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FR First Industrial Realty Trust

Filed: 22 Oct 21, 5:24pm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _______________________________
Form 10-Q
_______________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
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.)
  _______________________________
fr-20210930_g1.jpg
FIRST INDUSTRIAL REALTY TRUST, INC.
FIRST INDUSTRIAL, L.P.
(Exact name of Registrant as specified in its Charter)
First Industrial Realty Trust, Inc.Maryland36-3935116
First Industrial, L.P.Delaware36-3924586
(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)
    
(312) 344-4300
(Registrant's telephone number, including area code)
 _______________________________ 
Title of each classTrading 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.YesNo
First Industrial, L.P.YesNo
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.YesNo
First Industrial, L.P.YesNo
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 filerAccelerated filer
Non-accelerated filer(Do not check if a smaller reporting company)Smaller reporting company
Emerging growth company
First Industrial, L.P.:
Large accelerated filerAccelerated filer
Non-accelerated filer(Do not check if a smaller reporting company)Smaller reporting company
Emerging growth company
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.YesNo
First Industrial, L.P.YesNo
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.YesNo
First Industrial, L.P.YesNo
At October 22, 2021, 130,289,617 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 September 30, 2021 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 September 30, 2021, the Company owned an approximate 97.8% common general partnership interest in the Operating Partnership. The remaining approximate 2.2% common limited partnership interests in the Operating Partnership are owned by 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 limited partnership interests in the Operating Partnership and recipients of RLP Units (as defined in Note 6 to the Consolidated Financial Statements) 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:
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 several 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 several 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 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 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 SEPTEMBER 30, 2021
INDEX
 
  Page
First Industrial Realty Trust, Inc.
First Industrial, L.P.
First Industrial Realty Trust, Inc. and First Industrial, L.P.

2


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, 2021December 31, 2020
(Unaudited)
ASSETS
Assets:
Investment in Real Estate:
Land$1,267,769 $1,087,907 
Buildings and Improvements3,000,539 2,922,152 
Construction in Progress181,607 77,574 
Less: Accumulated Depreciation(874,427)(832,393)
Net Investment in Real Estate3,575,488 3,255,240 
Real Estate and Other Assets Held for Sale, Net of Accumulated Depreciation and Amortization of $3,791 and $7,0541,214 15,663 
Operating Lease Right-of-Use Assets24,764 25,205 
Cash and Cash Equivalents52,268 162,090 
Restricted Cash8,752 37,568 
Tenant Accounts Receivable4,143 5,714 
Investment in Joint Ventures35,857 45,697 
Deferred Rent Receivable97,088 84,567 
Deferred Leasing Intangibles, Net22,229 25,211 
Prepaid Expenses and Other Assets, Net153,641 134,983 
Total Assets$3,975,444 $3,791,938 
LIABILITIES AND EQUITY
Liabilities:
Indebtedness:
Mortgage Loans Payable, Net$82,991 $143,879 
Senior Unsecured Notes, Net992,841 992,300 
Unsecured Term Loans, Net458,104 458,462 
Unsecured Credit Facility74,000 — 
Accounts Payable, Accrued Expenses and Other Liabilities146,778 120,292 
Operating Lease Liabilities22,426 22,826 
Deferred Leasing Intangibles, Net9,684 11,064 
Rents Received in Advance and Security Deposits78,337 62,092 
Dividends and Distributions Payable36,701 33,703 
Total Liabilities1,901,862 1,844,618 
Commitments and Contingencies— — 
Equity:
First Industrial Realty Trust Inc.'s Equity:
Common Stock ($0.01 par value, 225,000,000 shares authorized and 130,289,617 and 129,051,412 shares issued and outstanding)1,303 1,290 
Additional Paid-in Capital2,287,232 2,224,691 
Distributions in Excess of Accumulated Earnings(257,092)(306,294)
Accumulated Other Comprehensive Loss(8,386)(16,953)
Total First Industrial Realty Trust, Inc.'s Equity2,023,057 1,902,734 
Noncontrolling Interests50,525 44,586 
Total Equity2,073,582 1,947,320 
Total Liabilities and Equity$3,975,444 $3,791,938 
The accompanying notes are an integral part of the consolidated financial statements.
3


FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share data)
Three Months Ended September 30, 2021Three Months Ended September 30, 2020Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
Revenues:
Lease Revenue$120,323 $109,657 $352,754 $326,681 
Other Revenue759 6,537 1,985 9,058 
Total Revenues121,082 116,194 354,739 335,739 
Expenses:
Property Expenses33,396 30,355 98,386 87,487 
General and Administrative8,598 7,485 25,631 24,970 
Depreciation and Other Amortization33,143 34,369 97,564 97,532 
Total Expenses75,137 72,209 221,581 209,989 
Other Income (Expense):
Gain on Sale of Real Estate8,879 6,525 66,378 29,594 
Interest Expense(9,849)(12,775)(34,374)(37,864)
Amortization of Debt Issuance Costs(782)(905)(2,666)(2,477)
Total Other Income (Expense)(1,752)(7,155)29,338 (10,747)
Income from Operations Before Equity in Loss of Joint Ventures and Income Tax (Provision) Benefit44,193 36,830 162,496 115,003 
Equity in Loss of Joint Ventures(15)(162)(154)(236)
Income Tax (Provision) Benefit(759)39 (2,179)(105)
Net Income43,419 36,707 160,163 114,662 
Less: Net Income Attributable to the Noncontrolling Interests(973)(748)(3,583)(2,400)
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities$42,446 $35,959 $156,580 $112,262 
Basic and Diluted Earnings Per Share:
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$0.33 $0.28 $1.21 $0.88 
Weighted Average Shares Outstanding - Basic129,633 127,903 129,275 127,306 
Weighted Average Shares Outstanding - Diluted129,722 128,101 129,362 127,495 
The accompanying notes are an integral part of the consolidated financial statements.

4


FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in thousands)
Three Months Ended September 30, 2021Three Months Ended September 30, 2020Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
Net Income$43,419 $36,707 $160,163 $114,662 
Acceleration of Derivative Instruments— 201 — 201 
Mark-to-Market Gain (Loss) on Derivative Instruments1,583 2,091 8,425 (13,884)
Amortization of Derivative Instruments103 103 308 308 
Comprehensive Income45,105 39,102 168,896 101,287 
Comprehensive Income Attributable to Noncontrolling Interests(1,011)(801)(3,779)(2,118)
Comprehensive Income Attributable to First Industrial Realty Trust, Inc.$44,094 $38,301 $165,117 $99,169 
The accompanying notes are an integral part of the consolidated financial statements.

5


FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited; in thousands, except per share data)
Nine Months Ended September 30, 2021:Common
Stock
Additional
Paid-in
Capital
Distributions
in Excess of
Accumulated
Earnings
Accumulated
Other
Comprehensive
(Loss) Income
Noncontrolling
Interests
Total
Balance as of December 31, 2020$1,290 $2,224,691 $(306,294)$(16,953)$44,586 $1,947,320 
Net Income— — 62,198 — 1,385 63,583 
Other Comprehensive Income— — — 6,607 148 6,755 
Stock Based Compensation Activity(1,347)(2,294)— 2,585 (1,055)
Common Stock Dividends and Unit Distributions ($0.27 Per Share/Unit)— — (34,933)— (785)(35,718)
Conversion of Limited Partner Units to Common Stock— 22 — — (22)— 
Reallocation - Additional Paid-in Capital— (2,110)— — 2,110 — 
Reallocation - Other Comprehensive Income— — — 34 (34)— 
Balance as of March 31, 2021$1,291 $2,221,256 $(281,323)$(10,312)$49,973 $1,980,885 
Net Income— — 51,936 — 1,225 53,161 
Other Comprehensive Income— — — 282 10 292 
Stock Based Compensation Activity— 1,023 — — 2,428 3,451 
Common Stock Dividends and Unit Distributions ($0.27 Per Share/Unit)— — (34,930)— (811)(35,741)
Reallocation - Additional Paid-in-Capital— 2,282 — — (2,282)— 
Reallocation - Other Comprehensive Income— — — (4)— 
Balance as of June 30, 2021$1,291 $2,224,561 $(264,317)$(10,026)$50,539 $2,002,048 
Net Income— — 42,446 — 973 43,419 
Other Comprehensive Income— — — 1,648 38 1,686 
Issuance of Common Stock, Net of Issuance Costs11 58,800 — — — 58,811 
Stock Based Compensation Activity— 1,080 — — 2,428 3,508 
Common Stock Dividends and Unit Distributions ($0.27 Per Share/Unit)— — (35,221)— (669)(35,890)
Conversion of Limited Partner Units to Common Stock1,364 — — (1,365)— 
Reallocation - Additional Paid-in-Capital— 1,427 — — (1,427)— 
Reallocation - Other Comprehensive Income— — — (8)— 
Balance as of September 30, 2021$1,303 $2,287,232 $(257,092)$(8,386)$50,525 $2,073,582 


