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FIRST INDUSTRIAL REALTY TRUST INC - Annual Report: 2006 (Form 10-K)

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-K
 
     
þ
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
    For the fiscal year ended December 31, 2006
or
o
  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.
(Exact name of Registrant as specified in its Charter)
 
     
Maryland   36-3935116
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
     
     
311 S. Wacker Drive,
Suite 4000, Chicago, Illinois
(Address of principal executive offices)
  60606
(Zip Code)
 
(312) 344-4300
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Common Stock
(Title of class)
 
New York Stock Exchange
(Name of exchange on which registered)
 
Depositary Shares Each Representing 1/100 of a Share of 8.625% Series C Cumulative Preferred Stock
Depositary Shares Each Representing 1/10,000 of a Share of 7.25% Series J Cumulative Preferred Stock
Depositary Shares Each Representing 1/10,000 of a Share of 7.25% Series K Cumulative Preferred Stock
(Title of class)
 
New York Stock Exchange
(Name of exchange on which registered)
 
Securities registered pursuant to Section 12(g) of the Act:
None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o
 
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes o     No þ
 
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.  Yes þ     No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ
 
The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant was approximately $1,648.6 million based on the closing price on the New York Stock Exchange for such stock on June 30, 2006.
 
At February 22, 2007, 44,919,636 shares of the Registrant’s Common Stock, $0.01 par value, were outstanding.
 
DOCUMENTS INCORPORATED BY REFERENCE
 
Part III incorporates certain information by reference to the Registrant’s definitive proxy statement expected to be filed with the Securities and Exchange Commission no later than 120 days after the end of the Registrant’s fiscal year.
 


 

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
TABLE OF CONTENTS
 
             
        Page
 
  Business   3
  Risk Factors   8
  Unresolved SEC Comments   14
  Properties   15
  Legal Proceedings   21
  Submission of Matters to a Vote of Security Holders   21
 
  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities   22
  Selected Financial Data   25
  Management’s Discussion and Analysis of Financial Condition and Results of Operations   26
  Quantitative and Qualitative Disclosures About Market Risk   43
  Financial Statements and Supplementary Data   43
  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   43
  Controls and Procedures   43
  Other Information   44
 
  Directors, Executive Officers and Corporate Governance   44
Item 11.
  Executive Compensation   44
Item 12.
  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters   44
Item 13.
  Certain Relationships and Related Transactions and Director Independence   44
Item 14.
  Principal Accountant Fees and Services   44
 
  Exhibits and Financial Statement Schedules   44
  S-1
 Computation of Ratios of Earnings to Fixed Charges
 Subsidiaries of the Registrant
 Consent of PricewaterhouseCoopers LLP
 Certification of Principal Executive Officer
 Certification of Principal Financial Officer
 Section 906 Certifications
 
This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. First Industrial Realty Trust, Inc. (the “Company”) intends 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, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Company on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rate levels, competition, supply and demand for industrial properties in the Company’s current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included herein in Item 1A, “Risk Factors” and in the Company’s other filings with the Securities and Exchange Commission.


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PART I
 
THE COMPANY
 
Item 1.   Business
 
General
 
First Industrial Realty Trust, Inc. is a Maryland corporation organized on August 10, 1993, and is a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). First Industrial Realty Trust, Inc., (together with its consolidated subsidiaries, 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 completed its initial public offering in June 1994 (the “Initial Offering”). Upon consummation of the Initial Offering, the Company owned 226 industrial properties which contained an aggregate of 17.4 million square feet of gross leasable area (“GLA”). As of December 31, 2006, the Company’s in-service portfolio consisted of 416 light industrial properties, 147 R&D/flex properties, 173 bulk warehouse properties, 98 regional warehouse properties and 24 manufacturing properties containing approximately 68.6 million square feet of GLA located in 28 states in the United States and one province in Canada. The Company’s in-service portfolio includes all properties other than developed, redeveloped and acquired properties that have not yet reached stabilized occupancy (generally defined as properties that are 90% leased).
 
The Company’s interests in its properties and land parcels are held through (i) partnerships controlled by the Company, including First Industrial, L.P. (the “Operating Partnership”), of which the Company is the sole general partner, as well as, among others, First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P., First Industrial Mortgage Partnership, L.P., First Industrial Pennsylvania, L.P., First Industrial Harrisburg, L.P., First Industrial Indianapolis, L.P., FI Development Services, L.P. and TK-SV, LTD., as to each of which the sole general partner is a wholly-owned subsidiary of the Company (except in the case of the Financing Partnership in which case the Operating Partnership is also the general partner) and the sole limited partner is the Operating Partnership; (ii) limited liability companies, of which the Operating Partnership is the sole member; and (iii) First Industrial Investment, Inc., of which the Operating Partnership is the sole stockholder, and wholly owned limited liability companies of First Industrial Investment, Inc., all of whose operating data is consolidated with that of the Company as presented herein. The Company, through separate wholly-owned limited liability companies of which the Operating Partnership or First Industrial Investment, Inc. is the sole member, also owns minority equity interests in, and provides various services to, six joint ventures which invest in industrial properties (the “September 1998 Joint Venture,” the “May 2003 Joint Venture,” the “March 2005 Joint Venture,” the “September 2005 Joint Venture,” the “March 2006 Co-Investment Program” and the “July 2006 Joint Venture”). The Company, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in and provided property management services to a seventh joint venture which invested in industrial properties (the “December 2001 Joint Venture” together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture, the September 2005 Joint Venture, the March 2006 Co-Investment Program and the July 2006 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. On January 31, 2007, the Company purchased the 90% equity interest from the institutional investor in the September 1998 Joint Venture. The operating data of the Joint Ventures is not consolidated with that of the Company as presented herein.
 
The Company utilizes an operating approach which combines the effectiveness of decentralized, locally-based property management, acquisition, sales and development functions with the cost efficiencies of centralized acquisition, sales and development support, capital markets expertise, asset management and fiscal control systems. At February 22, 2007, the Company had approximately 500 employees.
 
The Company has grown and will seek to continue to grow through the development and acquisition of additional industrial properties, through additional joint venture investments, and through its corporate services program.


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The Company maintains a website at www.firstindustrial.com. Copies of the Company’s annual report 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 the Company’s website as soon as reasonably practicable after such reports are filed with or furnished to the Securities and Exchange Commission (the “SEC”). In addition, the Company’s Corporate Governance Guidelines, Code of Business Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter, Nominating/Corporate Governance Committee Charter, along with supplemental financial and operating information prepared by the Company, are all available without charge on the Company’s website or upon request to the Company. Amendments to, or waivers from, the Company’s Code of Business Conduct and Ethics that apply to the Company’s executive officers or directors will be posted to the Company’s website at www.firstindustrial.com. Please direct requests as follows:
 
First Industrial Realty Trust, Inc.
311 S. Wacker, Suite 4000
Chicago, IL 60606
 
Business Objectives and Growth Plans
 
The Company’s fundamental business objective is to maximize the total return to its stockholders through increases in per share distributions and increases in the value of the Company’s properties and operations. The Company’s growth plans include the following elements:
 
  •  Internal Growth.  The Company seeks to grow internally by (i) increasing revenues by renewing or re-leasing spaces subject to expiring leases at higher rental levels; (ii) increasing occupancy levels at properties where vacancy exists and maintaining occupancy elsewhere; (iii) controlling and minimizing property operating and general and administrative expenses; (iv) renovating existing properties; and (v) increasing ancillary revenues from non-real estate sources.
 
  •  External Growth.  The Company seeks to grow externally through (i) the development of industrial properties; (ii) the acquisition of portfolios of industrial properties, industrial property businesses or individual properties which meet the Company’s investment parameters and target markets; (iii) additional joint venture investments; and (iv) the expansion of its properties.
 
  •  Corporate Services.  Through its corporate services program, the Company builds for, purchases from, and leases and sells industrial properties to companies that need industrial facilities. The Company seeks to grow this business by targeting both large and middle-market public and private companies.
 
Business Strategies
 
The Company utilizes the following six strategies in connection with the operation of its business:
 
  •  Organization Strategy.  The Company implements its decentralized property operations strategy through the deployment of experienced regional management teams and local property managers. Each operating region is headed by a managing director who is a senior executive officer of, and has an equity interest in, the Company. The Company provides acquisition, development and financing assistance, asset management oversight and financial reporting functions from its headquarters in Chicago, Illinois to support its regional operations. The Company believes the size of its portfolio enables it to realize operating efficiencies by spreading overhead among many properties and by negotiating purchasing discounts.
 
  •  Market Strategy.  The Company’s market strategy is to concentrate on the top industrial real estate markets in the United States. These top markets have one or more of the following characteristics: (i) strong industrial real estate fundamentals, including increased industrial demand expectations; (ii) a history of and outlook for continued economic growth and industry diversity; and (iii) a minimum market size of 75 million square feet of industrial space. The Company is currently evaluating industrial real estate investments outside the United States, including in Canada.


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  •  Leasing and Marketing Strategy.  The Company has an operational management strategy designed to enhance tenant satisfaction and portfolio performance. The Company pursues 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. The Company also has local and national marketing programs which focus on the business and real estate brokerage communities and national tenants.
 
  •  Acquisition/Development Strategy.  The Company’s acquisition/development strategy is to invest in properties and other assets with higher yield potential in the top industrial real estate markets in the United States. Of the 858 industrial properties in the Company’s in-service portfolio at December 31, 2006, 128 properties have been developed by the Company or its former management. The Company will continue to leverage the development capabilities of its management, many of whom are leading industrial property developers in their respective markets.
 
  •  Disposition Strategy.  The Company continuously evaluates local market conditions and property-related factors in all of its markets for purposes of identifying assets suitable for disposition.
 
  •  Financing Strategy.  The Company plans on utilizing a portion of net sales proceeds from property sales, borrowings under its unsecured line of credit and proceeds from the issuance, when and as warranted, of additional debt and equity securities to finance future acquisitions and developments. The Company also continually evaluates joint venture arrangements as another source of capital. As of February 22, 2007, the Company had approximately $210.6 million available in additional borrowings under its unsecured line of credit.
 
Recent Developments
 
In 2006, the Company acquired or placed in-service developments totaling 107 industrial properties and acquired several parcels of land for a total investment of approximately $805.5 million. The Company also sold 125 industrial properties and several parcels of land for a gross sales price of approximately $946.8 million. At December 31, 2006, the Company owned 858 in-service industrial properties containing approximately 68.6 million square feet of GLA.
 
During 2006, in conjunction with the acquisition of several industrial properties, the Company assumed mortgages in the aggregate of $34.0 million. During 2006, the Company paid off and retired $10.3 million of mortgage loans payable.
 
On January 10, 2006, the Company, through the Operating Partnership, issued $200.0 million of senior unsecured debt which matures on January 15, 2016 and bears interest at a rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. In December 2005, the Company also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Company settled the interest rate protection agreements on January 9, 2006 for a payment of approximately $1.7 million, which is included in other comprehensive income.
 
In December 2005, the Company, through the Operating Partnership, entered into a non-revolving unsecured line of credit (the “Unsecured Line of Credit II”). The Unsecured Line of Credit II had a borrowing capacity of $125.0 million and matured on March 15, 2006. The Unsecured Line of Credit II provided for interest only payments at LIBOR plus .625% or at Prime, at the Company’s election. On January 10, 2006, the Company, through the Operating Partnership, paid off and retired the Unsecured Line of Credit II.
 
On September 25, 2006, the Company, through the Operating Partnership, issued $175.0 million of senior unsecured debt which bears interest at a rate of 4.625% (the “2011 Exchangeable Notes”). Under certain circumstances, the holders of the 2011 Exchangeable Notes may exchange their notes for cash up to their principal amount and shares of the Company’s common stock for the remainder of the exchange value in excess of the principal amount. The Company also granted the initial purchasers of the 2011 Exchangeable Notes an option exercisable until October 4, 2006 to purchase up to an additional $25.0 million principal amount of the 2011 Exchangeable Notes to cover over-allotments, if any (the “Over-Allotment Option”). On October 3, 2006, the initial purchasers of the 2011 Exchangeable Notes exercised their Over-Allotment Option


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with respect to $25.0 million in principal amount of the 2011 Exchangeable Notes. With the exercise of the Over-Allotment Option, the aggregate principal amount of 2011 Exchangeable Notes issued and outstanding is $200.0 million. In connection with the offering of the Exchangeable Notes, the Operating Partnership entered into capped call transactions in order to increase the effective exchange price. The aggregate cost of the capped call transactions was approximately $6.8 million.
 
On December 1, 2006, the Company paid off and retired its 7.0% 2006 Unsecured Notes in the amount of $150.0 million.
 
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Shares, respectively, of $0.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187.5 million. The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $0.4 million. In accordance with EITF D-42, due to the redemption of the Series I Preferred Stock, the difference between the redemption cost and the carrying value of the Series I Preferred Stock of approximately $0.7 million is reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2006.
 
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $0.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share.
 
On August 21, 2006, the Company issued 2,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $0.01 par value, Series K Flexible Cumulative Redeemable Preferred Stock (the “Series K Preferred Stock”), at an initial offering price of $25.00 per Depositary Share.
 
On March 21, 2006, the Company, through separate wholly-owned limited liability companies of which the Operating Partnership is the sole member, entered into a co-investment arrangement with an institutional investor to invest in industrial properties (the “March 2006 Co-Investment Program”). The Company, through separate wholly-owned limited liability companies of which the Operating Partnership or First Industrial Investment, Inc. is the sole member, owns a 15% equity interest in and provides property management, leasing, disposition and portfolio management services to the March 2006 Co-Investment Program.
 
On July 21, 2006, the Company, through a wholly-owned limited liability company of First Industrial Investment, Inc. entered into a joint venture arrangement with an institutional investor to invest in land and vertical development (the “July 2006 Joint Venture”). The Company, through wholly-owned limited liability companies in which First Industrial Investment, Inc. is the sole member, owns a 10% equity interest in and provides property management, leasing, development, disposition and portfolio management services to the July 2006 Joint Venture.
 
From January 1, 2007 to February 22, 2007, the Company acquired 55 industrial properties (including 41 properties in connection with the purchase of the 90% equity interest from the institutional investor in the September 1998 Joint Venture on January 31, 2007) and several land parcels for a total estimated investment of approximately $135.9 million. The Company also sold 14 industrial properties for approximately $74.4 million of gross proceeds during this period.
 
On February 28, 2007, the Company declared a first quarter 2007 distribution of $.710 per common share/unit on its common stock/units which is payable on April 16, 2007. The Company also declared a first quarter 2007 dividend of $53.91 per share ($0.5391 per Depositary Share), on its Series C Preferred Stock, totaling, in the aggregate, approximately $1.1 million, which is payable on April 2, 2007; a semi-annual dividend of $3,118.00 per share ($31.1800 per Depositary Share) on its Series F Preferred Stock, totaling, in the aggregate, approximately $1.6 million, which is payable on April 2, 2007; a semi-annual dividend of $3,618.00 per share ($36.1800 per Depositary Share) on its Series G Preferred Stock, totaling, in the aggregate, approximately $0.9 million, which is payable on April 2, 2007; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate approximately $2.7 million, which is payable on April 2, 2007 and a dividend of $4,531.30 per share ($0.4531 per Depositary


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Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $0.9 million, which is payable on April 2, 2007.
 
Future Property Acquisitions, Developments and Property Sales
 
The Company has an active acquisition and development program through which it is continually engaged in identifying, negotiating and consummating portfolio and individual industrial property acquisitions and developments. As a result, the Company is currently engaged in negotiations relating to the possible acquisition and development of certain industrial properties.
 
The Company also sells properties based on market conditions and property related factors. As a result, the Company is currently engaged in negotiations relating to the possible sale of certain industrial properties in the Company’s portfolio.
 
When evaluating potential industrial property acquisitions and developments, as well as potential industrial property sales, the Company will 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 potential for capital appreciation of the property; (iv) the ability of the Company to improve the property’s performance through renovation; (v) the terms of tenant leases, including the potential for rent increases; (vi) the potential for economic growth and the tax and regulatory environment of the area in which the property is located; (vii) the potential for expansion of the physical layout of the property and/or the number of sites; (viii) the occupancy and demand by tenants for properties of a similar type in the vicinity; and (ix) competition from existing properties and the potential for the construction of new properties in the area.
 
INDUSTRY
 
Industrial properties are typically used for the design, assembly, packaging, storage and distribution of goods and/or the provision of services. As a result, the demand for industrial space in the United States is related to the level of economic output. Historically, occupancy rates for industrial property in the United States have been higher than those for other types of commercial property. The Company believes that the higher occupancy rate in the industrial property sector is a result of the construction-on-demand nature of, and the comparatively short development time required for, industrial property. For the five years ended December 31, 2006, the occupancy rates for industrial properties in the United States have ranged from 88.1%* to 90.6%*, with an occupancy rate of 90.6%* at December 31, 2006.
 
 
* Source: Torto Wheaton Research


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Item 1A.   Risk Factors
 
Risk Factors
 
The Company’s operations involve various risks that could adversely affect its financial condition, results of operations, cash flow, ability to pay distributions on its common stock and the market price of its common stock. These risks, among others contained in the Company’s other filings with the SEC, include:
 
Real estate investments’ value fluctuates depending on conditions in the general economy and the real estate business. These conditions may limit the Company’s revenues and available cash.
 
The factors that affect the value of the Company’s real estate and the revenues the Company derives from its properties include, among other things:
 
  •  general economic conditions;
 
  •  local conditions such as oversupply or a reduction in demand in an area;
 
  •  the attractiveness of the properties to tenants;
 
  •  tenant defaults;
 
  •  zoning or other regulatory restrictions;
 
  •  competition from other available real estate;
 
  •  our ability to provide adequate maintenance and insurance; and
 
  •  increased operating costs, including insurance premiums and real estate taxes.
 
Many real estate costs are fixed, even if income from properties decreases.
 
The Company’s financial results depend on leasing space to tenants on terms favorable to the Company. The Company’s income and funds available for distribution to its stockholders will decrease if a significant number of the Company’s tenants cannot pay their rent or the Company is unable to lease properties on favorable terms. In addition, if a tenant does not pay its rent, the Company may not be able to enforce its rights as landlord without delays and the Company may incur substantial legal costs. Costs associated with real estate investment, such as real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the investment. For the year ended December 31, 2006, approximately 69.4% of the Company’s gross revenues from continuing operations came from rentals of real property.
 
The Company may be unable to sell properties when appropriate because real estate investments are not as liquid as certain other types of assets.
 
Real estate investments generally cannot be sold quickly and, therefore, will tend to limit the Company’s ability to adjust its property portfolio promptly in response to changes in economic or other conditions. The inability to respond promptly to changes in the performance of the Company’s property portfolio could adversely affect the Company’s financial condition and ability to service debt and make distributions to its stockholders. In addition, like other companies qualifying as REITs under the Internal Revenue Code, the Company must comply with the safe harbor rules relating to the number of properties disposed of in a year, their tax basis and the cost of improvements made to the properties, or meet other tests which enable a REIT to avoid punitive taxation on the sale of assets. Thus, the Company’s ability at any time to sell assets may be restricted.
 
The Company may be unable to sell properties on advantageous terms.
 
The Company has sold to third parties a significant number of properties in recent years and, as part of its business, the Company intends to continue to sell properties to third parties. The Company’s ability to sell properties on advantageous terms depends on factors beyond the Company’s control, including competition from other sellers and the availability of attractive financing for potential buyers of the Company’s properties. If the Company is unable to sell properties on favorable terms or redeploy the proceeds of property sales in


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accordance with the Company’s business strategy, then the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock could be adversely affected.
 
The Company has also sold to its joint ventures a significant number of properties in recent years and, as part of its business, the Company intends to continue to sell properties to its joint ventures as opportunities arise. If the Company does not have sufficient properties available that meet the investment criteria of current or future joint ventures, or if the joint ventures have reduced or do not have access to capital on favorable terms, then such sales could be delayed or prevented, adversely affecting the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock.
 
The Company may be unable to acquire properties on advantageous terms or acquisitions may not perform as the Company expects.
 
The Company acquires and intends to continue to acquire primarily industrial properties. The acquisition of properties entails various risks, including the risks that the Company’s investments may not perform as expected and that the Company’s cost estimates for bringing an acquired property up to market standards may prove inaccurate. Further, the Company faces significant competition for attractive investment opportunities from other well-capitalized real estate investors, including both publicly-traded REITs and private investors. This competition increases as investments in real estate become attractive relative to other forms of investment. As a result of competition, the Company may be unable to acquire additional properties as it desires or the purchase price may be elevated. In addition, the Company expects to finance future acquisitions through a combination of borrowings under its revolving line of credit (“Unsecured Line of Credit I”), proceeds from equity or debt offerings by the Company and proceeds from property sales, which may not be available and which could adversely affect the Company’s cash flow. Any of the above risks could adversely affect the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market value of, the Company’s common stock.
 
The Company may be unable to complete development and re-development projects on advantageous terms.
 
As part of its business, the Company develops new and re-develops existing properties. In addition, the Company has sold to third parties or sold to the Company’s joint ventures a significant number of development and re-development properties in recent years, and the Company intends to continue to sell such properties to third parties or to sell such properties to the Company’s joint ventures as opportunities arise. The real estate development and re-development business involves significant risks that could adversely affect the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of the Company’s common stock, which include:
 
  •  the Company may not be able to obtain financing for development projects on favorable terms and complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties and generating cash flow;
 
  •  the Company may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations;
 
  •  the properties may perform below anticipated levels, producing cash flow below budgeted amounts and limiting the Company’s ability to sell such properties to third parties or to sell such properties to the Company’s joint ventures.
 
The Company may be unable to renew leases or find other lessees.
 
The Company is subject to the risks that, upon expiration, leases may not be renewed, the space subject to such leases may not be relet or the terms of renewal or reletting, including the cost of required renovations, may be less favorable than expiring lease terms. If the Company were unable to promptly renew a significant


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number of expiring leases or to promptly relet the space covered by such leases, or if the rental rates upon renewal or reletting were significantly lower than the current rates, the Company’s cash, funds from operations, and ability to make expected distributions to stockholders might be adversely affected. As of December 31, 2006, leases with respect to approximately 12.6 million, 12.3 million and 10.0 million square feet of GLA, representing 20%, 19% and 16% of GLA, expire in the remainder of 2007, 2008 and 2009, respectively.
 
The Company might fail to qualify or remain qualified as a REIT.
 
The Company intends to operate so as to qualify as a REIT under the Code. Although the Company believes that it is organized and will operate in a manner so as to qualify as a REIT, qualification as a REIT involves the satisfaction of numerous requirements, some of which must be met on a recurring basis. These requirements are established under highly technical and complex Code provisions of which there are only limited judicial or administrative interpretations and involve the determination of various factual matters and circumstances not entirely within the Company’s control.
 
The Company (through one of its subsidiary partnerships) entered into certain development agreements in 2000 through 2003, the performance of which has been completed. Under these agreements, the Company provided services to unrelated third parties and certain payments were made by the unrelated third parties for services provided by certain contractors hired by the Company. The Company believes that these payments were properly characterized by it as reimbursements for costs incurred by it on behalf of the third parties and do not constitute gross income and did not prevent the Company from satisfying the gross income requirements of the REIT provisions (the “gross income tests”). The Company has brought this matter to the attention of the Internal Revenue Service (the “IRS”). The IRS has not challenged or expressed any interest in challenging the Company’s view on this matter.
 
Employees of the Operating Partnership, a subsidiary partnership of the Company (the “Service Employees”), have been providing certain acquisition and disposition services since 2004 and certain leasing and property management services since 1997 to one of the Company’s taxable REIT subsidiaries (the “TRS”), and have also been providing certain of these services (or similar services) to joint ventures in which First Industrial, L.P. owns a minority interest or to unrelated parties. In determining whether it satisfied the gross income tests for certain years, the Company has taken and intends to take the position that the costs of the Service Employees should be shared between First Industrial, L.P. and the TRS and that no fee income should be imputed to the Company as a result of such arrangement. However, because certain of these services (or similar services) have also been performed for the joint ventures or unrelated parties described above, there can be no assurance that the IRS will not successfully challenge this position. First Industrial, L.P. has taken and intends to continue to take appropriate steps to address this issue going forward, but there can be no assurance that any such steps will adequately resolve this issue.
 
If the IRS were to challenge either of the positions described in the two preceding paragraphs and were successful, the Company could be found not to have satisfied the gross income tests in one or more of its taxable years. If the Company were found not to have satisfied the gross income tests, it could be subject to a penalty tax. However, such noncompliance should not adversely affect the Company’s status as a REIT as long as such noncompliance was due to reasonable cause and not to willful neglect and certain other requirements were met. The Company believes that, in both situations, any such noncompliance was due to reasonable cause and not willful neglect and that such other requirements were met.
 
If the Company were to fail to qualify as a REIT in any taxable year, it would be subject to federal income tax, including any applicable alternative minimum tax, on its taxable income at corporate rates. This could result in a discontinuation or substantial reduction in dividends to stockholders and in cash to pay interest and principal on debt securities that the Company issues. Unless entitled to relief under certain statutory provisions, the Company would be disqualified from electing treatment as a REIT for the four taxable years following the year during which it failed to qualify as a REIT.


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Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on the gain attributable to the transaction.
 
As part of its business, the Company (through the Operating Partnership) sells properties to third parties or sells properties to the Company’s joint ventures as opportunities arise. Under the Code, a 100% penalty tax could be assessed on the gain resulting from sales of properties that are deemed to be prohibited transactions. The question of what constitutes a prohibited transaction is based on the facts and circumstances surrounding each transaction. The IRS could contend that certain sales of properties by the Company are prohibited transactions. While the Company’s management does not believe that the IRS would prevail in such a dispute, if the matter were successfully argued by the IRS, the 100% penalty tax could be assessed against the profits from these transactions. In addition, any income from a prohibited transaction may adversely affect the Company’s ability to satisfy the income tests for qualification as a REIT.
 
The REIT distribution requirements may require the Company to turn to external financing sources.
 
The Company could, in certain instances, have taxable income without sufficient cash to enable it to meet the distribution requirements of the REIT provisions of the Code. In that situation, the Company could be required to borrow funds or sell properties on adverse terms in order to meet those distribution requirements. In addition, because the Company must distribute to its stockholders at least 90% of the Company’s REIT taxable income each year, the Company’s ability to accumulate capital may be limited. Thus, in connection with future acquisitions, the Company may be more dependent on outside sources of financing, such as debt financing or issuances of additional capital stock, which may or may not be available on favorable terms. Additional debt financings may substantially increase the Company’s leverage and additional equity offerings may result in substantial dilution of stockholders’ interests.
 
Debt financing, the degree of leverage and rising interest rates could reduce the Company’s cash flow.
 
Where possible, the Company intends to continue to use leverage to increase the rate of return on the Company’s investments and to allow the Company to make more investments than it otherwise could. The Company’s use of leverage presents an additional element of risk in the event that the cash flow from the Company’s properties is insufficient to meet both debt payment obligations and the distribution requirements of the REIT provisions of the Code. In addition, rising interest rates would reduce the Company’s cash flow by increasing the amount of interest due on its floating rate debt and on its fixed rate debt as it matures and is refinanced.
 
Cross-collateralization of mortgage loans could result in foreclosure on substantially all of the Company’s properties if the Company is unable to service its indebtedness.
 
If the Operating Partnership decides to obtain additional debt financing in the future, it may do so through mortgages on some or all of its properties. These mortgages may be issued on a recourse, non-recourse or cross-collateralized basis. Cross-collateralization makes all of the subject properties available to the lender in order to satisfy the Company’s debt. Holders of indebtedness that is so secured will have a claim against these properties. To the extent indebtedness is cross-collateralized, lenders may seek to foreclose upon properties that are not the primary collateral for their loan, which may, in turn, result in acceleration of other indebtedness secured by properties. Foreclosure of properties would result in a loss of income and asset value to the Company, making it difficult for it to meet both debt payment obligations and the distribution requirements of the REIT provisions of the Code. As of December 31, 2006, none of the Company’s current indebtedness was cross-collateralized.


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The Company may have to make lump-sum payments on its existing indebtedness.
 
The Company is required to make the following lump-sum or “balloon” payments under the terms of some of its indebtedness, including the Operating Partnership’s:
 
  •  $50 million aggregate principal amount of 7.75% Notes due 2032 (the “2032 Notes”)
 
  •  $200 million aggregate principal amount of 7.60% Notes due 2028 (the “2028 Notes”)
 
  •  approximately $15 million aggregate principal amount of 7.15% Notes due 2027 (the “2027 Notes”)
 
  •  $100 million aggregate principal amount of 7.50% Notes due 2017 (the “2017 Notes”)
 
  •  $200 million aggregate principal amount of 5.75% Notes due 2016 (the “2016 Notes”)
 
  •  $125 million aggregate principal amount of 6.42% Notes due 2014 (the “2014 Notes”)
 
  •  $200 million aggregate principal amount of 6.875% Notes due 2012 (the “2012 Notes”)
 
  •  $200 million aggregate principal amount of 4.625% Notes due 2011 (the “2011 Exchangeable Notes”)
 
  •  $200 million aggregate principal amount of 7.375% Notes due 2011 (the “2011 Notes”)
 
  •  $125 million aggregate principal amount of 5.25% Notes due 2009 (the “2009 Notes”)
 
  •  $150 million aggregate principal amount of 7.60% Notes due 2007 (the “2007 Notes”)
 
  •  a $500 million unsecured revolving credit facility (the “Unsecured Line of Credit I”) under which First Industrial Realty Trust, Inc., through the Operating Partnership, may borrow to finance the acquisition of additional properties and for other corporate purposes, including working capital.
 
The Unsecured Line of Credit I provides for the repayment of principal in a lump-sum or “balloon” payment at maturity in 2008. Under the Unsecured Line of Credit I, the Operating Partnership has the right, subject to certain conditions, to increase the aggregate commitment by up to $100.0 million. As of December 31, 2006, $207.0 million was outstanding under the Unsecured Line of Credit I at a weighted average interest rate of 6.058%.
 
The Company’s ability to make required payments of principal on outstanding indebtedness, whether at maturity or otherwise, may depend on its ability either to refinance the applicable indebtedness or to sell properties. The Company has no commitments to refinance the 2007 Notes, the 2009 Notes, the 2011 Notes, the 2011 Exchangeable Notes, the 2012 Notes, the 2014 Notes, the 2016 Notes, the 2017 Notes, the 2027 Notes, the 2028 Notes, the 2032 Notes or the Unsecured Line of Credit I. Some of the existing debt obligations, other than those discussed above, of the Company, through the Operating Partnership, are secured by the Company’s properties, and therefore such obligations will permit the lender to foreclose on those properties in the event of a default.
 
