisition Leases4
 415
 $1,197
5
 564
 $852
Total21
 750
 $1,580
23
 1,135
 $1,475
          
Nine Months Ended     
Six Months Ended     
New Leases54
 1,158
 $1,479
24
 473
 $635
Renewal Leases10
 383
 $661
3
 324
 $217
Development / Acquisition Leases9
 876
 $1,696
9
 777
 $1,349
Total73
 2,417
 $3,836
36
 1,574
 $2,201






Liquidity and Capital Resources
At SeptemberJune 30, 2018,2019, our cash and cash equivalents and restricted cash were approximately $52.7 million and $19.0 million, respectively. Restricted cash is comprised of gross proceeds from the sales of certain industrial properties. These sale proceeds will be disbursed as we exchange industrial properties under Section 1031 of the Code.$33.4 million. We also had $720.8$565.4 million available for additional borrowings under our Unsecured Credit Facility as of SeptemberJune 30, 2018.2019.
We have considered our short-term (through SeptemberJune 30, 2019)2020) liquidity needs and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs. We have $108.6$56.8 million in mortgage loans payable outstanding at SeptemberJune 30, 20182019 that we anticipate (pre)paying (without penalty)without penalty prior to SeptemberJune 30, 2019.2020. We expect to satisfy these payment obligations with borrowings under our Unsecured Credit Facility, and/or excess cash flow.flow and/or the disposition of select assets. With the exception of these payment obligations, we believe that our principal short-term liquidity needs are to fund normal recurring expenses, property acquisitions, developments, renovations, expansions and other nonrecurring capital improvements, debt service requirements, the minimum distributions required to maintain the Company's REIT qualification under the Code and distributions approved by the Company's Board of Directors. We anticipate that these needs will be met with cash flows provided by operating activities as well as the disposition of select assets. These needs may also be met by the issuance of additional equity or debt securities, subject to market conditions and contractual restrictions or borrowings under our Unsecured Credit Facility.
We expect to meet long-term (after SeptemberJune 30, 2019)2020) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through the disposition of select assets, long-term unsecured and secured indebtedness and the issuance of additional equity or debt securities, subject to market conditions.
At June 30, 2019, borrowings under our Unsecured Credit Facility bore interest at a weighted average interest rate of 3.51%. As of October 25, 2018,July 26, 2019, we had approximately $720.6$667.4 million available for additional borrowings under our Unsecured Credit Facility. Our Unsecured Credit Facility contains certain financial covenants including limitations on incurrence of debt and debt service coverage. Our access to borrowings may be limited if we fail to meet any of these covenants. We believe that we were in compliance with our financial covenants as of SeptemberJune 30, 2018,2019, and we anticipate that we will be able to operate in compliance with our financial covenants for the remainder of 2018.2019.
Our senior unsecured notes have been assigned credit ratings from Standard & Poor's, Moody's and Fitch Ratings of BBB/Stable, Baa2/Stable and BBB/Stable, respectively. In the event of a downgrade, we believe we would continue to have access to sufficient capital; however, our cost of borrowing would increase and our ability to access certain financial markets may be limited.