6


FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Unaudited; in thousands, except per share data)
Nine Months Ended September 30, 2020:Common
Stock
Additional
Paid-in
Capital
Distributions
in Excess of
Accumulated
Earnings
Accumulated
Other
Comprehensive
(Loss) Income
Noncontrolling
Interests
Total
Balance as of December 31, 2019$1,270 $2,140,847 $(370,835)$(6,883)$33,864 $1,798,263 
Net Income— — 40,634 — 895 41,529 
Other Comprehensive Loss— — — (14,175)(313)(14,488)
Stock Based Compensation Activity— (1,233)(2,975)— 2,373 (1,835)
Common Stock Dividends and Unit Distributions ($0.25 Per Share/Unit)— — (31,874)— (614)(32,488)
Conversion of Limited Partner Units to Common Stock2,062 — — (2,064)— 
Reallocation - Additional Paid-in Capital— (3,378)— — 3,378 — 
Reallocation - Other Comprehensive Income— — — (4)— 
Balance as of March 31, 2020$1,272 $2,138,298 $(365,050)$(21,054)$37,515 $1,790,981 
Net Income— — 35,669 — 757 36,426 
Other Comprehensive Loss— — — (1,260)(22)(1,282)
Stock Based Compensation Activity— 1,486 — — 1,622 3,108 
Common Stock Dividends and Unit Distributions ($0.25 Per Share/Unit)— — (31,929)— (631)(32,560)
Conversion of Limited Partner Units to Common Stock— — — (1)— 
Reallocation - Additional Paid-in-Capital— 1,470 — — (1,470)— 
Reallocation - Other Comprehensive Income— — — (6)— 
Balance as of June 30, 2020$1,272 $2,141,255 $(361,310)$(22,308)$37,764 $1,796,673 
Net Income— — 35,959 — 748 36,707 
Other Comprehensive Income— — — 2,342 53 2,395 
Issuance of Common Stock, Net of Issuance Costs18 78,331 — — — 78,349 
Stock Based Compensation Activity— 1,486 — — 1,593 3,079 
Common Stock Dividends and Unit Distributions ($0.25 Per Share/Unit)— — (32,331)— (594)(32,925)
Conversion of Limited Partner Units to Common Stock— — — (4)— 
Contributions from Noncontrolling Interest— — — — 4,321 4,321 
Reallocation - Additional Paid-in-Capital— 476 — — (476)— 
Reallocation - Other Comprehensive Income— — — (3)— 
Balance as of September 30, 2020$1,290 $2,221,552 $(357,682)$(19,969)$43,408 $1,888,599 
The accompanying notes are an integral part of the consolidated financial statements.
7


FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income$160,163 $114,662 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation80,309 76,580 
Amortization of Debt Issuance Costs2,666 2,477 
Other Amortization, including Equity Based Compensation23,861 26,776 
Equity in Loss of Joint Ventures154 236 
Gain on Sale of Real Estate(66,378)(29,594)
Gain on Involuntary Conversion— (6,476)
Straight-line Rental Income and Expense, Net(12,826)(6,481)
(Increase) Decrease in Tenant Accounts Receivable, Prepaid Expenses and Other Assets, Net(5,348)3,149 
Increase in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance and Security Deposits13,836 8,810 
Net Cash Provided by Operating Activities196,437 190,139 
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of Real Estate(224,954)(184,883)
Additions to Investment in Real Estate and Non-Acquisition Tenant Improvements and Lease Costs(197,980)(150,908)
Net Proceeds from Sales of Investments in Real Estate, Including Sales-Type Lease Receivable114,644 110,049 
Contributions to and Investments in Joint Ventures(1,321)(42,744)
Distributions from Joint Ventures21,407 — 
Proceeds from Involuntary Conversion— 6,476 
Increase in Escrow Deposits and Other Investing Activity(3,398)(12,345)
Net Cash Used in Investing Activities(291,602)(274,355)
CASH FLOWS FROM FINANCING ACTIVITIES:
Financing and Equity Issuance Costs(6,365)(3,329)
Proceeds from the Issuance of Common Stock, Net of Underwriter's Discount59,008 78,718 
Tax Paid on Vested Equity Compensation(5,126)(5,944)
Common Stock Dividends and Unit Distributions Paid(103,893)(94,493)
Repayments on Mortgage Loans Payable(61,097)(18,654)
Proceeds from Senior Unsecured Notes— 300,000 
Proceeds from Unsecured Credit Facility159,000 247,000 
Repayments on Unsecured Credit Facility(85,000)(405,000)
Contributions from Noncontrolling Interests— 4,321 
Net Cash (Used in) Provided by Financing Activities(43,473)102,619 
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash(138,638)18,403 
Cash, Cash Equivalents and Restricted Cash, Beginning of Year199,658 152,718 
Cash, Cash Equivalents and Restricted Cash, End of Period$61,020 $171,121 
8


FIRST INDUSTRIAL REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited; in thousands)
Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS:
Interest Expense Capitalized in Connection with Development Activity$8,150 $5,029 
Cash Paid for Operating Lease Liabilities$2,407 $2,175 
Supplemental Schedule of Non-Cash Operating Activities:
Operating Lease Liabilities Arising from Obtaining Right-of-Use Assets$354 $1,208 
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Common Stock Dividends and Unit Distributions Payable$36,701 $33,577 
Exchange of Limited Partnership Units for Common Stock:
Noncontrolling Interests$(1,387)$(2,069)
Common Stock
Additional Paid-in Capital1,386 2,067 
Total$— $— 
Assumption of Escrow in Connection with the Acquisition of Real Estate$3,611 $— 
Assumption of Liabilities in Connection with the Acquisition of Real Estate$3,451 $6,542 
Accounts Payable Related to Construction in Progress and Additions to Investment in Real Estate$66,092 $24,385 
Tenant Improvements Funded by Tenant$16,239 $— 
Write-off of Fully Depreciated Assets$(25,106)$(30,935)

The accompanying notes are an integral part of the consolidated financial statements.
9


FIRST INDUSTRIAL, L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands, except Unit data)
September 30, 2021December 31, 2020
(Unaudited)
ASSETS
Assets:
Investment in Real Estate:
Land$1,267,769 $1,087,907 
Buildings and Improvements3,000,539 2,922,152 
Construction in Progress181,607 77,574 
Less: Accumulated Depreciation(874,427)(832,393)
Net Investment in Real Estate (including $260,228 and $245,396 related to consolidated variable interest entities, see Note 5)3,575,488 3,255,240 
Real Estate and Other Assets Held for Sale, Net of Accumulated Depreciation and Amortization of $3,791 and $7,0541,214 15,663 
Operating Lease Right-of-Use Assets24,764 25,205 
Cash and Cash Equivalents52,268 162,090 
Restricted Cash8,752 37,568 
Tenant Accounts Receivable4,143 5,714 
Investment in Joint Ventures35,857 45,697 
Deferred Rent Receivable97,088 84,567 
Deferred Leasing Intangibles, Net22,229 25,211 
Prepaid Expenses and Other Assets, Net162,970 144,353 
Total Assets$3,984,773 $3,801,308 
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Indebtedness:
Mortgage Loans Payable, Net (including $2,469 and $6,292 related to consolidated variable interest entities, see Note 5)$82,991 $143,879 
Senior Unsecured Notes, Net992,841 992,300 
Unsecured Term Loans, Net458,104 458,462 
Unsecured Credit Facility74,000 — 
Accounts Payable, Accrued Expenses and Other Liabilities146,778 120,292 
Operating Lease Liabilities22,426 22,826 
Deferred Leasing Intangibles, Net9,684 11,064 
Rents Received in Advance and Security Deposits78,337 62,092 
Distributions Payable36,701 33,703 
Total Liabilities1,901,862 1,844,618 
Commitments and Contingencies— — 
Partners' Capital:
First Industrial, L.P.'s Partners' Capital:
General Partner Units (130,289,617 and 129,051,412 units outstanding)2,008,725 1,898,635 
Limited Partners Units (2,956,508 and 2,713,142 units outstanding)77,815 70,435 
Accumulated Other Comprehensive Loss(8,575)(17,308)
Total First Industrial L.P.'s Partners' Capital2,077,965 1,951,762 
Noncontrolling Interests4,946 4,928 
Total Partners' Capital2,082,911 1,956,690 
Total Liabilities and Partners' Capital$3,984,773 $3,801,308 
The accompanying notes are an integral part of the consolidated financial statements.
10


FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per Unit data)
Three Months Ended September 30, 2021Three Months Ended September 30, 2020Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
Revenues:
Lease Revenue$120,323 $109,657 $352,754 $326,681 
Other Revenue759 6,537 1,985 9,058 
Total Revenues121,082 116,194 354,739 335,739 
Expenses:
Property Expenses33,396 30,355 98,386 87,487 
General and Administrative8,598 7,485 25,631 24,970 
Depreciation and Other Amortization33,143 34,369 97,564 97,532 
Total Expenses75,137 72,209 221,581 209,989 
Other Income (Expense):
Gain on Sale of Real Estate8,879 6,525 66,378 29,594 
Interest Expense(9,849)(12,775)(34,374)(37,864)
Amortization of Debt Issuance Costs(782)(905)(2,666)(2,477)
Total Other Income (Expense)(1,752)(7,155)29,338 (10,747)
Income from Operations Before Equity in Loss of Joint Ventures and Income Tax (Provision) Benefit44,193 36,830 162,496 115,003 
Equity in Loss of Joint Ventures(15)(162)(154)(236)
Income Tax (Provision) Benefit(759)39 (2,179)(105)
Net Income43,419 36,707 160,163 114,662 
Less: Net Income Attributable to the Noncontrolling Interests(20)(68)(59)(212)
Net Income Available to Unitholders and Participating Securities$43,399 $36,639 $160,104 $114,450 
Basic Earnings Per Unit:
Net Income Available to Unitholders$0.33 $0.28 $1.22 $0.88 
Diluted Earnings Per Unit:
Net Income Available to Unitholders$0.33 $0.28 $1.21 $0.88 
Weighted Average Units Outstanding - Basic131,668 129,914 131,345 129,357 
Weighted Average Units Outstanding - Diluted132,178 130,294 131,841 129,720 
The accompanying notes are an integral part of the consolidated financial statements.


11


FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in thousands)
Three Months Ended September 30, 2021Three Months Ended September 30, 2020Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
Net Income$43,419 $36,707 $160,163 $114,662 
Acceleration of Derivative Instruments— 201 — 201 
Mark-to-Market Gain (Loss) on Derivative Instruments1,583 2,091 8,425 (13,884)
Amortization of Derivative Instruments103 103 308 308 
Comprehensive Income45,105 39,102 $168,896 $101,287 
Comprehensive Income Attributable to Noncontrolling Interests(20)(68)(59)(212)
Comprehensive Income Attributable to Unitholders$45,085 $39,034 $168,837 $101,075 
The accompanying notes are an integral part of the consolidated financial statements.