There is no limitation on debt in the Company’s organizational documents.
 
The organizational documents of the Company do not contain any limitation on the amount or percentage of indebtedness the Company may incur. Accordingly, the Company could become more highly leveraged, resulting in an increase in debt service that could adversely affect the Company’s ability to make expected distributions to stockholders and in an increased risk of default on the Company’s obligations. As of December 31, 2006, the Company’s ratio of debt to its total market capitalization was 40.1%. The Company computes that percentage by calculating its total consolidated debt as a percentage of the aggregate market value of all outstanding shares of the Company’s common stock, assuming the exchange of all limited partnership units of the Operating Partnership for common stock, plus the aggregate stated value of all outstanding shares of preferred stock and total consolidated debt.


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Rising interest rates on the Company’s Unsecured Line of Credit could decrease the Company’s available cash.
 
The Company’s Unsecured Line of Credit I bears interest at a floating rate. As of December 31, 2006, the Company’s Unsecured Line of Credit I had an outstanding balance of $207.0 million at a weighted average interest rate of 6.058%. The Company’s Unsecured Line of Credit I bears interest at the Prime Rate or at the LIBOR plus .625%. Based on an outstanding balance on the Company’s Unsecured Line of Credit I as of December 31, 2006, a 10% increase in interest rates would increase interest expense by $1.3 million on an annual basis. Increases in the interest rate payable on balances outstanding under the Unsecured Line of Credit I would decrease the Company’s cash available for distribution to stockholders.
 
Earnings and cash dividends, asset value and market interest rates affect the price of the Company’s common stock.
 
As a real estate investment trust, the market value of the Company’s common stock, in general, is based primarily upon the market’s perception of the Company’s growth potential and its current and potential future earnings and cash dividends. The market value of the Company’s common stock is based secondarily upon the market value of the Company’s underlying real estate assets. For this reason, shares of the Company’s common stock may trade at prices that are higher or lower than the Company’s net asset value per share. To the extent that the Company retains operating cash flow for investment purposes, working capital reserves, or other purposes, these retained funds, while increasing the value of the Company’s underlying assets, may not correspondingly increase the market price of the Company’s common stock. The Company’s failure to meet the market’s expectations with regard to future earnings and cash dividends likely would adversely affect the market price of the Company’s common stock. Further, the distribution yield on the common stock (as a percentage of the price of the common stock) relative to market interest rates may also influence the price of the Company’s common stock. An increase in market interest rates might lead prospective purchasers of the Company’s common stock to expect a higher distribution yield, which would adversely affect the market price of the Company’s common stock. Additionally, if the market price of the Company’s common stock declines significantly, then the Company might breach certain covenants with respect to its debt obligations, which could adversely affect the Company’s liquidity and ability to make future acquisitions and the Company’s ability to pay dividends to its stockholders.
 
The Company may incur unanticipated costs and liabilities due to environmental problems.
 
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be liable for the costs of clean-up of certain conditions relating to the presence of hazardous or toxic materials on, in or emanating from a property, and any related damages to natural resources. Environmental laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous or toxic materials. The presence of such materials, or the failure to address those conditions properly, may adversely affect the ability to rent or sell the property or to borrow using a property as collateral. Persons who dispose of or arrange for the disposal or treatment of hazardous or toxic materials may also be liable for the costs of clean-up of such materials, or for related natural resource damages, at or from an off-site disposal or treatment facility, whether or not the facility is owned or operated by those persons. No assurance can be given that existing environmental assessments with respect to any of the Company’s properties reveal all environmental liabilities, that any prior owner or operator of any of the properties did not create any material environmental condition not known to the Company or that a material environmental condition does not otherwise exist as to any of the Company’s properties.
 
The Company’s insurance coverage does not include all potential losses.
 
The Company currently carries comprehensive insurance coverage including property, boiler & machinery, liability, fire, flood, terrorism, earthquake, extended coverage and rental loss as appropriate for the markets where each of the Company’s properties and their business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties and business activities. The Company believes its properties are adequately insured. However, there are certain losses,


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including losses from earthquakes, hurricanes, floods, pollution, acts of war, acts of terrorism or riots, that are not generally insured against or that are not generally fully insured against because it is not deemed to be economically feasible or prudent to do so. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of the Company’s properties, the Company could experience a significant loss of capital invested and potential revenues from these properties, and could potentially remain obligated under any recourse debt associated with the property.
 
The Company is subject to risks and liabilities in connection with its investments in properties through joint ventures.
 
As of December 31, 2006, the Company’s six joint ventures owned approximately 26.0 million square feet of properties. As of December 31, 2006, the Company’s investment in joint ventures exceeded $55 million in the aggregate, and for the year ended December 31, 2006, the Company’s equity in income of joint ventures exceeded $30 million. The Company’s organizational documents do not limit the amount of available funds that the Company may invest in joint ventures and the Company intends to continue to develop and acquire properties through joint ventures with other persons or entities when warranted by the circumstances. Joint venture investments, in general, involve certain risks, including:
 
  •  co-members or joint venturers may share certain approval rights over major decisions;
 
  •  co-members or joint venturers might fail to fund their share of any required capital commitments;
 
  •  co-members or joint venturers might have economic or other business interests or goals that are inconsistent with the Company’s business interests or goals that would affect its ability to operate the property;
 
  •  co-members or joint venturers may have the power to act contrary to the Company’s instructions, requests, policies or objectives, including our current policy with respect to maintaining our qualification as a real estate investment trust;
 
  •  the joint venture agreements often restrict the transfer of a member’s or joint venturer’s interest or “buy-sell” or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms;
 
  •  disputes between the Company and its co-members or joint venturers may result in litigation or arbitration that would increase the Company’s expenses and prevent its officers and directors from focusing their time and effort on the Company’s business and subject the properties owned by the applicable joint venture to additional risk; and
 
  •  the Company may in certain circumstances be liable for the actions of its co-members or joint venturers.
 
The occurrence of one or more of the events described above could adversely affect the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock.
 
In addition, joint venture investments in real estate involve all of the risks related to the ownership, acquisition, development, sale and financing of real estate discussed in the risk factors above. To the extent the Company’s investments in joint ventures are adversely affected by such risks, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock could be adversely affected.
 
Item 1B.   Unresolved SEC Comments
 
None


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Item 2.   Properties
 
General
 
At December 31, 2006, the Company owned 858 in-service industrial properties containing an aggregate of approximately 68.6 million square feet of GLA in 28 states and one province in Canada, with a diverse base of more than 2,500 tenants engaged in a wide variety of businesses, including manufacturing, retail, wholesale trade, distribution and professional services. The properties are generally located in business parks that have convenient access to interstate highways and/or rail and air transportation. The weighted average age of the properties as of December 31, 2006 was approximately 19 years. The Company maintains insurance on its properties that the Company believes is adequate.
 
The Company classifies its properties into five industrial categories: light industrial, R&D/flex, bulk warehouse, regional warehouse and manufacturing. While some properties may have characteristics which fall under more than one property type, the Company uses what it believes is the most dominant characteristic to categorize the property.
 
The following describes, generally, the different industrial categories:
 
  •  Light industrial properties are of less than 100,000 square feet, have a ceiling height of 16-21 feet, are comprised of 5%-50% of office space, contain less than 50% of manufacturing space and have a land use ratio of 4:1. The land use ratio is the ratio of the total property area to the area occupied by the building.
 
  •  R&D/flex buildings are of less than 100,000 square feet, have a ceiling height of less than 16 feet, are comprised of 50% or more of office space, contain less than 25% of manufacturing space and have a land use ratio of 4:1.
 
  •  Bulk warehouse buildings are of more than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5%-15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1.
 
  •  Regional warehouses are of less than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5%-15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1.
 
  •  Manufacturing properties are a diverse category of buildings that have a ceiling height of 10-18 feet, are comprised of 5%-15% of office space, contain at least 50% of manufacturing space and have a land use ratio of 4:1.


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Each of the properties is wholly owned by the Company or its consolidated subsidiaries. The following tables summarize certain information as of December 31, 2006, with respect to the Company’s in-service properties.
 
Property Summary
 
                                                                                 
    Light Industrial     R&D/Flex     Bulk Warehouse     Regional Warehouse     Manufacturing  
          Number of
          Number of
          Number of
          Number of
          Number of
 
Metropolitan Area
  GLA     Properties     GLA     Properties     GLA     Properties     GLA     Properties     GLA     Properties  
 
Atlanta, GA(a)
    789,082       13       206,826       5       2,620,959       12       455,935       6       747,950       3  
Baltimore, MD
    918,062       15       169,660       5       910,735       4                   171,000       1  
Central PA(b)
    923,242       9                   897,000       3       117,599       3              
Chicago, IL
    1,104,890       19       174,198       3       2,898,661       15       198,131       4       421,000       2  
Cincinnati, OH
    436,389       4                   1,765,130       8       79,800       1              
Cleveland, OH
    64,000       1                   608,740       4                          
Columbus, OH(c)
    217,612       2                   2,442,967       7       98,800       1              
Dallas, TX
    1,811,665       45       454,963       18       2,637,371       18       677,433       10       128,478       1  
Denver, CO
    1,543,666       29       1,527,480       37       1,499,976       9       521,664       8       126,384       1  
Des Moines, IA
                            150,444       1       88,000       1              
Detroit, MI
    2,380,894       86       532,376       16       530,843       5       759,851       18       116,250       1  
Grand Rapids, MI
    61,250       1                                                  
Houston, TX
    449,325       6                   2,233,064       13       437,088       6              
Indianapolis, IN(d,e,f,g)
    889,600       18       108,200       4       3,728,421       15       323,610       8       71,600       2  
Los Angeles, CA
    451,760       6                   329,664       3       120,162       2              
Louisville, KY
                            443,500       2                          
Milwaukee, WI
    263,567       6       93,705       2       838,129       6       129,557       2              
Minneapolis/St. Paul, MN(h,i,j)
    1,626,304       20       524,265       7       1,902,386       9       321,805       4       994,077       9  
Nashville, TN
    273,843       5                   1,588,813       7                   109,058       1  
N. New Jersey
    1,200,856       21       413,167       7       555,205       4       58,585       1              
Philadelphia, PA
    878,456       18       127,802       5       221,937       2       160,828       3       30,000       1  
Phoenix, AZ
    135,415       6                   131,000       1       588,520       8              
Salt Lake City, UT
    601,051       33       146,937       6       834,693       5       82,704       1              
San Diego, CA
    112,773       5                   397,967       2       274,042       7              
S. New Jersey(k)
    1,386,577       21       23,050       1                   118,496       2       22,738       1  
St. Louis, MO(l)
    545,747       7                   1,887,790       8       96,392       1              
Tampa, FL(m)
    493,029       12       759,328       31       209,500       1                          
Other(n)
    692,837       8                   2,098,214       9       50,000       1       36,000       1  
                                                                                 
Total
    20,251,892       416       5,261,957       147       34,363,109       173       5,759,002       98       2,974,535       24  
                                                                                 
 
 
(a) One property collateralizes a $3.0 million mortgage loan which matures on May 1, 2016.
 
(b) One property collateralizes a $15.2 million mortgage loan which matures on December 1, 2010.
 
(c) One property collateralizes a $5.1 million mortgage loan which matures on December 1, 2019.
 
(d) Twelve properties collateralize a $1.8 million mortgage loan which matures on September 1, 2009.
 
(e) One property collateralizes a $1.6 million mortgage loan which matures on January 1, 2013.
 
(f) One property collateralizes a $2.4 million mortgage loan which matures on January 1, 2012.
 
(g) One property collateralizes a $1.9 million mortgage loan which matures on June 1, 2014.
 
(h) One property collateralizes a $0.8 million mortgage loan which matures on February 1, 2017.
 
(i) One property collateralizes a $5.3 million mortgage loan which matures on December 1, 2019.
 
(j) One property collateralizes a $1.9 million mortgage loan which matures on September 30, 2024.
 
(k) One property collateralizes a $6.7 million mortgage loan which matures on March 1, 2011.


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(l) One property collateralizes a $14.2 million mortgage loan and a $12.0 million mortgage loan which both mature on January 1, 2014.
 
(m) Six properties collateralize a $6.0 million mortgage loan which matures on July 1, 2009.
 
(n) Properties are located in Wichita, KS, McAllen, TX, Austin, TX, Orlando, FL, Horn Lake, MS, Shreveport, LA, Kansas City, MO, San Antonio, TX, Birmingham, AL, Portland, OR, Cambridge, ON, Stratford, ON, Omaha, NE, and Ajax, ON.
 
Property Summary Totals
 
                                 
    Totals  
                Average
    GLA as a %
 
          Number of
    Occupancy at
    of Total
 
Metropolitan Area
  GLA     Properties(b)     12/31/06(b)     Portfolio(b)  
 
Atlanta, GA
    4,820,752       39       94 %     7.0 %
Baltimore, MD
    2,169,457       25       98 %     3.2 %
Central, PA
    1,937,841       15       98 %     2.8 %
Chicago, IL
    4,796,880       43       91 %     7.0 %
Cincinnati, OH
    2,281,319       13       89 %     3.3 %
Cleveland, OH
    672,740       5       100 %     1.0 %
Columbus, OH
    2,759,379       10       90 %     4.0 %
Dallas, TX
    5,709,910       92       93 %     8.3 %
Denver, CO
    5,219,170       84       90 %     7.6 %
Des Moines, IA
    238,444       2       87 %     0.3 %
Detroit, MI
    4,320,214       126       86 %     6.3 %
Grand Rapids, MI
    61,250       1       100 %     0.1 %
Houston, TX
    3,119,477       25       94 %     4.5 %
Indianapolis, IN
    5,121,431       47       98 %     7.5 %
Los Angeles, CA
    901,586       11       100 %     1.3 %
Louisville, KY
    443,500       2       100 %     0.6 %
Milwaukee, WI
    1,324,958       16       95 %     1.9 %
Minneapolis/St. Paul, MN
    5,368,837       49       95 %     7.8 %
Nashville, TN
    1,971,714       13       99 %     2.9 %
N. New Jersey
    2,227,813       33       96 %     3.2 %
Philadelphia, PA
    1,419,023       29       96 %     2.1 %
Phoenix, AZ
    854,935       15       93 %     1.2 %
Salt Lake City, UT
    1,665,385       45       97 %     2.4 %
San Diego, CA
    784,782       14       83 %     1.1 %
S. New Jersey
    1,550,861       25       98 %     2.3 %
St. Louis, MO
    2,529,929       16       98 %     3.7 %
Tampa, FL
    1,461,857       44       92 %     2.1 %
Other(a)
    2,877,051       19       100 %     4.2 %
                                 
Total or Average
    68,610,495       858       94 %     100.0 %
                                 
 
 
(a) Properties are located in Wichita, KS, McAllen, TX, Austin, TX, Orlando, FL, Horn Lake, MS, Shreveport, LA, Kansas City, MO, San Antonio, TX, Birmingham, AL, Portland, OR, Cambridge, ON, Stratford, ON, Omaha, NE, and Ajax, ON.
 
(b) Includes only in-service properties.


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Property Acquisition Activity
 
During 2006, the Company acquired 91 industrial properties totaling approximately 10.5 million square feet of GLA at a total purchase price of approximately $573.3 million, or approximately $54.60 per square foot. The Company also purchased several land parcels for an aggregate purchase price of approximately $37.4 million. The 91 industrial properties acquired have the following characteristics:
 
                                 
                      Average
 
    Number of
                Occupancy at
 
Metropolitan Area
  Properties     GLA    
Property Type
    12/31/2006(b)  
 
Atlanta, GA
    2       192,000       Bulk/Regional Warehouse       71 %
Central, PA
    2       81,200       Light Industrial       100 %
Chicago, IL(a)
    1       25,313       Bulk Warehouse       N/A  
Chicago, IL
    4       652,944       Bulk Warehouse/Light Industrial       96 %
Cincinnati, OH
    1       79,800       Regional Warehouse       100 %
Cleveland, OH
    7       1,124,799       Bulk Warehouse/Light Industrial       86 %
Cleveland, OH(a)
    4       788,292       Bulk Warehouse       N/A  
Columbus, OH(a)
    1       744,800       Bulk Warehouse       N/A  
Columbus, OH
    2       306,627       Bulk/Regional Warehouse       100 %
Dallas, TX
    2       628,243       Light Industrial/Bulk Warehouse       100 %
Denver, CO
    4       350,606       Bulk Warehouse       98 %
Detroit, MI
    3       168,962       Manufacturing/Regional Warehouse       100 %
Indianapolis, IN
    1       209,380       Bulk Warehouse       100 %
Los Angeles, CA
    7       698,991       Light Industrial       63 %
Milwaukee, WI
    1       90,089       Regional Warehouse       100 %
Minneapolis/St. Paul, MN
    3       180,589       Light Industrial/Regional Warehouse       100 %
Philadelphia, PA(a)
    1       87,000       Light Industrial       N/A  
Phoenix, AZ
    3       272,197       Bulk /Regional Warehouse       44 %
Phoenix, AZ(a)
    2       217,496       Bulk Warehouse/Light Industrial       44 %
San Diego, CA
    8       186,787       Light Industrial/Regional Warehouse       45 %
S. New Jersey
    2       128,026       Light Industrial       66 %
S. New Jersey(a)
    1       37,875       R&D/Flex       N/A  
                      Light Industrial /Bulk Warehouse /          
Salt Lake City, UT
    5       715,273       Regional Warehouse       99 %
San Francisco, CA
    1       143,750       Bulk Warehouse       100 %
St. Louis, MO
    2       1,186,423       Light Industrial/Bulk Warehouse       100 %
Tampa, FL
    19       497,535       R&D/Flex       66 %
Other(c)
    2       698,794       Bulk Warehouse       100 %
                               
                                 
Total
    91       10,493,791                  
                                 
 
 
(a) Property was sold in 2006.
 
(b) Includes only in-service properties.
 
(c) Properties are located in Omaha, NE, and Ajax, ON.


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Property Development Activity
 
During 2006, the Company placed in-service 16 developments totaling approximately 5.0 million square feet of GLA at a total cost of approximately $194.8 million, or approximately $38.64 per square foot. The placed in-service developments have the following characteristics:
 
                         
                Average
 
                Occupancy
 
Metropolitan Area
  GLA    
Property Type
    at 12/31/06  
 
Chicago, IL
    134,905       Bulk Warehouse       100 %
Seattle, WA(a)
    451,151       Bulk Warehouse       N/A  
Atlanta, GA(a)
    399,695       Regional Warehouse       N/A  
Chicago, IL
    167,556       Bulk Warehouse       100 %
Indianapolis, IN(a)
    158,928       Bulk Warehouse       N/A  
Dallas, TX
    201,500       Bulk Warehouse       100 %
Flint, MI
    80,000       R&D/Flex       100 %
Byhalia, MS(a)
    400,000       Bulk Warehouse       N/A  
Atlanta, GA(a)
    1,300,716       Bulk Warehouse       N/A  
Shreveport, TX
    646,000       Bulk Warehouse       100 %
Houston, TX(a)
    210,000       Bulk Warehouse       N/A  
Houston, TX(a)
    80,000       Regional Warehouse       N/A  
Nashville, TN
    300,000       Bulk Warehouse       100 %
Detroit, MI
    116,250       Manufacturing       100 %
Chicago, IL
    120,000       Bulk Warehouse       100 %
Nashville, TN
    275,000       Bulk Warehouse       100 %
                         
Total
    5,041,701                  
                         
 
 
(a) Property was sold in 2006.
 
At December 31, 2006, the Company had 16 development projects not placed in service, totaling an estimated 2.8 million square feet and with an estimated completion cost of approximately $154.7 million. The Company estimates it will place in service 16 of the 16 projects in fiscal year 2007. There can be no assurance that the Company will place these projects in service in 2007 or that the actual completion cost will not exceed the estimated completion cost stated above.


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Property Sales
 
During 2006, the Company sold 125 industrial properties totaling approximately 17.1 million square feet of GLA and several land parcels. Total gross sales proceeds approximated $946.8 million. The 125 industrial properties sold have the following characteristics:
 
                         
    Number of
             
Metropolitan Area
  Properties     GLA    
Property Type
 
 
Atlanta, GA
    5       2,170,372       R&D/Flex/Bulk Warehouse/Manufacturing  
Baltimore, MD
    5       636,073       Light Industrial/Bulk Warehouse  
Central, PA
    2       206,931       Bulk Warehouse  
Chicago, IL
    7       922,983       Bulk/Regional Warehouse/Manufacturing  
Cincinnati, OH
    11       913,041       Regional /Bulk Warehouse/Lt. Ind.  
Cleveland, OH
    5       1,250,292       Bulk Warehouse/Manufacturing  
Columbus, OH
    1       744,800       Bulk Warehouse  
Dallas, TX
    14       1,060,054       Bulk/Lt. Ind./Manufacturing /R&D/Flex/Regional  
Denver, CO
    2       63,287       Light Industrial  
Detroit, MI
    5       178,942       Bulk/Lt. Ind/R&D/Flex/Regional  
Houston, TX
    7       783,080       Bulk/Lt. Ind/R&D/Flex/Regional  
Indianapolis, IN
    9       856,206       Bulk/Lt. Ind/R&D/Flex/Regional  
Los Angeles, CA
    13       818,362       Bulk Warehouse/R&D/Flex/Lt. Ind.  
Milwaukee, WI
    5       1,000,263       Bulk/Regional/Lt. Ind. Warehouse  
Minneapolis/St. Paul, MN
    5       276,881       Manufacturing/R&D/Flex  
N. New Jersey
    1       92,400       Regional Warehouse  
Nashville, TN
    3       467,041       Bulk/Regional Warehouse  
Philadelphia, PA
    4       239,038       Light Industrial  
Phoenix, AZ
    6       1,102,179       Bulk Warehouse/Light Industrial  
Raleigh, NC
    2       397,120       Bulk Warehouse/Manufacturing  
S. New Jersey
    2       58,883       R&D/Flex/Light Industrial  
San Diego, CA
    3       155,984       Bulk/Regional Warehouse  
San Francisco, CA
    1       143,750       Bulk Warehouse  
Seattle, WA
    1       451,151       Bulk Warehouse  
St. Louis, MO
    1       281,105       Bulk Warehouse  
Tampa, FL
    1       14,914       R&D/Flex  
Other(a)
    4       1,827,946       Bulk Warehouse  
                       
                         
Total
    125       17,113,078          
                         
 
 
(a) Properties are located in Malvern, AR, Sparks, NV, Byhalia, MS and Greenville, SC.
 
Property Acquisitions, Developments and Sales Subsequent to Year End
 
From January 1, 2007 to February 22, 2007, the Company acquired 55 industrial properties (including 41 properties in connection with the purchase of the 90% equity interest from the institutional investor in the September 1998 Joint Venture on January 31, 2007) and several land parcels for a total estimated investment of approximately $135.9 million. The Company also sold 14 industrial properties, for approximately $74.4 million of gross proceeds during this period.


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Tenant and Lease Information
 
The Company has a diverse base of more than 2,500 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and six years and provide for periodic rent increases that are either fixed or based on changes in the Consumer Price Index. Industrial tenants typically have net or semi-net leases and pay as additional rent their percentage of the property’s operating costs, including the costs of common area maintenance, property taxes and insurance. As of December 31, 2006, approximately 94% of the GLA of the in-service industrial properties was leased, and no single tenant or group of related tenants accounted for more than 2.2% of the Company’s rent revenues, nor did any single tenant or group of related tenants occupy more than 1.6% of the Company’s total GLA as of December 31, 2006.
 
The following table shows scheduled lease expirations for all leases for the Company’s in-service properties as of December 31, 2006.
 
                                         
    Number of
          Percentage of
    Annual Base Rent
    Percentage of Total
 
Year of
  Leases
    GLA
    GLA
    Under Expiring
    Annual Base Rent
 
Expiration(1)
  Expiring     Expiring(2)     Expiring     Leases     Expiring(2)  
    (In thousands)  
 
2007
    716       12,577,758       20 %     54,949       19 %
2008
    566       12,329,575       19 %     52,606       18 %
2009
    517       10,039,151       16 %     46,189       16 %
2010
    300       7,060,607       11 %     32,543       11 %
2011
    254       6,223,967       10 %     31,779       11 %
2012
    81       2,177,391       3 %     10,557       4 %
2013
    51       3,501,366       5 %     14,029       5 %
2014
    23       1,142,517       2 %     5,448       2 %
2015
    30       2,176,249       3 %     6,996       2 %
2016
    27       2,250,640       3 %     8,036       3 %
Thereafter
    28       5,120,820       8 %     22,928       9 %
                                         
Total
    2,593       64,600,041       100.0 %   $ 286,060       100.0 %
                                         
 
 
(1) Lease expirations as of December 31, 2006 assume tenants do not exercise existing renewal, termination or purchase options.
 
(2) Does not include existing vacancies of 4,010,454 aggregate square feet.
 
Item 3.   Legal Proceedings
 
The Company is involved in legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material impact on the results of operations, financial position or liquidity of the Company.
 
Item 4.   Submission of Matters to a Vote of Security Holders
 
None.


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PART II
 
Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 
Market Information
 
The following table sets forth for the periods indicated the high and low closing prices per share and distributions declared per share for the Company’s common stock, which trades on the New York Stock Exchange under the trading symbol “FR”.
 
                         
                Distribution
 
Quarter Ended
  High     Low     Declared  
 
December 31, 2006
  $ 50.52     $ 43.70     $ 0.7100  
September 30, 2006
  $ 44.25     $ 37.25     $ 0.7000  
June 30, 2006
  $ 41.79     $ 36.50     $ 0.7000  
March 31, 2006
  $ 43.24     $ 37.73     $ 0.7000  
December 31, 2005
  $ 41.82     $ 37.79     $ 0.7000  
September 30, 2005
  $ 41.80     $ 37.20     $ 0.6950  
June 30, 2005
  $ 42.16     $ 37.35     $ 0.6950  
March 31, 2005
  $ 42.65     $ 37.83     $ 0.6950  
 
The Company had 617 common stockholders of record registered with its transfer agent as of February 22, 2007.
 
The Company has determined that, for federal income tax purposes, approximately 9.30% of the total $126.0 million in distributions declared in 2006 represents ordinary dividend income to its stockholders, 8.57% qualify as 25 percent rate capital gain, 20.63% qualify as 15 percent rate qualified dividend income, 11.97% qualify as a 15 percent rate capital gain and the remaining 49.53% represents a return of capital.
 
Additionally, for tax purposes, 18.42% of the Company’s 2006 preferred stock dividends qualify as ordinary income, 16.98% qualify as 25 percent rate capital gain, 40.88% qualify as 15 percent rate qualified dividend income and 23.72% qualify as 15 percent rate capital gain.
 
In order to maintain its status as a REIT, the Company is required to meet certain tests, including distributing at least 90% of its REIT taxable income, or approximately $1.24 per common share for 2006. The Company’s dividend policy is to meet the minimum distribution required to maintain the Company’s REIT qualification under the Internal Revenue Code.
 
On January 20 and March 31, 2006, the Operating Partnership issued 21,650 and 9,823 Units, respectively, having an aggregate market value of approximately $1.3 million in exchange for property.
 
All of the above Units were issued in private placements in reliance on Section 4(2) of the Securities Act of 1933, as amended, including Regulation D promulgated thereunder, to individuals or entities holding real property or interests therein. No underwriters were used in connection with such issuances.
 
Subject to lock-up periods and certain adjustments, Units are convertible into common stock, par value $0.01 per share, of the Company on a one-for-one basis or cash at the option of the Company.


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Equity Compensation Plans
 
The following table sets forth information regarding the Company’s equity compensation plans.
 
                         
    Number of Securities
          Number of Securities
 
    to be Issued
    Weighted-Average
    Remaining Available
 
    Upon Exercise of
    Exercise Price of
    for Further Issuance
 
    Outstanding Options,
    Outstanding Options,
    Under Equity
 
Plan Category
  Warrants and Rights     Warrants and Rights     Compensation Plans  
 
Equity Compensation Plans Approved by Security Holders
                2,178,868  
Equity Compensation Plans Not Approved by Security Holders(1)
    381,976     $ 31.65       93,340  
                         
Total
    381,976     $ 31.65       2,272,208  
                         
 
 
(1) See Notes 3 and 13 of the Notes to Consolidated Financial Statements contained herein for a description of the plan.


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Table of Contents

Performance Graph*
 
The following graph provides a comparison of the cumulative total stockholder return among the Company, the NAREIT Equity REIT Total Return Index (the “NAREIT Index”), an industry index which, as of December 31, 2006, was comprised of 130 tax-qualified equity REITs (including the Company), and the Standard & Poor’s 500 Index (“S&P 500”). The comparison is for the period from December 31, 2001 to December 31, 2006 and assumes the reinvestment of any dividends. The closing price for the Company’s Common Stock quoted on the NYSE at the close of business on December 31, 2001 was $31.10 per share. The NAREIT Index includes REITs with 75% or more of their gross invested book value of assets invested directly or indirectly in the equity ownership of real estate. Upon written request, the Company will provide stockholders with a list of the REITs included in the NAREIT Index. The historical information set forth below is not necessarily indicative of future performance. The following graph was prepared at the Company’s request by Research Data Group, Inc., San Francisco, California.
 
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
 
(PERFORMANCE GRAPH)
 
                                                 
    12/01     12/02     12/03     12/04     12/05     12/06  
 
FIRST INDUSTRIAL REALTY TRUST, INC.
  $ 100     $ 98     $ 129     $ 167     $ 169     $ 220  
S&P 500
    100       78       100       111       117       135  
NAREIT
    100       104       142       187       210       284  
 
 
* The information provided in this performance graph shall not be deemed to be “soliciting material,” to be “filed” or to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act of 1934 unless specifically treated as such.


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Table of Contents

 
Item 6.   Selected Financial Data
 
The following sets forth selected financial and operating data for the Company on a historical consolidated basis. The following data should be read in conjunction with the financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Form 10-K. The historical statements of operations for the years ended December 31, 2006, 2005, 2004, 2003, and 2002 include the results of operations of the Company as derived from the Company’s audited financial statements. The results of operations of properties sold are presented in discontinued operations if they met both of the following criteria: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Company as a result of the disposition and (b) the Company will not have any significant involvement in the operations of the property after the disposal transaction. The historical balance sheet data and other data as of December 31, 2006, 2005, 2004, 2003, and 2002 include the balances of the Company as derived from the Company’s audited financial statements.
 