Cash Flow Activity
The following table summarizes our cash flow activity for the Company for the ninesix months ended SeptemberJune 30, 20182019 and 2017:2018:
 2018 2017 2019 2018
 (In millions) (In thousands)
Net cash provided by operating activities $151.0
 $148.2
 $120,118
 $93,817
Net cash used in investing activities (172.5) (171.1) (157,562) (139,483)
Net cash provided by financing activities 46.7
 16.1
 20,516
 76,697
The following table summarizes our cash flow activity for the Operating Partnership for the ninesix months ended SeptemberJune 30, 20182019 and 2017:2018:
 2018 2017 2019 2018
 (In millions) (In thousands)
Net cash provided by operating activities $151.0
 $148.4
 $120,177
 $93,760
Net cash used in investing activities (172.5) (171.1) (157,562) (139,483)
Net cash provided by financing activities 46.7
 15.8
 20,457
 76,754
Changes in cash flow for the ninesix months ended SeptemberJune 30, 2018,2019, compared to the prior year comparable period are described as follows:
Operating Activities: Cash provided by operating activities increased $2.8$26.3 million for the Company (increased $2.6$26.4 million for the Operating Partnership), primarily due to the following:
decrease in interest expense of $5.8 million; andan:
increase in NOI from same store properties, acquired properties and recently developed properties of $14.8$15.6 million offset by decreases in NOI due to building disposals of $13.6$4.7 million; and
offset by:an increase in distributions from our Joint Venture of $16.1 million in 2019.
decrease in accounts payable and other liabilities due to timing of cash payments.
Investing Activities: Cash used in investing activities increased $1.4$18.1 million, primarily due to the following:
increase in cash used of $64.0 million related to non-acquisition additions and improvements to real estate primarily due to an increase in development expenditures in 2018; and
increase in cash used of $23.4 million related to our net contributions to the Joint Venture in 2018;
offset by:
decrease of $84.4 million in cash used of $68.3 million of cash required to acquire real estate in 2018; and
decrease in cash used of $20.9 million due to highernet proceeds received from the disposition of real estate in 2018.2019
offset by:
decrease of $35.3 million related to the acquisition of real estate in 2019; and
decrease of $31.9 million related to net contributions made to our Joint Venture in 2019.
Financing Activities: Cash provided by financing activities increased $30.6decreased $56.2 million for the Company (increased $30.9(decreased $56.3 million for the Operating Partnership), primarily due to the following:
increase in cash provideddecrease of $100.0$300.0 million related to the issuance of Unsecured Private Placement notesNotes in 2018; and
increase in cash provideddecrease of $70.7$145.6 million related to the proceeds received from the issuance of common stock in an underwritten public offering during both 2018 and 2017;
offset by:
increase in net proceeds from the Unsecured Credit Facility of $302.5 million; and
the payoff of Senior Unsecured Notes during 2017 in the amount of $101.9 million;
offset by an increase in cash used:
increasedecrease in repayments of Mortgage Loans Payable of $119.6 million;$86.6 million.
increase in net repayments of Unsecured Credit Facility of $112.0 million; and
increase in Dividend and Unit Distributions of $7.1 million primarily due to the Company raising the dividend rate in 2018.



Market Risk
The following discussion about our risk-management activities includes "forward-looking statements" that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. Our business subjects us to market risk from interest rates, as described below.
Interest Rate Risk
The following analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments which are held by us at SeptemberJune 30, 20182019 that are sensitive to changes in interest rates. While this analysis may have some use as a benchmark, it should not be viewed as a forecast.
In the normal course of business, we also face risks that are either non-financial or non-quantifiable. Such risks principally include credit risk and legal risk and are not represented in the following analysis.
At SeptemberJune 30, 2018, 100.0% of our total debt was fixed rate debt. At December 31, 2017, $1,160.3 million2019, $1,230.8 or 88.9%88.6% of our total debt, excluding unamortized debt issuance costs, was fixed rate debt and $144.5 milliondebt. As of the same date, $158.0 or 11.1%11.4% of our total debt, excluding unamortized debt issuance costs, was variable rate debt. At December 31, 2018, 100.0% of our total debt was fixed rate debt.
At SeptemberJune 30, 20182019 and December 31, 2017,2018, the fixed rate debt amounts include $460.0 million of variable-rate debt that has been effectively swapped to a fixed rate through the use of interest rate protection agreementsderivative instruments with a notional aggregate amount outstanding of $460.0 million, whichthat mitigate our exposure to our Unsecured Term Loans' variable interest rates, which are based upon LIBOR, as defined in the loan agreements. Currently, we do not enter into financial instruments for trading or other speculative purposes.
For fixed rate debt, changes in interest rates generally affect the fair value of the debt, but not our earnings or cash flows. Conversely, for variable rate debt, changes in the base interest rate used to calculate the all-in interest rate generally do not impact the fair value of the debt, but would affect our future earnings and cash flows. The interest rate risk and changes in fair market value of fixed rate debt generally do not have a significant impact on us until we are required to refinance such debt. See Note 4 to the Consolidated Financial Statements for a discussion of the maturity dates of our various fixed rate debt.
Our variable rate debt is subject to risk based upon prevailing market interest rates. If the LIBOR rates relevant to our variable rate debt were to have increased 10%, we estimate that our interest expense during the ninesix months ended SeptemberJune 30, 20182019 would have increased by approximately $0.07$0.11 million based on our average outstanding floating-rate debt during the ninesix months ended SeptemberJune 30, 2018.2019. Additionally, if weighted average interest rates on our weighted average fixed rate debt during the six months ended June 30, 2019 were to have increased by 10% due to refinancing, interest expense would have increased by approximately $4.2$2.6 million during the ninesix months ended SeptemberJune 30, 2018.2019.
As of SeptemberJune 30, 2018,2019, the estimated fair value of our debt was approximately $1,307.4$1,432.7 million based on our estimate of the then-current market interest rates.