12


FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(Unaudited; in thousands, except per Unit data)
Nine Months Ended September 30, 2021:General
Partner
Units
Limited
Partner
Units
Accumulated
Other
Comprehensive
(Loss) Income
Noncontrolling InterestsTotal
Balance as of December 31, 2020$1,898,635 $70,435 $(17,308)$4,928 $1,956,690 
Net Income62,176 1,389 — 18 63,583 
Other Comprehensive Income— — 6,755 — 6,755 
Stock Based Compensation Activity(3,640)2,585 — — (1,055)
Unit Distributions ($0.27 Per Unit)(34,933)(785)— — (35,718)
Conversion of Limited Partner Units to General Partner Units22 (22)— — — 
Contributions from Noncontrolling Interests— — — 29 29 
Distributions to Noncontrolling Interests— — — (24)(24)
Balance as of March 31, 2021$1,922,260 $73,602 $(10,553)$4,951 $1,990,260 
Net Income51,913 1,227 — 21 53,161 
Other Comprehensive Income— — 292 — 292 
Stock Based Compensation Activity1,023 2,428 — — 3,451 
Unit Distributions ($0.27 Per Unit)(34,930)(811)— — (35,741)
Distributions to Noncontrolling Interests— — — (23)(23)
Balance as of June 30, 2021$1,940,266 $76,446 $(10,261)$4,949 $2,011,400 
Net Income42,424 975 — 20 43,419 
Other Comprehensive Income— — 1,686 — 1,686 
Contribution of General Partner Units, Net of Issuance Costs58,811 — — — 58,811 
Stock Based Compensation Activity1,080 2,428 — — 3,508 
Unit Distributions ($0.27 Per Unit)(35,221)(669)— — (35,890)
Conversion of Limited Partner Units to General Partner Units1,365 (1,365)— — — 
Contributions from Noncontrolling Interests— — — 
Distributions to Noncontrolling Interests— — — (29)(29)
Balance as of September 30, 2021$2,008,725 $77,815 $(8,575)$4,946 $2,082,911 


13


FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (Continued)
(Unaudited; in thousands, except per Unit data)
Nine Months Ended September 30, 2020:General
Partner
Units
Limited
Partner
Units
Accumulated
Other
Comprehensive
(Loss) Income
Noncontrolling InterestsTotal
Balance as of December 31, 2019$1,750,656 $63,618 $(7,013)$1,023 $1,808,284 
Net Income40,584 895 — 50 41,529 
Other Comprehensive Loss— — (14,488)— (14,488)
Stock Based Compensation Activity(4,208)2,373 — — (1,835)
Unit Distributions ($0.25 Per Unit)(31,874)(614)— — (32,488)
Conversion of Limited Partner Units to General Partner Units2,064 (2,064)— — — 
Contributions from Noncontrolling Interests— — — 
Distributions to Noncontrolling Interests— — — (366)(366)
Balance as of March 31, 2020$1,757,222 $64,208 $(21,501)$712 $1,800,641 
Net Income35,575 757 — 94 36,426 
Other Comprehensive Loss— — (1,282)— (1,282)
Stock Based Compensation Activity1,486 1,622 — — 3,108 
Unit Distributions ($0.25 Per Unit)(31,929)(631)— — (32,560)
Conversion of Limited Partner Units to General Partner Units(1)— — — 
Contributions from Noncontrolling Interests— — — 12 12 
Distributions to Noncontrolling Interests— — — (65)(65)
Balance as of June 30, 2020$1,762,355 $65,955 $(22,783)$753 $1,806,280 
Net Income35,879 760 — 68 36,707 
Other Comprehensive Income— — 2,395 — 2,395 
Contribution of General Partner Units, Net of Issuance Costs78,349 — — — 78,349 
Stock Based Compensation Activity1,486 1,593 — — 3,079 
Unit Distributions ($0.25 Per Unit)(32,331)(594)— — (32,925)
Conversion of Limited Partner Units to General Partner Units(4)— — — 
Contributions from Noncontrolling Interests— — — 4,371 4,371 
Distributions to Noncontrolling Interests— — — (196)(196)
Balance as of September 30, 2020$1,845,742 $67,710 $(20,388)$4,996 $1,898,060 
The accompanying notes are an integral part of the consolidated financial statements.

14


FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income$160,163 $114,662 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation80,309 76,580 
Amortization of Debt Issuance Costs2,666 2,477 
Other Amortization, including Equity Based Compensation23,861 26,776 
Equity in Loss of Joint Ventures154 236 
Gain on Sale of Real Estate(66,378)(29,594)
Gain on Involuntary Conversion— (6,476)
Straight-line Rental Income and Expense, Net(12,826)(6,481)
(Increase) Decrease in Tenant Accounts Receivable, Prepaid Expenses and Other Assets, Net(5,307)3,709 
Increase in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance and Security Deposits13,836 8,810 
Net Cash Provided by Operating Activities196,478 190,699 
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of Real Estate(224,954)(184,883)
Additions to Investment in Real Estate and Non-Acquisition Tenant Improvements and Lease Costs(197,980)(150,908)
Net Proceeds from Sales of Investments in Real Estate, Including Sales-Type Lease Receivable114,644 110,049 
Contributions to and Investments in Joint Ventures(1,321)(42,744)
Distributions from Joint Ventures21,407 — 
Proceeds from Involuntary Conversion— 6,476 
Increase in Escrow Deposits and Other Investing Activity(3,398)(12,345)
Net Cash Used in Investing Activities(291,602)(274,355)
CASH FLOWS FROM FINANCING ACTIVITIES:
Financing and Equity Issuance Costs(6,365)(3,329)
Contribution of General Partner Units59,008 78,718 
Tax Paid on Vested Equity Compensation(5,126)(5,944)
Unit Distributions Paid(103,893)(94,493)
Contributions from Noncontrolling Interests35 4,388 
Distributions to Noncontrolling Interests(76)(627)
Repayments on Mortgage Loans Payable(61,097)(18,654)
Proceeds from Senior Unsecured Notes— 300,000 
Proceeds from Unsecured Credit Facility159,000 247,000 
Repayments on Unsecured Credit Facility(85,000)(405,000)
Net Cash (Used in) Provided by Financing Activities(43,514)102,059 
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash(138,638)18,403 
Cash, Cash Equivalents and Restricted Cash, Beginning of Year199,658 152,718 
Cash, Cash Equivalents and Restricted Cash, End of Period$61,020 $171,121 
15


FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited; in thousands)
Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS:
Interest Expense Capitalized in Connection with Development Activity$8,150 $5,029 
Cash Paid for Operating Lease Liabilities$2,407 $2,175 
Supplemental Schedule of Non-Cash Operating Activities:
Operating Lease Liabilities Arising from Obtaining Right-of-Use Assets$354 $1,208 
Supplemental Schedule of Non-Cash Investing and Financing Activities:
General and Limited Partner Unit Distributions Payable$36,701 $33,577 
Exchange of Limited Partner Units for General Partner Units:
Limited Partner Units$(1,387)$(2,069)
General Partner Units1,387 2,069 
Total$— $— 
Assumption of Escrow in Connection with the Acquisition of Real Estate$3,611 $— 
Assumption of Liabilities in Connection with the Acquisition of Real Estate$3,451 $6,542 
Accounts Payable Related to Construction in Progress and Additions to Investment in Real Estate$66,092 $24,385 
Tenant Improvements Funded by Tenant$16,239 $— 
Write-off of Fully Depreciated Assets$(25,106)$(30,935)
The accompanying notes are an integral part of the consolidated financial statements.
16


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 97.8% ownership interest ("General Partner Units") at September 30, 2021. The Operating Partnership also conducts operations through several 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. The Company's noncontrolling interest in the Operating Partnership of approximately 2.2% at September 30, 2021 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 RLP Units of the Operating Partnership (see Note 6) pursuant to the Company's stock incentive plan.
We also own equity interests in, and provide various services to, 2 joint ventures (the "Joint Ventures") through a wholly-owned TRS of the Operating Partnership. The Joint Ventures are accounted for under the equity method of accounting. The operating data of the Joint Ventures is not consolidated with that of the Company or the Operating Partnership as presented herein. One of the Joint Ventures sold its remaining acres of land during the nine months ended September 30, 2021. See Note 5 for more information related to the Joint Ventures.
Profits, losses and distributions of the Operating Partnership, the LLCs, the Other Real Estate Partnerships, the TRSs and the Joint Ventures 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 September 30, 2021, we owned 423 industrial properties located in 20 states, containing an aggregate of approximately 62.1 million square feet of gross leasable area ("GLA"). Of the 423 properties owned on a consolidated basis, none of them are directly owned by the Company.