                                         
    Year Ended
    Year Ended
    Year Ended
    Year Ended
    Year Ended
 
    12/31/06     12/31/05     12/31/04     12/31/03     12/31/02  
    (In thousands, except per unit and property data)  
 
Statement of Operations Data:
                                       
Total Revenues
  $ 396,036     $ 325,530     $ 268,008     $ 247,129     $ 231,893  
Interest Income
    1,614       1,486       3,632       2,416       2,378  
Mark-to-Market/(Loss) Gain on Settlement of Interest Rate Protection Agreements
    (3,112 )     811       1,583              
Property Expenses
    (130,230 )     (108,464 )     (90,309 )     (83,848 )     (75,694 )
General and Administrative Expense
    (77,497 )     (55,812 )     (39,569 )     (26,953 )     (19,610 )
Interest Expense
    (121,141 )     (108,339 )     (98,636 )     (94,895 )     (90,017 )
Amortization of Deferred Financing Costs
    (2,666 )     (2,125 )     (1,931 )     (1,764 )     (1,925 )
Depreciation and Other Amortization
    (145,906 )     (105,720 )     (79,939 )     (63,006 )     (52,521 )
Expenses from Build to Suit Development for Sale
    (10,263 )     (15,574 )                  
Gain (Loss) from Early Retirement from Debt(a)
          82       (515 )     (1,466 )     (888 )
Equity in Income of Joint Ventures
    30,673       3,699       37,301       539       463  
Income Tax Benefit
    8,920       14,022       7,937       5,495       2,125  
Minority Interest Allocable to Continuing Operations
    9,795       7,980       2,034       5,239       4,660  
                                         
(Loss) Income from Continuing Operations
    (43,777 )     (42,424 )     9,596       (11,114 )     864  
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $213,442, $132,139, $88,245, $79,485 and $58,323 for the Years Ended December 31, 2006, 2005, 2004, 2003 and 2002, respectively)
    225,357       154,061       116,693       136,764       129,686  
Provision for Income Taxes Allocable to Discontinued Operations (Including $47,511, $20,529, $8,659, $2,154, and $1,538 allocable to Gain on Sale of Real Estate for the Years ended December 31, 2006, 2005, 2004, 2003 and 2002, respectively)
    (50,140 )     (23,583 )     (11,005 )     (3,689 )     (2,680 )
Minority Interest Allocable to Discontinued Operations
    (22,796 )     (17,171 )     (14,500 )     (19,602 )     (19,025 )
Gain on Sale of Real Estate
    6,071       29,550       16,755       15,794       16,476  
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
    (2,119 )     (10,871 )     (5,371 )     (2,408 )     (3,111 )
Minority Interest Allocable to Gain on Sale of Real Estate
    (514 )     (2,458 )     (1,562 )     (1,972 )     (2,002 )
                                         
Net Income
    112,082       87,104       110,606       113,773       120,208  
Redemption of Preferred Stock
    (672 )           (7,959 )           (3,707 )
Preferred Dividends
    (21,424 )     (10,688 )     (14,488 )     (20,176 )     (23,432 )
                                         
Net Income Available to Common Stockholders
  $ 89,986     $ 76,416     $ 88,159     $ 93,597     $ 93,069  
                                         
Loss from Continuing Operations Available to Common Stockholders Per Weighted Average Common Share Outstanding:
                                       
Basic
  $ (1.42 )   $ (0.87 )   $ (0.07 )   $ (0.52 )   $ (0.38 )
                                         
Diluted
  $ (1.42 )   $ (0.87 )   $ (0.07 )   $ (0.52 )   $ (0.38 )
                                         
Net Income Available to Common Stockholders Per Weighted Average Common Share Outstanding:
                                       
Basic
  $ 2.04     $ 1.80     $ 2.17     $ 2.43     $ 2.39  
                                         
Diluted
  $ 2.04     $ 1.80     $ 2.17     $ 2.43     $ 2.39  
                                         
Distributions Per Share
  $ 2.8100     $ 2.7850     $ 2.7500     $ 2.7400     $ 2.7250  
                                         
Weighted Average Number of Common Shares Outstanding:
                                       
Basic
    44,012       42,431       40,557       38,542       38,927  
                                         
Diluted
    44,012       42,431       40,557       38,542       38,927  
                                         
Net Income
  $ 112,082     $ 87,104     $ 110,606     $ 113,773     $ 120,208  
Other Comprehensive Income (Loss):
                                       
Settlement of Interest Rate Protection Agreements
    (1,729 )           6,816             1,772  
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
          (159 )                  
Mark-to-Market of Interest Rate Protection Agreements and Interest Rate Swap Agreements
    (2,800 )     (1,414 )     106       251       (126 )
Amortization of Interest Rate Protection Agreements
    (912 )     (1,085 )     (512 )     198       176  
Other Comprehensive Loss Allocable to Minority Interest
    698       837                    
                                         
Comprehensive Income
  $ 107,339     $ 85,283     $ 117,016     $ 114,222     $ 122,030  
                                         


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    Year Ended
    Year Ended
    Year Ended
    Year Ended
    Year Ended
 
    12/31/06     12/31/05     12/31/04     12/31/03     12/31/02  
    (In thousands, except per unit and property data)  
 
Balance Sheet Data (End of Period):
                                       
Real Estate, Before Accumulated Depreciation
  $ 3,219,728     $ 3,260,761     $ 2,856,474     $ 2,738,034     $ 2,697,269  
Real Estate, After Accumulated Depreciation
    2,754,310       2,850,195       2,478,091       2,388,782       2,388,781  
Real Estate Held for Sale, Net
    115,961       16,840       52,790             7,040  
Total Assets
    3,224,399       3,226,243       2,721,890       2,648,023       2,629,973  
Mortgage Loans Payable, Net, Unsecured Lines of Credit and Senior Unsecured Debt, Net
    1,834,658       1,813,702       1,574,929       1,453,798       1,442,149  
Total Liabilities
    2,048,873       2,020,361       1,719,463       1,591,732       1,575,586  
Stockholders’ Equity
    1,022,979       1,043,562       845,494       889,173       882,326  
Other Data:
                                       
Cash Flow From Operating Activities
  $ 59,551     $ 49,350     $ 77,657     $ 103,156     $ 132,838  
Cash Flow From Investing Activities
    129,147       (371,654 )     9,992       29,037       33,350  
Cash Flow From Financing Activities
    (180,800 )     325,617       (83,546 )     (131,372 )     (166,188 )
Total In-Service Properties
    858       884       827       834       908  
Total In-Service GLA, in Square Feet
    68,610,505       70,193,161       61,670,735       57,925,466       59,979,894  
In-Service Occupancy Percentage
    94 %     92 %     90 %     88 %     90 %
 
 
(a) In 2005, the Company wrote off $0.05 million of financing fees related to the Company’s previous line of credit agreement, which was amended and restated on August 23, 2005. In addition, the Company paid $0.3 million of finance fees and wrote off a loan premium of $0.4 million on a mortgage loan payable which was assumed by the buyers of the related properties on July 13, 2005. In 2004, the Company paid off and retired a mortgage loan. The Company recorded a loss from the early retirement of debt in 2004 of approximately $0.5 million, which is comprised of the write-off of unamortized deferred financing costs and prepayment penalties. In 2003, the Company paid off and retired a mortgage loan. The Company recorded a loss from the early retirement of debt in 2003 of approximately $1.5 million, which is comprised of the write-off of unamortized deferred financing costs. In 2002, the Company paid off and retired senior unsecured debt. The Company recorded a loss from the early retirement of debt of approximately $0.9 million which is comprised of the amount paid above the carrying amount of the senior unsecured debt and the write-off of pro rata unamortized deferred financing costs and legal costs.
 
Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion should be read in conjunction with “Selected Financial Data” and the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K.
 
In addition, the following discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends 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, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Company on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rate levels, competition, supply and demand for industrial properties in the Company’s current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs and changes in general accounting principles and policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included herein in Item 1A. “Risk Factors,” and in the Company’s other filings with the SEC.

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The Company was organized in the state of Maryland on August 10, 1993. The Company is a REIT, as defined in the Code. The Company began operations on July 1, 1994. The Company’s interests in its properties and land parcels are held through (i) partnerships controlled by the Company, including First Industrial, L.P. (the “Operating Partnership”), of which the Company is the sole general partner, as well as, among others, First Industrial Financing Partnership, L.P., First Industrial Securities, L.P., First Industrial Mortgage Partnership, L.P., First Industrial Pennsylvania, L.P. (the “Financing Partnership”), First Industrial Harrisburg, L.P., First Industrial Indianapolis, L.P., FI Development Services, L.P. and TK-SV, LTD., as to each of which the sole general partner is a wholly-owned subsidiary of the Company (except in the case of the Financing Partnership in which case the Operating Partnership is also the general partner) and the sole limited partner is the Operating Partnership; (ii) limited liability companies, of which the Operating Partnership is the sole member; and (iii) First Industrial Investment, Inc., of which the Operating Partnership is the sole stockholder, all of whose operating data is consolidated with that of the Company as presented herein. The Company, through separate, wholly-owned limited liability companies of which the Operating Partnership or First Industrial Investment, Inc. is the sole member, also owns minority equity interests in, and provides services to, six joint ventures which invest in industrial properties (the “September 1998 Joint Venture,” the “May 2003 Joint Venture,” the “March 2005 Joint Venture,” the “September 2005 Joint Venture,” the “March 2006 Co-Investment Program” and the “July 2006 Joint Venture”). The Company, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in and provided property management services to a seventh joint venture which invested in industrial properties (the “December 2001 Joint Venture” together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture, the September 2005 Joint Venture, the March 2006 Co-Investment Program and the July 2006 Joint Venture ; the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. On January 31, 2007, the Company purchased the 90% equity interest from the institutional investor in the September 1998 Joint Venture. The operating data of the Joint Ventures is not consolidated with that of the Company as presented herein.
 
Management believes the Company’s financial condition and results of operations are, primarily, a function of the Company’s and its joint ventures’ performance in four key areas: leasing of industrial properties, acquisition and development of additional industrial properties, redeployment of internal capital and access to external capital.
 
The Company generates revenue primarily from rental income and tenant recoveries from long-term (generally three to six years) operating leases of its and its joint ventures’ industrial properties. Such revenue is offset by certain property specific operating expenses, such as real estate taxes, repairs and maintenance, property management, utilities and insurance expenses, along with certain other costs and expenses, such as depreciation and amortization costs and general and administrative and interest expenses. The Company’s revenue growth is dependent, in part, on its ability to (i) increase rental income, through increasing either or both occupancy rates and rental rates at the Company’s and its joint ventures’ properties, (ii) maximize tenant recoveries and (iii) minimize operating and certain other expenses. Revenues generated from rental income and tenant recoveries are a significant source of funds, in addition to income generated from gains/losses on the sale of the Company’s and its joint ventures’ properties (as discussed below), for the Company’s distributions. The leasing of property, in general, and occupancy rates, rental rates, operating expenses and certain non-operating expenses, in particular, are impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Company. The leasing of property also entails various risks, including the risk of tenant default. If the Company were unable to maintain or increase occupancy rates and rental rates at the Company’s and its joint ventures’ properties or to maintain tenant recoveries and operating and certain other expenses consistent with historical levels and proportions, the Company’s revenue growth would be limited. Further, if a significant number of the Company’s and its joint ventures’ tenants were unable to pay rent (including tenant recoveries) or if the Company or its joint ventures were unable to rent their properties on favorable terms, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.


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The Company’s revenue growth is also dependent, in part, on its and its joint ventures’ ability to acquire existing, and acquire and develop new, additional industrial properties on favorable terms. The Company itself and through its various joint ventures, continually seeks to acquire existing industrial properties on favorable terms, and, when conditions permit, also seeks to acquire and develop new industrial properties on favorable terms. Existing properties, as they are acquired, and acquired and developed properties, as they lease-up, generate revenue from rental income, tenant recoveries and fees, income from which, as discussed above, is a source of funds for the Company’s distributions. The acquisition and development of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Company. The acquisition and development of properties also entails various risks, including the risk that the Company’s and its joint ventures’ investments may not perform as expected. For example, acquired existing and acquired and developed new properties may not sustain and/or achieve anticipated occupancy and rental rate levels. With respect to acquired and developed new properties, the Company may not be able to complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties. Also, the Company and its joint ventures face significant competition for attractive acquisition and development opportunities from other well-capitalized real estate investors, including both publicly-traded REITs and private investors. Further, as discussed below, the Company and its joint ventures may not be able to finance the acquisition and development opportunities they identify. If the Company and its joint ventures were unable to acquire and develop sufficient additional properties on favorable terms, or if such investments did not perform as expected, the Company’s revenue growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
 
The Company also generates income from the sale of its and its joint ventures’ properties (including existing buildings, buildings which the Company or its joint ventures have developed or re-developed on a merchant basis, and land). The Company itself and through its various joint ventures is continually engaged in, and its income growth is dependent in part on, systematically redeploying capital from properties and other assets with lower yield potential into properties and other assets with higher yield potential. As part of that process, the Company and its joint ventures sell, on an ongoing basis, select stabilized properties or land or properties offering lower potential returns relative to their market value. The gain/loss on and fees from, the sale of such properties are included in the Company’s income and are a significant source of funds, in addition to revenues generated from rental income and tenant recoveries, for the Company’s distributions. Also, a significant portion of the Company’s proceeds from such sales is used to fund the acquisition of existing, and the acquisition and development of new, industrial properties. The sale of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Company. The sale of properties also entails various risks, including competition from other sellers and the availability of attractive financing for potential buyers of the Company’s and its joint ventures’ properties. Further, the Company’s ability to sell properties is limited by safe harbor rules applying to REITs under the Code which relate to the number of properties that may be disposed of in a year, their tax bases and the cost of improvements made to the properties, along with other tests which enable a REIT to avoid punitive taxation on the sale of assets. If the Company and its joint ventures were unable to sell properties on favorable terms, the Company’s income growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
 
Currently, the Company utilizes a portion of the net sales proceeds from property sales, borrowings under its unsecured line of credit and proceeds from the issuance, when and as warranted, of additional equity securities to finance future acquisitions and developments and to fund its equity commitments to its joint ventures. Access to external capital on favorable terms plays a key role in the Company’s financial condition and results of operations, as it impacts the Company’s cost of capital and its ability and cost to refinance existing indebtedness as it matures and to fund acquisitions, developments and contributions to its joint ventures or through the issuance, when and as warranted, of additional equity securities. The Company’s ability to access external capital on favorable terms is dependent on various factors, including general market conditions, interest rates, credit ratings on the Company’s capital stock and debt, the market’s perception of


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the Company’s growth potential, the Company’s current and potential future earnings and cash distributions and the market price of the Company’s capital stock. If the Company were unable to access external capital on favorable terms, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
 
CRITICAL ACCOUNTING POLICIES
 
The Company’s significant accounting policies are described in more detail in Note 3 to the consolidated financial statements. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
 
  •  The Company maintains an allowance for doubtful accounts which is based on estimates of potential losses which could result from the inability of the Company’s tenants to satisfy outstanding billings with the Company. The allowance for doubtful accounts is an estimate based on the Company’s assessment of the creditworthiness of its tenants.
 
  •  Properties are classified as held for sale when management of the Company have approved the sales of such properties. When properties are classified as held for sale, the Company ceases depreciating the properties and estimates the values of such properties and measures them at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify such property as held and used. The Company estimates the value of such property and measures it at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. Fair value is determined by deducting from the estimated sales price of the property the estimated costs to close the sale.
 
  •  The Company reviews its properties on a quarterly basis for possible impairment and provides a provision if impairments are determined. The Company utilizes the guidelines established under Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards (“FAS”) No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”) to determine if impairment conditions exist. The Company reviews the expected undiscounted cash flows of each property to determine if there are any indications of impairment. If the expected undiscounted cash flows of a particular property are less than the net book basis of the property, the Company will recognize an impairment charge equal to the amount of carrying value of the property that exceeds the fair value of the property. Fair value is determined by discounting the future expected cash flows of the property. The calculation of the fair value involves subjective assumptions such as estimated occupancy, rental rates, ultimate residual value and the discount rate used to present value the cash flows.
 
  •  The Company is engaged in the acquisition of individual properties as well as multi-property portfolios. In accordance with FAS No. 141, “Business Combinations” (“FAS 141”), the Company is required to allocate purchase price between land, building, tenant improvements, leasing commissions, intangible assets and above and below market leases. Above-market and below-market lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rents for each corresponding in-place lease. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental income. The Company also must allocate purchase price on multi-property portfolios to individual properties. The allocation of purchase price is based on the Company’s assessment of various characteristics of the markets where the property is located and the expected cash flows of the property.
 
  •  The Company capitalizes (direct and certain indirect) costs incurred in developing, renovating, acquiring and rehabilitating real estate assets as part of the investment basis. Costs incurred in making certain other improvements are also capitalized. During the land development and construction periods, we capitalize interest costs, real estate taxes and certain general and administrative costs of the personnel


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  performing development, renovations or rehabilitation up to the time the property is substantially complete. The determination and calculation of certain indirect costs requires estimates by the Company. Amounts included in capitalized costs are included in the investment basis of real estate assets.
 
  •  The company analyzes its investments in joint ventures to determine whether the joint venture should be accounted for under the equity method of accounting or consolidated into the Company’s financial statements based on standards set forth under Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R), Consolidation of Variable Interest Entities, EITF 96-16, Investor’s Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights and Statement of Position 78-9, Accounting for Investments in Real Estate Ventures. Based on the guidance set forth in these pronouncements, the Company does not consolidate any of its joint venture investments because either the joint venture has been determined not to be a variable interest entity or it has been determined the Company is not the primary beneficiary. The Company’s assessment of whether they are the primary beneficiary of a variable interest involves the consideration of various factors including the form of our ownership interest, the Company’s representation on the entity’s governing body, the size of the Company’s investment and future cash flows of the entity.
 
RESULTS OF OPERATIONS
 
Comparison of Year Ended December 31, 2006 to Year Ended December 31, 2005
 
The Company’s net income available to common stockholders was $90.0 million and $76.4 million for the years ended December 31, 2006 and 2005, respectively. Basic and diluted net income available to common stockholders were $2.04 and $2.04 per share, respectively, for the year ended December 31, 2006, and $1.80 and $1.80 per share, respectively, for the year ended December 31, 2005.
 
The tables below summarize the Company’s revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2006 and December 31, 2005. Same store properties are in-service properties owned prior to January 1, 2005. Acquired properties are properties that were acquired subsequent to December 31, 2004. Sold properties are properties that were sold subsequent to December 31, 2004. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after December 31, 2004 or acquisitions made prior to January 1, 2005 that were not placed in service as of December 31, 2004. These properties are placed in service as they reach stabilized occupancy (generally defined as properties that are 90% leased). Other revenues are derived from the operations of the Company’s maintenance company, fees earned from the Company’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Company’s maintenance company and other miscellaneous regional expenses.
 
The Company’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The Company’s future revenues and expenses may vary materially from historical rates.
 
At December 31, 2006 and 2005, the occupancy rates of the Company’s same store properties were 92.6% and 91.7%, respectively.
 


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    2006     2005     $ Change     % Change  
    ($ in 000’s)  
 
REVENUES
                               
Same Store Properties
  $ 257,525     $ 255,963     $ 1,562       0.6 %
Acquired Properties
    95,957       18,565       77,392       416.9 %
Sold Properties
    27,738       79,826       (52,088 )     (65.3 )%
Properties Not In-service
    22,217       18,789       3,428       18.2 %
Other
    30,048       19,118       10,930       57.2 %
                                 
      433,485       392,261       41,224       10.5 %
Discontinued Operations
    (37,449 )     (66,731 )     29,282       (43.9 )%
                                 
Total Revenues
  $ 396,036     $ 325,530     $ 70,506       21.7 %
                                 
 
Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $77.4 million due to the 252 industrial properties totaling approximately 30.6 million square feet of GLA acquired subsequent to December 31, 2004. Revenues from sold properties decreased $52.1 million due to the 221 industrial properties totaling approximately 29.9 million square feet of GLA sold subsequent to December 31, 2004. Revenues from properties not in service increased by approximately $3.4 million due primarily to an increase in properties placed in service during 2006 and 2005. Other revenues increased by approximately $10.9 million due primarily to an increase in joint venture fees, partially offset by a decrease in assignment fees.
 
                                 
    2006     2005     $ Change     % Change  
    ($ in 000’s)  
 
PROPERTY EXPENSES
                               
Same Store Properties
  $ 87,047     $ 85,220     $ 1,827       2.1 %
Acquired Properties
    31,380       5,688       25,692       451.7 %
Sold Properties
    8,270       34,959       (26,689 )     (76.3 )%
Properties Not In-service
    9,512       9,005       507       5.6 %
Other
    15,429       11,321       4,108       36.3 %
                                 
      151,638       146,193       5,445       3.7 %
Discontinued Operations
    (11,145 )     (22,155 )     11,010       (49.7 )%
                                 
Total Property Expenses
  $ 140,493     $ 124,038     $ 16,455       13.3 %
                                 
 
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses and expenses from build to suit development for sale. Property expenses from same store properties increased $1.8 million or 2.1% primarily due to an increase of $1.1 million in utility expense attributable to increases in gas and electric costs and an increase of $0.8 million in real estate tax expense. Property expenses from acquired properties increased by $25.7 million primarily due to properties acquired subsequent to December 31, 2004 and due to an increase in build-to-suit-for-sale expenses of $10.3 million. Property expenses from sold properties decreased $26.7 million due to properties sold subsequent to December 31, 2004, and also due to a decrease in build-to-suit-for-sale expenses of $15.6 million. Property expenses from properties not in service increased by approximately $0.5 million due primarily to an increase in properties placed in service during 2006 and 2005. Other expenses increased $4.1 million due primarily to increases in employee compensation.
 
General and administrative expense increased by approximately $21.7 million, or 38.9%, due primarily to increases in employee compensation related to compensation for new employees as well as an increase in incentive compensation.
 

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    2006     2005     $ Change     % Change  
    ($ in 000’s)  
 
DEPRECIATION AND OTHER AMORTIZATION
                               
Same Store Properties
  $ 82,896     $ 84,009     $ (1,113 )     (1.3 )%
Acquired Properties
    51,652       11,808       39,844       337.4 %
Sold Properties
    9,584       20,644       (11,060 )     (53.6 )%
Properties Not In-service and Other
    14,250       10,169       4,081       40.1 %
Corporate Furniture, Fixtures and Equipment
    1,913       1,371       542       39.5 %
                                 
      160,295       128,001       32,294       25.2 %
Discontinued Operations
    (14,389 )     (22,281 )     7,892       (35.4 )%
                                 
Total Depreciation and Other Amortization
  $ 145,906     $ 105,720     $ 40,186       38.0 %
                                 
 
Depreciation and other amortization for same store properties remained relatively unchanged. Depreciation and other amortization from acquired properties increased by $39.8 million due to properties acquired subsequent to December 31, 2004. Depreciation and other amortization from sold properties decreased by $11.1 million due to properties sold subsequent to December 31, 2004. Depreciation and other amortization for properties not in service and other increased $4.1 million due primarily to accelerated depreciation on one property in Columbus, OH which was razed during the year ended December 31, 2006. Amortization of corporate furniture, fixtures and equipment increased $0.5 million primarily due to expansion and improvement to corporate offices.
 
Interest income remained relatively unchanged.
 
In April 2006, the Company, through the Operating Partnership, entered into interest rate protection agreements which it designated as cash flow hedges. Each of the interest rate protection agreements had a notional value of $74.8 million, were effective from May 10, 2007 through May 10, 2012, and fixed the LIBOR rate at 5.42%. In September 2006, the interest rate protection agreements failed to qualify for hedge accounting since the actual debt issuance date was not within the range of dates the Company disclosed in its hedge designation. The Company, through the Operating Partnership, settled the interest rate protection agreements and paid the counterparties $2.9 million. In October 2005, the Company, through an entity wholly-owned by the Operating Partnership, entered into an interest rate protection agreement which hedged the change in value of a build-to-suit development project the Company was constructing. This interest rate protection agreement did not qualify for hedge accounting. The Company recognized a loss of $0.2 million related to this interest rate protection agreement for the year ended December 31, 2006. Both transactions are recognized in the mark-to-market/(loss) gain on settlement of interest rate protection agreements caption on the consolidated statement of operations.
 
The Company recognized a $0.6 million gain related to the settlement/mark-to-market of two interest rate protection agreements the Company entered into during 2005 in order to hedge the change in value of a build-to-suit development project as well as $0.2 million in deferred gain that was reclassified out of other comprehensive income relating to a settled interest rate protection agreement that no longer qualified for hedge accounting.
 
Interest expense increased by approximately $12.8 million due primarily to an increase in the weighted average debt balance outstanding for the year ended December 31, 2006 ($1,880.3 million) as compared to the year ended December 31, 2005 ($1,690.2 million), an increase in the weighted average interest rate for the year ended December 31, 2006 (6.72%) as compared to the year ended December 31, 2005 (6.63%), partially offset by an increase in capitalized interest for the year ended December 31, 2006 due to an increase in development activities.
 
Amortization of deferred financing costs increased by approximately $0.5 million, or 25.5%, due primarily to financing fees incurred associated with the amendment and restatement of the Company’s

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Unsecured Line of Credit I in August 2005, the issuance of the 2016 Notes in January 2006 and the issuance of the 2011 Exchangeable Notes in September 2006.
 
The Company recognized approximately $0.08 million of gain on the early retirement of debt for the year ended December 31, 2005, comprised of $0.05 million write-off of financing fees associated with the Company’s previous line of credit agreement which was amended and restated on August 23, 2005. The gain on early retirement of debt also includes a payment of $0.3 million of fees and a write-off of loan premium of $0.4 million on a $13.7 million mortgage loan which was assumed by the buyers of the related properties on July 13, 2005.
 
Equity in income of joint ventures increased by approximately $27.0 million due primarily to the Company’s economic share of gains and earn outs on property sales from the March 2005 Joint Venture and the September 2005 Joint Venture during the year ended December 31, 2006.
 
The income tax provision (included in continuing operations, discontinued operations and gain on sale) increased by $22.9 million, in the aggregate, due primarily to an increase in the gain on sale of real estate, joint venture fees, equity in net income of joint ventures, partially offset by an increase in interest expense and an increase in general and administrative expense within the Company’s taxable REIT subsidiary.
 
The $6.1 million gain on sale of real estate for the year ended December 31, 2006 resulted from the sale of several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $29.6 million gain on sale of real estate for the year ended December 31, 2005 resulted from the sale of 10 industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.
 
The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Company for the years ended December 31, 2006 and December 31, 2005.
 
                 
    Year Ended
 
    December 31,  
    2006     2005  
    ($ in 000’s)  
 
Total Revenues
  $ 37,449     $ 66,731  
Property Expenses
    (11,145 )     (22,155 )
Interest Expense
          (373 )
Depreciation and Amortization
    (14,389 )     (22,281 )
Provision for Income Taxes Allocable to Operations
    (2,629 )     (3,054 )
Gain on Sale of Real Estate
    213,442       132,139  
Provision for Income Taxes Allocable to Gain on Sale
    (47,511 )     (20,529 )
                 
Income from Discontinued Operations
  $ 175,217     $ 130,478  
                 
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2006 reflects the results of operations and gain on sale of real estate of $213.4 million relating to 125 industrial properties that were sold during the year ended December 31, 2006 and the results of operations of 25 properties that were identified as held for sale at December 31, 2006.
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2005 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2006, 25 properties that were identified as held for sale at December 31, 2006, the results of operations and gain on sale of real estate of $132.1 million from the 86 industrial properties which were sold during the year ended December 31, 2005.


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Comparison of Year Ended December 31, 2005 to Year Ended December 31, 2004
 
The Company’s net income available to common stockholders was $76.4 million and $88.2 million for the years ended December 31, 2005 and 2004, respectively. Basic and diluted net income available to common stockholders were $1.80 and $1.80 per share, respectively, for the year ended December 31, 2005, and $2.17 and $2.17 per share, respectively, for the year ended December 31, 2004.
 
The tables below summarize the Company’s revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2005 and December 31, 2004. Same store properties are in-service properties owned prior to January 1, 2004. Acquired properties are properties that were acquired subsequent to December 31, 2003. Sold properties are properties that were sold subsequent to December 31, 2003. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after December 31, 2003 or acquisitions made prior to January 1, 2004 that were not placed in service as of December 31, 2003. These properties are placed in service as they reach stabilized occupancy (generally defined as properties that are 90% leased). Other revenues are derived from the operations of the Company’s maintenance company, fees earned from the Company’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Company’s maintenance company and other miscellaneous regional expenses.
 
The Company’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The Company’s future revenues and expenses may vary materially from historical rates.
 
At December 31, 2005 and 2004, the occupancy rates of the Company’s same store properties were 90.1% and 89.5%, respectively.
 
                                 
    2005     2004     $ Change     % Change  
    ($ in 000’s)  
 
REVENUES
                               
Same Store Properties
  $ 251,046     $ 249,309     $ 1,737       0.7 %
Acquired Properties
    55,098       11,912       43,186       362.5 %
Sold Properties
    24,482       49,395       (24,913 )     (50.4 )%
Properties Not In-service
    42,199       23,617       18,582       78.7 %
Other
    19,436       8,880       10,556       118.9 %
                                 
      392,261       343,113       49,148       14.3 %
Discontinued Operations
    (66,731 )     (75,105 )     8,374       11.1 %
                                 
Total Revenues
  $ 325,530     $ 268,008     $ 57,522       21.5 %
                                 
 
Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $43.2 million due to the 240 industrial properties totaling approximately 29.3 million square feet of GLA acquired subsequent to December 31, 2003. Revenues from sold properties decreased $24.9 million due to the 193 industrial properties totaling approximately 20.2 million square feet of GLA sold subsequent to December 31, 2003. Revenues from properties not in service increased by approximately $18.6 million due primarily to build-to-suit-for-sale revenues of $16.2 million. Other revenues increased by approximately $10.6 million due primarily to an increase in joint venture fees due to new joint ventures and assignment fees.
 