The use of derivative financial instruments allows us to manage risks of increases in interest rates with respect to the effect these fluctuations would have on our earnings and cash flows. As of June 30, 2019 and December 31, 2018, we had derivative instruments ("Term Loan Swaps") with a notional aggregate amount outstanding of $460.0 million that mitigate our exposure to our Unsecured Term Loans' variable interest rates, which are based upon LIBOR. Additionally, during December 2018 in anticipation of issuing long term debt in the future, we entered into two treasury locks (the "2018 Treasury Locks") with an aggregate notional value of $100.0 million to manage our exposure to changes in the ten-year U.S. Treasury rate. During April 2019, we paid $3.1 million to settle the 2018 Treasury Locks with our counterparties. The 2018 Treasury Locks fixed the ten-year U.S. Treasury rate at a weighted average of 2.93%. We designated the 2018 Treasury Locks as cash flow hedges and will amortize the payment made to our counterparties into interest expense over the 10-year period, which corresponds to the term of our newly issued private placement debt (see Subsequent Events).


Supplemental Earnings Measure
Investors in and industry analysts following the real estate industry utilize funds from operations ("FFO") and net operating income ("NOI") as supplemental operating performance measures of an equity REIT. Historical cost accounting for real estate assets in accordance with accounting principles generally accepted in the United States of America ("GAAP") implicitly assumes that the value of real estate assets diminishes predictably over time through depreciation. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors prefer to supplement operating results that use historical cost accounting with measures such as FFO and NOI, among others. We provide information related to FFO and same store NOI ("SS NOI") both because such industry analysts are interested in such information, and because our management believes FFO and SS NOI are important performance measures. FFO and SS NOI are factors used by management in measuring our performance, including for purposes of determining the compensation of our executive officers under our 20182019 incentive compensation plan.
Neither FFO nor SS NOI should be considered as a substitute for net income, or any other measures derived in accordance with GAAP. Neither FFO nor SS NOI represents cash generated from operating activities in accordance with GAAP and neither should be considered as an alternative to cash flow from operating activities as a measure of our liquidity, nor is either indicative of funds available for our cash needs, including our ability to make cash distributions.


Funds From Operations
The National Association of Real Estate Investment Trusts ("NAREIT") has recognized and defined for the real estate industry a supplemental measure of REIT operating performance, FFO, that excludes historical cost depreciation, among other items, from net income determined in accordance with GAAP. FFO is a non-GAAP financial measure. FFO is calculated by us in accordance with the definition adopted by the Board of Governors of NAREIT and may not be comparable to other similarly titled measures of other companies.
In accordance with the restated NAREIT definition of FFO which we adopted effective January 1, 2019, we calculate FFO to be equal to net income available to First Industrial Realty Trust, Inc.'s common stockholders and participating securities, plus depreciation and other amortization of real estate, plus impairment of real estate, minus gain or plus loss on sale of real estate, net of any income tax provision or benefit associated with the sale of real estate. We also exclude the same adjustments from our share of net income from an unconsolidated joint venture. For the comparative 2018 period, if applicable, gain and losses from the sale of non-depreciable real estate as well as impairment of non-depreciable real estate were not excluded from FFO.
Management believes that the use of FFO available to common stockholders and participating securities, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful. Management believes that, by excluding gains or losses related to sales of previously depreciated real estate assets, impairment of previously depreciated real estate assets and real estate asset depreciation and amortization, investors and analysts are able to identify the operating results of the long-term assets that form the core of a REIT's activity and use these operating results for assistance in comparing these operating results between periods or to those of different companies.