17


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, 2020 ("2020 Form 10-K") and should be read in conjunction with such consolidated financial statements and related notes. The 2020 year end consolidated balance sheet data included in this Form 10-Q filing was derived from the audited consolidated financial statements in our 2020 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, 2020 audited consolidated financial statements included in our 2020 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 September 30, 2021 and December 31, 2020, and the reported amounts of revenues and expenses for the three and nine months ended September 30, 2021 and 2020. 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 September 30, 2021 and December 31, 2020, the results of our operations and comprehensive income for each of the three and nine months ended September 30, 2021 and 2020, and our cash flows for each of the nine months ended September 30, 2021 and 2020. All adjustments are of a normal recurring nature.
Recent Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2020-04 Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform-related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

18


3. Investment in Real Estate
Acquisitions
During the nine months ended September 30, 2021, we acquired 4 industrial properties comprised of approximately 0.2 million square feet of GLA and 9 land parcels, one of which was acquired from Joint Venture I (see Note 5). We accounted for the properties and land parcels as asset acquisitions and therefore capitalized transaction costs to the basis of the acquired assets. The following table summarizes the allocation of the aggregate purchase price to each major asset class for the industrial properties and land parcels acquired during the nine months ended September 30, 2021:
Land$186,160 
Building and Improvements/Construction in Progress27,880 
In-Place Leases789 
Other Assets1,592 
Total Purchase Price$216,421 
The revenue and net income associated with the acquisition of the industrial properties and land parcels, since their respective acquisition dates, are not significant to the nine months ended September 30, 2021.
Real Estate Held for Sale
As of September 30, 2021, we had 4 industrial properties comprised of approximately 0.09 million square feet of GLA held for sale.
Sales
During the nine months ended September 30, 2021, we sold 12 industrial properties and 7 industrial condominium units comprised of approximately 1.7 million square feet of GLA and 1 land parcel. Gross proceeds from the sales were $118,623. The gain on sale of real estate attributable to these sales was $66,378.
19


4. Indebtedness
The following table discloses certain information regarding our indebtedness: 
 Outstanding Balance atInterest
Rate at
September 30, 2021
Effective
Interest
Rate at
Issuance
Maturity
Date
 September 30, 2021December 31, 2020
Mortgage Loans Payable, Gross$83,117 $144,214 4.03% – 4.17%4.03% – 4.17%September 2022 –
August 2028
Unamortized Debt Issuance Costs(126)(335)
Mortgage Loans Payable, Net$82,991 $143,879 
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
2029 II Private Placement Notes150,000 150,000 3.97%4.23%7/23/2029
2030 Private Placement Notes150,000 150,000 3.96%3.96%2/15/2030
2030 II Private Placement Notes100,000 100,000 2.74%2.74%9/17/2030
2032 Private Placement Notes200,000 200,000 2.84%2.84%9/17/2032
Subtotal$998,571 $998,571 
Unamortized Debt Issuance Costs(5,670)(6,206)
Unamortized Discounts(60)(65)
Senior Unsecured Notes, Net$992,841 $992,300 
Unsecured Term Loans, Gross
2015 Unsecured Term Loan (A)
260,000 260,000 2.89%N/A9/12/2022
2020 Unsecured Term Loan— 200,000 N/AN/AN/A
2021 Unsecured Term Loan (A)
200,000 — 1.84%N/A7/7/2026
Subtotal$460,000 $460,000 
Unamortized Debt Issuance Costs(1,896)(1,538)
Unsecured Term Loans, Net$458,104 $458,462 
Unsecured Credit Facility (B)
$74,000 $— 0.86%N/A7/7/2025
_______________
(A) The interest rate at September 30, 2021 includes the impact of derivative instruments we entered into to effectively convert the variable rate to a fixed rate. See Note 10.
(B) Amounts exclude unamortized debt issuance costs of $4,897 and $1,049 as of September 30, 2021 and December 31, 2020, respectively, which are included in the line item Prepaid Expenses and Other Assets, Net.
Mortgage Loans Payable, Net
During the nine months ended September 30, 2021, we paid off mortgage loans in the amount of $57,912.
As of September 30, 2021, mortgage loans payable are collateralized, and in some instances cross-collateralized, by industrial properties with a net carrying value of $136,284. We believe the Operating Partnership and the Company were in compliance with all covenants relating to mortgage loans as of September 30, 2021.

20


Unsecured Term Loans
On July 7, 2021, we amended and restated our 2020 Unsecured Term Loan to, among other things, extend the maturity date of this $200,000 unsecured term loan (as amended and restated, the "2021 Unsecured Term Loan"). The 2021 Unsecured Term Loan matures on July 7, 2026. We may request the borrowing capacity under the 2021 Unsecured Term Loan to be increased to $460,000, subject to certain restrictions.
Also on July 7, 2021, in connection with the execution of the 2021 Unsecured Term Loan, we amended our 2015 Unsecured Term Loan to make certain changes to the covenants and other provisions of the 2015 Unsecured Term Loan to conform those covenants and other provisions to the terms of the 2021 Unsecured Term Loan. This amendment did not increase our borrowing capacity under, extend the maturity date of or modify the pricing of the 2015 Unsecured Term Loan. Subject to certain restrictions, we may request the borrowing capacity under the 2015 Unsecured Term Loan be increased to $360,000.
Unsecured Credit Facility
On July 7, 2021, we amended and restated our $725,000 revolving credit agreement with a new $750,000 revolving credit agreement (as amended and restated, the "Unsecured Credit Facility"). We may request that the borrowing capacity under the Unsecured Credit Facility be increased to $1,000,000, subject to certain restrictions. The Unsecured Credit Facility matures on July 7, 2025, unless extended at our option pursuant to two six-month extension options, subject to certain conditions.
Indebtedness
The following is a schedule of the stated maturities and scheduled principal payments of our indebtedness, exclusive of discounts and debt issuance costs, for the next five years as of September 30, and thereafter: 
 Amount
Remainder of 2021$793 
2022332,024 
2023321 
2024335 
202574,349 
Thereafter1,207,866 
Total$1,615,688 
The Unsecured Credit Facility, our unsecured term loans (the "Unsecured Term Loans"), our senior notes issued in private placements ("Private Placement Notes") 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 September 30, 2021; 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.


21


Fair Value
At September 30, 2021 and December 31, 2020, the fair value of our indebtedness was as follows: 
 September 30, 2021December 31, 2020
 
Carrying
Amount (A)
Fair
Value
Carrying
Amount (A)
Fair
Value
Mortgage Loans Payable$83,117 $85,452 $144,214 $148,770 
Senior Unsecured Notes, Net998,511 1,085,573 998,506 1,096,262 
Unsecured Term Loans460,000 460,647 460,000 458,207 
Unsecured Credit Facility74,000 74,000 — — 
Total$1,615,628 $1,705,672 $1,602,720 $1,703,239 
_______________
(A) The carrying amounts include unamortized 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 and the Unsecured Term Loans was primarily based upon Level 3 inputs.

22


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:
September 30, 2021December 31, 2020
ASSETS
Assets:
Net Investment in Real Estate$260,228 $245,396 
Operating Lease Right-of-Use Assets13,109 13,173 
Cash and Cash Equivalents3,343 4,090 
Deferred Rent Receivable11,068 9,219 
Prepaid Expenses and Other Assets, Net10,602 8,077 
Total Assets$298,350 $279,955 
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage Loans Payable, Net$2,469 $6,292 
Accounts Payable, Accrued Expenses and Other Liabilities10,884 10,067 
Operating Lease Liabilities10,284 10,304 
Rents Received in Advance and Security Deposits3,875 4,130 
Partners' Capital270,838 249,162 
Total Liabilities and Partners' Capital$298,350 $279,955 
Joint Ventures
Through a wholly-owned TRS of the Operating Partnership, we own a 49% interest in a joint venture ("Joint Venture I") and a 43% interest in another joint venture ("Joint Venture II", together with Joint Venture I, the "Joint Ventures"). The Joint Ventures were both formed for the purpose of developing, leasing, operating and selling land located in the Phoenix, Arizona metropolitan area. During the nine months ended September 30, 2021, Joint Venture I sold its remaining acres of land.
Under the operating agreements for each of the Joint Ventures, we act as the managing member and are entitled to receive fees for providing management, leasing, development, construction supervision, disposition and asset management services. In addition, both of the Joint Ventures' operating agreements provide us the ability to earn incentive fees based on the ultimate financial performance of each of the Joint Ventures.
During the nine months ended September 30, 2021 and 2020, we earned fees of $341 and $616, respectively, from the Joint Ventures related to asset management and development services we provided to the Joint Ventures, of which we deferred recognition of $51 and $263, respectively, due to our economic interest in the Joint Ventures. At September 30, 2021, we had an aggregate receivable from the Joint Ventures of $60.
For the nine months ended September 30, 2021, net income of the Joint Ventures was $14,873. For the nine months ended September 30, 2020, net loss of the Joint Ventures was $531. Included in net income during the nine months ended September 30, 2021 is gain on sale of real estate of $15,028 related to the sale of 138 net developable acres of land for which our economic share of the gain on sale, inclusive of incentive fees, is $10,166. However, since the Company was the purchaser of the 138 net developable acres from Joint Venture I, we netted our portion of gain on sale and incentive fees against the basis of the land acquired.

23


As part of our assessment of the appropriate accounting treatment for the Joint Ventures, we reviewed the operating agreements of each Joint Venture in order to determine our rights and the rights of our joint venture partners, including whether those rights are protective or participating. Each operating agreement contains certain protective rights, such as the requirement of both members' approvals to sell, finance or refinance the property and to pay capital expenditures and operating expenditures outside of the approved budget. Also, we and our Joint Venture partners 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 each Joint Venture. As such, we concluded to account for our investments in each Joint Venture under the equity method of accounting.
6. Equity of the Company and Partners' Capital of the Operating Partnership
Noncontrolling Interest of the Company

The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for Limited Partner Units, as well as the equity positions of the holders of Limited Partner Units issued in connection with the grant of restricted limited partner Units ("RLP Units") pursuant to the Company's stock incentive plan, are collectively referred to as the “Noncontrolling Interests.” An RLP 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 and is an award that is granted under our stock incentive plan (see Note 9). Generally, RLP 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 RLP Units, though receipt of such distributions may be delayed or made contingent on vesting. Once an RLP Unit has vested and received allocations of book income sufficient to increase the book capital account balance associated with such RLP Unit (which will initially be zero) equal to, on a per-unit basis, the book 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 holder to one share of Common Stock or a cash equivalent, at the Company's option. Net income is allocated to the Noncontrolling Interests based on the weighted average ownership percentage during the period.
Noncontrolling Interest - Joint Venture II

Our ownership interest in Joint Venture II is held through a partnership with a third party. We concluded that we hold the power to direct the activities that most significantly impact the economic performance of the partnership. As a result, we consolidate the partnership and reflect the third party's interest in the partnership that invests in Joint Venture II as a Noncontrolling Interest.
ATM Program

On February 14, 2020, we entered into three-year distribution agreements with certain sales agents to sell up to 14,000,000 shares of the Company's common stock, for up to $500,000 aggregate gross sales proceeds, from time to time in "at-the-market" offerings (the "ATM"). Under the terms of the ATM, sales are to be made through transactions that are deemed to be "at-the-market" offerings, including sales made directly on the New York Stock Exchange, sales made through a market maker other than on an exchange or sales made through privately negotiated transactions. During the three months ended September 30, 2021, we issued 1,076,955 shares of the Company's common stock under the ATM which resulted in $59,008 of net proceeds and, payment of compensation to certain sales agents of $596.