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    2005     2004     $ Change     % Change  
    ($ in 000’s)  
 
PROPERTY EXPENSES
                               
Same Store Properties
  $ 83,636     $ 80,051     $ 3,585       4.5 %
Acquired Properties
    15,702       3,756       11,946       318.1 %
Sold Properties
    8,823       16,661       (7,838 )     (47.0 )%
Properties Not In-service
    26,161       8,739       17,422       199.4 %
Other
    11,871       6,543       5,328       81.4 %
                                 
      146,193       115,750       30,443       26.3 %
Discontinued Operations
    (22,155 )     (25,441 )     3,286       (12.9 )%
                                 
Total Property Expenses
  $ 124,038     $ 90,309     $ 33,729       37.3 %
                                 
 
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses and expenses from build to suit development for sale. Property expenses from same store properties increased $3.6 million or 4.5% primarily due to an increase of $0.9 million in utility expense attributable to increases in gas and electric costs, an increase of $1.3 million in repair and maintenance attributable to increases in snow removal expense and an increase of $0.9 million in real estate tax expense. Property expenses from acquired properties increased by $11.9 million due to properties acquired subsequent to December 31, 2003. Property expenses from sold properties decreased by $7.8 million due to properties sold subsequent to December 31, 2003. Property expenses from properties not in service increased by approximately $17.4 million due primarily to build-to-suit-for-sale costs of $15.6 million. Other expenses increased $5.3 million due primarily to increases in employee compensation.
 
General and administrative expense increased by approximately $16.2 million, or 41.0%, due primarily to increases in employee compensation related to compensation for new employees as well as an increase in incentive compensation.
 
                                 
    2005     2004     $ Change     % Change  
    ($ in 000’s)  
 
DEPRECIATION AND OTHER AMORTIZATION
                               
Same Store Properties
  $ 77,329     $ 72,016     $ 5,313       7.4 %
Acquired Properties
    29,278       3,797       25,481       671.1 %
Sold Properties
    7,795       13,713       (5,918 )     (43.2 )%
Properties Not In-service and Other
    12,228       9,740       2,488       25.5 %
Corporate Furniture, Fixtures and Equipment
    1,371       1,280       91       7.1 %
                                 
      128,001       100,546       27,455       27.3 %
Discontinued Operations
    (22,281 )     (20,607 )     (1,674 )     8.1 %
                                 
Total Depreciation and Other Amortization
  $ 105,720     $ 79,939     $ 25,781       32.3 %
                                 
 
The increase in depreciation and other amortization for same store properties is due to an acceleration of depreciation and amortization on tenant improvements and leasing commissions for tenants who terminated leases early, an acceleration of amortization on in-place lease values related to leases for which the tenants did not renew and a net increase in leasing commissions and tenant improvements paid in 2005 and 2004. Depreciation and other amortization from acquired properties increased by $25.5 million due to properties acquired subsequent to December 31, 2003. Depreciation and other amortization from sold properties decreased by $5.9 million due to properties sold subsequent to December 31, 2003. Depreciation and other amortization for properties not in service and other increased $2.5 million due to developments substantially completed in 2004 and 2005. Amortization of corporate furniture, fixtures and equipment remained relatively unchanged.

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Interest income decreased by approximately $2.1 million due primarily to a decrease in the average mortgage loans receivable outstanding during the year ended December 31, 2005, as compared to the year ended December 31, 2004.
 
The Company recognized a $0.6 million gain related to the settlement/mark-to-market of two interest rate protection agreements that the Company entered into during 2005 in order to hedge the change in value of a build to suit development project as well as $0.2 million in deferred gain that was reclassified out of other comprehensive income relating to a settled interest rate protection agreement that no longer qualified for hedge accounting.
 
In March 2004, the Company, through the Operating Partnership, entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73.5 million. In May 2004, the Company reduced the projected amount of the future debt offering and settled $24.5 million of this interest rate protection agreement for proceeds in the amount of $1.5 million which is recognized in net income for the year ended December 31, 2004. In November 2004, the Company settled an interest rate protection agreement for $0.3 million that had been designated as a cash flow hedge of $50.0 million of a forecasted debt issuance. Hedge ineffectiveness in the amount of $0.1 million, due to a mismatch in the forecasted debt issuance dates, was recognized in net income. The remaining $0.2 million was included in other comprehensive income and was reclassified into net income for the year ended December 31, 2005 as the hedge no longer qualified for hedge accounting.
 
Interest expense increased by approximately $9.7 million due primarily to an increase in the weighted average debt balance outstanding for the year ended December 31, 2005 ($1,690.2 million) as compared to the year ended December 31, 2004 ($1,522.9 million), an increase in the weighted average interest rate for the year ended December 31, 2005 (6.63%) as compared to the year ended December 31, 2004 (6.60%), partially offset by an increase in capitalized interest for the year ended December 31, 2005 due to an increase in development activities.
 
Amortization of deferred financing costs remained relatively unchanged.
 
The Company recognized a $0.08 million gain on the early retirement of debt for the year ended December 31, 2005. This includes $0.05 million write-off of financing fees associated with the Company’s previous line of credit agreement which was amended and restated on August 23, 2005. The gain on early retirement of debt also includes a payment of $0.3 million of fees and a write-off of loan premium of $0.4 million on a $13.7 million mortgage loan which was assumed by the buyers of the related properties on July 13, 2005. The loss on early retirement of debt of approximately $0.5 million for the year ended December 31, 2004 is comprised of the write-off of unamortized deferred financing costs, a loan premium and a prepayment penalty related to the early pay off and retirement of a $4.8 million mortgage loan.
 
Equity in income of joint ventures decreased by approximately $33.6 million due primarily to the Company’s allocation of gain and earn out from the sale of all the properties in the December 2001 Joint Venture and the Company’s recognition of the deferred gain on its initial sale of certain properties to the December 2001 Joint Venture recognized in the year ended December 31, 2004.
 
The income tax provision (included in continuing operations, discontinued operations and gain on sale) increased by $12.0 million, in the aggregate, due primarily to an increase in the gain on sale of real estate and joint venture fees partially offset by an increase in general and administrative expense and interest expense in the Company’s taxable REIT subsidiary.
 
The $29.6 million gain on sale of real estate for the year ended December 31, 2005 resulted from the sale of ten industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $16.8 million gain on sale of real estate for the year ended December 31, 2004 resulted from the sale of five industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.


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The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Company for the years ended December 31, 2005 and December 31, 2004.
 
                 
    Year Ended
 
    December 31,  
    2005     2004  
    ($ in 000’s)  
 
Total Revenues
  $ 66,731     $ 75,105  
Property Expenses
    (22,155 )     (25,441 )
Interest Expense
    (373 )     (609 )
Depreciation and Amortization
    (22,281 )     (20,607 )
Provision for Income Taxes Allocable to Operations
    (3,054 )     (2,346 )
Gain on Sale of Real Estate
    132,139       88,245  
Provision for Income Taxes Allocable to Gain on Sale
    (20,529 )     (8,659 )
                 
Income from Discontinued Operations
  $ 130,478     $ 105,688  
                 
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2005 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2006, the results of operations and gain on sale of real estate of $132.1 million relating to 86 industrial properties that were sold during the year ended December 31, 2005 and the results of operations of 25 properties that were identified as held for sale at December 31, 2006.
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2004 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2006 and 2005, 25 properties that were identified as held for sale at December 31, 2006, the results of operations of industrial properties that were sold during the year ended December 31, 2004, as well as the gain on sale of real estate of $88.2 million from the 92 industrial properties which were sold during the year ended December 31, 2004.
 
LIQUIDITY AND CAPITAL RESOURCES
 
At December 31, 2006, the Company’s cash and cash equivalents was approximately $16.1 million and restricted cash was approximately $16.0 million. Restricted cash is primarily comprised of gross proceeds from the sales of certain industrial properties. These sales proceeds will be disbursed as the Company exchanges industrial properties under Section 1031 of the Internal Revenue Code.
 
The Company has considered its short-term (one year or less) liquidity needs and the adequacy of its estimated cash flow from operations and other expected liquidity sources to meet these needs. The Company’s 7.6% Notes due 2007, with an aggregate principal amount of $150.0 million, are due on May 15, 2007. The Company expects to satisfy the maturity of the 2007 Notes with the issuance of additional debt. With the exception of the 2007 Notes, the Company believes that its principal short-term liquidity needs are to fund normal recurring expenses, debt service requirements and the minimum distribution required to maintain the Company’s REIT qualification under the Code. The Company anticipates that these needs will be met with cash flows provided by operating activities.
 
The Company expects to meet long-term (greater than one year) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through the disposition of select assets, the issuance of long-term unsecured indebtedness and the issuance of additional equity securities. As of December 31, 2006 and February 22, 2007, $215.4 million of common stock, preferred stock and depositary shares and approximately $300.0 million of debt securities were registered and unissued under the Securities Act of 1933, as amended. The Company also may finance the development or acquisition of additional properties through borrowings under the Unsecured Line of Credit I. At December 31, 2006, borrowings under the Unsecured Line of Credit I bore interest at a weighted average interest rate of 6.058%. The Unsecured Line of Credit bear interest at a floating rate of LIBOR plus .625% or the Prime Rate, at the Company’s election. As of February 22, 2007, the Company had


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approximately $210.6 million available in additional borrowings under the Unsecured Line of Credit I. The Unsecured Line of Credit I contains certain financial covenants relating to debt service coverage, market value net worth, dividend payout ratio and total funded indebtedness. The Company’s access to borrowings may be limited if it fails to meet any of these covenants. Also, the Company’s borrowing rate on its Unsecured Line of Credit I may increase in the event of a downgrade on the Company’s unsecured notes by the rating agencies.
 
The Company currently has credit ratings from Standard & Poor’s, Moody’s and Fitch Ratings of BBB/Baa2/BBB, respectively. The Company’s goal is to maintain its existing credit ratings. In the event of a downgrade, management believes the Company would continue to have access to sufficient capital; however, the Company’s cost of borrowing would increase and its ability to access certain financial markets may be limited.
 
Year Ended December 31, 2006
 
Net cash provided by operating activities of approximately $59.6 million for the year ended December 31, 2006 was comprised primarily of net income before minority interest of approximately $125.6 million and net distributions from joint ventures of $1.0 million, offset by the net change in operating assets and liabilities of approximately $4.6 million and adjustments for non-cash items of approximately $62.4 million. The adjustments for the non-cash items of approximately $62.4 million are primarily comprised of the gain on sale of real estate of approximately $219.5 million and the effect of the straight-lining of rental income of approximately $10.2 million, offset by depreciation and amortization of approximately $165.0 million and the provision for bad debt of $2.3 million.
 
Net cash provided by investing activities of approximately $129.1 million for the year ended December 31, 2006 was comprised primarily of the net proceeds from the sale of real estate, the repayment of mortgage loans receivable, decrease in restricted cash that is held by an intermediary for Section 1031 exchange purposes, and distributions from the Company’s industrial real estate joint ventures, partially offset by the acquisition of real estate, development of real estate, capital expenditures related to the expansion and improvement of existing real estate, contributions to, and investments in, the Company’s industrial real estate joint ventures.
 
During the year ended December 31, 2006, the Company acquired 91 industrial properties comprising approximately 10.5 million square feet of GLA and several land parcels. The purchase price of these acquisitions totaled approximately $610.7 million, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. The Company also substantially completed the development of 15 industrial properties comprising approximately 5.0 million square feet of GLA at an estimated cost of approximately $188.6 million.
 
The Company, through wholly-owned limited liability companies in which the Operating Partnership is the sole member, contributed approximately $32.8 million to, and received distributions of approximately $51.4 million from, the Company’s industrial real estate joint ventures. As of December 31, 2006, the Company’s industrial real estate joint ventures owned 255 industrial properties comprising approximately 26.0 million square feet of GLA.
 
During the year ended December 31, 2006, the Company sold 125 industrial properties comprising approximately 17.1 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 125 industrial properties and several land parcels were approximately $946.8 million.
 
Net cash used in financing activities of approximately $180.8 million for the year ended December 31, 2006 was derived primarily by the redemption of preferred stock, common and preferred stock dividends and unit distributions, net repayments under the Company’s Unsecured Lines of Credit, the repayments of senior unsecured debt, the repurchase of restricted stock from employees of the Company to pay for withholding taxes on the vesting of restricted stock and repayments on mortgage loans payable, partially offset by the net


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proceeds from the issuance of senior unsecured debt and preferred stock and the net proceeds from the exercise of stock options.
 
For the year ended December 31, 2006, certain directors and employees of the Company exercised 125,780 non-qualified employee stock options. Net proceeds to the Company were approximately $3.7 million.
 
During the year ended December 31, 2006, the Company awarded 303,142 shares of restricted common stock to certain employees and 16,232 shares of restricted common stock to certain directors. These shares of restricted common stock had a fair value of approximately $12.2 million on the date of grant. The restricted common stock vests over a period of three years for awards granted to employees and generally over a period of five years for awards granted to directors. Compensation expense will be charged to earnings over the respective vesting periods.
 
On January 10, 2006, the Company, through the Operating Partnership, paid off and retired the 2005 Unsecured Line of Credit II, which had a borrowing capacity of $125.0 million and matured on March 15, 2006.
 
On January 10, 2006, the Company, through the Operating Partnership, issued the 2016 Notes. Net of offering costs, the Company received net proceeds of $197.5 million from the issuance of 2016 Notes. In December 2005, the Company also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Company settled the interest rate protection agreements on January 9, 2006 for a payment of approximately $1.7 million which is included in other comprehensive income.
 
On January 13, 2006, the Company redeemed the Series I Preferred Stock for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $0.4 million. The Operating Partnership also redeemed the Series I Preferred Units.
 
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $0.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share.
 
On August 21, 2006, the Company issued 2,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series K Flexible Cumulative Redeemable Preferred Stock (the “Series K Preferred Stock”), at an initial offering price of $25.00 per Depositary Share.
 
On September 25, 2006, the Company, through the Operating Partnership issued $175.0 million of senior unsecured debt which bears interest at 4.625% (the “Exchangeable Notes”). Under certain circumstances, the holders of the Exchangeable Notes may exchange their notes for cash up to their principal amount and shares of the Company’s common stock for the remainder of the exchange value in excess of the principal amount. The Company also granted the initial purchasers of the 2011 Exchangeable Notes an option exercisable until October 4, 2006 to purchase up to an additional $25,000 principal amount of the 2011 Exchangeable Notes to cover over-allotments, if any (the “Over-allotment Option”). On October 3, 2006, the initial purchasers of the 2011 Exchangeable Notes exercised their Over-Allotment Option with respect to $25,000 in principal amount of the 2011 Exchangeable Notes. With the exercise of the Over-Allotment Option, the aggregate principal amount of 2011 Exchangeable Notes issued and outstanding is $200,000. In connection with the offering of the Exchangeable Notes, the Operating Partnership entered into capped call transactions in order to increase the effective exchange price. The aggregate cost of the capped call transactions was approximately $6.8 million.


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Contractual Obligations and Commitments
 
The following table lists our contractual obligations and commitments as of December 31, 2006 (In thousands):
 
                                         
          Payments Due by Period  
          Less Than
                   
    Total     1 Year     1-3 Years     3-5 Years     Over 5 Years  
 
Operating and Ground Leases*
  $ 41,649     $ 2,561     $ 4,417     $ 3,504     $ 31,167  
Real Estate Development*
    101,050       101,050                    
Long-term Debt
    1,847,077       152,884       343,112       422,905       928,176  
Interest Expense on Long-Term Debt*
    921,160       100,967       189,078       162,359       468,756  
                                         
Total
  $ 2,910,936     $ 357,462     $ 536,607     $ 588,768     $ 1,428,099  
                                         
 
 
* Not on balance sheet.
 
Off-Balance Sheet Arrangements
 
Letters of credit are issued in most cases as pledges to governmental entities for development purposes or to support purchase obligations. At December 31, 2006, the Company has $9.0 million in outstanding letters of credit, none of which are reflected as liabilities on the Company’s balance sheet. The Company has no other off-balance sheet arrangements other than those disclosed on the Contractual Obligations and Commitments table above.
 
Environmental
 
The Company incurred environmental costs of approximately $0.6 million and $0.4 million in 2006 and 2005, respectively. The Company estimates 2007 costs of approximately $0.7 million. The Company estimates that the aggregate cost which needs to be expended in 2007 and beyond with regard to currently identified environmental issues will not exceed approximately $2.0 million, a substantial amount of which will be the primary responsibility of the tenant, the seller to the Company or another responsible party.
 
Inflation
 
For the last several years, inflation has not had a significant impact on the Company because of the relatively low inflation rates in the Company’s markets of operation. Most of the Company’s leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation. In addition, many of the outstanding leases expire within six years which may enable the Company to replace existing leases with new leases at higher base rentals if rents of existing leases are below the then-existing market rate.
 
Market Risk
 
The following discussion about the Company’s 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.
 
This 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 the Company at December 31, 2006 that are sensitive to changes in the interest rates. While this analysis may have some use as a benchmark, it should not be viewed as a forecast.


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In the normal course of business, the Company also faces 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 December 31, 2006, $1,627.7 million (approximately 88.7% of total debt at December 31, 2006) of the Company’s debt was fixed rate debt and $207.0 million (approximately 11.3% of total debt at December 31, 2006) was variable rate debt. Currently, the Company does 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 earnings or cash flows of the Company. Conversely, for variable rate debt, changes in the interest rate generally do not impact the fair value of the debt, but would affect the Company’s 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 the Company until the Company is required to refinance such debt. See Note 5 to the consolidated financial statements for a discussion of the maturity dates of the Company’s various fixed rate debt.
 
Based upon the amount of variable rate debt outstanding at December 31, 2006, a 10% increase or decrease in the interest rate on the Company’s variable rate debt would decrease or increase, respectively, future net income and cash flows by approximately $1.3 million per year. A 10% increase in interest rates would decrease the fair value of the fixed rate debt at December 31, 2006 by approximately $55.2 million to $1,659.9 million. A 10% decrease in interest rates would increase the fair value of the fixed rate debt at December 31, 2006 by approximately $59.1 million to $1,774.2 million.
 
The use of derivative financial instruments allows the Company to manage risks of increases in interest rates with respect to the effect these fluctuations would have on our earnings and cash flows. As of December 31, 2006, we had two outstanding interest rate swaps with aggregate notional amount of $145.8 million which fix the interest rate on a forecasted offering of debt.
 
Subsequent Events
 
On January 2, 2007, the Company paid fourth quarter 2006 dividends of $53.91 per share ($0.5391 per Depositary Share) on its Series C Preferred Stock, totaling, in the aggregate, approximately $1.1 million; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate, approximately $2.7 million; and a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $0.9 million.
 
On January 22, 2007, the Company and the Operating Partnership paid a fourth quarter 2006 distribution of $.7100 per share, totaling approximately $36.6 million.
 
On February 28, 2007, the Company declared a first quarter 2007 distribution of $.7100 per common share/unit on its common stock/units which is payable on April 16, 2007. The Company also declared first quarter 2007 dividends of $53.91 per share ($0.5391 per Depositary Share), on its Series C Preferred Stock, totaling, in the aggregate, approximately $1.1 million, which is payable on April 2, 2007; semi-annual dividends of $3,118.00 per share ($31.1800 per Depositary Share) on its Series F Preferred Stock, totaling, in the aggregate, approximately $1.6 million, which is payable on April 2, 2007; semi-annual dividends of $3,618.00 per share ($36.1800 per Depositary Share) on its Series G Preferred Stock, totaling, in the aggregate, approximately $0.9 million, which is payable on April 2, 2007; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate, approximately $2.7, which is payable on April 2, 2007; and a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $0.9 million, which is payable on April 2, 2007.
 
From January 1, 2007 to February 22, 2007, the Company awarded 1,598 shares of restricted common stock to certain Directors. These shares of restricted common stock had a fair value of approximately $0.1 million on the date of grant. The restricted common stock vests over a period of five years. Compensation expense will be charged to earnings over the respective vesting period.


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From January 1, 2007 to February 22, 2007, the Company acquired 55 industrial properties (including 41 properties in connection with the purchase of the 90% equity interest from the institutional investor in the September 1998 Joint Venture on January 31, 2007) and several land parcels for a total estimated investment of approximately $135.9 million. The Company also sold 14 industrial properties for approximately $74.4 million of gross proceeds during this period.
 
Related Party Transactions
 
The Company periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of Michael W. Brennan, the President and Chief Executive Officer and a director of the Company, is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2006, 2005 and 2004 this relative received approximately $0.3, $0.3, and $0.03 million in brokerage commissions.
 
Other
 
In February 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 155, “Accounting for Certain Hybrid Financial Instruments” which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets.” This statement:
 
a. Permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation;
 
b. Clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133;
 
c. Establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation;
 
d. Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and
 
e. Amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.
 
This Statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets” which amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, (“FAS 140”) with respect to the accounting for separately recognized servicing assets and servicing liabilities. This statement was issued to simplify the accounting for servicing rights and reduce the volatility that results from the use of different measurements attributes for servicing rights and the related financial instruments used to economically hedge risks associated with those servicing rights. The statement clarifies when to separately account for servicing rights, requires separately recognized servicing rights to be initially measured at fair value, and provides the option to subsequently account for those servicing rights at either fair value or under the amortization method previously required under FAS 140. An entity should adopt this statement as of the beginning of its first fiscal year that begins after September 15, 2006. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.


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In June 2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with SFAS No. 109, “Accounting for Income Taxes.” The evaluation of a tax position in accordance with FIN 48 is a two-step process. First, the Company determines whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. Second, a tax position that meets the more-likely-than-not threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent reporting period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent reporting period in which the threshold is no longer met. The Company is required to apply the guidance of FIN 48 beginning January 1, 2007. The Company is currently evaluating what impact the application of FIN 48 will have on the consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” which establishes a common definition of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In December 2006, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regarding EITF 00-19-2, “Accounting for Registration Payment Arrangements.” The guidance specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with SFAS No. 5, “Accounting for Contingencies”. The guidance is effective for periods beginning after December 15, 2006. EITF 00-19-2 is not expected to impact the Company’s results of operations, financial position, or liquidity.
 
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk
 
Response to this item is included in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” above.
 
Item 8.   Financial Statements and Supplementary Data
 
See Index to Financial Statements and Financial Statement Schedule on page 55 included in Item 15.
 
Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
None.
 
Item 9A.   Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures
 
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s periodic reports pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosure.
 
The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based upon this evaluation,


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the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.
 
Management’s Report on Internal Control Over Financial Reporting
 
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
 
Management of the Company has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006. In making its assessment of internal control over financial reporting, management used the criteria described in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
 
Management of the Company has concluded that, as of December 31, 2006, the Company’s internal control over financial reporting was effective.
 
Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein within Item 15. See Report of Independent Registered Public Accounting Firm on page 56-57.
 
Changes in Internal Control Over Financial Reporting
 
There has been no change in the Company’s internal control over financial reporting that occurred during the fourth quarter of 2006 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
Item 9B.   Other Information
 
None.
 
PART III
 
Item 10, 11, 12, 13 and 14.   Directors, Executive Officers and Corporate Governance, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships and Related Transactions and Director Independence and Principal Accountant Fees and Services
 
The information required by Item 10, Item 11, Item 12, Item 13 and Item 14 is hereby incorporated or furnished, solely to the extent required by such item, from the Company’s definitive proxy statement, which is expected to be filed with the SEC no later than 120 days after the end of the Company’s fiscal year. Information from the Company’s definitive proxy statement shall not be deemed to be “filed” or “soliciting material,” or subject to liability for purposes of Section 18 of the Securities Exchange Act of 1934 to the maximum extent permitted under the Exchange Act.
 
PART IV
 
Item 15.   Exhibits and Financial Statement Schedules
 
(a) Financial Statements, Financial Statement Schedule and Exhibits
 
(1 & 2) See Index to Financial Statements and Financial Statement Schedule on page 55.


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(3) Exhibits:
 
         
Exhibits
 
Description
 
  3 .1   Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
  3 .2   Amended and Restated Bylaws of the Company, dated September 4, 1997 (incorporated by reference to Exhibit 1 of the Company’s Form 8-K, dated September 4, 1997, as filed on September 29, 1997, File No. 1-13102)
  3 .3   Articles of Amendment to the Company’s Articles of Incorporation, dated June 20, 1994 (incorporated by reference to Exhibit 3.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
  3 .4   Articles of Amendment to the Company’s Articles of Incorporation, dated May 31, 1996 (incorporated by reference to Exhibit 3.3 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
  3 .5   Articles Supplementary relating to the Company’s 85/8% Series C Cumulative Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company dated June 6, 1997, File No. 1-13102)
  3 .6   Articles Supplementary relating to the Company’s 6.236% Series F Flexible Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 3.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  3 .7   Articles Supplementary relating to the Company’s 7.236% Series G Flexible Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 3.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  3 .8   Articles Supplementary relating to the Company’s Junior Participating Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.10 of Form S-3 of the Company and First Industrial, L.P. dated September 24, 1997, Registration No. 333-29879)
  3 .9   Articles Supplementary relating to the Company’s 7.25% Series J Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company filed January 17, 2006, File No. 1-13102)
  3 .10   Articles Supplementary relating to the Company’s 7.25% Series K Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 1.6 of the Form 8-A of the Company, as filed on August 18, 2006, File No. 1-13102)
  4 .1   Deposit Agreement, dated June 6, 1997, by and among the Company, First Chicago Trust Company of New York and holders from time to time of Series C Depositary Receipts (incorporated by reference to Exhibit 4.2 of the Form 8-K of the Company, dated June 6, 1997, File No. 1-13102)
  4 .2   Deposit Agreement, dated May 27, 2004, by and among the Company, EquiServe Inc. and EquiServe Trust Company, N.A. and holders from time to time of Series F Depositary Receipts (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  4 .3   Deposit Agreement, dated May 27, 2004, by and among the Company, EquiServe Inc. and EquiServe Trust Company, N.A. and holders from time to time of Series G Depositary Receipts (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  4 .4   Remarketing Agreement, dated May 27, 2004, relating to 50,000 depositary shares, each representing 1/100 of a share of the Series F Flexible Cumulative Redeemable Preferred Stock, by and among Lehman Brothers Inc., the Company and First Industrial, L.P. (incorporated by reference to Exhibit 1.2 of the Form 8-K of the Company, dated May 27, 2004, File No. 1-13102)
  4 .5   Remarketing Agreement, dated May 27, 2004, relating to 25,000 depositary shares, each representing 1/100 of a share of the Series G Flexible Cumulative Redeemable Preferred Stock, by and among Lehman Brothers Inc., the Company and First Industrial, L.P. (incorporated by reference to Exhibit 1.3 of the Form 8-K of the Company, dated May 27, 2004, File No. 1-13102)


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Exhibits
 
Description
 
  4 .6   Deposit Agreement, dated January 13, 2006, by and among the Company, Computershare Shareholder Services, Inc. and Computershare Trust Company, N.A., as depositary, and holders from time to time of Series J Depositary Receipts (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company, filed January 17, 2006, File No. 1-13102)
  4 .7   Deposit Agreement, dated August 21, 2006, by and among the Company, Computershare Shareholder Services, Inc. and Computershare Trust Company, N.A., as depositary, and holders from time to time of Series K Depositary Receipts (incorporated by reference to Exhibit 1.7 of the Form 8-A of the Company, as filed on August 18, 2006, File No. 1-13102)
  4 .8   Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
  4 .9   Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
  4 .10   Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011(incorporated by reference to Exhibit 4.4 of the Form 10-Q of First Industrial, L.P. for the fiscal quarter ended March 31, 1997, File No. 333-21873)
  4 .11   Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 of Form 8-K of First Industrial, L.P., dated November 3, 1997, as filed November 3, 1997, File No. 333-21873)
  4 .12   7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 1-13102)
  4 .13   7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 1-13102)
  4 .14   Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of the Form 10-Q of First Industrial, L.P. for the fiscal quarter ended March 31, 1997, File No. 333-21873)
  4 .15   Rights Agreement, dated as of September 16, 1997, between the Company and First Chicago Trust Company of New York, as Rights Agent (incorporated by reference to Exhibit 99.1 of Form 8-A12B as filed on September 24, 1997, File No. 1-13102)
  4 .16   7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of First Industrial, L.P. dated July 15, 1998, File No. 333-21873)
  4 .17   Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2008 (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P. dated July 15, 1998, File No. 333-21873)
  4 .18   7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of First Industrial, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
  4 .19   Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011 (incorporated by reference to Exhibit 4.16 of First Industrial, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)

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Exhibits
 
Description
 
  4 .20   Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of First Industrial, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
  4 .21   Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P. dated April 4, 2002, File No. 333-21873)
  4 .22   Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of First Industrial, L.P., dated April 4, 2002, File No. 333-21873)
  4 .23   Form of 7.75% Notes due 2032 in the principal amount of $50.0 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of the Form 8-K of First Industrial, L.P., dated April 4, 2002, File No. 333-21873)
  4 .24   Supplemental Indenture No. 8, dated as of May 17, 2004, relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P., dated May 27, 2004, File No. 333-21873)
  4 .25   Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P., dated June 17, 2004, File No. 333-21873)
  4 .26   Amendment No. 1, dated as of February 25, 2004, to Rights Agreement, dated as of September 16, 1997, between the Company and Equiserve Trust Company, N.A. (f/k/a First Chicago Trust Company of New York), as Rights Agent (incorporated by reference to Exhibit 4.23 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-13102)
  4 .27   Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company, filed January 11, 2006, File No. 1-13102)
  4 .28   Indenture dated as of September 25, 2006 among First Industrial, L.P., as issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K of First Industrial, L.P. dated September 25, 2006, File No. 333-21873)
  4 .29   Form of 4.625% Exchangeable Senior Note due 2011 (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K of First Industrial, L.P. dated September 25, 2006, File No. 333-21873)
  4 .30   Registration Rights Agreement dated September 25, 2006 among the Company, First Industrial, L.P. and the Initial Purchasers named therein (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K of First Industrial, L.P. dated September 25, 2006, File No. 333-21873)
  10 .1   Eleventh Amended and Restated Partnership Agreement of First Industrial, L.P. dated August 21, 2006 (the “LP Agreement”) (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company, filed August 22, 2006, File No. 1-13102)
  10 .2   Sales Agreement by and among the Company, First Industrial, L.P. and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of the Form 8-K of the Company, dated September 16, 2004, File No. 1-13102)
  10 .3   Registration Rights Agreement, dated April 29, 1998, relating to the Company’s Common Stock, par value $0.01 per share, between the Company, the Operating Partnership and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company dated May 1, 1998, File No. 1-13102)

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Exhibits
 
Description
 
  10 .4   Non-Competition Agreement between Jay H. Shidler and First Industrial Realty Trust, Inc. (incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1994, File No. 1-13102)
  10 .5   Form of Non-Competition Agreement between each of Michael T. Tomasz, Paul T. Lambert, Michael J. Havala, Michael W. Brennan, Michael G. Damone, Duane H. Lund, and Johannson L. Yap and First Industrial Realty Trust, Inc. (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-11, File No. 33-77804)
  10 .6†   1994 Stock Incentive Plan (incorporated by reference to Exhibit 10.37 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1994, File No. 1-13102)
  10 .7†   First Industrial Realty Trust, Inc. Deferred Income Plan (incorporated by reference to Exhibit 10 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1996, File No. 1-13102)
  10 .8   Contribution Agreement, dated March 19, 1996, among FR Acquisitions, Inc. and the parties listed on the signature pages thereto (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company, dated April 3, 1996, File No. 1-13102)
  10 .9   Contribution Agreement, dated January 31, 1997, among FR Acquisitions, Inc. and the parties listed on the signature pages thereto (incorporated by reference to Exhibit 10.58 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1996, File No. 1-13102)
  10 .10†   Employment Agreement, dated June 21, 2005, between the Company and Michael W. Brennan (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed June 24, 2005 File No. 1-13102)
  10 .11†   1997 Stock Incentive Plan (incorporated by reference to Exhibit 10.62 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1996, File No. 1-13102)
  10 .12†   2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.34 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, File No. 1-13102)
  10 .13†   Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Michael J. Havala (incorporated by reference to Exhibit 10.1 of the Form 10-Q of First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
  10 .14†   Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Johannson L. Yap (incorporated by reference to Exhibit 10.2 of the Form 10-Q of First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
  10 .15†   Employment Agreement, dated March 25, 2002, between First Industrial Realty Trust, Inc. and David P. Draft (incorporated by reference to Exhibit 10.3 of the Form 10-Q of First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
  10 .16†   Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  10 .17†   Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.4 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  10 .18†   Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.5 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  10 .19†   Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.6 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  10 .20   Fourth Amended and Restated Unsecured Revolving Credit Agreement, dated as of August 23, 2005, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase Bank, NA and certain other banks (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed August 25, 2005, File No. 1-13102)
  10 .21†   Form of Restricted Stock Agreement (Director’s Annual Retainer) (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed May 19, 2006, File No. 1-13102)
  10 .22†   Amendment No. 1 to the Company’s 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2006, File No. 1-13102)

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Exhibits
 
Description
 
  10 .23†   Summary of Managing Director 2006 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed August 7, 2006, File No. 1-13102)
  10 .24†   Separation Agreement between Robert Cutlip and First Industrial Realty Trust, Inc. dated March 13, 2006 (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed March 16, 2006, File No. 1-13102)
  12 .1*   Computation of ratios of earnings to fixed charges and preferred stock dividends of the Company
  21 .1*   Subsidiaries of the Registrant
  23 *   Consent of PricewaterhouseCoopers LLP
  31 .1*   Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
  31 .2*   Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
  32 **   Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes — Oxley Act of 2002
 
 
Filed herewith.
 
