• FFO per Share: $0.71 per fully diluted share for Q4 2024, up from $0.63 in Q4 2023.
• Annual FFO per Share Growth: 8.6% increase to $2.65 in 2024 from $2.44 in 2023.
• Cash Same Store NOI Growth: 9.3% for Q4 2024, 8.1% for the full year 2024.
• In-Service Occupancy: 96.2% at year-end 2024, up 120 basis points from Q3 2024.
• Development Leasing: 4.7 million square feet signed in 2024, exceeding the budgeted 2.8 million square feet.
• Dividend Increase: 20.3% to $0.445 per share.
• 2025 FFO Guidance: $2.87 to $2.97 per share, midpoint growth of 10% from 2024.
• 2025 Cash Same Store NOI Growth Guidance: 6% to 7%.
• 2025 G&A Expense Guidance: $40.5 million to $41.5 million.

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Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• First Industrial Realty Trust Inc (NYSE:FR) achieved strong cash rental rate growth, with a 51% increase for the year, marking back-to-back years of over 50% growth.
• The company reported a high in-service occupancy rate of 96.2% at year-end, supported by successful development leasing activities.
• First Industrial Realty Trust Inc (NYSE:FR) signed 4.7 million square feet of development leases in 2024, surpassing their original guidance of 2.8 million square feet.
• The company expects a 10% growth in Funds From Operations (FFO) for 2025, based on the midpoint of their guidance.
• First Industrial Realty Trust Inc (NYSE:FR) increased its dividend by 20.3%, reflecting strong performance and anticipated cash flow growth.

Negative Points

• The US industrial market vacancy rate increased to 6.1% by year-end, indicating a potential challenge in maintaining high occupancy levels.
• New construction start volume has significantly decreased, with a 62% drop from the third quarter 2022 peak, which may impact future growth opportunities.
• The company anticipates lower property sales volumes in 2025, with expected asset sales of up to $75 million, compared to $163 million in 2024.
• Development leasing times are elongated, and decision-making by tenants is slower, which could impact future leasing activities.
• Some markets, such as Southern California, are expected to experience flat to slightly down rent growth in 2025, posing a challenge for revenue growth in those areas.

Q & A Highlights

Q: Can you provide your views on the Los Angeles and Inland Empire markets and any signs of demand growth? A: Johannson Yap, Executive Vice President, noted an increase in touring activities post-election, with port activity up 22% year-to-date. Vacancy rates have risen slightly, but construction starts and completions are down, which could stabilize the market if absorption continues.

Q: How much square footage are you assuming for leasing in your development pipeline for 2025? A: Scott Musil, CFO, stated they are assuming 1.6 million square feet of development leasing, with most expected in the second half of the year.

Q: What are your plans for future development, and which geographies are you focusing on? A: Peter Baccile, CEO, mentioned focusing on Pennsylvania, Texas, and Florida for new development starts, without specifying volumes.

Q: Are there any large move-outs expected in 2025, and how do you see tenant retention rates trending? A: Christopher Schneider, EVP of Operations, noted a significant move-out in Central PA but expects tenant retention to remain high, similar to the 77% rate in 2024.

Q: How are you planning to fund development with reduced dispositions? A: Scott Musil, CFO, explained that funding will come from excess cash flow, sales, and borrowings on the line of credit, with an expected development spend of $220 million in 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.