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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 nine months ended September 30, 2021:
Derivative InstrumentsAccumulated Other Comprehensive Loss of the Operating PartnershipComprehensive Loss Attributable to Noncontrolling Interest of the CompanyAccumulated Other Comprehensive Loss of the Company
Balance as of December 31, 2020$(17,308)$(17,308)$355 $(16,953)
Other Comprehensive Gain Before Reclassifications3,593 3,593 (166)3,427 
Amounts Reclassified from Accumulated Other Comprehensive Loss5,140 5,140 — 5,140 
Net Current Period Other Comprehensive Gain8,733 8,733 (166)8,567 
Balance as of September 30, 2021$(8,575)$(8,575)$189 $(8,386)
The following table summarizes the reclassifications out of accumulated other comprehensive income for both the Company and the Operating Partnership for the three and nine months ended September 30, 2021 and 2020:
Amounts Reclassified from Accumulated
Other Comprehensive Loss (Income)
Details about Accumulated
Other Comprehensive Income Components
Three Months Ended September 30, 2021Three Months Ended September 30, 2020Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020Affected Line Items in the Consolidated Statements of Operations
Derivative Instruments:
Amortization of Previously Settled Derivative Instruments$103 $103 $308 $308 Interest Expense
Net Settlement Payments to our Counterparties1,583 2,250 4,832 4,338 Interest Expense
Acceleration of 2020 Swap (as defined in Note 10)— 201 — 201 General & Administrative
Total$1,686 $2,554 $5,140 $4,847 

The 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 $410 into net income by increasing interest expense for derivative instruments we settled in previous periods. Additionally, recurring settlement amounts on the 2015 Swaps and the 2021 Swaps (as defined in Note 10) will also be reclassified to net income.

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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 September 30, 2021Three Months Ended September 30, 2020Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
Numerator:
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities$42,446 $35,959 $156,580 $112,262 
Net Income Allocable to Participating Securities(48)(59)(170)(177)
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$42,398 $35,900 $156,410 $112,085 
Denominator (In Thousands):
Weighted Average Shares - Basic129,633 127,903 129,275 127,306 
Effect of Dilutive Securities:
        Performance Units (See Note 9)89 198 87 189 
Weighted Average Shares - Diluted129,722 128,101 129,362 127,495 
Basic and Diluted EPS:
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders$0.33 $0.28 $1.21 $0.88 
The computation of basic and diluted EPU of the Operating Partnership is presented below:
Three Months Ended September 30, 2021Three Months Ended September 30, 2020Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
Numerator:
Net Income Available to Unitholders and Participating Securities$43,399 $36,639 $160,104 $114,450 
Net Income Allocable to Participating Securities(126)(125)(441)(374)
Net Income Available to Unitholders$43,273 $36,514 $159,663 $114,076 
Denominator (In Thousands):
Weighted Average Units - Basic131,668 129,914 131,345 129,357 
Effect of Dilutive Securities:
Performance Units and certain Performance RLP Units (See Note 9)510 380 496 363 
Weighted Average Units - Diluted132,178 130,294 131,841 129,720 
Basic EPU:
Net Income Available to Unitholders$0.33 $0.28 $1.22 $0.88 
Diluted EPU:
Net Income Available to Unitholders$0.33 $0.28 $1.21 $0.88 
At September 30, 2021 and 2020, participating securities for the Company include 147,937 and 211,920, respectively, of Service Awards (see Note 9), which participate in non-forfeitable distributions. At September 30, 2021 and 2020, participating securities for the Operating Partnership include 378,548 and 444,407, respectively, of Service Awards and certain Performance Awards (see Note 9), 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.
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9. Long-Term Compensation
Awards with Performance Measures
During the nine months ended September 30, 2021, 58,568 performance units ("Performance Units") and 263,621 RLP Units ("Performance RLP Units" and, together with the Performance Units, collectively the "Performance Awards") were granted to certain employees based on performance-based criteria, which had a fair value of approximately $7,162 on the grant date as determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation. A portion of each Performance Award vests based upon the total shareholder return ("TSR") of the Company's common stock compared to the TSR of the FTSE Nareit All Equity Index and the remainder vests based upon the TSR of the Company’s common stock compared to nine other peer industrial real estate companies. The performance period for these Performance Awards is three years. Compensation expense is charged to earnings over the applicable vesting period for the Performance Awards. At the end of the measuring period, vested Performance Units convert into shares of common stock.
Service Based Awards
For the nine months ended September 30, 2021, 67,127 shares of restricted stock units ("Service Units") and 51,525 RLP Units ("Service RLP Units" and together with the Service Units, collectively the "Service Awards") were granted to certain employees and outside directors based on service-based criteria, which had an aggregate fair value of approximately $5,195 on the grant date. The Service Awards granted to employees generally vest ratably over three years based on continued employment. Service Awards granted to outside directors vest after one year. Compensation expense is charged to earnings over the vesting periods for the Service Awards. At the end of the service period, vested Service Units convert into shares of common stock.
Retirement Eligibility
Commencing January 1, 2020, all award agreements issued underlying Performance Awards and Service Awards contain a retirement benefit for employees with at least 10 years of continuous service and are at least 60 years old. For employees that meet the age and service eligibility requirements, their awards are non-forfeitable. As such, during the nine months ended September 30, 2021, we expensed 100% of the awards granted to retirement-eligible employees at the grant date as if fully vested. For employees who will meet the age and service eligibility requirements during the normal vesting periods, the grants are amortized over the shorter service period.
Outstanding Performance Awards and Service Awards
We recognized $3,508 and $3,078 for the three months ended September 30, 2021 and 2020, respectively, and $10,572 and $9,827 for the nine months ended September 30, 2021 and 2020, respectively, in compensation expense related to the amortization of the Service Awards and the Performance Awards. Service Award and Performance Award amortization capitalized in connection with development activities was $549 and $358 for the three months ended September 30, 2021 and 2020, respectively, and $1,759 and $1,670 for the nine months ended September 30, 2021 and 2020, respectively. At September 30, 2021, we had $14,268 in unrecognized compensation related to unvested Service Awards and Performance Awards. The weighted average period that the unrecognized compensation is expected to be recognized is 0.85 years.
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 these objectives, we primarily use derivative instruments as part of our interest rate risk management strategy. Derivative 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.
We entered into interest rate swaps to manage our exposure to changes in the one-month LIBOR rate related to our Unsecured Term Loans. We have 6 interest rate swaps, with an aggregate notional value of $260,000, that fix the one-month LIBOR rate at a weighted average rate of 1.79% and mature on September 12, 2022 (the "2015 Swaps") and 3 interest rate swaps with an aggregate notional value of $200,000, that fix the one-month LIBOR rate at 0.99% and mature on February 2, 2026 (the "2021 Swaps"). We also had 4 interest rate swaps, with an aggregate notional value of $200,000, that fixed the one-month LIBOR rate at a weighted average rate of 2.29% and matured on January 29, 2021 (the "2014 Swaps"). We designated the 2014 Swaps, the 2015 Swaps and the 2021 Swaps as cash flow hedges.

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Additionally, during the nine months ended September 30, 2020, we entered into an interest rate swap to manage our exposure to changes in the one-month LIBOR rate related to our Unsecured Credit Facility (the "2020 Swap"). The 2020 Swap commenced April 1, 2020, matured on April 1, 2021, had a notional value of $150,000 and fixed the one-month LIBOR rate at 0.42%.
Our agreements with our derivative counterparties contain certain cross-default provisions that may be triggered in the event that our other indebtedness is in default, subject to certain thresholds. As of September 30, 2021, 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 liabilities related to the 2014 Swaps, the 2015 Swaps, the 2020 Swap and the 2021 Swaps which are included in the line items Accounts Payable, Accrued Expenses and Other Liabilities and are accounted for at fair value on a recurring basis as of September 30, 2021 and December 31, 2020:
  Fair Value Measurements:
DescriptionFair Value at September 30, 2021Quoted 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:
2021 Swaps$78 — $78 — 
Liabilities:
2015 Swaps$(4,152)— $(4,152)— 
2021 Swaps$(1,395)— $(1,395)— 
Fair Value at December 31, 2020
Derivatives designated as a hedging instrument:
Liabilities:
2014 Swaps$(333)— $(333)— 
2015 Swaps$(7,317)— $(7,317)— 
2021 Swaps$(6,244)— $(6,244)— 
Derivatives not designated as a hedging instrument:
Liabilities:
2020 Swap$(106)— $(106)— 
There was no ineffectiveness recorded on the 2015 Swaps or the 2021 Swaps during the nine months ended September 30, 2021. See Note 7 for more information regarding our derivatives.
The estimated fair value of the 2014 Swaps, the 2015 Swaps, the 2020 Swap and the 2021 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, the 2015 Swaps, the 2020 Swap and the 2021 Swaps fell within Level 2 of the fair value hierarchy.

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11. Related Party Transactions
At September 30, 2021 and December 31, 2020, the Operating Partnership had receivable balances of $9,337 and $9,380, respectively, from a direct wholly-owned subsidiary of the Company. Additionally, see Note 5 for transactions with our joint ventures.
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 September 30, 2021, we had 17 industrial properties totaling approximately 5.6 million square feet of GLA under construction. The estimated total investment as of September 30, 2021 is approximately $594,700. Of this amount, approximately $355,600 remains to be funded. There can be no assurance that the actual completion cost will not exceed the estimated total investment.
13. Subsequent Events
From October 1, 2021 to October 22, 2021, we acquired 3 land parcels for a purchase price of $18,779, excluding transaction costs. In addition, we sold 4 industrial properties for $7,295, excluding transaction costs.