** Furnished herewith.
 
Indicates a compensatory plan or arrangement contemplated by Item 15 a (3) of Form 10-K.

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EXHIBIT INDEX
 
         
Exhibits
 
Description
 
  3 .1   Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
  3 .2   Amended and Restated Bylaws of the Company, dated September 4, 1997 (incorporated by reference to Exhibit 1 of the Company’s Form 8-K, dated September 4, 1997, as filed on September 29, 1997, File No. 1-13102)
  3 .3   Articles of Amendment to the Company’s Articles of Incorporation, dated June 20, 1994 (incorporated by reference to Exhibit 3.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
  3 .4   Articles of Amendment to the Company’s Articles of Incorporation, dated May 31, 1996 (incorporated by reference to Exhibit 3.3 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
  3 .5   Articles Supplementary relating to the Company’s 85/8% Series C Cumulative Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company dated June 6, 1997, File No. 1-13102)
  3 .6   Articles Supplementary relating to the Company’s 6.236% Series F Flexible Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 3.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  3 .7   Articles Supplementary relating to the Company’s 7.236% Series G Flexible Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 3.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  3 .8   Articles Supplementary relating to the Company’s Junior Participating Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.10 of Form S-3 of the Company and First Industrial, L.P. dated September 24, 1997, Registration No. 333-29879)
  3 .9   Articles Supplementary relating to the Company’s 7.25% Series J Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company filed January 17, 2006, File No. 1-13102)
  3 .10   Articles Supplementary relating to the Company’s 7.25% Series K Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 1.6 of the Form 8-A of the Company, as filed on August 18, 2006, File No. 1-13102)
  4 .1   Deposit Agreement, dated June 6, 1997, by and among the Company, First Chicago Trust Company of New York and holders from time to time of Series C Depositary Receipts (incorporated by reference to Exhibit 4.2 of the Form 8-K of the Company, dated June 6, 1997, File No. 1-13102)
  4 .2   Deposit Agreement, dated May 27, 2004, by and among the Company, EquiServe Inc. and EquiServe Trust Company, N.A. and holders from time to time of Series F Depositary Receipts (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  4 .3   Deposit Agreement, dated May 27, 2004, by and among the Company, EquiServe Inc. and EquiServe Trust Company, N.A. and holders from time to time of Series G Depositary Receipts (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  4 .4   Remarketing Agreement, dated May 27, 2004, relating to 50,000 depositary shares, each representing 1/100 of a share of the Series F Flexible Cumulative Redeemable Preferred Stock, by and among Lehman Brothers Inc., the Company and First Industrial, L.P. (incorporated by reference to Exhibit 1.2 of the Form 8-K of the Company, dated May 27, 2004, File No. 1-13102)
  4 .5   Remarketing Agreement, dated May 27, 2004, relating to 25,000 depositary shares, each representing 1/100 of a share of the Series G Flexible Cumulative Redeemable Preferred Stock, by and among Lehman Brothers Inc., the Company and First Industrial, L.P. (incorporated by reference to Exhibit 1.3 of the Form 8-K of the Company, dated May 27, 2004, File No. 1-13102)


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Exhibits
 
Description
 
  4 .6   Deposit Agreement, dated January 13, 2006, by and among the Company, Computershare Shareholder Services, Inc. and Computershare Trust Company, N.A., as depositary, and holders from time to time of Series J Depositary Receipts (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company, filed January 17, 2006, File No. 1-13102)
  4 .7   Deposit Agreement, dated August 21, 2006, by and among the Company, Computershare Shareholder Services, Inc. and Computershare Trust Company, N.A., as depositary, and holders from time to time of Series K Depositary Receipts (incorporated by reference to Exhibit 1.7 of the Form 8-A of the Company, as filed on August 18, 2006, File No. 1-13102)
  4 .8   Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
  4 .9   Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
  4 .10   Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011(incorporated by reference to Exhibit 4.4 of the Form 10-Q of First Industrial, L.P. for the fiscal quarter ended March 31, 1997, File No. 333-21873)
  4 .11   Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 of Form 8-K of First Industrial, L.P., dated November 3, 1997, as filed November 3, 1997, File No. 333-21873)
  4 .12   7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 1-13102)
  4 .13   7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1997, File No. 1-13102)
  4 .14   Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of the Form 10-Q of First Industrial, L.P. for the fiscal quarter ended March 31, 1997, File No. 333-21873)
  4 .15   Rights Agreement, dated as of September 16, 1997, between the Company and First Chicago Trust Company of New York, as Rights Agent (incorporated by reference to Exhibit 99.1 of Form 8-A12B as filed on September 24, 1997, File No. 1-13102)
  4 .16   7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of First Industrial, L.P. dated July 15, 1998, File No. 333-21873)
  4 .17   Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2008 (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P. dated July 15, 1998, File No. 333-21873)
  4 .18   7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of First Industrial, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
  4 .19   Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011 (incorporated by reference to Exhibit 4.16 of First Industrial, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)


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Exhibits
 
Description
 
  4 .20   Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of First Industrial, L.P.’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
  4 .21   Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and the U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P. dated April 4, 2002, File No. 333-21873)
  4 .22   Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of First Industrial, L.P., dated April 4, 2002, File No. 333-21873)
  4 .23   Form of 7.75% Notes due 2032 in the principal amount of $50.0 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of the Form 8-K of First Industrial, L.P., dated April 4, 2002, File No. 333-21873)
  4 .24   Supplemental Indenture No. 8, dated as of May 17, 2004, relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P., dated May 27, 2004, File No. 333-21873)
  4 .25   Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P., dated June 17, 2004, File No. 333-21873)
  4 .26   Amendment No. 1, dated as of February 25, 2004, to Rights Agreement, dated as of September 16, 1997, between the Company and Equiserve Trust Company, N.A. (f/k/a First Chicago Trust Company of New York), as Rights Agent (incorporated by reference to Exhibit 4.23 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, File No. 1-13102)
  4 .27   Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company, filed January 11, 2006, File No. 1-13102)
  4 .28   Indenture dated as of September 25, 2006 among First Industrial, L.P., as issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K of First Industrial, L.P. dated September 25, 2006, File No. 333-21873)
  4 .29   Form of 4.625% Exchangeable Senior Note due 2011 (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K of First Industrial, L.P. dated September 25, 2006, File No. 333-21873)
  4 .30   Registration Rights Agreement dated September 25, 2006 among the Company, First Industrial, L.P. and the Initial Purchasers named therein (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K of First Industrial, L.P. dated September 25, 2006, File No. 333-21873)
  10 .1   Eleventh Amended and Restated Partnership Agreement of First Industrial, L.P. dated August 21, 2006 (the “LP Agreement”) (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company, filed August 22, 2006, File No. 1-13102).
  10 .2   Sales Agreement by and among the Company, First Industrial, L.P. and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of the Form 8-K of the Company, dated September 16, 2004, File No. 1-13102)
  10 .3   Registration Rights Agreement, dated April 29, 1998, relating to the Company’s Common Stock, par value $0.01 per share, between the Company, the Operating Partnership and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company dated May 1, 1998, File No. 1-13102)


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Exhibits
 
Description
 
  10 .4   Non-Competition Agreement between Jay H. Shidler and First Industrial Realty Trust, Inc. (incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1994, File No. 1-13102)
  10 .5   Form of Non-Competition Agreement between each of Michael T. Tomasz, Paul T. Lambert, Michael J. Havala, Michael W. Brennan, Michael G. Damone, Duane H. Lund, and Johannson L. Yap and First Industrial Realty Trust, Inc. (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-11, File No. 33-77804)
  10 .6†   1994 Stock Incentive Plan (incorporated by reference to Exhibit 10.37 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1994, File No. 1-13102)
  10 .7†   First Industrial Realty Trust, Inc. Deferred Income Plan (incorporated by reference to Exhibit 10 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1996, File No. 1-13102)
  10 .8   Contribution Agreement, dated March 19, 1996, among FR Acquisitions, Inc. and the parties listed on the signature pages thereto (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company, dated April 3, 1996, File No. 1-13102)
  10 .9   Contribution Agreement, dated January 31, 1997, among FR Acquisitions, Inc. and the parties listed on the signature pages thereto (incorporated by reference to Exhibit 10.58 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1996, File No. 1-13102)
  10 .10†   Employment Agreement, dated June 21, 2005, between the Company and Michael W. Brennan (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed June 24, 2005 File No. 1-13102)
  10 .11†   1997 Stock Incentive Plan (incorporated by reference to Exhibit 10.62 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1996, File No. 1-13102)
  10 .12†   2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.34 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2001, File No. 1-13102)
  10 .13†   Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Michael J. Havala (incorporated by reference to Exhibit 10.1 of the Form 10-Q of First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
  10 .14†   Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Johannson L. Yap (incorporated by reference to Exhibit 10.2 of the Form 10-Q of First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
  10 .15†   Employment Agreement, dated March 25, 2002, between First Industrial Realty Trust, Inc. and David P. Draft (incorporated by reference to Exhibit 10.3 of the Form 10-Q of First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
  10 .16†   Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  10 .17†   Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.4 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  10 .18†   Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.5 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  10 .19†   Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.6 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
  10 .20   Fourth Amended and Restated Unsecured Revolving Credit Agreement, dated as of August 23, 2005, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase Bank, NA and certain other banks (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed August 25, 2005, File No. 1-13102)
  10 .21†   Form of Restricted Stock Agreement (Director’s Annual Retainer) (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed May 19, 2006, File No. 1-13102)
  10 .22†   Amendment No. 1 to the Company’s 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2006, File No. 1-13102)


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Exhibits
 
Description
 
  10 .23†   Summary of Managing Director 2006 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed August 7, 2006, File No. 1-13102)
  10 .24†   Separation Agreement between Robert Cutlip and First Industrial Realty Trust, Inc. dated March 13, 2006 (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed March 16, 2006, File No. 1-13102)
  12 .1*   Computation of ratios of earnings to fixed charges and preferred stock dividends of the Company
  21 .1*   Subsidiaries of the Registrant
  23*     Consent of PricewaterhouseCoopers LLP
  31 .1*   Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
  31 .2*   Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
  32**     Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes — Oxley Act of 2002
 
 
Filed herewith.
 
** Furnished herewith.
 
Indicates a compensatory plan or arrangement contemplated by Item 15 a (3) of Form 10-K.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
 
         
    Page
 
FINANCIAL STATEMENTS
   
  56
  58
  59
  60
  61
  62
  63
FINANCIAL STATEMENT SCHEDULE
   
  S-1


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Report of Independent Registered Public Accounting Firm
 
To the Board of Directors and Stockholders of
First Industrial Realty Trust, Inc.:
 
We have completed integrated audits of First Industrial Realty Trust, Inc.’s consolidated financial statements and of its internal control over financial reporting as of December 31, 2006, in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.
 
Consolidated financial statements and financial statement schedule
 
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of First Industrial Realty Trust, Inc. and its subsidiaries (“the Company”) at December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for stock-based compensation in fiscal 2006.
 
Internal control over financial reporting
 
Also, in our opinion, management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, that the Company maintained effective internal control over financial reporting as of December 31, 2006 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006 based on criteria established in Internal Control — Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.
 
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external


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purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
PricewaterhouseCoopers LLP
 
Chicago, Illinois
March 1, 2007


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED BALANCE SHEETS
 
                 
    December 31,
    December 31,
 
    2006     2005  
    (Dollars in thousands, except share and per share data)  
 
ASSETS
Assets:
               
Investment in Real Estate:
               
Land
  $ 558,425     $ 541,406  
Buildings and Improvements
    2,626,284       2,653,281  
Construction in Progress
    35,019       66,074  
Less: Accumulated Depreciation
    (465,418 )     (410,566 )
                 
Net Investment in Real Estate
    2,754,310       2,850,195  
                 
Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $9,688 and $1,622 at December 31, 2006 and December 31, 2005
    115,961       16,840  
Cash and Cash Equivalents
    16,135       8,237  
Restricted Cash
    15,970       29,581  
Tenant Accounts Receivable, Net
    8,014       8,897  
Investments in Joint Ventures
    55,527       44,241  
Deferred Rent Receivable, Net
    28,839       24,910  
Deferred Financing Costs, Net
    15,210       10,909  
Deferred Leasing Intangibles, Net
    86,265       78,537  
Prepaid Expenses and Other Assets, Net
    128,168       153,896  
                 
Total Assets
  $ 3,224,399     $ 3,226,243  
                 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
               
Mortgage Loans Payable, Net
  $ 77,926     $ 57,309  
Senior Unsecured Debt, Net
    1,549,732       1,298,893  
Unsecured Lines of Credit
    207,000       457,500  
Accounts Payable and Accrued Expenses
    119,027       110,560  
Deferred Leasing Intangibles, Net
    19,486       24,307  
Rents Received in Advance and Security Deposits
    30,844       32,283  
Leasing Intangibles Held for Sale Net of Accumulated Amortization of $183 at December 31, 2006
    2,310        
Dividends Payable
    42,548       39,509  
                 
Total Liabilities
    2,048,873       2,020,361  
                 
Commitments and Contingencies
           
Minority Interest
    152,547       162,320  
Stockholders’ Equity:
               
Preferred Stock ($0.01 par value, 10,000,000 shares authorized, 20,000, 500, 250, 600, and 200 shares of Series C, F, G, J, and K Cumulative Preferred Stock, respectively, issued and outstanding at December 31, 2006, having a liquidation preference of $2,500 per share ($50,000), $100,000 per share ($50,000), $100,000 per share ($25,000), $250,000 per share ($150,000), and $250,000 per share ($50,000), respectively. At December 31, 2005, 10,000,000 shares authorized, 20,000, 500, 250 and 750 shares of Series C, F, G and I Cumulative Preferred Stock, respectively, were issued and outstanding, having a liquidation preference of $2,500 per share ($50,000), $100,000 per share ($50,000), $100,000 per share ($25,000) and $250,000 per share ($187,500), respectively
           
Common Stock ($0.01 par value, 100,000,000 shares authorized, 47,537,030 and 46,971,110 shares issued and 45,010,630 and 44,444,710 shares outstanding at December 31, 2006 and December 31, 2005, respectively)
    475       470  
Additional Paid-in-Capital
    1,388,311       1,384,712  
Distributions in Excess of Accumulated Earnings
    (284,955 )     (248,686 )
Unearned Value of Restricted Stock Grants
          (16,825 )
Accumulated Other Comprehensive Loss
    (10,264 )     (5,521 )
Treasury Shares at Cost (2,526,400 shares at December 31, 2006 and December 31, 2005)
    (70,588 )     (70,588 )
                 
Total Stockholders’ Equity
    1,022,979       1,043,562  
                 
Total Liabilities and Stockholders’ Equity
  $ 3,224,399     $ 3,226,243  
                 
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
                         
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2006     2005     2004  
    (In thousands except per unit data)  
 
Revenues:
                       
Rental Income
  $ 274,907     $ 223,572     $ 200,600  
Tenant Recoveries and Other Income
    110,589       85,717       67,408  
Revenues from Build to Suit Development for Sale
    10,540       16,241        
                         
Total Revenues
    396,036       325,530       268,008  
                         
Expenses:
                       
Property Expenses
    130,230       108,464       90,309  
General and Administrative
    77,497       55,812       39,569  
Depreciation and Other Amortization
    145,906       105,720       79,939  
Expenses from Build to Suit Development for Sale
    10,263       15,574        
                         
Total Expenses
    363,896       285,570       209,817  
                         
Other Income/Expense:
                       
Interest Income
    1,614       1,486       3,632  
Mark-to-Market/(Loss) Gain on Settlement of Interest Rate Protection Agreements
    (3,112 )     811       1,583  
Interest Expense
    (121,141 )     (108,339 )     (98,636 )
Amortization of Deferred Financing Costs
    (2,666 )     (2,125 )     (1,931 )
Gain (Loss) From Early Retirement of Debt
          82       (515 )
                         
Total Other Income/Expense
    (125,305 )     (108,085 )     (95,867 )
Loss from Continuing Operations Before Equity in Income of Joint Ventures, Income Tax Benefit and Income Allocated To Minority Interest
    (93,165 )     (68,125 )     (37,676 )
Equity in Income of Joint Ventures
    30,673       3,699       37,301  
Income Tax Benefit
    8,920       14,022       7,937  
Minority Interest Allocable to Continuing Operations
    9,795       7,980       2,034  
                         
(Loss) Income from Continuing Operations
    (43,777 )     (42,424 )     9,596  
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $213,442, $132,139, and $88,245 for the Years Ended December 31, 2006, 2005 and 2004, respectively)
    225,357       154,061       116,693  
Provision for Income Taxes Allocable to Discontinued Operations (including $47,511, $20,529, and $8,659 allocable to Gain on Sale of Real Estate for the Years Ended December 31, 2006, 2005 and 2004, respectively)
    (50,140 )     (23,583 )     (11,005 )
Minority Interest Allocable to Discontinued Operations
    (22,796 )     (17,171 )     (14,500 )
                         
Income Before Gain on Sale of Real Estate
    108,644       70,883       100,784  
Gain on Sale of Real Estate
    6,071       29,550       16,755  
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
    (2,119 )     (10,871 )     (5,371 )
Minority Interest Allocable to Gain on Sale of Real Estate
    (514 )     (2,458 )     (1,562 )
                         
Net Income
    112,082       87,104       110,606  
Less: Preferred Dividends
    (21,424 )     (10,688 )     (14,488 )
Less: Redemption of Preferred Stock
    (672 )           (7,959 )
                         
Net Income Available to Common Stockholders
  $ 89,986     $ 76,416     $ 88,159  
                         
Basic Earnings Per Share:
                       
Loss from Continuing Operations Available to Common Stockholders
  $ (1.42 )   $ (0.87 )   $ (0.07 )
                         
Income from Discontinued Operations
  $ 3.46     $ 2.67     $ 2.25  
                         
Net Income Available to Common Stockholders
  $ 2.04     $ 1.80     $ 2.17  
                         
Weighted Average Shares Outstanding
    44,012       42,431       40,557  
                         
Diluted Earnings Per Share:
                       
Loss from Continuing Operations Available to Common Stockholders
  $ (1.42 )   $ (0.87 )   $ (0.07 )
                         
Income from Discontinued Operations
  $ 3.46     $ 2.67     $ 2.25  
                         
Net Income Available to Common Stockholders
  $ 2.04     $ 1.80     $ 2.17  
                         
Weighted Average Shares Outstanding
    44,012       42,431       40,557  
                         
Dividends/Distributions declared per Common Share Outstanding
  $ 2.8100     $ 2.7850     $ 2.7500  
                         
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
                         
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2006     2005     2004  
    (Dollars in thousands)  
 
Net Income
    112,082     $ 87,104     $ 110,606  
Other Comprehensive (Loss) Income:
                       
Settlement of Interest Rate Protection Agreements
    (1,729 )           6,816  
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
          (159 )      
Mark-to-Market of Interest Rate Protection Agreements
    (2,800 )     (1,414 )     106  
Amortization of Interest Rate Protection Agreements
    (912 )     (1,085 )     (512 )
Other Comprehensive Loss Allocable to Minority Interest
    698       837        
                         
Comprehensive Income
  $ 107,339     $ 85,283     $ 117,016  
                         
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
 
                         
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2006     2005     2004  
    (Dollars in thousands)  
 
Preferred Stock — Beginning of Year
  $     $     $ 1  
Issuance of Preferred Stock
                 
Redemption of Preferred Stock
                (1 )
                         
Preferred Stock — End of Year
  $     $     $  
                         
Common Stock — Beginning of Year
  $ 470     $ 454     $ 424  
Net Proceeds from the Issuance of Common Stock
    1       15       30  
Issuance of Restricted Stock
    3       2       2  
Repurchase and Retirement of Common Stock
    (1 )     (1 )     (1 )
Restricted Stock Forfeitures
          (1 )     (4 )
Conversion of Units to Common Stock
    2       1       3  
                         
Common Stock — End of Year
  $ 475     $ 470     $ 454  
                         
Additional Paid-In-Capital — Beginning of Year
  $ 1,384,712     $ 1,142,356     $ 1,161,373  
Net Proceeds from the Issuance of Common Stock
    3,819       56,109       99,250  
Issuance of Restricted Stock
    (3 )     8,379       8,377  
Repurchase and Retirement of Restricted Stock/Common Stock
    (2,463 )     (2,741 )     (3,094 )
Restricted Stock Forfeitures
          (2,825 )     (10,629 )
Call Spread
    (6,835 )            
Net Proceeds from the Issuance of Preferred Stock
    192,624       181,484       194,424  
Redemption of Preferred Stock
    (181,484 )           (313,537 )
Conversion of Units to Common Stock
    5,142       1,950       6,192  
Reclassification to initially adopt SFAS No. 123R
    (16,825 )            
Amortization of Restricted Stock Grants
    9,624              
                         
Additional Paid-In-Capital — End of Year
  $ 1,388,311     $ 1,384,712     $ 1,142,356  
                         
Dist. In Excess of Accum. Earnings — Beginning of Year
  $ (248,686 )   $ (203,417 )   $ (172,892 )
Preferred Stock Dividends
    (21,424 )     (10,688 )     (14,488 )
Distributions ($2.8100, $2.7850 and $2.7500 per Share/Unit at December 31, 2006, 2005 and 2004, respectively)
    (144,720 )     (139,168 )     (132,585 )
Redemption of Preferred Stock
    (672 )           (7,959 )
Repurchase and Retirement of Restricted Stock/Common Stock
    (269 )     (543 )     (652 )
Restricted Stock Forfeitures
          (147 )     (3,464 )
Net Income Before Minority Interest
    125,597       98,753       124,634  
Minority Interest:
                       
Allocation of Income
    (13,515 )     (11,649 )     (14,028 )
Distributions ($2.8100, $2.7850 and $2.7500 per Unit at December 31, 2006, 2005 and 2004, respectively)
    18,734       18,173       18,017  
                         
Dist. In Excess of Accum. Earnings — End of Year
  $ (284,955 )   $ (248,686 )   $ (203,417 )
                         
Unearned Value of Rest. Stock Grants — Beginning of Year
  $ (16,825 )   $ (19,611 )   $ (19,035 )
Issuance of Restricted Stock
          (8,381 )     (8,379 )
Amortization of Restricted Stock Grants
          8,845       6,866  
Restricted Stock Forfeitures
          2,322       937  
Reclassification to initially adopt SFAS No. 123R
    16,825              
                         
Unearned Value of Rest. Stock Grants — End of Year
  $     $ (16,825 )   $ (19,611 )
                         
Treasury Shares, at cost — Beginning of Year
  $ (70,588 )   $ (70,588 )   $ (70,588 )
Purchase of Treasury Shares
                 
                         
Treasury Shares, at cost — End of Year
  $ (70,588 )   $ (70,588 )   $ (70,588 )
                         
Accum. Other Comprehensive Loss — Beginning of Year
  $ (5,521 )   $ (3,700 )   $ (10,110 )
Settlement of Interest Rate Protection Agreements
    (1,729 )           6,816  
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
          (159 )      
Mark-to-Market of Interest Rate Protection Agreements
    (2,800 )     (1,414 )     106  
Amortization of Interest Rate Protection Agreements
    (912 )     (1,085 )     (512 )
Other Comprehensive Loss Allocable to Minority Interest
    698       837        
                         
Accum. Other Comprehensive Loss — End of Year
  $ (10,264 )   $ (5,521 )   $ (3,700 )
                         
Total Stockholders’ Equity at End of Year
  $ 1,022,979     $ 1,043,562     $ 845,494  
                         
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                         
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2006     2005     2004  
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                       
Net Income
  $ 112,082     $ 87,104     $ 110,606  
Income Allocated to Minority Interest
    13,515       11,649       14,028  
                         
Net Income Before Minority Interest
    125,597       98,753       124,634  
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
                       
Depreciation
    121,347       99,338       82,757  
Amortization of Deferred Financing Costs
    2,666       2,125       1,931  
Other Amortization
    40,965       33,728       22,547  
Provision for Bad Debt
    2,289       1,817       (1,474 )
Mark-to-Market/Loss on Settlement of Interest Rate Protection Agreements
    (16 )     (143 )      
(Gain) Loss From Early Retirement of Debt
          (82 )     515  
Equity in Income of Joint Ventures
    (30,673 )     (3,699 )     (36,451 )
Distributions from Joint Ventures
    31,664       3,866       36,451  
Decrease (Increase) in Build to Suit Development for Sale Costs Receivable
    5,883       (16,241 )      
Gain on Sale of Real Estate
    (219,513 )     (161,689 )     (91,242 )
Increase in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net
    (16,524 )     (23,371 )     (46,030 )
Increase in Deferred Rent Receivable
    (10,154 )     (9,459 )     (6,771 )
Increase (Decrease) in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits
    6,020       24,407       (9,210 )
                         
Net Cash Provided by Operating Activities
    59,551       49,350       77,657  
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
Purchases of and Additions to Investment in Real Estate
    (813,840 )     (920,707 )     (485,393 )
Net Proceeds from Sales of Investments in Real Estate
    907,428       537,252       293,703  
Contributions to and Investments in Joint Ventures
    (32,773 )     (45,175 )     (5,422 )
Distributions from Joint Ventures
    19,734       2,971       14,074  
Repayment and Sale of Mortgage Loans Receivable
    34,987       83,561       111,049  
Decrease (Increase) in Restricted Cash
    13,611       (29,556 )     81,981  
                         
Net Cash Provided by (Used in) Investing Activities
    129,147       (371,654 )     9,992  
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Net Proceeds from the Issuance of Common Stock
    3,462       55,754       86,121  
Proceeds from the Issuance of Preferred Stock
    200,000       187,500       200,000  
Preferred Stock Offering Costs
    (7,103 )     (5,906 )     (5,576 )
Redemption of Preferred Stock
    (182,156 )           (321,438 )
Repurchase of Restricted Stock
    (2,660 )     (3,285 )     (3,747 )
Proceeds from Senior Unsecured Debt
    399,306             134,496  
Other (Costs) Proceeds from Senior Unsecured Debt
    (1,729 )           6,816  
Repayment of Senior Unsecured Debt
    (150,000 )     (50,000 )      
Dividends/Distributions
    (143,858 )     (137,672 )     (130,220 )
Preferred Stock Dividends
    (19,248 )     (8,162 )     (13,256 )
Proceeds from Mortgage Loans Payable
          1,167       1,400  
Repayments of Mortgage Loans Payable
    (12,618 )     (1,987 )     (5,965 )
Proceeds from Unsecured Lines of Credit
    779,300       647,500       581,000  
Repayments on Unsecured Lines of Credit
    (1,029,800 )     (357,500 )     (609,400 )
Call Spread
    (6,835 )            
Cost of Debt Issuance and Prepayment Fees
    (6,861 )     (1,792 )     (3,777 )
                         
Net Cash (Used in) Provided by Financing Activities
    (180,800 )     325,617       (83,546 )
                         
Net Increase in Cash and Cash Equivalents
    7,898       3,313       4,103  
Cash and Cash Equivalents, Beginning of Period
    8,237       4,924       821  
                         
Cash and Cash Equivalents, End of Period
  $ 16,135     $ 8,237     $ 4,924  
                         
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
 
1.   Organization and Formation of Company
 
First Industrial Realty Trust, Inc. was organized in the state of Maryland on August 10, 1993. First Industrial Realty Trust, Inc. is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code of 1986, as amended (the “Code”).
 