The following table shows a reconciliation of net income available to common stockholders and participating securities to the calculation of FFO available to common stockholders and participating securities for the three and ninesix months ended SeptemberJune 30, 20182019 and 2017.2018.
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 20172019 2018 2019 2018
(In thousands) (In thousands)(In thousands) (In thousands)
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities$30,911
 $43,198
 $112,412
 $103,469
$39,800
 $45,209
 $63,603
 $81,501
Adjustments:              
Depreciation and Other Amortization of Real Estate28,439
 29,530
 85,019
 86,729
29,603
 28,448
 59,458
 56,580
Impairment of Depreciable Real Estate—
 —
 2,285
 —
—
 —
 —
 2,285
Gain on Sale of Depreciable Real Estate(7,520) (23,271) (52,660) (52,140)(1,097) (25,067) (889) (45,140)
Gain on Sale of Real Estate from Joint Venture(15,747) —
 (16,714) —
Income Tax Provision - Gain on Sale of Real Estate from Joint Venture2,877
 —
 3,095
 —
Noncontrolling Interest Share of Adjustments(503) (202) (878) (1,141)(344) (65) (992) (375)
Funds from Operations Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities$51,327
 $49,255
 $146,178
 $136,917
$55,092
 $48,525
 $107,561
 $94,851
Same Store Net Operating Income
SS NOI is a non-GAAP financial measure that provides a measure of rental operations and, as calculated by us, that does not factor in depreciation and amortization, general and administrative expense, interest expense, impairment charges, income tax benefit and expense, equity in income or loss from our joint venture, gains and losses on retirement of debt and sale of real estate. We define SS NOI as revenues minus property expenses such as real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses, minus the NOI of properties that are not same store properties and minus the impact of straight-line rent, the amortization of above/above and below market rent amortization and lease termination fees. We exclude straight-line rent and above (below) market rent in calculating SS NOI because we believe it provides a better measure of actual cash basis rental growth for a year-over-year comparison. As so defined, SS NOI may not be comparable to same store net operating income or similar measures reported by other REITs that define same store properties or NOI differently. The major factors influencing SS NOI are occupancy levels, rental rate increases or decreases and tenant recoveries increases or decreases. Our success depends largely upon our ability to lease space and to recover the operating costs associated with those leases from our tenants.
The following table shows a reconciliation of the same store revenues and property expenses disclosed in the results of operations (and reconciled to revenues and expenses reflected on the statements of operations) to SS NOI for the three and ninesix months ended SeptemberJune 30, 20182019 and 2017.2018.
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended June 30, Six Months Ended June 30, 
2018 2017 % Change 2018 2017 % Change2019 2018 % Change 2019 2018 % Change
(In thousands) (In thousands) (In thousands) (In thousands) 
Same Store Revenues$92,919
 $88,495
 $276,779
 $263,767
 $94,286
 $91,401
 $189,753
 $183,252
 
Same Store Property Expenses(24,198) (23,603) (73,889) (68,871) (23,450) (22,871) (48,822) (46,638) 
Same Store Net Operating Income Before Same Store Adjustments$68,721
 $64,892
 5.9% $202,890
 $194,896
 4.1%$70,836
 $68,530
 3.4% $140,931
 $136,614
 3.2%
Same Store Adjustments:                
Straight-line Rent405
 31
 286
 (2,308) 14
 (8) 119
 (595) 
Above / Below Market Rent Amortization(201) (242) (606) (766) (256) (249) (507) (501) 
Lease Termination Fees(88) (211) (268) (668) (443) (163) (1,014) (174) 
Same Store Net Operating Income$68,837
 $64,470
 6.8% $202,302
 $191,154
 5.8%$70,151
 $68,110
 3.0% $139,529
 $135,344
 3.1%


Recent Accounting Pronouncements
Refer to Note 2 to the Consolidated Financial Statements.
Subsequent Events
From OctoberJuly 1, 20182019 to October 25, 2018,July 26, 2019, we acquired onethree industrial propertyindustrial properties and onetwo land parcelparcels for aan aggregate purchase price of approximately $16.6$31.7 million, excluding costs incurred in conjunction with the acquisition of the industrial property and land parcel.
From October 1, 2018 to October 25, 2018,transaction costs. In addition, we sold one industrial property and one land parcel for approximately $8.3 million.$6.2 million, excluding transaction costs.
On July 23, 2019, the Operating Partnership issued $150,000 of 3.97% Series E Guaranteed Senior Notes due July 23, 2029 (the "2029 II Private Placement Notes") in a private placement pursuant to a Note and Guaranty Agreement dated May 16, 2019. The 2029 II Private Placement Notes are unsecured obligations of the Operating Partnership that are fully and unconditionally guaranteed by the Company and require semi-annual interest payments.