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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;
our ability to retain 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;
our ability to identify, acquire, develop and/or manage properties on favorable terms;
our ability to dispose of properties on favorable terms;
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;
the uncertainty and economic impact of pandemics, epidemics or other public health emergencies or fear of such events, such as the recent outbreak of COVID-19;
potential natural disasters and other potentially catastrophic events such as acts of war and/or terrorism;
litigation, including costs associated with prosecuting or defending claims and any adverse outcomes;
risks associated with our investments in joint ventures, including our lack of sole decision-making authority; 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, 2020 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.

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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"). As of September 30, 2021, we owned 423 industrial properties located in 20 states, containing an aggregate of approximately 62.1 million square feet of gross leasable area ("GLA"). Of the 423 properties owned on a consolidated basis, none of them are directly owned by the Company.
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 97.8% ownership interest ("General Partner Units") at September 30, 2021. The Operating Partnership also conducts operations through several 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. The noncontrolling interest in the Operating Partnership of approximately 2.2% at September 30, 2021 represents the aggregate partnership interest held by the limited partners thereof ("Limited Partner Units" and together with the General Partner Units, the "Units"). 
We also own equity interests in, and provide various services to, two joint ventures (the "Joint Ventures"), each through a wholly-owned TRS of the Operating Partnership. The Joint Ventures are each accounted for under the equity method of accounting. The operating data of the Joint Ventures is not consolidated with that of the Operating Partnership or the Company as presented herein. One of the Joint Ventures sold its remaining acres of land during the nine months ended September 30, 2021.
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. 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.
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Management's Overview
Business Objectives and Growth Plans
Our fundamental business objective is to maximize the total return to the Company's stockholders and the Operating Partnership's partners through an increase in cash flows and increases in the value of our properties and operations. Our long-term business growth plans include the following elements:
Internal Growth. We seek to grow internally by (i) increasing revenues by renewing or re-leasing spaces subject to expiring leases at higher rental levels; (ii) contractual rent escalations on our long-term leases; (iii) increasing occupancy levels at properties where vacancies exist and maintaining occupancy elsewhere; (iv) controlling and minimizing property operating expenses, general and administrative expenses and releasing costs; and (v) renovating existing properties.
External Growth. We seek to grow externally through (i) the development of best-in-class industrial properties; (ii) the acquisition of portfolios of industrial properties or individual properties which meet our investment parameters within our 15 target logistics markets; (iii) the expansion of our properties; and (iv) possible additional joint venture investments.
Portfolio Enhancement. We continually seek to upgrade our overall portfolio via new investments as well as through the sale of select assets that we believe do not exhibit favorable characteristics for long-term cash flow growth. We target new investments located in 15 logistics markets where land is more scarce. We seek to refine our portfolio over the coming years by focusing on bulk and regional warehouses properties and downsizing our percentage of light industrial and R&D/flex buildings.
Our ability to pursue our long-term growth plans is affected by market conditions and our financial condition and operating capabilities.
Business Strategies
We utilize the following strategies in connection with the operation of our business:
Organizational Strategy. We implement our decentralized property operations strategy through the deployment of experienced regional management teams and local property managers. We provide acquisition, development and financing assistance, asset management oversight and financial reporting functions from our headquarters in Chicago, Illinois to support our regional operations. We believe the size of our portfolio enables us to realize operating efficiencies by spreading overhead among many properties and by negotiating purchasing discounts.
Market Strategy. Our market strategy is to concentrate on the top 15 industrial real estate markets in the United States. These markets have one or more of the following characteristics: (i) favorable industrial real estate fundamentals, including improving industrial demand and constrained supply that can lead to long-term rent growth; (ii) favorable economic and business environments that should benefit from increases in distribution activity driven by growth in global trade and local consumption; (iii) population growth as it generally drives industrial demand; (iv) natural barriers to entry and scarcity of land which are key elements in delivering future rent growth; and (v) sufficient size to provide ample opportunity for growth through incremental investments as well as offer asset liquidity.
Leasing and Marketing Strategy. We have an operational management strategy designed to enhance tenant satisfaction and portfolio performance. We pursue an active leasing strategy, which includes broadly marketing available space, seeking to renew existing leases at higher rents per square foot and seeking leases which provide for the pass-through of property-related expenses to the tenant. We also have local and national marketing programs which focus on the business and real estate brokerage communities and multi-national tenants.
Acquisition/Development Strategy. Our investment strategy is primarily focused on developing and acquiring industrial properties in the top 15 key logistics markets with a coastal orientation in the United States through the deployment of experienced regional management teams. When evaluating potential industrial property acquisitions and developments, we consider such factors as: (i) the geographic area and type of property; (ii) the location, construction quality, condition and design of the property; (iii) the terms of tenant leases, including the potential for rent increases; (iv) the potential for economic growth and the general business, tax and regulatory environment of the area in which the property is located; (v) the occupancy and demand by tenants for properties of a similar type in the vicinity; (vi) competition from existing properties and the potential for the construction of new properties in the area; (vii) the potential for capital appreciation of the property; (viii) the ability to improve
32


the property's performance through renovation; and (ix) the potential for expansion of the physical layout of the property and/or the number of sites.
Disposition Strategy. We continually evaluate local market conditions and property-related factors in all of our markets for purposes of identifying assets suitable for disposition. We look to sell assets we believe have lower rent growth potential and redeploy the capital into assets we believe have higher rent growth potential in key logistics markets. We also seek to reduce our percentage of our holdings of light industrial and R&D/flex assets over time.
Financing Strategy. To finance acquisitions, developments and debt maturities, as market conditions permit, we may utilize a portion of proceeds from property sales, unsecured debt offerings, term loans, mortgage financings and borrowings under our $750.0 million unsecured revolving credit agreement (the "Unsecured Credit Facility"), and proceeds from the issuance, when and as warranted, of additional equity securities. We also evaluate joint venture arrangements as additional sources of capital to finance acquisitions and developments.

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Summary of the Nine Months Ended September 30, 2021
Despite the COVID-19 pandemic, our operating results remained strong during the nine months ended September, 30 2021. Our quarter end in-service occupancy was 97.1%, which is a 140 basis point increase compared to our in-service occupancy at December 31, 2020. Also, during the nine months ended September 30, 2021, we grew cash rental rates by 15.9% on new and renewal leases (22.8% during the third quarter). After resuming speculative development in the fourth quarter of 2020, we started 13 additional speculative buildings and one build-to-suit building comprising, in the aggregate, 5.0 million square feet of GLA during the nine months ended September 30, 2021. We continued to position ourselves for future development activity by acquiring land located in our target markets. Although the impact of COVID-19 pandemic has had an overall minimal impact on us in 2020 and so far in 2021, we cannot predict the future impact it may have on our business, future financial condition and operating results.
During the nine months ended September 30, 2021, we completed the following significant real estate activities:
We acquired four industrial properties comprised of approximately 0.2 million square feet of GLA located in the Central Florida, Denver and Northern California markets for an aggregate purchase price of $38.7 million, excluding transactions costs.
We acquired approximately 455.8 acres of land for development located in the Central Pennsylvania, Denver, Inland Empire, Northern California, Philadelphia and Phoenix markets, for an aggregate purchase price of $177.7 million, excluding transaction costs.
We commenced speculative development of 13 industrial buildings and one build-to-suit facility totaling 5.0 million square feet of GLA in our Central Florida, Central Pennsylvania, Dallas, Denver, Inland Empire, Miami, Nashville, Phoenix and Seattle markets.
We sold 12 industrial properties and seven industrial condominium units comprising approximately 1.7 million square feet of GLA and one land parcel for gross sales proceeds of $118.6 million.
One of the Joint Ventures sold its remaining 138 acres (for which the Company was the purchaser and such land purchase is included above) for a sale price of $31.8 million. Additionally, we netted our share of gain on sale and incentive fees of $10.2 million against the basis of the land.
Our significant financing activities during the nine months ended September 30, 2021 were:
We amended and restated our Unsecured Line of Credit which extended the maturity date to July 7, 2025 and increased our borrowing capacity to $750.0 million. The current credit spread is 32.5 basis points lower than the spread on the prior facility.
We also amended and restated our $200.0 million 2020 Unsecured Term Loan, extending the maturity date to July 7, 2026 and increasing the additional borrowing capacity potentially available to incremental borrowings of $260.0 million if, subject to certain conditions, we exercise the accordion feature of this unsecured term loan. The current credit spread is 65 basis points lower than the the spread on the 2020 Unsecured Term Loan.
We paid off $57.9 million in mortgage loans payable, increasing the percentage of our real estate that is unencumbered to 95.7% at September 30, 2021.
We issued 1,076,955 shares of our common stock, through “at-the-market” (“ATM”) offerings, resulting in net proceeds of $59.0 million.
We declared first, second and third quarter cash dividends of $0.27 per common share or Unit per quarter, an increase of 8.0% from the 2020 quarterly rate.
At September 30, 2021, we had $670.7 million available for additional borrowings under our Unsecured Credit Facility and cash and cash equivalents of $52.3 million.