First Industrial Realty Trust, Inc. and its subsidiaries (the “Company”) began operations on July 1, 1994. The Company’s operations are conducted primarily through First Industrial, L.P. (the “Operating Partnership”) of which the Company is the sole general partner. The Company is the sole stockholder of First Industrial Finance Corporation, First Industrial Pennsylvania Corporation, First Industrial Harrisburg Corporation, First Industrial Securities Corporation, First Industrial Mortgage Corporation, First Industrial Indianapolis Corporation, FI Development Services Corporation and First Industrial Florida Finance Corporation, which are the sole general partners of First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, L.P. (the “Mortgage Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), FI Development Services, L.P. and TK-SV, LTD., respectively (except in the case of the Financing Partnership in which case the Operating Partnership is also the general partner), and the Operating Partnership is the sole limited partner. The Operating Partnership is also the sole member of limited liability companies and the sole stockholder of First Industrial Investment, Inc. The operating data of the foregoing subsidiaries of the Company is consolidated with that of the Company as presented herein. The Company, through separate, wholly-owned limited liability companies of which the Operating Partnership or First Industrial Investment, Inc. is the sole member, also owns minority equity interests in, and provides various services to, six joint ventures which invest in industrial properties (the “September 1998 Joint Venture,” the “May 2003 Joint Venture,” the “March 2005 Joint Venture,” the “September 2005 Joint Venture,” the “March 2006 Co-Investment Program” and the “July 2006 Joint Venture”). The Company, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in and provided property management services to a seventh joint venture which invested in industrial properties (the “December 2001 Joint Venture” together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture, the September 2005 Joint Venture, the March 2006 Co-Investment Program and the July 2006 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. On January 31, 2007, the Company purchased the 90% equity interest from the institutional investor in the September 1998 Joint Venture. The operating data of the Joint Ventures is not consolidated with that of the Company as presented herein.
 
As of December 31, 2006, the Company owned 931 industrial properties (inclusive of developments in progress) located in 28 states in the United States and one province in Canada, containing an aggregate of approximately 76.9 million square feet (unaudited) of gross leasable area (“GLA”).
 
2.   Basis of Presentation
 
First Industrial Realty Trust, Inc. is the sole general partner of the Operating Partnership, with an approximate 87.3% and 86.8% ownership interest at December 31, 2006 and 2005, respectively. Minority interest at December 31, 2006 and 2005, represents the approximate 12.7% and 13.2%, respectively, aggregate partnership interest in the Operating Partnership held by the limited partners thereof.
 
The consolidated financial statements of the Company at December 31, 2006 and 2005 and for each of the years ended December 31, 2006, 2005 and 2004 include the accounts and operating results of the Company and its subsidiaries. Such financial statements present the Company’s minority equity interests in the


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Joint Ventures under the equity method of accounting. All intercompany transactions have been eliminated in consolidation.
 
3.   Summary of Significant Accounting Policies
 
In order to conform with generally accepted accounting principles, management, in preparation of the Company’s financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2006 and 2005, and the reported amounts of revenues and expenses for each of the years ended December 31, 2006, 2005 and 2004. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short term maturity of these investments.
 
Restricted Cash
 
At December 31, 2006 and 2005, restricted cash includes gross proceeds from the sales of certain properties. These sales proceeds will be disbursed as the Company exchanges into properties under Section 1031 of the Internal Revenue Code. The carrying amount approximates fair value due to the short term maturity of these investments.
 
Investment in Real Estate and Depreciation
 
Investment in Real Estate is carried at cost. The Company reviews its properties on a quarterly basis for impairment and provides a provision if impairments are found. To determine if an impairment may exist, the Company reviews its properties and identifies those that have had either an event of change or event of circumstances warranting further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, the Company estimates the future net cash flows expected to result from the use of the property and its eventual disposition, on an individual property basis. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property on an individual property basis, the Company will recognize an impairment loss based upon the estimated fair value of such property. For properties management considers held for sale, the Company ceases depreciating the properties and values the properties at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. To calculate the fair value of properties held for sale, the Company deducts from the estimated sales price of the property the estimated costs to close the sale. The Company classifies properties as held for sale when management of the Company has approved the properties for sale.
 
Interest costs, real estate taxes, compensation costs of development personnel and other directly related costs incurred during construction periods are capitalized and depreciated commencing with the date the property is substantially completed. Upon substantial completion, the Company reclassifies construction in progress to building, tenant improvements and leasing commissions. Such costs begin to be capitalized to the development projects from the point the Company is undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

available for occupancy. Depreciation expense is computed using the straight-line method based on the following useful lives:
 
         
    Years  
 
Buildings and Improvements
    20 to 50  
Land Improvements
    15  
Furniture, Fixtures and Equipment
    5 to 10  
 
Construction expenditures for tenant improvements, leasehold improvements and leasing commissions (inclusive of compensation costs of personnel attributable to leasing) are capitalized and amortized over the terms of each specific lease. Capitalized compensation costs of personnel attributable to leasing relate to time directly attributable to originating leases with independent third parties that result directly from and are essential to originating those leases and would not have been incurred had these leasing transactions not occurred. Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized.
 
The Company accounts for all acquisitions entered into subsequent to June 30, 2001 in accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standard No. 141, “Business Combinations” (“FAS 141”). Upon acquisition of a property, the Company allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, buildings, tenant improvements, leasing commissions and intangible assets including in-place leases, above market and below market leases and tenant relationships. The Company allocates the purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. Acquired above and below market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates over the remaining lease term.
 
The purchase price is further allocated to in-place lease values and tenant relationships based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the respective tenant. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental revenue on the Company’s consolidated statements of operations. The value of in-place lease intangibles and tenant relationships, which are included as components of Deferred Leasing Intangibles, Net (see below) are amortized over the remaining lease term and expected renewal periods of the respective lease as adjustments to depreciation and other amortization expense. If a tenant terminates its lease early, the unamortized portion of the tenant improvements, leasing commissions, above and below market leases, the in-place lease value and tenant relationships is immediately written off.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Deferred Leasing Intangibles, exclusive of deferred leasing intangibles held for sale, included in the Company’s total assets consist of the following:
 
                 
    December 31,
    December 31,
 
    2006     2005  
 
In-Place Leases
  $ 81,422     $ 78,674  
Less: Accumulated Amortization
    (15,361 )     (6,236 )
                 
    $ 66,061     $ 72,438  
                 
Above Market Leases
  $ 6,933     $ 7,958  
Less: Accumulated Amortization
    (2,177 )     (1,859 )
                 
    $ 4,756     $ 6,099  
                 
Tenant Relationships
  $ 16,657     $  
Less: Accumulated Amortization
    (1,209 )      
                 
    $ 15,448     $  
                 
 
Deferred Leasing Intangibles, exclusive of deferred leasing intangibles held for sale, included in the Company’s total liabilities consist of the following:
 
                 
    December 31,
    December 31,
 
    2006     2005  
 
Below Market Leases
  $ 25,735     $ 27,710  
Less: Accumulated Amortization
    (6,249 )     (3,403 )
                 
    $ 19,486     $ 24,307  
                 
 
Amortization expense related to deferred leasing intangibles was $13,747, $6,733, and $1,643 for the years ended December 31, 2006, 2005, and 2004 respectively. The Company will recognize net amortization expense related to deferred leasing intangibles over the next five years as follows:
 
         
2007
  $ 19,673  
2008
    17,012  
2009
    14,695  
2010
    12,324  
2011
    10,409  
 
Build to Suit for Sale Revenues and Expenses
 
During 2006 and 2005, the Company entered into contracts with third parties to construct industrial properties. The build-to-suit for sale contracts require the purchase price to be paid at closing. The Company uses the percentage-of-completion contract method of accounting in accordance with SOP 81-1 “Accounting for Performance of Construction-Type and Certain Production-Type Contracts”. During the period of performance, costs are accumulated on the balance sheet in Prepaid Expenses and Other Assets ($10,263 at December 31, 2006 and $15,574 at December 31, 2005) and revenues and expenses are recognized in continuing operations.
 
Deferred Financing Costs
 
Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

financing costs was $13,863 and $12,541 at December 31, 2006 and 2005, respectively. Unamortized deferred financing costs are written-off when debt is retired before the maturity date.
 
Investments in Joint Ventures
 
Investments in Joint Ventures represent the Company’s minority equity interests in the Joint Ventures. The Company accounts for its investments in Joint Ventures under the equity method of accounting, as the Company does not have operational control or a majority voting interest. Under the equity method of accounting, the Company’s share of earnings or losses of the Joint Ventures is reflected in income as earned and contributions or distributions increase or decrease, respectively, the Company’s Investments in Joint Ventures as paid or received, respectively. Differences between the Company’s carrying value of its investments in joint ventures and the Company’s underlying equity of such joint ventures are amortized over the respective lives of the underlying assets.
 
Stock Based Compensation
 
Effective January 1, 2006 the Company adopted Statement of Financial Accounting Standards No. 123R, “Share Based Payment” (“FAS 123R”), using the modified prospective application method, which requires measurement of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. For the years ended December 31, 2003, 2004 and 2005, the Company accounted for its stock incentive plans under the recognition and measurement principles of Statement of Financial Accounting Standards No. 123, “Accounting for Stock Based Compensation” for all new issuances of stock based compensation. At January 1, 2006, the Company did not have any unvested option awards and the Company had accounted for their previously issued restricted stock awards at fair value, accordingly, the adoption of FAS 123R did not require the Company to recognize a cumulative effect of a change in accounting principle. The Company did reclassify $16,825 from the Unearned Value of Restricted Stock Grants caption within Stockholder’s Equity to Additional Paid in Capital during the year ended December 31, 2006 in accordance with the provisions of FAS 123R.
 
Prior to January 1, 2003, the Company accounted for its stock incentive plans under the recognition measurement principles of Accounting Principles Board opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Under APB 25, compensation expense is not recognized for options issued in which the strike price is equal to the fair value of the Company’s stock on the date of grant. The following table illustrates the pro forma effect on net income and earnings per share as if the fair value recognition provisions


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of FAS 123R had been applied to all outstanding and unvested option awards for the years ended December 31, 2005 and 2004:
 
                 
    For the Year Ended  
    2005     2004  
 
Net Income Available to Common Stockholders — as reported
  $ 76,416     $ 88,159  
Add: Stock-Based Employee Compensation Expense Included in Net Income Available to Common Stockholders, Net of Minority Interest — as reported
           
Less: Total Stock-Based Employee Compensation Expense, Net of Minority Interest — Determined Under the Fair Value Method
    (87 )     (362 )
                 
Net Income Available to Common Stockholders — pro forma
  $ 76,329     $ 87,797  
                 
Net Income Available to Common Stockholders per Share — as reported — Basic
  $ 1.80     $ 2.17  
Net Income Available to Common Stockholders per Share — pro forma — Basic
  $ 1.80     $ 2.16  
Net Income Available to Common Stockholders per Share — as reported — Diluted
  $ 1.80     $ 2.17  
Net Income Available to Common Stockholders per Share — pro forma — Diluted
  $ 1.80     $ 2.16  
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:
               
Expected dividend yield
    N/A       N/A  
Expected stock price volatility
    N/A       N/A  
Risk-free interest rate
    N/A       N/A  
Expected life of options
    N/A       N/A  
 
The Company did not issue any options in 2005 and 2004.
 
Revenue Recognition
 
Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as revenue in the same period the related expenses are incurred by the Company.
 
Revenue is recognized on payments received from tenants for early lease terminations after the Company determines that all the necessary criteria have been met in accordance with FASB Statement of Financial Accounting Standards No. 13, “Accounting for Leases” (“FAS 13”).
 
Interest income on mortgage loans receivable is recognized based on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected.
 
The Company provides an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the consolidated balance sheets are shown net of an allowance for doubtful accounts of $783 and $111 as of December 31, 2006 and 2005, respectively. For accounts receivable the Company deems uncollectible, the Company uses the direct write-off method.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Gain on Sale of Real Estate
 
Gain on sale of real estate is recognized using the full accrual method, when appropriate. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are written off with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Company after completion of each sale are included in the determination of the gain on sales.
 
Income Taxes
 
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Code. As a result, the Company generally is not subject to federal income taxation to the extent of the income which it distributes if it satisfies the requirements set forth in Section 856 of the Code (pertaining to its organization and types of income and assets) necessary to maintain its status as a REIT, it distributes annually at least 90% of its REIT taxable income, as defined in the Code, to its stockholders and it satisfies certain other requirements.
 
A provision has been made for federal income taxes in the accompanying consolidated financial statements for activities conducted in its taxable REIT subsidiary, First Industrial Investment, Inc. which has been accounted for under FASB Statement of Financial Standards No. 109, “Accounting for Income Taxes” (“FAS 109”). In accordance with FAS 109, the total benefit/expense has been separately allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
 
The Company and certain of its subsidiaries are subject to certain state and local income, excise and franchise taxes. The provision for excise and franchise taxes has been reflected in general and administrative expense in the consolidated statements of operations and has not been separately stated due to its insignificance. State and local income taxes are included in the provision/benefit for income taxes which is allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
 
Earnings Per Common Share
 
Net income per weighted average share — basic is based on the weighted average common shares outstanding (excluding restricted stock that has not yet vested). Net income per weighted average share — diluted is based on the weighted average common shares outstanding (excluding restricted stock that has not yet vested) plus the dilutive effect of in-the-money employee stock options, restricted stock and 2011 Exchangeable Notes (hereinafter defined). See Note 10 for further disclosure about earnings per share.
 
Fair Value of Financial Instruments
 
The Company’s financial instruments include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses, mortgage loans payable, unsecured lines of credit and senior unsecured debt.
 
The fair values of the short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable and other accrued expenses approximates their carrying or contract values. See Note 5 for the fair values of the mortgage loans payable, unsecured lines of credit and senior unsecured debt.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Derivative Financial Instruments
 
Historically, the Company has used interest rate protection agreements (the “Agreements”) to fix the interest rate on anticipated offerings of senior unsecured debt or convert floating rate debt to fixed rate debt. Receipts or payments that result from the settlement of Agreements used to fix the interest rate on anticipated offerings of senior unsecured debt are amortized over the life of the senior unsecured debt and included in interest expense. Receipts or payments resulting from Agreements used to convert floating rate debt to fixed rate debt are recognized as a component of interest expense. Agreements which qualify for hedge accounting are marked-to-market and any gain or loss is recognized in other comprehensive income (shareholders’ equity). Any agreements which no longer qualify for hedge accounting are marked-to-market and any gain or loss is recognized in net income immediately. The credit risks associated with the Agreements are controlled through the evaluation and monitoring of the creditworthiness of the counterparty. In the event that the counterparty fails to meet the terms of the Agreements, the Company’s exposure is limited to the current value of the interest rate differential, not the notional amount, and the Company’s carrying value of the Agreements on the balance sheet. See Note 5 for more information on the Agreements.
 
Discontinued Operations
 
On January 1, 2002, the Company adopted the FASB Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”). FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property or property held for sale be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Company as a result of the disposal transaction and (b) the Company will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be reclassified and presented in discontinued operations in prior consolidated statements of operations.
 
Segment Reporting
 
Management views the Company as a single segment based on its method of internal reporting.
 
Recent Accounting Pronouncements
 
In February 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 155, “Accounting for Certain Hybrid Financial Instruments” which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“FAS 133”), and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, “Application of SFAS No. 133 to Beneficial Interests in Securitized Financial Assets.” This statement:
 
a. Permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation;
 
b. Clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133;
 
c. Establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation;


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
d. Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and
 
e. Amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.
 
This Statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets” which amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, (“FAS 140”) with respect to the accounting for separately recognized servicing assets and servicing liabilities. This statement was issued to simplify the accounting for servicing rights and reduce the volatility that results from the use of different measurements attributes for servicing rights and the related financial instruments used to economically hedge risks associated with those servicing rights. The statement clarifies when to separately account for servicing rights, requires separately recognized servicing rights to be initially measured at fair value, and provides the option to subsequently account for those servicing rights at either fair value or under the amortization method previously required under FAS 140. An entity should adopt this statement as of the beginning of its first fiscal year that begins after September 15, 2006. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In June 2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with SFAS No. 109, “Accounting for Income Taxes.” The evaluation of a tax position in accordance with FIN 48 is a two-step process. First, the Company determines whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. Second, a tax position that meets the more-likely-than-not threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent reporting period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent reporting period in which the threshold is no longer met. The Company is required to apply the guidance of FIN 48 beginning January 1, 2007. The Company is currently evaluating what impact the application of FIN 48 will have on the consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” which establishes a common definition of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In December 2006, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regarding EITF 00-19-2, “Accounting for Registration Payment Arrangements.” The guidance specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with SFAS No. 5, “Accounting for Contingencies.” The guidance is effective for periods beginning after December 15, 2006. EITF 00-19-2 is not expected to impact the Company’s results of operations, financial position, or liquidity.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
4.   Investments in Joint Ventures
 
On September 28, 1998, the Company, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “September 1998 Joint Venture”) with an institutional investor to invest in industrial properties. At December 31, 2006, the Company, through wholly-owned limited liability companies of the Operating Partnership, owns a 10% equity interest in the September 1998 Joint Venture and provides property and asset management services to the September 1998 Joint Venture. On January 31, 2007, the Company purchased the remaining 90% equity interest from the institutional investor in the September 1998 Joint Venture (See Note 16).
 
On December 28, 2001, the Company, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “December 2001 Joint Venture”) with an institutional investor to invest in industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership, owned a 15% equity interest in the December 2001 Joint Venture and provided property management services to the December 2001 Joint Venture. On August 27, 2004, the December 2001 Joint Venture sold all 36 industrial properties, containing approximately 6.2 million square feet (unaudited) of GLA, to a third party for gross proceeds of approximately $349,750. Due to certain provisions in the operating agreement, the Company received distributions in excess of its 15% equity interest in the December 2001 Joint Venture. Due to the sale of all 36 industrial properties, the Company recognized, in aggregate, approximately $34,767 from the Company’s 15% share of gain from the sale of the December 2001 Joint Venture’s properties and distributions received from the December 2001 Joint Venture in excess of the Company’s 15% equity interest. This amount is included in Equity in Income of Joint Ventures.
 
As a result of the sale on August 27, 2004 to a third party, the Company recognized the unamortized portion of the previously deferred gain from the original sales to the December 2001 Joint Venture, of approximately $5,836. These deferred gains are included in Equity in Income of Joint Ventures.
 
On May 16, 2003, the Company, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “May 2003 Joint Venture”) with an institutional investor to invest in industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Investment, Inc., owns a 15% equity interest in the May 2003 Joint Venture and provides property management services to the May 2003 Joint Venture.
 
On March 18, 2005, the Company, through a wholly-owned limited liability company in which First Industrial Investment, Inc. is the sole member, entered into a joint venture arrangement (the “March 2005 Joint Venture”) with an institutional investor to invest in, own, develop, redevelop and operate certain industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Investment, Inc., owns a 10% equity interest in the March 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the March 2005 Joint Venture.
 
On September 7, 2005, the Company, through a wholly-owned limited liability company in which First Industrial Investment, Inc. is the sole member, entered into a joint venture arrangement (the “September 2005 Joint Venture”) with an institutional investor to invest in, own and operate certain industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Investment, Inc., owns a 10% equity interest in the September 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the September 2005 Joint Venture.
 
On March 21, 2006, the Company, through separate wholly-owned limited liability companies in which the Operating Partnership is the sole member, entered into a co-investment arrangement with an institutional investor to invest in industrial properties (the “March 2006 Co-Investment Program”). The Company, through


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

separate wholly-owned limited liability companies of the Operating Partnership or First Industrial Investment, Inc., owns a 15% equity interest in and provides property management, asset management and leasing management services to the March 2006 Co-Investment Program.
 
On July 21, 2006 the Company, through a wholly-owned limited liability company of First Industrial Investment, Inc., entered into a joint venture arrangement with an institutional investor to invest in land and vertical development (the “July 2006 Joint Venture”). The Company, through wholly-owned limited liability companies of First Industrial Investment, Inc., owns a 10% equity interest in and provides property management, asset management, development management and leasing management services to the July 2006 Joint Venture.
 
As of December 31, 2006, the September 1998 Joint Venture owned 41 industrial properties comprising approximately 1.3 million square feet (unaudited) of GLA, the May 2003 Joint Venture owned 12 industrial properties comprising approximately 5.4 million square feet (unaudited) of GLA, the March 2005 Joint Venture owned 42 industrial properties comprising approximately 3.9 million square feet (unaudited) of GLA and several land parcels, the September 2005 Joint Venture owned 148 industrial properties comprising approximately 10.3 million square feet (unaudited) of GLA and several land parcels, the March 2006 Co-Investment Program owned 13 industrial properties comprising approximately 5.9 million square feet (unaudited) of GLA (of which the Consolidated Operating Partnership has an equity interest in 12 industrial properties comprising approximately 5.0 million square feet (unaudited) of GLA) and the July 2006 Joint Venture owned several land parcels.
 
During the year ended December 31, 2006, the Company sold several land parcels to the March 2005 Joint Venture for a sales price of $12.3 million. During the year ended December 31, 2005, the Company sold eight properties and several land parcels to the March 2005 Joint Venture for a sales price of $92.6 million. The Company deferred 10% of the gain from these sales in 2006 and 2005, which is equal to the Company’s economic interest in the March 2005 Joint Venture. In 2006 and 2005, the March 2005 Joint Venture sold three properties and several parcels of land to third parties. As a result of the sales, the Company recognized the unamortized portion of the previously deferred gains from the original sales to the March 2005 Joint Venture in Equity in Income of Joint Ventures. If the Company repurchases any of the properties or land parcels from the March 2005 Joint Venture, the 10% deferral will be netted against the basis of the property purchased (which reduces the basis of the property).
 
During the year ended December 31, 2006, the Company earned acquisition fees from the May 2003 Joint Venture, the September 2005 Joint Venture and the March 2006 Co-Investment Program. During the year ended December 31, 2005, the Company earned acquisition fees from the May 2003 Joint Venture and the September 2005 Joint Venture. The Company deferred 15% of the acquisition fees earned from the May 2003 Joint Venture and the March 2006 Co-Investment Program activity and 10% of the acquisition fees earned from the September 2005 Joint Venture activity. The deferrals reduced the Company’s investment in the joint ventures and are amortized into income over the life of the properties, generally 25 to 40 years.
 
At December 31, 2006 and 2005, the Company has a receivable from the Joint Ventures of $7,967 and $3,354, respectively, which relates to development, leasing, property management and asset management fees due to the Company from the Joint Ventures, reimbursement for general contractor expenditures made by a wholly owned subsidiary of the Company who is acting in the capacity of the developer for several development projects for the March 2005 Joint Venture and from borrowings made to the September 1998 Joint Venture.
 
During the years ended December 31, 2006, 2005 and 2004, the Company invested the following amounts in its Joint Ventures as well as received distributions and recognized fees (included within Other Income) from


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

acquisition, disposition, property management, leasing, development, general contractor, incentive and asset management services in the following amounts:
 
                         
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2006     2005     2004  
 
Contributions
  $ 29,194     $ 43,311     $ 3,676  
Distributions
  $ 51,398     $ 6,837     $ 50,525  
Fees
  $ 22,507     $ 8,301     $ 2,689  
 
The combined summarized financial information of the investments in joint ventures is as follows:
 
                 
    December 31,
    December 31,
 
    2006     2005  
 
Condensed Combined Balance Sheets
               
Gross Real Estate Investment
  $ 1,685,969     $ 1,410,389  
Less: Accumulated Depreciation
    (72,398 )     (30,497 )
                 
Net Real Estate
    1,613,571       1,379,892  
Other Assets
    224,048       256,233  
                 
Total Assets
  $ 1,837,619     $ 1,636,125  
                 
Debt
  $ 1,276,001     $ 1,174,296  
Other Liabilities
    108,430       46,962  
Equity
    453,188       414,867  
                 
Total Liabilities and Equity
  $ 1,837,619     $ 1,636,125  
                 
Company’s share of Equity
  $ 53,151     $ 44,772  
Basis Differentials(1)
    2,376       (531 )
                 
Carrying Value of the Company’s investments in joint ventures
  $ 55,527     $ 44,241  
                 
 
 
(1) This amount represents the aggregate difference between the Company’s historical cost basis and the basis reflected at the joint venture level. Basis differentials are primarily comprised of gain deferrals related to properties the Company sold to the Joint Ventures, certain acquisition costs which are not reflected at the joint venture level and incentive payments the Company has earned but has not received.
 
                         
    Year Ended December 31,  
    2006     2005     2004  
 
Condensed Combined Statements of Operations
                       
Total Revenues
  $ 163,443     $ 59,411     $ 32,353  
Expenses
                       
Operating and Other
    55,070       16,128       11,593  
Interest
    61,524       20,995       7,712  
Depreciation and Amortization
    90,842       32,150       12,540  
                         
Total Expenses
    207,436       69,273       31,845  
                         
Gain on Sale of Real Estate
    94,352       10,761       81,431  
                         
Net Income
    50,359       899       81,939  
                         
Company’s share of Net Income
  $ 30,673     $ 3,699     $ 37,301  
                         


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

5.   Mortgage Loans Payable, Net, Senior Unsecured Debt, Net and Unsecured Lines of Credit
 
The following table discloses certain information regarding the Company’s mortgage loans, senior unsecured debt and unsecured lines of credit:
 
                                     
                      Effective
     
    Outstanding
    Interest
    Interest
     
    Balance at     Rate at
    Rate at
     
    December 31,
    December 31,
    December 31,
    December 31,
    Maturity
    2006     2005     2006     2006     Date
 
Mortgage Loans Payable, Net
  $ 77,926     $ 57,309       5.50% - 9.25%       4.58% - 9.25%     July 2009 -
September 2024
Unamortized Premiums
    (2,919 )     (3,549 )                    
                                     
Mortgage Loans Payable, Gross
  $ 75,007     $ 53,760                      
                                     
Senior Unsecured Debt, Net
                                   
2006 Notes
  $     $ 150,000       7.000%       7.22%     12/01/06
2007 Notes
    149,998       149,992       7.600%       7.61%     05/15/07
2016 Notes
    199,372             5.750%       5.91%     01/15/16
2017 Notes
    99,895       99,886       7.500%       7.52%     12/01/17
2027 Notes
    15,055       15,054       7.150%       7.11%     05/15/27
2028 Notes
    199,831       199,823       7.600%       8.13%     07/15/28
2011 Notes
    199,746       199,685       7.375%       7.39%     03/15/11
2012 Notes
    199,270       199,132       6.875%       6.85%     04/15/12
2032 Notes
    49,435       49,413       7.750%       7.87%     04/15/32
2009 Notes
    124,893       124,849       5.250%       4.10%     06/15/09
2014 Notes
    112,237       111,059       6.420%       6.54%     06/01/14
2011 Exchangeable Notes
    200,000             4.625%       4.63%     09/15/11
                                     
Subtotal
  $ 1,549,732     $ 1,298,893                      
                                     
Unamortized Discounts
    15,338       16,177                      
                                     
Senior Unsecured Notes, Gross
  $ 1,565,070     $ 1,315,070                      
                                     
Unsecured Lines of Credit
                                   
Unsecured Line of Credit I
  $ 207,000     $ 332,500       6.058%       6.058%     09/28/08
Unsecured Line of Credit II
          125,000       N/A       N/A     N/A
                                     
Unsecured Lines of Credit Total
  $ 207,000     $ 457,500                      
                                     
 
Mortgage Loans Payable, Net
 
During 2006, in conjunction with the acquisition of several industrial properties, the Company assumed mortgages in the aggregate of $33,866. In conjunction with the assumption of the loans, the Company recorded a premium in the amount of $116. Also during 2006, the Company paid off and retired $10,331 of mortgage loans payable. As of December 31, 2006, mortgage loans payable of $77,926 is collateralized by industrial properties with a carrying value of $124,470.
 
Senior Unsecured Debt, Net
 
On January 10, 2006, the Company, through the Operating Partnership, issued $200,000 of senior unsecured debt which matures on January 15, 2016 and bears interest at a rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. Interest is paid semi-annually in arrears on January 15 and July 15. In December 2005, the Company also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Company settled the interest rate protection agreements on January 9, 2006 for a payment of approximately $1,729, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements will be amortized over the life of the 2016 Notes as an adjustment to interest expense. Including


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the impact of the offering discount and the settlement amount of the interest rate protection agreements, the Company’s effective interest rate on the 2016 Notes is 5.91%.
 
On September 25, 2006, the Company, through the Operating Partnership, issued $175,000 of senior unsecured debt which bears interest at a rate of 4.625% (the “2011 Exchangeable Notes”). The Company also granted the initial purchasers of the 2011 Exchangeable Notes an option exercisable until October 4, 2006 to purchase up to an additional $25,000 principal amount of the 2011 Exchangeable Notes to cover over-allotments, if any (the “Over-allotment Option”). Holders of the 2011 Exchangeable Notes may exchange their notes for the Company’s common stock prior to the close of business on the second business day immediately preceding the stated maturity date at any time beginning on July 15, 2011 and also under the following circumstances: 1) during any calendar quarter beginning after December 31, 2006 (and only during such calendar quarter), if, and only if, the closing sale price per share of the Company’s common stock for at least 20 trading days ending on the last trading day of the preceding calendar quarter is more than 130% of the exchange price per share of the Company’s common stock in effect on the applicable trading day; 2) during the five consecutive trading-day period following any five consecutive trading-day period in which the trading price of the notes was less than 98% of the product of the closing sale price per share of the Company’s common stock multiplied by the applicable exchange rate; 3) if those notes have been called for redemption, at any time prior to the close of business on the second business day prior to the redemption date; 4) upon the occurrence of distributions of certain rights to purchase the Company’s common stock or certain other assets; or 5) if the Company’s common stock ceases to be listed on a U.S. national or regional securities exchange and is not quoted on the over-the-counter market as reported by Pink Sheets LLC or any similar organization, in each case, for 30 consecutive trading days. The 2011 Exchangeable Notes have an initial exchange rate of 19.6356 shares of the Company’s common stock per $1,000 principal amount, representing an exchange price of approximately $50.93 per common share and an exchange premium of approximately 20% based on the last reported sale price of $42.44 per share of the Company’s common stock on September 19, 2006. If a change of control transaction described in the indenture relating to the 2011 Exchangeable Notes occurs and a holder elects to exchange notes in connection with any such transaction, holders of the 2011 Exchangeable Notes will be entitled to a make-whole amount in the form of an increase in the exchange rate. The exchange rate may also be adjusted under certain other circumstances, including the payment of cash dividends in excess of the Company’s current regular quarterly dividend on its common stock of $0.70 per share. The 2011 Exchangeable Notes will be exchangeable for cash up to their principal amount and shares of the Company’s common stock for the remainder of the exchange value in excess of the principal amount. The 2011 Exchangeable notes mature on September 15, 2011, unless previously redeemed or repurchased by the Company or exchanged in accordance with their terms prior to such date. Interest is paid semi-annually in arrears on March 15 and September 15 of each year, beginning March 15, 2007. The 2011 Exchangeable Notes are fully and unconditionally guaranteed by the Company. On October 3, 2006, the initial purchasers of the 2011 Exchangeable Notes exercised their Over-Allotment Option with respect to $25,000 in principal amount of the 2011 Exchangeable Notes. With the exercise of the Over-Allotment Option, the aggregate principal amount of 2011 Exchangeable Notes issued and outstanding is $200,000. In connection with the Operating Partnership’s offering of the 2011 Exchangeable Notes, the Operating Partnership entered into capped call transactions (the “capped call transactions”) with affiliates of two of the initial purchasers of the 2011 Exchangeable Notes (the “option counterparties”) in order to increase the effective exchange price of the 2011 Exchangeable Notes to $59.42 per share of the Company’s common stock, which represents an exchange premium of approximately 40% based on the last reported sale price of $42.44 per share of the Company’s common stock on September 19, 2006. The aggregate cost of the capped call transactions was approximately $6,835. The capped call transactions are expected to reduce the potential dilution with respect to the Company’s common stock upon exchange of the 2011 Exchangeable Notes to the extent the then market value per share of the Company’s common stock does not exceed the cap price of the capped call transaction during the observation period relating to an exchange. The cost of the capped call will be accounted for as a hedge and included in


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

shareholders’ equity because the derivative is indexed to the Company’s own stock and meets the scope exception in FAS 133.
 
