First Industrial Realty Trust, Inc. (FR) Business Profile

What it does

First Industrial Realty Trust is a real estate investment trust, or REIT, that owns and leases industrial properties. It also manages, acquires, sells, develops and redevelops industrial real estate. Its customers are tenants looking for industrial space, and its business includes both leasing existing properties and building new ones.

The company was organized in 1993 and is headquartered in Chicago, Illinois. Peter E. Baccile is president and chief executive officer. At December 31, 2025, its in-service portfolio consisted of 414 industrial properties in 19 states, with approximately 69.9 million square feet of gross leasable area. First Industrial had 152 employees at that date.

First Industrial conducts its operations primarily through an operating partnership. The company is the partnership’s sole general partner and held an approximate 97.0% ownership interest at December 31, 2025. Its regional management teams and local property managers handle property operations, while the Chicago headquarters provides assistance with acquisitions, development and financing, as well as asset-management oversight and financial reporting.

The company invests in properties and land in US logistics markets. It seeks to lease available space, renew existing tenants and develop or acquire additional properties. It also sells properties that have lower rent-growth potential or no longer fit its preferred functionality, generally reinvesting the proceeds in other assets.

How it makes money

First Industrial earns rental revenue by leasing industrial properties. Leases can provide recurring rent over their terms, and many include contractual rent increases. The company also seeks to renew or re-lease expiring space at higher rental rates and to fill vacancies. Its ability to increase property income depends in part on occupancy, rental rates and the recovery of property operating costs from tenants.

First Industrial primarily operates under net leases, under which tenants are ultimately responsible for maintaining leased properties. The company seeks leases that pass property-related expenses through to tenants. Many leases require tenants to pay their proportionate share of costs such as common-area expenses, utilities, insurance, real estate taxes and certain maintenance-related capital expenditures. First Industrial remains exposed to some expenses that are not reimbursed, including costs associated with vacant premises.

New and renewed leases provide opportunities to reset rents. In 2025, First Industrial recorded a 32.2% average increase in cash rental rates on new and renewal commenced leases, tenant retention of 71.0% and year-end in-service occupancy of 94.4%. In the third quarter of 2026, in-service occupancy was 94.1%; the company reported an overall cash rental rate increase for new and renewal leasing of 38% as it addressed its 2026 lease rollovers.

First Industrial also realizes gains or losses when it sells real estate. Other revenue sources have included operations of its maintenance company, interest income and joint venture fees. Its joint venture sold its remaining real estate assets during the year ended December 31, 2025. The company’s net income was $264.1 million for the year ended December 31, 2025.

Customers and how it sells

First Industrial leases industrial properties to tenants and markets available space through local and national programs. Those programs target the business and real estate brokerage communities as well as multinational tenants. The company also seeks to retain existing tenants when leases expire.

Its investment strategy focuses on 15 key logistics markets in the United States. It looks for markets with characteristics that can include industrial demand, limited future supply, population growth, land scarcity and enough market size to support additional investment. At December 31, 2025, its in-service properties were located in 19 states.

In 2025, the company acquired industrial properties in its Phoenix and Baltimore/D.C. markets, an income-producing land parcel in Northern California and land for development in Philadelphia. In the third quarter and fourth quarter to date of 2026, it leased vacant in-service facilities in the Inland Empire East and a transload facility in Los Angeles.

First Industrial also acquired Park 83 Logistics Center in Central Pennsylvania. The 764,000 square foot facility was 100% leased to an unnamed Fortune 500 tenant when the company discussed the acquisition. In Denver, the company said development leasing activity had improved, although the timing of prospective tenants’ decisions remained difficult to forecast.

Suppliers and costs

First Industrial’s property expenses include real estate taxes, repairs and maintenance, property management, utilities and insurance. It also incurs general and administrative expenses, depreciation and amortization, and interest expense. In 2025, same-store property expenses rose primarily because of higher real estate taxes and repairs and maintenance expenses.

Although many leases pass property costs to tenants, the company bears some non-reimbursable expenses, including costs associated with vacant premises. Leasing can also require tenant improvements, rent concessions or other inducements. First Industrial seeks to control operating expenses and re-leasing costs while maintaining occupancy.