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Results of Operations
The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the three and nine months ended September 30, 2021 and 2020. Same store properties are properties owned prior to January 1, 2020 and held as an in-service property through September 30, 2021 and developments and redevelopments that were placed in service prior to January 1, 2020. 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 (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 within 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, 2019 and held as an operating property through September 30, 2021. Sold properties are properties that were sold subsequent to December 31, 2019. Developments and redevelopments (collectively referred to as "(Re)Developments") include (re)developments that were not: a) substantially complete 12 months prior to January 1, 2020; or b) stabilized prior to January 1, 2020. 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.
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.
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Comparison of Nine Months Ended September 30, 2021 to Nine Months Ended September 30, 2020
Our net income was $160.2 million and $114.7 million for the nine months ended September 30, 2021 and 2020, respectively.
For the nine months ended September 30, 2021 and 2020, the average daily occupancy rate of our same store properties was 96.4% and 96.8%, respectively.
Nine Months Ended September 30,
 20212020$ Change% Change
 ($ in 000's)
REVENUES
Same Store Properties$319,312 $301,755 $17,557 5.8 %
Acquired Properties10,438 2,223 8,215 369.5 %
Sold Properties3,056 17,367 (14,311)(82.4)%
(Re)Developments17,601 5,181 12,420 239.7 %
Other4,332 9,213 (4,881)(53.0)%
Total Revenues$354,739 $335,739 $19,000 5.7 %
Revenues from same store properties increased $17.6 million primarily due to an increase in rental rates and tenant recoveries and a decrease in reserves taken on tenant accounts receivable, offset by a decrease in occupancy and final insurance settlement proceeds of $1.1 million received and recorded in 2020 as revenue related to a property that was destroyed by fire in 2016. Revenues from acquired properties increased $8.2 million due to the 12 industrial properties acquired subsequent to December 31, 2019 totaling approximately 1.8 million square feet of GLA. Revenues from sold properties decreased $14.3 million due to the 41 industrial properties sold subsequent to December 31, 2019 totaling approximately 3.6 million square feet of GLA as well as a lease we reclassified from an operating lease to a sales-type lease in 2019, for which the sale of such property subsequently closed in 2020. Revenues from (re)developments increased $12.4 million due to an increase in occupancy. Revenues from other decreased $4.9 million primarily due to final insurance settlement proceeds of $5.4 million received and recorded in 2020 as revenue related to a property that was destroyed by fire in 2017, offset by revenues related to acquisitions of partially occupied properties during 2019 that were not yet stabilized at December 31, 2019 and therefore are not yet included in the same store pool.
Nine Months Ended September 30,
 20212020$ Change% Change
 ($ in 000's)
PROPERTY EXPENSES
Same Store Properties$82,629 $74,354 $8,275 11.1 %
Acquired Properties2,114 537 1,577 293.7 %
Sold Properties356 3,554 (3,198)(90.0)%
(Re)Developments5,070 2,599 2,471 95.1 %
Other8,217 6,443 1,774 27.5 %
Total Property Expenses$98,386 $87,487 $10,899 12.5 %

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 $8.3 million primarily due to an increase in real estate tax expense, snow removal costs and repair and maintenance costs. Property expenses from acquired properties increased $1.6 million due to properties acquired subsequent to December 31, 2019. Property expenses from sold properties (including expenses related to the lease reclassified as a sales-type lease) decreased $3.2 million due to properties sold subsequent to December 31, 2019. Property expenses from (re)developments increased $2.5 million primarily due to the substantial completion of developments. Property expenses from other increased $1.8 million primarily due to an increase in certain miscellaneous expenses.
36


General and administrative expense increased by $0.7 million, or 2.6%, primarily due to an increase in compensation, offset by severance and regional wind-up expenses associated with the closing of our Indianapolis office during the nine months ended September 30, 2020.
Nine Months Ended September 30,
 20212020$ Change% Change
 ($ in 000's)
DEPRECIATION AND OTHER AMORTIZATION
Same Store Properties$83,748 $87,831 $(4,083)(4.6)%
Acquired Properties5,328 1,462 3,866 264.4 %
Sold Properties452 3,650 (3,198)(87.6)%
(Re) Developments6,284 2,689 3,595 133.7 %
Corporate Furniture, Fixtures and Equipment and Other1,752 1,900 (148)(7.8)%
Total Depreciation and Other Amortization$97,564 $97,532 $32 — %
Depreciation and other amortization from same store properties decreased $4.1 million primarily due to accelerated depreciation and amortization recognized during the nine months ended September 30, 2020 attributable to the early termination of certain tenants' leases. Depreciation and other amortization from acquired properties increased $3.9 million due to properties acquired subsequent to December 31, 2019. Depreciation and other amortization from sold properties decreased $3.2 million due to properties sold subsequent to December 31, 2019. Depreciation and other amortization from (re)developments increased $3.6 million primarily due to an increase in depreciation and amortization related to completed developments. Depreciation from corporate furniture, fixtures and equipment and other remained relatively unchanged.
For the nine months ended September 30, 2021, we recognized $66.4 million of gain on sale of real estate related to the sale of 12 industrial properties and seven industrial condominium units comprised of approximately 1.7 million square feet of GLA and one land parcel. For the nine months ended September 30, 2020, we recognized $29.6 million of gain on sale of real estate related to the sale of 14 industrial properties comprised of approximately 0.6 million square feet of GLA.
Interest expense decreased by $3.5 million, or 9.2%, due to an increase in capitalized interest of $3.1 million caused by an increase in development projects eligible for capitalization during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020, and a decrease in the weighted average interest rate for the nine months ended September 30, 2021 (3.52%) as compared to the nine months ended September 30, 2020 (3.61%), offset by an increase in the weighted average debt balance outstanding for the nine months ended September 30, 2021 ($1,615.5 million) as compared to the nine months ended September 30, 2020 ($1,587.5 million).
Amortization of debt issuance costs was not significant.
Equity in loss of Joint Ventures for both the nine months ended September 30, 2021 and 2020 was not significant. However, during the nine months ended September 30, 2021, we deferred $10.2 million of equity in income and incentive fees earned from the sale of the remaining 138 acres of developable land from one of the Joint Ventures since the Company was the purchaser of the land. This deferral was netted against the basis of the land acquired.
Income tax provision increased by $2.1 million, or 1,975.2%, primarily due to an increase in our pro-rata share of gain from the sale of real estate as well as incentive fees we earned from one of the Joint Ventures. Our equity ownership in the Joint Ventures is owned through a wholly-owned TRS. We also recognized additional income taxes in 2021 related to sales of real estate from another TRS as well an increase in state tax expense.
37


Comparison of Three Months Ended September 30, 2021 to Three Months Ended September 30, 2020
Our net income was $43.4 million and $36.7 million for the three months ended September 30, 2021 and 2020, respectively.
For the three months ended September 30, 2021 and 2020, the average daily occupancy rate of our same store properties was 97.3% and 96.7%, respectively.
Three Months Ended September 30,
 20212020$ Change% Change
 ($ in 000's)
REVENUES
Same Store Properties$108,420 $101,210 $7,210 7.1 %
Acquired Properties3,841 1,727 2,114 122.4 %
Sold Properties163 4,643 (4,480)(96.5)%
(Re)Developments6,627 1,863 4,764 255.7 %
Other2,031 6,751 (4,720)(69.9)%
Total Revenues$121,082 $116,194 $4,888 4.2 %
Revenues from same store properties increased $7.2 million primarily due to an increase in rental rates and tenant recoveries, a decrease in reserves taken on receivable amounts and an increase in occupancy. Revenues from acquired properties increased $2.1 million due to the 12 industrial properties acquired subsequent to December 31, 2019 totaling approximately 1.8 million square feet of GLA. Revenues from sold properties decreased $4.5 million due to the 41 industrial properties sold subsequent to December 31, 2019 totaling approximately 3.6 million square feet of GLA as well as a lease we reclassified from an operating lease to a sales-type lease in 2019, for which the sale of such property subsequently closed in 2020. Revenues from (re)developments increased $4.8 million due to an increase in occupancy. Revenues from other decreased $4.7 million primarily due to final insurance settlement proceeds of $5.4 million received and recorded in 2020 as revenue related to a property that was destroyed by fire in 2017, offset by revenues related to acquisitions of partially occupied properties during 2019 that were not yet stabilized at December 31, 2019 and therefore are not yet included in the same store pool.
Three Months Ended September 30,
 20212020$ Change% Change
 ($ in 000's)
PROPERTY EXPENSES
Same Store Properties$27,144 $26,264 $880 3.4 %
Acquired Properties812 417 395 94.7 %
Sold Properties24 670 (646)(96.4)%
(Re)Developments1,819 1,010 809 80.1 %
Other3,597 1,994 1,603 80.4 %
Total Property Expenses$33,396 $30,355 $3,041 10.0 %
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 $0.9 million primarily due to an increase in real estate tax expense. Property expenses from acquired properties increased $0.4 million due to properties acquired subsequent to December 31, 2019. Property expenses from sold properties (including expenses related to the lease reclassified as a sales-type lease) decreased $0.6 million due to properties sold subsequent to December 31, 2019. Property expenses from (re)developments increased $0.8 million primarily due to the substantial completion of developments. Property expenses from other increased $1.6 million primarily due to an increase in certain miscellaneous expenses.
38


General and administrative expense increased by $1.1 million, or 14.9%, primarily due to an increase in incentive compensation.
Three Months Ended September 30,
 20212020$ Change% Change
 ($ in 000's)
DEPRECIATION AND OTHER AMORTIZATION
Same Store Properties$28,110 $30,617 $(2,507)(8.2)%
Acquired Properties2,042 924 1,118 121.0 %
Sold Properties20 1,128 (1,108)(98.2)%
(Re) Developments2,343 1,052 1,291 122.7 %
Corporate Furniture, Fixtures and Equipment and Other628 648 (20)(3.1)%
Total Depreciation and Other Amortization$33,143 $34,369 $(1,226)(3.6)%
Depreciation and other amortization from same store properties decreased $2.5 million primarily due to accelerated depreciation and amortization recognized during the nine months ended September 30, 2020 attributable to the early termination of certain tenants' leases. Depreciation and other amortization from acquired properties increased $1.1 million due to properties acquired subsequent to December 31, 2019. Depreciation and other amortization from sold properties decreased $1.1 million due to properties sold subsequent to December 31, 2019. Depreciation and other amortization from (re)developments increased $1.3 million primarily due to an increase in depreciation and amortization related to completed developments. Depreciation from corporate furniture, fixtures and equipment and other remained relatively unchanged.
For the three months ended September 30, 2021, we recognized $8.9 million of gain on sale of real estate related to the sale of six industrial properties and four industrial condominium units comprised of approximately 0.2 million square feet of GLA. For the three months ended September 30, 2020, we recognized $6.5 million of gain on sale of real estate related to the sale of two industrial properties comprised of approximately 0.1 million square feet of GLA.
Interest expense decreased by $2.9 million, or 22.9%, due to an increase in capitalized interest of $2.2 million caused by an increase in development projects eligible for capitalization during the three months ended September 30, 2021 as compared to the three months ended September 30, 2020 and a decrease in the weighted average interest rate for the three months ended September 30, 2021 (3.31%) as compared to the three months ended September 30, 2020 (3.56%), offset by an increase in the weighted average debt balance outstanding for the three months ended September 30, 2021 ($1,640.0 million) as compared to the three months ended September 30, 2020 ($1,604.8 million).
Amortization of debt issuance costs was not significant.
Equity in loss of Joint Ventures for both the three months ended September 30, 2021 and 2020 was not significant.
Income tax provision was $0.8 million for the three months ended September 30, 2021 compared to an income tax benefit of $0.04 million for the three months ended September 30, 2020. The increase of $0.8 million was primarily related to sales of real estate from one of our TRSs as well as an increase in state tax expense.