On December 1, 2006, the Company paid off and retired its 7.0% 2006 Unsecured Notes in the amount of $150,000.
 
All of the Company’s senior unsecured debt (except for the 2011 Exchangeable Notes) contains certain covenants, including limitations on incurrence of debt and debt service coverage.
 
Unsecured Lines of Credit
 
The Company has maintained an unsecured revolving credit facility since 1997 (the “Unsecured Line of Credit”). On August 23, 2005, the Company, through the Operating Partnership, amended and restated the Unsecured Line of Credit (the “Unsecured Line of Credit I”). The Unsecured Line of Credit I matures on September 28, 2008, has a borrowing capacity of $500,000, with the right, subject to certain conditions, to increase the borrowing capacity up to $600,000 and bears interest at a floating rate of LIBOR plus .625%, or the Prime Rate, at the Company’s election. The net unamortized deferred financing fees related to the Unsecured Line of Credit I and any additional deferred financing fees incurred related to the Unsecured Line of Credit I are being amortized over the life of the Unsecured Line of Credit I in accordance with Emerging Issues Task Force Issue 98-14, “Debtor’s Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements”, except for $51, which represents the write off of deferred financing costs and is included in the gain from early retirement of debt. The Unsecured Line of Credit I contains certain financial covenants relating to debt service coverage, market value net worth, dividend payout ratio and total funded indebtedness.
 
In December 2005, the Company, through the Operating Partnership, entered into a non-revolving unsecured line of credit (the “Unsecured Line of Credit II” together with the Unsecured Line of Credit I, the “Unsecured Lines of Credit”). The Unsecured Line of Credit II had a borrowing capacity of $125,000 and matured on March 15, 2006. The Unsecured Line of Credit II provided for interest only payments at LIBOR plus .625% or at Prime, at the Company’s election. The Company, through the Operating Partnership, paid off and retired the Unsecured Line of Credit II in January 2006.
 
The following is a schedule of the stated maturities and scheduled principal payments of the mortgage loans, senior unsecured debt and unsecured line of credit, exclusive of premiums and discounts, for the next five years ending December 31, 2007 and thereafter:
 
         
    Amount  
 
2007
  $ 152,884  
2008
    210,111  
2009
    133,001  
2010
    15,545  
2011
    407,360  
Thereafter
    928,176  
         
Total
  $ 1,847,077  
         


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value
 
At December 31, 2006 and 2005, the fair value of the Company’s mortgage loans payable, senior unsecured debt and Unsecured Line of Credit I were as follows:
 
                                 
    December 31, 2006     December 31, 2005  
    Carrying
    Fair
    Carrying
    Fair
 
    Amount     Value     Amount     Value  
 
Mortgage Loans Payable
  $ 77,926     $ 78,730     $ 57,309     $ 58,864  
Senior Unsecured Debt
    1,549,732       1,636,318       1,298,893       1,415,268  
Unsecured Lines of Credit I
    207,000       207,000       457,500       457,500  
                                 
Total
  $ 1,834,658     $ 1,922,048     $ 1,813,702     $ 1,931,632  
                                 
 
The fair value of the senior unsecured debt was determined by quoted market prices, if available. The fair values of the Company’s senior unsecured debt not valued by quoted market prices and mortgage loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value of the Unsecured Lines of Credit was equal to their carrying value due to the variable interest rate nature of the loans.
 
Other Comprehensive Income
 
In conjunction with the prior issuances of senior unsecured debt, the Company entered into interest rate protection agreements to fix the interest rate on anticipated offerings of senior unsecured debt (the “Interest Rate Protection Agreements”). In the next 12 months, the Company will amortize approximately $1,182 of the Interest Rate Protection Agreements into net income as a decrease to interest expense.
 
In October 2005, the Company, through an entity wholly-owned by the Operating Partnership, entered into an interest rate protection agreement which hedged the change in value of a build to suit development project the Company was constructing. This interest rate protection agreement had a notional value of $50,000, was based on the three Month LIBOR rate, had a strike rate of 4.8675%, had an effective date of December 30, 2005 and a termination date of December 30, 2010. Per Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” fair value and cash flow hedge accounting for hedges of non-financial assets and liabilities is limited to hedges of the risk of changes in the market price of the entire hedged item because changes in the price of an ingredient or component of a non-financial item generally do not have a predictable, separately measurable effect on the price of the item. Since the interest rate protection agreement is hedging a component of the change in value of the build to suit development, the interest rate protection agreement does not qualify for hedge accounting and the change in value of the interest rate protection agreement will be recognized immediately in net income as opposed to other comprehensive income. On January 5, 2006, the Company, settled the interest rate protection agreement for a payment of $186.
 
In December 2005, the Company, through the Operating Partnership, entered into three interest rate protection agreements which fixed the interest rate on a forecasted offering of unsecured debt which it designated as cash flow hedges. Two of the interest rate protection agreements each had a notional value of $48,700 and were effective from December 30, 2005 through December 30, 2015. The interest rate protection agreements fixed the LIBOR rate at 5.066% and 5.067%. The third interest rate protection agreement had a notional value of $48,700, was effective from January 19, 2006 through January 19, 2016, and fixed the LIBOR rate at 4.992%. The Company settled the three interest rate protection agreements on January 9, 2006 for a payment of $1,729, which is included in other comprehensive income. The settlement amount of the interest rate protection agreements will be amortized over the life of the 2016 Notes as an adjustment to interest expense.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
In April 2006, the Company, through the Operating Partnership, entered into four interest rate protection agreements which fixed the interest rate on forecasted offerings of unsecured debt which it designated as cash flow hedges. Two of the interest rate protection agreements each have a notional value of $72,900 and are effective from November 28, 2006 through November 28, 2016. The interest rate protection agreements fixed the LIBOR rate at 5.537%. The third and fourth interest rate protection agreements each have a notional value of $74,750, are effective from May 10, 2007 through May 10, 2012, and fixed the LIBOR rate at 5.420% (the ”2006 Interest Rate Protection Agreements”). In September 2006, the 2006 Interest Rate Protection Agreements failed to qualify for hedge accounting, since the actual debt issuance date was not within the range of dates the Company disclosed in its hedge designation. The Company settled the 2006 Interest Rate Protection Agreements and paid the counterparties $2,942. This amount is recognized in the mark-to-market/gain (loss) on settlement of interest rate protection agreements caption on the consolidated statements of operations.
 
6.   Stockholders’ Equity
 
Preferred Stock
 
On June 6, 1997, the Company issued 2,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 85/8%, $0.01 par value, Series C Cumulative Preferred Stock (the “Series C Preferred Stock”), at an initial offering price of $25 per Depositary Share. Dividends on the Series C Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series C Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series F Preferred Stock (hereinafter defined), Series G Preferred Stock (hereinafter defined), Series J Preferred Stock (hereinafter defined) and Series K Preferred Stock (hereinafter defined). The Series C Preferred Stock is not redeemable prior to June 6, 2007. On or after June 6, 2007, the Series C Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series C Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On February 4, 1998, the Company issued 5,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.95%, $0.01 par value, Series D Cumulative Preferred Stock (the “Series D Preferred Stock”), at an initial offering price of $25 per Depositary Share. On or after February 4, 2003, the Series D Preferred Stock became redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25 per Depositary Share, or $125,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Company redeemed the Series D Preferred Stock on June 7, 2004 at a redemption price of $25.00 per Depositary Share, and paid a prorated second quarter dividend of $0.36990 per Depositary Share, totaling approximately $1,850. In accordance with EITF D-42, due to the redemption of the Series D Preferred Stock, the initial offering costs associated with the issuance of the Series D Preferred Stock of $4,467 were reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2004.
 
On March 18, 1998, the Company issued 3,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.90%, $0.01 par value, Series E Cumulative Preferred Stock (the “Series E Preferred Stock”), at an initial offering price of $25 per Depositary Share. On or after March 18, 2003, the Series E Preferred Stock became redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25 per Depositary Share, or $75,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Company redeemed the Series E Preferred Stock on June 7, 2004 at a redemption price of $25.00 per Depositary Share, and paid a prorated second quarter dividend of $0.36757 per Depositary Share, totaling approximately $1,103. In accordance with EITF D-42, due to the redemption of the Series E Preferred Stock, the initial offering costs associated with the issuance of the Series E Preferred Stock


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of $2,892 were reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2004.
 
On May 27, 2004, the Company issued 50,000 Depositary Shares, each representing 1/100th of a share of the Company’s 6.236%, $0.01 par value, Series F Flexible Cumulative Redeemable Preferred Stock (the “Series F Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share. Dividends on the Series F Preferred Stock are cumulative from the date of initial issuance and are payable semi-annually in arrears for the period from the date of original issuance through March 31, 2009 (the “Series F Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 6.236% per annum of the liquidation preference (the “Series F Initial Distribution Rate”) (equivalent to $62.36 per Depositary Share). On or after March 31, 2009, the Series F Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.375% (the initial credit spread), plus the greater of (i) the 3-month LIBOR Rate, (ii) the 10-year Treasury CMT Rate (as defined in the Articles Supplementary), and (iii) the 30-year Treasury CMT Rate (the adjustable rate)(as defined in the Articles Supplementary), reset quarterly. Dividends on the Series F Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series F Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series F Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series G Preferred Stock (hereinafter defined), Series J Preferred Stock (hereinafter defined) and Series K Preferred Stock (hereinafter defined). On or after March 31, 2009, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series F Initial Fixed Rate Period, the Series F Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series F Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On May 27, 2004, the Company issued 25,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.236%, $0.01 par value, Series G Flexible Cumulative Redeemable Preferred Stock (the “Series G Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share. Dividends on the Series G Preferred Stock are cumulative from the date of initial issuance and are payable semi-annually in arrears for the period from the date of original issuance of the Series G Preferred Stock through March 31, 2014 (the “Series G Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 7.236% per annum of the liquidation preference (the “Series G Initial Distribution Rate”) (equivalent to $72.36 per Depositary Share). On or after March 31, 2014, the Series G Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.500% (the initial credit spread), plus the greater of (i) the 3-month LIBOR Rate, (ii) the 10-year Treasury CMT Rate (as defined in the Articles Supplementary), and (iii) the 30-year Treasury CMT Rate (the adjustable rate) (as defined in the Articles Supplementary), reset quarterly. Dividends on the Series G Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series G Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series G Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock, Series J Preferred Stock (hereinafter defined) and Series K Preferred Stock (hereinafter defined). On or after March 31, 2014, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series G Initial Fixed Rate Period, the Series G Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $25,000 in the aggregate, plus dividends accrued and unpaid to the


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

redemption date. The Series G Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On June 2, 2004, the Company issued 500 shares of 2.965%, $0.01 par value, Series H Flexible Cumulative Redeemable Preferred Stock (the “Series H Preferred Stock”), at an initial offering price of $250,000.00 per share. On or after July 2, 2004, the Series H Preferred Stock became redeemable for cash at the option of the Company, in whole but not in part, at a redemption price equivalent, initially, to $242,875.00 per share, plus accrued and unpaid dividends. The Company redeemed the Series H Preferred Stock on July 2, 2004 and paid a prorated second and third quarter dividend of $629.555 per share, totaling approximately $315. In accordance with EITF D-42, due to the redemption of the Series H Preferred Stock, the initial offering costs associated with the issuance of the Series H Preferred Stock of $600 is reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2004.
 
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Shares, respectively, of $.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock, (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187,500. The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $353. In accordance with EITF D-42, due to the redemption of the Series I Preferred Stock, the difference between the redemption cost and the carrying value of the Series I Preferred Stock of approximately $672 is reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2006.
 
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. Dividends on the Series J Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. However, during any period that both (i) the depositary shares are not listed on the NYSE or AMEX, or quoted on NASDAQ, and (ii) the Company is not subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, the Company will increase the dividend on the preferred shares to a rate of 8.25% of the liquidation preference per year. However, if at any time both (i) the depositary shares cease to be listed on the NYSE or the AMEX, or quoted on NASDAQ, and (ii) the Company ceases to be subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, then the preferred shares will be redeemable, in whole but not in part at the Company’s option, within 90 days of the date upon which the depositary shares cease to be listed and the Company ceases to be subject to such reporting requirements, at a redemption price equivalent to $25.00 per Depositary Share, plus all accrued and unpaid dividends to the date of redemption. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock, Series G Preferred Stock and Series K Preferred Stock (hereinafter defined). The Series J Preferred Stock is not redeemable prior to January 15, 2011. On or after January 15, 2011, the Series J Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On August 21, 2006, the Company issued 2,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series K Flexible Cumulative Redeemable Preferred Stock (the “Series K Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. Dividends on the Series K Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

issuance and are payable quarterly in arrears. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series K Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock, Series G Preferred Stock and Series J Preferred Stock. The Series K Preferred Stock is not redeemable prior to August 15, 2011. On or after August 15, 2011, the Series K Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series K Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
The following table summarizes certain information regarding the Company’s preferred stock:
 
                 
    Stated Value at  
    December 31,
    December 31,
 
    2006     2005  
 
Series C Preferred Stock
  $ 50,000     $ 50,000  
Series F Preferred Stock
    50,000       50,000  
Series G Preferred Stock
    25,000       25,000  
Series I Preferred Stock
          187,500  
Series J Preferred Stock
    150,000        
Series K Preferred Stock
    50,000        
                 
Total
  $ 325,000     $ 312,500  
                 
 
Shares of Common Stock
 
On September 16, 2004, the Company and the Operating Partnership entered into a sales agreement to sell up to 3,900,000 shares of the Company’s common stock from time to time with Cantor Fitzgerald & Co., as sales agent, in a controlled equity offering program. During the year ended December 31, 2004, the Company issued 1,333,600 shares of common stock under the controlled equity offering program and received net proceeds of $48,820.
 
On December 9, 2005, the Company issued 1,250,000 shares of $0.01 par value common stock (the “December 2005 Equity Offering”). The price per share was $39.45 resulting in gross offering proceeds of $49,313. Proceeds to the Company, net of underwriters’ discount and total expenses, were approximately $48,775.
 
For the years ended December 31, 2006, 2005 and 2004, 213,773, 81,644, and 248,098 respectively, shares of common stock were converted from an equivalent number of limited partnership interests in the Operating Partnership (“Units”).


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
The following table is a roll-forward of the Company’s shares of common stock outstanding, including unvested restricted shares of common stock for the three years ended December 31, 2006:
 
         
    Shares of
 
    Common Stock
 
    Outstanding  
 
Balance at December 31, 2003
    39,850,370  
Issuance of Common Stock and Stock Option Exercises
    2,621,082  
Issuance of Restricted Stock Shares
    216,617  
Repurchase and Retirement of Restricted Stock Shares
    (102,076 )
Conversion of Operating Partnership Units
    248,098  
         
Balance at December 31, 2004
    42,834,091  
         
Issuance of Common Stock and Stock Option Exercises
    1,480,942  
Issuance of Restricted Stock Shares
    200,042  
Repurchase and Retirement of Restricted Stock Shares
    (152,009 )
Conversion of Operating Partnership Units
    81,644  
         
Balance at December 31, 2005
    44,444,710  
         
Stock Option Exercises
    125,780  
Issuance of Restricted Stock Shares
    319,374  
Repurchase and Retirement of Restricted Stock Shares
    (93,007 )
Conversion of Operating Partnership Units
    213,773  
         
Balance at December 31, 2006
    45,010,630  
         
 
Non-Qualified Employee Stock Options
 
For the year ended December 31, 2004, certain employees of the Company exercised 1,663,652 non-qualified employee stock options. Net proceeds to the Company were approximately $37,301.
 
For the year ended December 31, 2005, certain employees of the Company exercised 248,881 non-qualified employee stock options. Net proceeds to the Company were approximately $6,698.
 
For the year ended December 31, 2006, certain employees of the Company exercised 125,780 non-qualified employee stock options. Net proceeds to the Company were approximately $3,742.
 
Restricted Stock
 
During the years ended December 31, 2006, 2005, and 2004 the Company awarded 319,374, 200,042, and 216,617 restricted shares of common stock, respectively, to certain employees and certain directors of the Company. See Note 13 for further disclosure on the Company’s stock based compensation.
 
Shareholders’ Rights Plan
 
On September 4, 1997, the Board of Directors of the Company declared a dividend distribution of one Preferred Share Purchase Right (“Right”) for each outstanding share of Common Stock. The dividend distribution was made on October 20, 1997 to stockholders of record as of the close of business on October 19, 1997. In addition, a Right will attach to each share of Common Stock issued in the future. Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Junior Participating Preferred Stock (the “Junior Preferred Stock”), at a price of $125 per one one-hundredth of a share (the “Purchase Price”), subject to adjustment. The Rights become exercisable only if a person or group of affiliated


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

or associated persons (an “Acquiring Person”) acquires, or obtains the right to acquire, beneficial ownership of Common Stock or other voting securities (“Voting Stock”) that have 15% or more of the voting power of the outstanding shares of Voting Stock, or if an Acquiring Person commences or makes an announcement of an intention to commence a tender offer or exchange offer to acquire beneficial ownership of Voting Stock that have 15% or more of the voting power of the outstanding shares of Voting Stock. The Rights will expire on October 19, 2007, unless redeemed earlier by the Company at $0.001 per Right, or exchanged by the Company at an exchange ratio of one share of Common Stock per Right.
 
In the event that a person becomes an Acquiring Person, each holder of a Right, other than the Acquiring Person, is entitled to receive, upon exercise, (1) Common Stock having a value equal to two times the Purchase Price of the Right or (2) common stock of the acquiring company having a value equal to two times the Purchase Price of the Right.
 
The Junior Preferred Stock ranks junior to all other series of the Company’s preferred stock with respect to payment of dividends and as to distributions of assets in liquidation. Each share of Junior Preferred Stock has a quarterly dividend rate per share equal to the greater of $1.00 or 100 times the per share amount of any dividend (other than a dividend payable in shares of Common Stock or a subdivision of the Common Stock) declared on the Common Stock, subject to certain adjustments. In the event of liquidation, the holder of the Junior Preferred Stock is entitled to receive a preferred liquidation payment per share of $1.00 (plus accrued and unpaid dividends) or, if greater, an amount equal to 100 times the payment to be made per share of Common Stock, subject to certain adjustments.
 
Dividends/Distributions
 
The following table summarizes dividends/distributions declared for the past three years:
 
                                                 
    Year Ended 2006     Year Ended 2005     Year Ended 2004  
    Dividend/
          Dividend/
          Dividend/
       
    Distribution
    Total
    Distribution
    Total
    Distribution
    Total
 
    per Share/
    Dividend/
    per Share/
    Dividend/
    per Share/
    Dividend/
 
    Unit     Distribution     Unit     Distribution     Unit     Distribution  
 
Common Stock/Operating Partnership Units
  $ 2.8100     $ 144,720     $ 2.7850     $ 139,168     $ 2.7500     $ 132,585  
Series C Preferred Stock
  $ 215.6240     $ 4,313     $ 215.6240     $ 4,313     $ 215.6240     $ 4,313  
Series D Preferred Stock
  $     $     $     $     $ 86.6780     $ 4,334  
Series E Preferred Stock
  $     $     $     $     $ 86.1320     $ 2,585  
Series F Preferred Stock
  $ 6,236.0000     $ 3,118     $ 6,236.0000     $ 3,118     $ 3,724.2800     $ 1,861  
Series G Preferred Stock
  $ 7,236.0000     $ 1,809     $ 7,236.0000     $ 1,809     $ 4,321.5000     $ 1,080  
Series H Preferred Stock
  $     $     $     $     $ 629.5550     $ 315  
Series I Preferred Stock
  $ 470.6667     $ 353     $ 1,930.2431     $ 1,448     $     $  
Series J Preferred Stock
  $ 17,521.0000     $ 10,512     $     $     $     $  
Series K Preferred Stock
  $ 6,595.6000     $ 1,319     $     $     $     $  
 
7.   Acquisition and Development of Real Estate
 
In 2004, the Company acquired 79 industrial properties comprising, in the aggregate, approximately 9.2 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $402,388, excluding costs incurred in conjunction with the acquisition of the properties. The Company also substantially completed development of 11 properties comprising approximately 2.3 million square feet (unaudited) of GLA at a cost of approximately $80,241. The Company reclassed the costs of the substantially


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
In 2005, the Company acquired 161 industrial properties comprising, in the aggregate, approximately 20.1 million square feet (unaudited) of GLA and several land parcels. The gross purchase price for 160 industrial properties and several land parcels totaled approximately $752,674, (approximately $14,698 of which was made through the issuance of 366,472 Units relating to five properties) excluding costs incurred in conjunction with the acquisition of the properties. Additionally, one industrial property was acquired through foreclosure due to a default on a mortgage loan receivable. The Company also substantially completed development of five properties comprising approximately 1.8 million square feet (unaudited) of GLA at a cost of approximately $97,466. The Company reclassed the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
In 2006, the Company acquired 91 industrial properties comprising, in the aggregate, approximately 10.5 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $610,745 (approximately $1,288 of which was made through the issuance of 31,473 Units relating to two properties) excluding costs incurred in conjunction with the acquisition of the properties. The Company also substantially completed development of 15 properties comprising approximately 5.0 million square feet (unaudited) of GLA at a cost of approximately $188,592. The Company reclassed the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
Intangible Assets Subject To Amortization in the Period of Acquisition
 
The fair value of in-place leases, above market leases, tenant relationships and below market leases recorded as a result of the above acquisitions was $36,270, $3,831, $20,336, and $(13,148), respectively, for the year ended December 31, 2006. The weighted average life in months of in-place leases, above market leases, tenant relationships and below market leases recorded as a result of 2006 acquisitions was 72, 71, 105, and 109 months, respectively.
 
The fair value of in-place leases, above market leases, and below market leases recorded as a result of the above acquisitions was $59,901, $6,137, and $(23,600), respectively for the year ended December 31, 2005. The weighted average life in months of in-place leases, above market leases, and below market leases recorded as a result of 2005 acquisitions was 137, 75 and 115 months, respectively.
 
8.   Sale of Real Estate, Real Estate Held for Sale and Discontinued Operations
 
In 2004, the Company sold 97 industrial properties comprising approximately 7.4 million square feet (unaudited) of GLA and several land parcels. Gross proceeds from the sales of the 97 industrial properties and several land parcels were approximately $424,878. The gain on sale of real estate was approximately $105,000, of which $88,245 is shown in discontinued operations. Ninety-two of the 97 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate, net of income taxes for the 92 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate, net of income taxes for the five industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
In 2005, the Company sold 96 industrial properties comprising approximately 12.8 million square feet (unaudited) of GLA and several land parcels. Of the 96 industrial properties sold, eight industrial property sales were to the March 2005 Joint Venture. Gross proceeds from the sales of the 96 industrial properties and several land parcels were approximately $656,094. The gain on sale of real estate was approximately


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$161,689, of which $132,139 is shown in discontinued operations. Eighty-six of the 96 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 86 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the ten industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
In 2006, the Company sold 125 industrial properties comprising approximately 17.1 million square feet (unaudited) of GLA and several land parcels, totaling gross proceeds of $946,800. The gain on sale of real estate was approximately $219,513, of which $213,442 is shown in discontinued operations. The 125 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate, for the 125 sold industrial properties are included in discontinued operations. The results of operations and gain on sale of real estate, for the several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
At December 31, 2006, the Company had 25 industrial properties comprising approximately 2.0 million square feet (unaudited) of GLA held for sale. In accordance with FAS 144, the results of operations of the 25 industrial properties held for sale at December 31, 2006 are included in discontinued operations. There can be no assurance that such industrial properties held for sale will be sold.
 
The following table discloses certain information regarding the industrial properties included in discontinued operations by the Company for the years ended December 31, 2006, 2005 and 2004.
 
                         
    Year Ended December 31,  
    2006     2005     2004  
 
Total Revenues
  $ 37,449     $ 66,731     $ 75,105  
Property Expenses
    (11,145 )     (22,155 )     (25,441 )
Interest Expense
          (373 )     (609 )
Depreciation and Amortization
    (14,389 )     (22,281 )     (20,607 )
Provision for Income Taxes Allocable to Operations
    (2,629 )     (3,054 )     (2,346 )
Gain on Sale of Real Estate
    213,442       132,139       88,245  
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
    (47,511 )     (20,529 )     (8,659 )
                         
Income from Discontinued Operations
  $ 175,217     $ 130.478     $ 105,688  
                         
 
In conjunction with certain property sales, the Company provided seller financing. At December 31, 2006 and 2005, the Company had mortgage notes receivable and accrued interest outstanding of approximately $0 and $24,118, respectively, which is included as a component of prepaid expenses and other assets.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
9.   Supplemental Information to Statements of Cash Flows
 
Supplemental disclosure of cash flow information:
 
                         
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2006     2005     2004  
 
Interest paid, net of capitalized interest
  $ 114,709     $ 107,573     $ 98,910  
                         
Interest capitalized
  $ 5,159     $ 3,271     $ 1,304  
                         
Income Taxes Paid
  $ 36,374     $ 36,080     $ 7,936  
                         
Supplemental schedule of noncash investing and financing activities:
                       
Distribution payable on common stock/units
  $ 36,613     $ 35,752     $ 34,255  
                         
Distribution payable on preferred stock
  $ 5,935     $ 3,757     $ 1,232  
                         
Exchange of units for common shares:
                       
Minority interest
  $ (5,144 )   $ (1,951 )   $ (6,195 )
Common stock
    2       1       3  
Additional paid-in-capital
    5,142       1,950       6,192  
                         
    $     $     $  
                         
In conjunction with property and land acquisitions, the following assets and liabilities were assumed:
                       
Accounts payable and accrued expenses
  $ (1,928 )   $ (4,735 )   $ (3,231 )
                         
Issuance of Operating Partnership Units
  $ (1,288 )   $ (14,698 )   $  
                         
Mortgage debt
  $ (33,982 )   $ (11,545 )   $ (18,244 )
                         
Foreclosed property acquisition and write-off of a Mortgage loan receivable
  $     $ 3,870     $  
                         
Write-off of fully depreciated assets
  $ 30,596     $ 67,814     $ 26,041  
                         
In conjunction with certain property sales, the Company provided seller financing or assigned a mortgage loan payable:
                       
Notes receivable
  $ 11,200     $ 76,744     $ 92,146  
                         
Mortgage Note Payable
  $     $ 13,242     $  
                         


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10.   Earnings Per Share (“EPS”)
 
The computation of basic and diluted EPS is presented below.
 
                         
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2006     2005     2004  
 
Numerator:
                       
(Loss) Income from Continuing Operations
  $ (43,777 )   $ (42,424 )   $ 9,596  
Gain on Sale of Real Estate, Net of Minority Interest and Income Tax
    3,438       16,221       9,822  
Less: Preferred Stock Dividends
    (21,424 )     (10,688 )     (14,488 )
Less: Redemption of Preferred Stock
    (672 )           (7,959 )
                         
Loss from Continuing Operations Available to Common Stockholders, Net of Minority Interest — For Basic and Diluted EPS
    (62,435 )     (36,891 )     (3,029 )
Discontinued Operations, Net of Minority Interest and Income Tax
    152,421       113,307       91,188  
                         
Net Income Available to Common Stockholders — For Basic and Diluted EPS
  $ 89,986     $ 76,416     $ 88,159  
                         
Denominator:
                       
Weighted Average Shares — Basic
    44,011,503       42,431,109       40,557,053  
Effect of Dilutive Securities:
                       
2011 Exchangeable Notes
                 
Employee and Director Common Stock Options
                 
Employee and Director Shares of Restricted Stock
                 
                         
Weighted Average Shares — Diluted
    44,011,503       42,431,109       40,557,053  
                         
Basic EPS:
                       
Loss from Continuing Operations Available to Common Stockholders, Net of Minority Interest
  $ (1.42 )   $ (0.87 )   $ (0.07 )
                         
Discontinued Operations, Net of Minority Interest and Income Tax
  $ 3.46     $ 2.67     $ 2.25  
                         
Net Income Available to Common Stockholders
  $ 2.04     $ 1.80     $ 2.17  
                         
Diluted EPS:
                       
Loss from Continuing Operations Available to Common Stockholders, Net of Minority Interest
  $ (1.42 )   $ (0.87 )   $ (0.07 )
                         
Discontinued Operations, Net of Minority Interest and Income Tax
  $ 3.46     $ 2.67     $ 2.25  
                         
Net Income Available to Common Stockholders
  $ 2.04     $ 1.80     $ 2.17  
                         
 
Weighted average shares — diluted are the same as weighted average shares — basic for the years ended December 31, 2006, 2005 and 2004 as the dilutive effect of stock options and restricted stock was excluded because its inclusion would have been anti-dilutive to the loss from continuing operations available to common stockholders, net of minority interest. The dilutive stock options and restricted stock excluded from the


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

computation are 116,155 and 93,643, respectively, for the year ended December 31, 2006, 141,625 and 82,888, respectively, for the year ended December 31, 2005 and 227,423 and 103,551, respectively, for the year ended December 31, 2004.
 
Unvested restricted stock of 778,535, 700,023, and 823,836 were outstanding as of December 31, 2006, 2005 and 2004 respectively. Unvested restricted stock aggregating 109,517, 182,651, and 211,924 were antidilutive at December 31, 2006, 2005 and 2004, respectively, and accordingly, were excluded from dilution computations.
 
Additionally, options to purchase common stock of 381,976, 546,723, and 823,421 were outstanding as of December 31, 2006, 2005 and 2004, respectively. None of the options outstanding at December 31, 2006, 2005 and 2004 were antidilutive.
 
The 2011 Exchangeable Notes issued during 2006, which are convertible into common shares of the Company at a price of $50.93, were not included in the computation of diluted EPS for 2006 as the Company’s average stock price did not exceed the strike price of the conversion feature (see Note 5).
 