Item 3.Quantitative and Qualitative Disclosures About Market Risk
Response to this item is included in Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations" above.
Item 4.Controls and Procedures
First Industrial Realty Trust, Inc.
The Company's management, including its principal executive officer and principal financial officer, have conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on the evaluation of these controls and procedures required by Exchange Act Rules 13a-15(b) or 15d-15(b), the Company's principal executive officer and principal financial officer have concluded that as of the end of such period the Company's disclosure controls and procedures were effective.
There has been no change in the Company's internal control over financial reporting that occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
First Industrial, L.P.
The Company's management, including its principal executive officer and principal financial officer, on behalf of the Company in its capacity as the general partner of the Operating Partnership, have conducted an evaluation of the effectiveness of the Operating Partnership's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on the evaluation of these controls and procedures required by Exchange Act Rules 13a-15(b) or 15d-15(b), the Company's principal executive officer and principal financial officer, on behalf of the Company in its capacity as the general partner of the Operating Partnership, have concluded that as of the end of such period the Operating Partnership's disclosure controls and procedures were effective.
There has been no change in the Operating Partnership's internal control over financial reporting that occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, the Operating Partnership's internal control over financial reporting.


PART II: OTHER INFORMATION
Item  1.Legal Proceedings
None.
Item  1A.Risk Factors
There have been no material changes to the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2017,2018, except to the extent factual information disclosed elsewhere in this Form 10-Q relates to such risk factors, or as otherwise disclosed in the Form 10-Q for the three months ended March 31, 2018.factors. For a full description of these risk factors, please refer to "Item 1A. Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2017 and in our quarterly report on Form 10-Q for the three months ended March 31, 2018.
Item  2.Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3.Defaults Upon Senior Securities
None.
Item  4.Mine Safety Disclosures
None.
Item 5.Other Information
None.
Item 6.Exhibits
The exhibits required by this item are set forth on the Exhibit Index attached hereto.




EXHIBIT INDEX
Exhibits Description
3.9*10.1
 
Conformed Twelfth AmendedNote and Restated Limited PartnershipGuaranty Agreement, dated as of May 16, 2019, by and among First Industrial, L.P., First Industrial Realty Trust, Inc. and the purchasers of the notes party thereto (including the form of the 3.97% Series E Guaranteed Senior Notes due July 23, 2019) (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company and the Operating Partnership, filed May 20, 2019, Company's File No. 1-13102 and Operating Partnership's File No. 333-21873)
   
31.1*
 
Certification of Principal Executive Officer of First Industrial Realty Trust, Inc. pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
   
31.2*
 
Certification of Principal Financial Officer of First Industrial Realty Trust, Inc. pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
   
31.3*
 
Certification of Principal Executive Officer of First Industrial Realty Trust, Inc., in its capacity as the sole general partner of First Industrial, L.P., pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
   
31.4*
 
Certification of Principal Financial Officer of First Industrial Realty Trust, Inc., in its capacity as the sole general partner of First Industrial, L.P., pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
   
32.1**
 
Certification of the Principal Executive Officer and Principal Financial Officer of First Industrial Realty Trust, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
   
32.2**
 
Certification of the Principal Executive Officer and Principal Financial Officer of First Industrial Realty Trust, Inc., in its capacity as the sole general partner of First Industrial, L.P., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
   
101.1* The following financial statements from First Industrial Realty Trust, Inc.'s and First Industrial L.P.'s Quarterly Report on Form 10-Q for the quarter ended SeptemberJune 30, 2018,2019, formatted in XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statement of Changes in Stockholders' Equity / Consolidated Statement of Changes in Partners' Capital (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to Consolidated Financial Statements (unaudited)
_______________
*Filed herewith.
**Furnished herewith.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 FIRST INDUSTRIAL REALTY TRUST, INC.
   
 By:/S/    SCOTT A. MUSIL
  
Scott A. Musil
Chief Financial Officer
(Principal Financial Officer)
   
 By:/S/    SARA E. NIEMIEC
  
Sara E. Niemiec
Chief Accounting Officer
(Principal Accounting Officer)
 
 FIRST INDUSTRIAL, L.P.
   
 By:FIRST INDUSTRIAL REALTY TRUST, INC.
  as general partner
   
 By:/S/    SCOTT A. MUSIL
  
Scott A. Musil
Chief Financial Officer
(Principal Financial Officer)
   
 By:/S/    SARA E. NIEMIEC
  
Sara E. Niemiec
Chief Accounting Officer
(Principal Accounting Officer)
Date: October 25, 2018July 26, 2019


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