39


Leasing Activity
The following table provides a summary of our commenced leases for the three and nine months ended September 30, 2021. The table does not include month-to-month leases or leases with terms less than twelve months.  
Three Months EndedNumber 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 Leases26 465 $8.81 39.5 %4.8 $10.30 N/A
Renewal Leases28 1,408 $7.71 34.9 %3.9 $1.82 84.7 %
Development / Acquisition Leases485 $6.96 N/A7.6 N/AN/A
Total / Weighted Average60 2,358 $7.78 36.2 %4.8 $3.92 84.7 %
Nine Months Ended
New Leases76 2,125 $7.16 36.0 %5.9 $7.03 N/A
Renewal Leases97 5,728 $6.31 25.7 %4.0 $1.36 76.2 %
Development / Acquisition Leases16 1,370 $7.97 N/A8.1 N/AN/A
Total / Weighted Average189 9,223 $6.75 28.6 %5.1 $2.89 76.2 %
_______________
(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 nine months ended September 30, 2021, which included rent concessions during the lease term.  
Three Months EndedNumber of
Leases
With Rent Concessions
Square Feet
(in 000's)
Rent Concessions ($)
New Leases17 344 $882 
Renewal Leases45 25 
Development / Acquisition Leases416 793 
Total23 805 $1,700 
Nine Months Ended
New Leases53 1,741 $3,335 
Renewal Leases232 182 
Development / Acquisition Leases14 1,201 3,658 
Total74 3,174 $7,175 
40


Liquidity and Capital Resources
At September 30, 2021, our cash and cash equivalents was approximately $52.3 million and restricted cash was approximately $8.8 million. We also had $670.7 million available for additional borrowings under our Unsecured Credit Facility as of September 30, 2021.
We have considered our short-term (through September 30, 2022) liquidity needs and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs. We have $72.4 million in mortgage loans payable outstanding at September 30, 2021 that we anticipate paying prior to September 30, 2022. 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 other debt or equity securities, subject to market conditions, or borrowings under our Unsecured Credit Facility.
We expect to meet long-term (after September 30, 2022) 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 securities, subject to market conditions.
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 September 30, 2021, and we anticipate that we will be able to operate in compliance with our financial covenants for the next twelve months.
As of October 22, 2021, we had approximately $590.6 million available for additional borrowings under our Unsecured Credit Facility.
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.
41


Cash Flow Activity
The following table summarizes our cash flow activity for the Company for the nine months ended September 30, 2021 and 2020:
20212020
(In thousands)
Net cash provided by operating activities$196,437 $190,139 
Net cash used in investing activities(291,602)(274,355)
Net cash (used in) provided by financing activities(43,473)102,619 
The following table summarizes our cash flow activity for the Operating Partnership for the nine months ended September 30, 2021 and 2020:
20212020
(In thousands)
Net cash provided by operating activities$196,478 $190,699 
Net cash used in investing activities(291,602)(274,355)
Net cash (used in) provided by financing activities(43,514)102,059 

Changes in cash flow for the nine months ended September 30, 2021, compared to the prior year comparable period are described as follows:
Operating Activities: Cash provided by operating activities increased $6.3 million for the Company (increased $5.8 million for the Operating Partnership), primarily due to the following:
increase in NOI from same store properties, acquired properties and recently developed properties of $25.9 million offset by a decrease in NOI due to the disposition of real estate of $11.1 million; and
increase in accounts payable, accrued expenses, other liabilities, rents received in advance and security deposits due to timing of cash payments; offset by:
increase in tenant accounts receivable, prepaid expenses and other assets due to timing of cash receipts.
Investing Activities: Cash used in investing activities increased $17.2 million, primarily due to the following:
increase of $87.1 million related to the acquisition and development of real estate as well as payments for improvements and leasing commissions in 2021 as compared to 2020; and
decrease of $6.5 million related to the collection of insurance settlement proceeds in 2020; offset by:
increase in distributions from and a decrease in contributions to our Joint Ventures resulting in a net reduction of $62.8 million in 2021 as compared to 2020;
decrease of $8.9 million in escrow deposits; and
increase of $4.6 million in net proceeds received from the disposition of real estate in 2021 as compared to 2020 and collection of a sales-type lease receivable in 2020.
Financing Activities: Cash used in financing activities increased $146.1 million for the Company (increased $145.6 million for the Operating Partnership), primarily due to the following:
decrease of $300.0 million related to the issuance of unsecured notes in a private placement in 2020;
increase in repayments of mortgage loans payable of $42.4 million in 2021 compared to 2020;
a decrease of $19.7 million related to net proceeds from the issuance of 1,076,955 shares of the Company's common stock under our ATM in 2021 as compared to the net proceeds from the issuance of 1,842,281 shares of the Company's common stock under our ATM in 2020; and
increase in dividend and unit distributions of $9.4 million primarily due to the Company increasing the dividend rate in 2021; offset by:
increase in net borrowings under our Unsecured Credit Facility of $232.0 million in 2021 compared to 2020.
42


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 September 30, 2021 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 September 30, 2021, $1,541.6 million or 95.4% of our total debt, excluding unamortized debt issuance costs, was fixed rate debt. As of the same date, $74.0 million, or 4.6% of our total debt, excluding unamortized debt issuance costs, was variable rate debt. At December 31, 2020, our total debt, excluding unamortized debt issuance costs, was $1,602.7 million and 100% was fixed rate debt. At September 30, 2021 and December 31, 2020, the fixed rate debt amounts include variable rate debt that has been effectively swapped to a fixed rate through the use of derivative instruments with an aggregate notional amount outstanding of $460.0 million, that mitigate our exposure to our Unsecured Term Loans' variable interest rates, which are based on LIBOR.
The use of derivative financial instruments allows us to manage the risks increases in interest rates would have on our earnings and cash flows. 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 nine months ended September 30, 2021 would have increased by approximately $0.005 million based on our average outstanding floating-rate debt during the nine months ended September 30, 2021. Additionally, if weighted average interest rates on our weighted average fixed rate debt during the nine months ended September 30, 2021 were to have increased by 10% due to refinancing, interest expense would have increased by approximately $4.3 million during the nine months ended September 30, 2021.
On March 5, 2021, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced that USD-LIBOR will no longer be published after June 30, 2023. The Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate (“SOFR”) is the rate that represents best practice as the alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR.
We anticipate that LIBOR will continue to be available substantially in its current form at least until June 30, 2023. Although many of our LIBOR-based obligations provide for alternative methods of calculating the interest rate payable if LIBOR is not reported, however the extent and manner of any future changes with respect to methods of calculating LIBOR or replacing LIBOR with another benchmark are unknown and impossible to predict at this time and, as such, may result in interest rates that are materially higher than current interest rates. We are monitoring this activity and evaluating the related risks.
As of September 30, 2021, the estimated fair value of our debt was approximately $1,705.7 million based on our estimate of the then-current market interest rates.




43


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 2021 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, 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 unconsolidated joint ventures.
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 real estate assets, impairment of 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 nine months ended September 30, 2021 and 2020.
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
 (In thousands)(In thousands)
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities$42,446 $35,959 $156,580 $112,262 
Adjustments:
Depreciation and Other Amortization of Real Estate32,886 34,152 96,907 96,921 
Gain on Sale of Real Estate(8,879)(6,525)(66,378)(29,594)
Income Tax Provision - Allocable to Gain on Sale of Real Estate, including Joint Ventures337 — 1,888 — 
Noncontrolling Interest Share of Adjustments(518)(578)(712)(1,401)
Funds from Operations Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities$66,272 $63,008 $188,285 $178,188 
44


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, income tax benefit and expense, and equity in income or loss from our joint ventures. 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, 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 nine months ended September 30, 2021 and 2020.
Three Months Ended September 30,Nine Months Ended September 30,
 20212020% Change20212020% Change
 (In thousands)(In thousands)
Same Store Revenues$108,420 $101,210 $319,312 $301,755 
Same Store Property Expenses(27,144)(26,264)(82,629)(74,354)
Same Store Net Operating Income Before Same Store Adjustments$81,276 $74,946 8.4%$236,683 $227,401 4.1%
Same Store Adjustments:
Straight-line Rent(1,822)(707)(6,202)(3,739)
Above / Below Market Rent Amortization(219)(256)(664)(786)
Lease Termination Fees(159)(1)(415)(703)
Same Store Net Operating Income(A)
$79,076 $73,982 6.9%$229,402 $222,173 3.3%
(A) The nine months ended September 30, 2020 includes $1.1 million of insurance settlement gain related to a building destroyed by fire in 2016. Excluding this gain, the percent increase to Same Store Net Operating Income would be 3.7% for the nine months ended September 30, 2021.
Subsequent Events
From October 1, 2021 to October 22, 2021, we acquired three land parcels for a purchase price of $18.8 million, excluding transaction costs. In addition, we sold four industrial properties for $7.3 million, excluding transaction costs.


45


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.
46


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, 2020, except to the extent factual information disclosed elsewhere in this Form 10-Q relates to such risk 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, 2020.
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.
47


EXHIBIT INDEX 
ExhibitsDescription
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 September 30, 2021, 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 Equity / Consolidated Statement of Changes in Partners' Capital (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to Consolidated Financial Statements (unaudited)
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
_______________
*Filed herewith.
**Furnished herewith.
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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 22, 2021
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