Development and redevelopment require spending on land, construction and other costs to bring properties into service. The company said petroleum-related costs were increasing construction costs in 2026. Construction materials, contractors and subcontractors also affect project delivery, and shortages, disputes or supply-chain disruptions can delay work.

First Industrial finances acquisitions, developments and debt maturities through sources that can include property-sale proceeds, unsecured debt, term loans, mortgages, credit-facility borrowings and equity issuance. Interest expense increased in 2025 primarily because of a higher weighted average debt balance, partly offset by a lower weighted average interest rate and increased capitalized interest.

Competitive position

First Industrial competes for industrial properties and development land with publicly traded industrial REITs, non-traded REITs, private real estate funds, and other investors and developers. Some competitors have greater financial resources or other competitive advantages. Competition can increase acquisition prices or cause First Industrial to forgo investments that otherwise meet its criteria.

The company also competes to lease vacant properties and renew existing leases. It may offer concessions, pay for tenant improvements or provide other inducements to secure tenants. First Industrial considers competing properties and potential new construction when evaluating acquisitions and developments. No individual competitors are named in the available company material.

The company concentrates on logistics markets where it considers land scarcity and barriers to entry relevant. Its regional teams and local property managers support acquisitions, development and leasing, while headquarters provides financing and asset-management assistance. First Industrial believes its portfolio size helps it spread overhead and negotiate purchasing terms.

Our reading: Scarce developable land can support the company’s position in selected markets, but its strength varies by location and does not eliminate competition from existing properties. Our reading: Local operating teams and a portfolio that spreads overhead are useful capabilities, though other owners and developers also compete for the same assets and tenants.

Growth opportunities

First Industrial’s growth plan combines changes within its existing portfolio with new investment. It seeks higher rents on renewals and re-leasing, contractual rent increases and improved occupancy at vacant properties. It also selectively renovates properties and works to control operating and re-leasing expenses.

For external growth, the company develops and acquires industrial properties and leased land sites in its 15 key logistics markets. It also expands or redevelops existing properties. Sales are part of the strategy: First Industrial evaluates local conditions and sells properties with lower rent-growth potential or less suitable functionality, generally reinvesting the proceeds.

At December 31, 2025, the company had six projects classified as under development, totaling approximately 1.1 million square feet of gross leasable area and an aggregate estimated investment of approximately $187.1 million. That total included two projects for which vertical construction commenced in the first quarter of 2026.

In 2026, First Industrial acquired Park 83 Logistics Center and acquired a 32-acre site in McKinney, Texas, for $13 million. The company said the McKinney site would accommodate 2 buildings totaling 390,000 square feet, with the first phase developable in the near term after entitlement and infrastructure work. It also signed a 32,000 square foot lease at First Park Miami Building 12, bringing development leases signed during the year to 849,000 square feet at the time of its third-quarter update.

First Industrial’s ability to pursue its plans is affected by market conditions, its financial condition and its operating capabilities.

Structural risks

• Property markets and tenants: Property values and revenues can be affected by economic conditions, local oversupply or reduced demand, changes in tenants’ operations and credit, and the ability to collect rent on time. Competition from other available real estate can also affect leasing.

• Development execution: Projects may run over budget or behind schedule because of material delays, labor shortages, supply-chain disruptions or permit delays. Completed properties may perform below anticipated levels, producing less cash flow than budgeted.

• Financing and interest rates: Financial-market disruptions can affect access to financing and liquidity. Changes in interest rates and financing terms can affect property values and costs, while failure to meet credit-facility covenants may limit access to borrowings.

• Operating and construction costs: Labor and material costs, maintenance, insurance and real estate taxes can increase. First Industrial remains exposed to costs that tenants do not reimburse, including expenses associated with vacant space.

• REIT qualification: The company might fail to qualify as a REIT under existing laws, or federal income tax laws could change. Its cash requirements include the minimum distributions needed to maintain REIT status.

Bottom line

Our reading

Our reading: First Industrial is an industrial landlord whose cash flow depends on keeping space leased, resetting rents and recovering property costs from tenants. Its development and acquisition program provides another route to growth, but ties the business to construction execution and financing conditions. Scarce land in selected markets can help its position, while vacancies, competing properties and tenant demand remain exposures.