11.   Income Taxes
 
For income tax purposes, distributions paid to common shareholders are classified as ordinary income, capital gain, return of capital or qualified dividends. For the three years ended December 31, 2006, 2005 and 2004, the distributions per common share were classified as follows:
 
                                                 
          As a Percentage
          As a Percentage
          As a Percentage
 
    2006     of Distributions     2005     of Distributions     2004     of Distributions  
 
Ordinary income
  $ 0.2613       9.30 %   $ 0.3278       11.77 %   $ 0.3622       13.17 %
Short-term capital gains
                            0.0423       1.54 %
Long-term capital gains
    0.3364       11.97 %     0.4289       15.40 %     0.8654       31.47 %
Unrecaptured Section 1250 gain
    0.2408       8.57 %     0.2158       7.75 %     0.2503       9.10 %
Return of capital
    1.3918       49.53 %     1.6276       58.44 %     1.2298       44.72 %
Qualified Dividends
    0.5797       20.63 %     0.1849       6.64 %            
                                                 
    $ 2.810       100.00 %   $ 2.785       100.00 %   $ 2.7500       100.00 %
                                                 
 
For income tax purposes, distributions paid to preferred shareholders are classified as ordinary income, capital gain, or qualified dividends. For the three years ended December 31, 2006, 2005 and 2004, the preferred distributions per depositary share were classified as follows:
 
                                                 
          As a Percentage
          As a Percentage
          As a Percentage
 
Series C Cumulative Preferred Stock
  2006     of Distributions     2005     of Distributions     2004     of Distributions  
 
Ordinary income
  $ 0.3972       18.42 %   $ 0.5992       27.79 %   $ 0.9249       23.81 %
Short-term capital gains
                            0.1080       2.78 %
Long-term capital gains
    0.5115       23.72 %     0.8023       37.21 %     2.2119       56.94 %
Unrecaptured Section 1250 gain
    0.3661       16.98 %     0.4041       18.74 %     0.6398       16.47 %
Qualified Dividends
    0.8814       40.88 %     0.3506       16.26 %            
                                                 
    $ 2.1562       100.00 %   $ 2.1562       100.00 %   $ 3.8846       100.00 %
                                                 


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

                 
          As a Percentage
 
Series J Cumulative Redeemable Preferred Stock
  2006     of Distributions  
 
Ordinary income
  $ 0.3227       18.42 %
Long-term capital gains
    0.4156       23.72 %
Unrecaptured Section 1250 gain
    0.2975       16.98 %
Qualified Dividends
    0.7163       40.88 %
                 
    $ 1.7521       100.00 %
                 
 
                 
          As a Percentage
 
Series K Cumulative Redeemable Preferred Stock
  2006     of Distributions  
 
Ordinary income
  $ 0.1215       18.42 %
Long-term capital gains
    0.1564       23.72 %
Unrecaptured Section 1250 gain
    0.1120       16.98 %
Qualified Dividends
    0.2696       40.88 %
                 
    $ 0.6595       100.00 %
                 
 
The components of income tax (expense) benefit for the Company’s taxable REIT subsidiary (the “TRS”) for the years ended December 31, 2006, 2005 and 2004 are comprised of the following:
 
                         
    2006     2005     2004  
 
Current:
                       
Federal
  $ (39,531 )   $ (19,265 )   $ (8,074 )
State
    (7,734 )     (4,519 )     (1,654 )
Deferred:
                       
Federal
    3,548       4,299       1,070  
State
    695       1,009       219  
                         
    $ (43,022 )   $ (18,476 )   $ (8,439 )
                         
 
In addition to income tax expense/benefit recognized by the TRS, $317 and $1,956 of state income taxes was recognized by the Company and is included in income tax expense (benefit) on the consolidated statement of operations for the years ended December 31, 2006 and 2005, respectively.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Deferred income taxes represent the tax effect of the temporary differences between the book and tax basis of assets and liabilities. Deferred tax assets (liabilities) of the TRS include the following as of December 31, 2006, 2005 and 2004:
 
                         
    2006     2005     2004  
 
Bad debt expense
  $ 119     $ 118     $  
Investment in partnerships
    2,519       648        
Fixed assets
    7,133       4,363       2,012  
Prepaid rent
    556       461       323  
Capitalized general and administrative expense under 263A
    2,408       2,696       818  
Deferred losses/gains
    968       878       334  
Mark-to-Market of interest rate protection agreements
          6        
Capitalized interest under 263A
    191       184        
Accrued contingency loss
    297              
                         
Total deferred tax assets
  $ 14,191     $ 9,354     $ 3,487  
                         
Straight-line rent
    (1,483 )     (923 )     (430 )
Build to suit development
    (100 )     (66 )      
                         
Total deferred tax liabilities
  $ (1,583 )   $ (989 )   $ (430 )
                         
Total net deferred tax asset
  $ 12,608     $ 8,365     $ 3,057  
                         
 
The TRS does not have any net operating loss carryforwards or tax credit carryforwards.
 
The TRS’s components of income tax expense for the years ended December 31, 2006, 2005 and 2004 are as follows:
 
                         
    2006     2005     2004  
 
Tax expense associated with income from operations on sold properties which is included in discontinued operations
  $ (2,629 )   $ (3,054 )   $ (2,346 )
Tax expense associated with gains and losses on the sale of real estate which is included in discontinued operations
    (47,511 )     (20,529 )     (8,659 )
Tax expense associated with gains and losses on the sale of real estate
    (2,119 )     (10,871 )     (5,371 )
Income tax benefit
    9,237       15,978       7,937  
                         
Income tax expense
  $ (43,022 )   $ (18,476 )   $ (8,439 )
                         
 
The income tax benefit pertaining to income from continuing operations and gain on sale of real estate for the TRS differs from the amounts computed by applying the applicable federal statutory rate as follows:
 
                         
    2006     2005     2004  
 
Tax benefit at Federal rate related to continuing operations
  $ 5,873     $ 2,785     $ 2,256  
State tax benefit, net of Federal benefit
    700       403       282  
Meals and Entertainment
    (24 )     (19 )     (16 )
Prior year provision to return adjustments
    484       1,886        
Other
    85       52       44  
                         
Net Income tax benefit
  $ 7,118     $ 5,107     $ 2,566  
                         


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12.   Future Rental Revenues
 
The Company’s properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under non-cancelable operating leases in effect as of December 31, 2006 are approximately as follows:
 
         
2007
  $ 280,654  
2008
    236,882  
2009
    189,035  
2010
    140,853  
2011
    106,194  
Thereafter
    460,231  
         
Total
  $ 1,413,849  
         
 
13.   Stock Based Compensation
 
The Company maintains three stock incentive plans (the “Stock Incentive Plans”) which are administered by the Compensation Committee of the Board of Directors. There are approximately 10.0 million shares reserved under the Stock Incentive Plans. Only officers, other employees of the Company, its Independent Directors and its affiliates generally are eligible to participate in the Stock Incentive Plans.
 
The Stock Incentive Plans authorize (i) the grant of stock options that qualify as incentive stock options under Section 422 of the Code, (ii) the grant of stock options that do not so qualify, (iii) restricted stock awards, (iv) performance share awards and (v) dividend equivalent rights. The exercise price of the stock options is determined by the Compensation Committee. Special provisions apply to awards granted under the Stock Incentive Plans in the event of a change in control in the Company. As of December 31, 2006, stock options and restricted stock covering 1.2 million shares were outstanding and 2.3 million shares were available under the Stock Incentive Plans. At December 31, 2006 all outstanding stock options are vested. Stock option transactions are summarized as follows:
 
                                 
          Weighted
             
          Average
    Exercise
    Aggregate
 
          Exercise
    Price
    Intrinsic
 
    Shares     Price     per Share     Value  
 
Outstanding at December 31, 2004
    823,421     $ 30.74     $ 18.25-$33.15     $ 8,230  
Exercised
    (248,881 )   $ 29.57     $ 18.25-$33.15     $ 2,588  
Expired or Terminated
    (27,817 )   $ 30.71     $ 25.13-$33.13          
                                 
Outstanding at December 31, 2005
    546,723     $ 31.27     $ 22.75-$33.15     $ 3,954  
Exercised
    (125,780 )   $ 30.24     $ 22.75-$33.15     $ 1,846  
Expired or Terminated
    (38,967 )   $ 30.88     $ 27.25-$33.13          
                                 
Outstanding at December 31, 2006
    381,976     $ 31.65     $ 25.13-$33.15     $ 5,823  
                                 
 
The following table summarizes currently outstanding and exercisable options as of December 31, 2006:
 
                         
    Number
    Weighted
    Weighted
 
    Outstanding
    Average
    Average
 
    and
    Remaining
    Exercise
 
Range of Exercise Price
  Exercisable     Contractual Life     Price  
 
$25.13 - $30.53
    117,576       3.98       29.90  
$31.05 - $33.15
    264,400       3.45       32.42  


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In September 1994, the Board of Directors approved and the Company adopted a 401(k)/Profit Sharing Plan. Under the Company’s 401(k)/Profit Sharing Plan, all eligible employees may participate by making voluntary contributions. The Company may make, but is not required to make, matching contributions. For the years ended December 31, 2006, 2005 and 2004, the Company made matching contributions of approximately $451, $358, and $305, respectively.
 
For the twelve months ended December 31, 2006, 2005 and 2004, the Company awarded 319,374, 200,042 and 216,617 restricted stock awards to its employees and directors of the Company having a fair value at grant date of $12,152, $8,381 and $8,379 respectively. Restricted stock awards granted to employees generally vest over a period of three years and restricted stock awards granted to directors generally vest over a period of five to ten years. For the twelve months ended December 31, 2006, 2005 and 2004, the Company recognized $9,624, $8,845 and $6,869 in restricted stock amortization related to restricted stock awards, of which $1,323, $1,357, and $1,140 respectively, was capitalized in connection with development activities. At December 31, 2006, the Company has $18,541 in unearned compensation related to unvested restricted stock awards. The weighted average period that the unrecognized compensation is expected to be incurred is 1.84 years. The Company has not awarded options to employees or directors of the Company during the twelve months ended December 31, 2006, 2005 and 2004, and therefore no stock-based employee compensation expense related to options is included in net income available to common stockholders.
 
Restricted stock transactions for the years ended December 31, 2006 and 2005 are summarized as follows:
 
                 
          Weighted
 
          Average
 
          Grant Date
 
    Shares     Fair Value  
 
Outstanding at December 31, 2004
    823,836     $ 31.88  
Issued
    200,042     $ 41.89  
Vested
    (279,266 )   $ 32.78  
Forfeited
    (44,589 )   $ 34.37  
                 
Outstanding at December 31, 2005
    700,023     $ 34.23  
Issued
    319,374     $ 38.05  
Vested
    (217,168 )   $ 36.57  
Forfeited
    (23,694 )   $ 34.55  
                 
Outstanding at December 31, 2006
    778,535     $ 35.49  
                 
 
14.   Related Party Transactions
 
The Company periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of one of the Company’s officers/Directors is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2006, 2005 and 2004 this relative received brokerage commissions in the amount of $341, $285 and $29, respectively.
 
15.   Commitments and Contingencies
 
In the normal course of business, the Company is involved in legal actions arising from the ownership of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the consolidated financial position, operations or liquidity of the Company.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Twelve properties have leases granting the tenants options to purchase the property. Such options are exercisable at various times at appraised fair market value or at a fixed purchase price in excess of the Company’s depreciated cost of the asset. The Company has no notice of any exercise of any tenant purchase option.
 
The Company has committed to the construction of certain industrial properties totaling approximately 3.2 million square feet (unaudited) of GLA. The estimated total construction costs are approximately $168,614 (unaudited). Of this amount, approximately $101,050 (unaudited) remains to be funded. There can be no assurance that the actual completion cost will not exceed the estimated completion cost stated above.
 
At December 31, 2006, the Company had 23 other letters of credit outstanding in the aggregate amount of $9,012. These letters of credit expire between March 31, 2007 and January 13, 2010.
 
Ground and Operating Lease Agreements
 
Future minimum rental payments under the terms of all non-cancelable ground and operating leases under which the Company is the lessee, as of December 31, 2006, are as follows:
 
         
2007
  $ 2,561  
2008
    2,433  
2009
    1,984  
2010
    1,789  
2011
    1,715  
Thereafter
    31,167  
         
Total
  $ 41,649  
         
 
16.   Subsequent Events
 
On January 2, 2007, the Company paid fourth quarter 2006 dividends of $53.91 per share ($0.5391 per Depositary Share) on its Series C Preferred Stock, totaling, in the aggregate, approximately $1,078; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate, approximately $2,719; and a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $906.
 
On January 22, 2007, the Company and the Operating Partnership paid a fourth quarter 2006 distribution of $.7100 per common share/unit, totaling approximately $36,613.
 
On February 28, 2007, the Company declared a first quarter 2007 distribution of $.7100 per common share/unit on its common stock/units which is payable on April 16, 2007. The Company also declared first quarter 2007 dividends of $53.91 per share ($0.5391 per Depositary Share), on its Series C Preferred Stock, totaling, in the aggregate, approximately $1,078, which is payable on April 2, 2007; semi-annual dividends of $3,118.00 per share ($31.1800 per Depositary Share) on its Series F Preferred Stock, totaling, in the aggregate, approximately $1,559, which is payable on April 2, 2007; semi-annual dividends of $3,618.00 per share ($36.1800 per Depositary Share) on its Series G Preferred Stock, totaling, in the aggregate, approximately $905, which is payable on April 2, 2007; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate, approximately $2,719, which is payable on April 2, 2007; and a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $906, which is payable on April 2, 2007.
 
From January 1, 2007 to February 22, 2007, the Company awarded 1,598 shares of restricted common stock to certain Directors. These shares of restricted common stock had a fair value of approximately $73 on


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the date of grant. The restricted common stock vests over a period of five years. Compensation expense will be charged to earnings over the respective vesting period.
 
From January 1, 2007 to February 22, 2007, the Company acquired 55 industrial properties (including 41 properties in connection with the purchase of the 90% equity interest from the institutional investor in the September 1998 Joint Venture on January 31, 2007) and several land parcels for a total estimated investment of approximately $135,937. The Company also sold 14 industrial properties for approximately $74,430 of gross proceeds during this period.
 
17.   Quarterly Financial Information (unaudited)
 
The following table summarizes quarterly financial information of the Company. The first, second and third fiscal quarters of 2006 and all fiscal quarters in 2005 have been revised in accordance with FAS 144.
 
Net income available to common stockholders and basic and diluted EPS from net income available to common stockholders has not been affected.
 
                                 
    Year Ended December 31, 2006  
    First
    Second
    Third
    Fourth
 
    Quarter     Quarter     Quarter     Quarter  
 
Total Revenues
  $ 90,591     $ 94,487     $ 97,512     $ 113,446  
Equity in Income (Loss) of Joint Ventures
    (34 )     7,307       4,747       18,654  
Minority Interest Allocable to Continuing Operations
    2,916       2,231       2,892       1,756  
Loss from Continuing Operations, Net of Income Tax and Minority Interest
    (13,754 )     (10,635 )     (14,063 )     (5,325 )
Income from Discontinued Operations, Net of Income Tax
    41,284       47,874       48,190       37,869  
Minority Interest Allocable to Discontinued Operations
    (5,442 )     (6,228 )     (6,260 )     (4,866 )
Gain on Sale of Real Estate, Net of Income Tax
    982       1,475       1,729       (234 )
Minority Interest Allocable to (Gain) Loss Sale of Real Estate
    (127 )     (192 )     (225 )     30  
Net Income
    22,943       32,294       29,371       27,474  
Preferred Stock Dividends
    (5,019 )     (5,029 )     (5,442 )     (5,934 )
Less: Redemption of Preferred Stock
    (672 )                  
                                 
Net Income Available to Common Stockholders
  $ 17,252     $ 27,265     $ 23,929     $ 21,540  
                                 
Basic Earnings Per Share:
                               
Loss From Continuing Operations
  $ (0.42 )   $ (0.33 )   $ (0.41 )   $ (0.26 )
                                 
Income from Discontinued Operations
  $ 0.82     $ 0.95     $ 0.95     $ 0.75  
                                 
Net Income Available to Common Stockholders
  $ 0.39     $ 0.62     $ 0.54     $ 0.49  
                                 
Weighted Average Shares Outstanding
    43,887       44,006       44,032       44,118  
                                 
Diluted Earnings Per Share:
                               
Loss From Continuing Operations
  $ (0.42 )   $ (0.33 )   $ (0.41 )   $ (0.26 )
                                 
Income from Discontinued Operations
  $ 0.82     $ 0.95     $ 0.95     $ 0.75  
                                 
Net Income Available to Common Stockholders
  $ 0.39     $ 0.62     $ 0.54     $ 0.49  
                                 
Weighted Average Shares Outstanding
    43,887       44,006       44,032       44,118  
                                 


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

                                 
    Year Ended December 31, 2005  
    First
    Second
    Third
    Fourth
 
    Quarter     Quarter     Quarter     Quarter  
 
Total Revenues
  $ 73,267     $ 72,365     $ 88,861     $ 91,037  
Equity in (Loss) Income of Joint Ventures
    (122 )     (98 )     3,978       (59 )
Minority Interest Allocable to Continuing Operations
    1,724       1,954       1,854       2,448  
Loss from Continuing Operations, Net of Income Tax and Minority Interest
    (9,238 )     (10,828 )     (9,901 )     (12,457 )
Income from Discontinued Operations, Net of Income Tax
    15,714       35,666       36,943       42,155  
Minority Interest Allocable to Discontinued Operations
    (2,053 )     (4,665 )     (4,880 )     (5,573 )
Gain on Sale of Real Estate, Net of Income Tax
    13,780       1,818       1,538       1,543  
Minority Interest Allocable to Gain on Sale of Real Estate
    (1,813 )     (238 )     (203 )     (204 )
Net Income
    16,390       21,753       23,497       25,464  
Preferred Stock Dividends
    (2,310 )     (2,310 )     (2,310 )     (3,758 )
                                 
Net Income Available to Common Stockholders
  $ 14,080     $ 19,443     $ 21,187     $ 21,706  
                                 
Basic Earnings Per Share:
                               
Income (Loss) From Continuing Operations
  $ 0.01     $ (0.27 )   $ (0.26 )   $ (0.35 )
                                 
Income From Discontinued Operations
  $ 0.32     $ 0.73     $ 0.75     $ 0.85  
                                 
Net Income Available to Common Stockholders
  $ 0.33     $ 0.46     $ 0.50     $ 0.51  
                                 
Weighted Average Shares Outstanding
    42,158       42,285       42,468       42,806  
                                 
Diluted Earnings Per Share:
                               
Income (Loss) From Continuing Operations
  $ 0.01     $ (0.27 )   $ (0.26 )   $ (0.35 )
                                 
Income From Discontinued Operations
  $ 0.32     $ 0.73     $ 0.75     $ 0.85  
                                 
Net Income Available to Common Stockholders
  $ 0.33     $ 0.46     $ 0.50     $ 0.51  
                                 
Weighted Average Shares Outstanding
    42,466       42,285       42,468       42,806  
                                 


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

18.   Pro Forma Financial Information (unaudited)
 
The following Pro Forma Condensed Statements of Operations for the years ended December 31, 2006 and 2005 (the “Pro Forma Statements”) are presented as if the acquisition of 56 operating industrial properties between January 1, 2006 and December 31, 2006 had occurred at the beginning of each year. The Pro Forma Statements do not include acquisitions between January 1, 2006 and December 31, 2006 for industrial properties that were vacant upon purchase, were leased back to the sellers upon purchase or were subsequently sold before December 31, 2006. The Pro Forma Condensed Statements of Operations include all necessary adjustments to reflect the occurrence of purchases and sales of properties during 2006 as of January 1, 2006 and 2005.
 
The Pro Forma Statements are not necessarily indicative of what the Company’s results of operations would have been for the years ended December 31, 2006 and 2005, nor do they purport to present the future results of operations of the Company.
 
Pro Forma Condensed Statements of Operations
 
                 
    Year Ended
    Year Ended
 
    December 31,
    December 31,
 
    2006     2005  
 
Pro Forma Revenues
  $ 409,229     $ 355,126  
Pro Forma Loss from Continuing Operations Available to Common Stockholders, Net of Minority Interest and Income Taxes
  $ (58,391 )   $ (36,017 )
Pro Forma Net Income Available to Common Stockholders
  $ 94,029     $ 77,290  
                 
Per Share Data:
               
Basic Earnings Per Share Data:
               
Income from Continuing Operations Available to Common Stockholders
  $ (1.31 )   $ (0.85 )
                 
Net Income Available to Common Stockholders
  $ 2.14     $ 1.82  
                 
Diluted Earnings Per Share Data:
               
Income from Continuing Operations Available to Common Stockholders
  $ (1.31 )   $ (0.85 )
                 
Net Income Available to Common Stockholders
  $ 2.14     $ 1.82  
                 
 
The following Pro Forma Condensed Statements of Operations for the years ended December 31, 2005 and 2004 (the “Pro Forma Statements”) are presented as if the acquisition of 73 operating industrial properties between January 1, 2005 and December 31, 2005 had occurred at the beginning of each year. The Pro Forma Statements do not include acquisitions between January 1, 2005 and December 31, 2005 for industrial properties that were vacant upon purchase, were leased back to the sellers upon purchase or were subsequently sold before December 31, 2005. The Pro Forma Condensed Statements of Operations include all necessary adjustments to reflect the occurrence of purchases and sales of properties during 2005 as of January 1, 2005 and 2004.
 
The Pro Forma Statements are not necessarily indicative of what the Company’s results of operations would have been for the years ended December 31, 2005 and 2004, nor do they purport to present the future results of operations of the Company.
 


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

                 
    Year Ended
    Year Ended
 
    December 31,
    December 31,
 
    2005     2004  
 
Pro Forma Revenues
  $ 390,716     $ 329,152  
Pro Forma (Loss) Income from Continuing Operations Available to Common Stockholders, Net of Minority Interest and Income Taxes
    (16,869 )     17,661  
Pro Forma Net Income Available to Common Stockholders
    85,580       100,982  
Per Share Data:
               
Basic Earnings Per Share Data:
               
Income from Continuing Operations Available to Common Stockholders
  $ (0.40 )   $ 0.44  
                 
Net Income Available to Common Stockholders
  $ 2.02     $ 2.49  
                 
Diluted Earnings Per Share Data:
               
Income from Continuing Operations Available to Common Stockholders
  $ (0.40 )   $ 0.43  
                 
Net Income Available to Common Stockholders
  $ 2.02     $ 2.47  
                 

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FIRST INDUSTRIAL REALTY TRUST, INC.

SCHEDULE III:

REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2006
 
                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
Atlanta
                                                                               
4250 River Green Parkway
  Duluth, GA             264     $ 1,522     $ 186     $ 264     $ 1,708     $ 1,972     $ 515     1988     (o )
3450 Corporate Parkway
  Duluth, GA             506       2,904       444       506       3,348       3,854       1,100     1988     (o )
1650 GA Highway 155
  McDonough, GA             788       4,544       203       788       4,747       5,535       1,453     1991     (o )
14101 Industrial Park Boulevard
  Covington, GA             285       1,658       703       285       2,361       2,646       640     1984     (o )
801-804 Blacklawn Road
  Conyers, GA             361       2,095       859       361       2,954       3,316       879     1982     (o )
1665 Dogwood Drive
  Conyers, GA             635       3,662       481       635       4,143       4,778       1,335     1973     (o )
1715 Dogwood Drive(j)
  Conyers, GA             288       1,675       1,042       288       2,717       3,005       544     1973     (o )
11235 Harland Drive
  Covington, GA             125       739       88       125       827       952       251     1988     (o )
4050 Southmeadow Parkway
  Atlanta, GA             401       2,813       328       425       3,117       3,542       972     1991     (o )
4051 Southmeadow Parkway
  Atlanta, GA             726       4,130       1,429       726       5,558       6,284       1,820     1989     (o )
4071 Southmeadow Parkway
  Atlanta, GA             750       4,460       1,094       828       5,476       6,304       1,705     1991     (o )
4081 Southmeadow Parkway
  Atlanta, GA             1,012       5,918       1,649       1,157       7,423       8,579       2,077     1989     (o )
370 Great Southwest Parkway(c)
  Atlanta, GA             527       2,984       578       546       3,542       4,088       935     1986     (o )
955 Cobb Place
  Kennesaw, GA             780       4,420       627       804       5,023       5,827       1,161     1991     (o )
1005 Sigman Road
  Conyers, GA             566       3,134       160       574       3,285       3,860       600     1986     (o )
2050 East Park Drive
  Conyers, GA             452       2,504       111       459       2,608       3,067       470     1998     (o )
1256 Oakbrook Drive
  Norcross, GA             336       1,907       346       339       2,250       2,589       368     1984     (o )
1265 Oakbrook Drive
  Norcross, GA             307       1,742       636       309       2,377       2,686       310     1984     (o )
1266 Oakbrook Drive
  Norcross, GA             234       1,326       95       235       1,419       1,654       194     1984     (o )
1275 Oakbrook Drive
  Norcross, GA             400       2,269       235       403       2,502       2,905       352     1986     (o )
1280 Oakbrook Drive
  Norcross, GA             281       1,592       345       283       1,935       2,218       290     1986     (o )


S-1


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
1300 Oakbrook Drive
  Norcross, GA             420       2,381       185       423       2,563       2,986       342     1986     (o )
1325 Oakbrook Drive
  Norcross, GA             332       1,879       260       334       2,137       2,470       297     1986     (o )
1351 Oakbrook Drive
  Norcross, GA             370       2,099       173       373       2,270       2,643       316     1984     (o )
1346 Oakbrook Drive
  Norcross, GA             740       4,192       132       744       4,319       5,063       602     1985     (o )
1412 Oakbrook Drive
  Norcross, GA             313       1,776       209       315       1,983       2,298       300     1985     (o )
7800 The Bluffs
  Austell, GA             490       2,415       564       496       2,974       3,469       372     1995     (o )
Greenwood Industrial Park
  McDonough, GA             1,550             7,485       1,550       7,485       9,035       441     2003     (o )
3060 South Park Blvd
  Ellenwood, GA             1,600       12,464       862       1,603       13,323       14,926       1,392     1992     (o )
46 Kent Drive
  Cartersville, GA             875       2,476       13       879       2,485       3,364       148     2001     (o )
100 Dorris Williams Industrial -King
  Atlanta, GA     (l )     401       3,754       42       406       3,791       4,197       343     2000     (o )
605 Stonehill Diver
  Atlanta, GA             485       1,979       24       490       1,998       2,488       316     1970     (o )
5095 Phillips Lee Drive(j)
  Atlanta, GA             735       3,627       54       740       3,676       4,416       330     1985/1990     (o )
6514 Warren Drive
  Norcross, GA             510       1,250       (165 )     513       1,082       1,595       57     1999     (o )
6544 Warren Drive
  Norcross, GA             711       2,310       52       715       2,358       3,073       140     1999     (o )
720 Industrial Boulevard
  Dublin, GA             250       2,632       39       255       2,667       2,921       389     1973/2000     (o )
5356 East Ponce DeLeon
  One Mountain, GA             604       3,888       7       610       3,890       4,499       284     1982     (o )
5390 East Ponce DeLeon
  One Mountain, GA             397       1,791       8       402       1,794       2,196       136     1982     (o )
1755 Enterprise Drive
  Buford, GA             712       2,118       41       716       2,155       2,871       45     1997     (o )
4555 Atwater Court(j)
  Buford, GA             881       3,550       34       885       3,580       4,465       63     1999     (o )
195 & 197 Collins Boulevard
  Athens, GA             1,410       5,344       64       1,426       5,393       6,818       747     1969/1984     (o )
Baltimore
                                                                               
1820 Portal
  Baltimore, MD             884       4,891       455       899       5,330       6,230       1,151     1982     (o )
8900 Yellow Brick Road
  Baltimore, MD             447       2,473       409       475       2,853       3,328       624     1982     (o )
504 Advantage Way
  Aberdeen, MD             2,799       15,864       953       2,807       16,809       19,616       1,651     1987/92     (o )
9700 Martin Luther King Hwy
  Lanham, MD             700       1,920       729       700       2,649       3,349       447     1980     (o )
9730 Martin Luther King Hwy
  Lanham, MD             500       955       418       500       1,373       1,873       212     1980     (o )
4621 Boston Way
  Lanham, MD             1,100       3,070       614       1,100       3,684       4,784       469     1980     (o )
4720 Boston Way
  Lanham, MD             1,200       2,174       735       1,200       2,909       4,109       512     1979     (o )
2250 Randolph Drive
  Dulles, VA             3,200       8,187       36       3,208       8,215       11,423       654     1999     (o )


S-2


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
22630 Dulles Summit Court
  Dulles, VA             2,200       9,346       128       2,206       9,468       11,674       747     1998     (o )
4201 Forbes Boulevard(j)
  Lanham, MD             356       1,823       403       375       2,207       2,582       176     1989     (o )
4370-4383 Lottsford Vista Road
  Lanham, MD             279       1,358       247       296       1,588       1,884       109     1989     (o )
4400 Lottsford Vista Road
  Lanham, MD             351       1,955       112       372       2,046       2,418       140     1989     (o )
4420 Lottsford Vista Road
  Lanham, MD             539       2,196       165       568       2,332       2,900       187     1989     (o )
11204 McCormick Road
  Hunt Valley, MD             1,017       3,132       86       1,038       3,197       4,235       231     1962     (o )
11110 Pepper Road
  Hunt Valley, MD             918       2,529       252       938       2,762       3,699       152     1964     (o )
11100 Gilroy Road
  Hunt Valley, MD             901       1,455       43       919       1,480       2,399       107     1972     (o )
318 Clubhouse
  Hunt Valley, MD             701       1,691       (3 )     718       1,671       2,389       128     1984     (o )
336 Clubhouse(j)
  Hunt Valley, MD             982       3,158       98       1,004       3,234       4,238       240     1976     (o )
10709 Gilroy Road
  Hunt Valley, MD             907       2,884       (173 )     913       2,705       3,618       195     1978     (o )
10707 Gilroy Road
  Hunt Valley, MD             1,111       3,819       96       1,136       3,890       5,026       274     1977     (o )
10947 Golden West
  Hunt Valley, MD             1,134       3,436       70       1,135       3,504       4,640       168     1983     (o )
38 Loveton Circle
  Hunt Valley, MD             1,664       2,151       78       1,701       2,191       3,893       239     1983     (o )
7120-7132 Ambassador Road
  Hunt Valley, MD             829       1,329       145       847       1,456       2,303       117     1970     (o )
7142 Ambassador Road
  Hunt Valley, MD             924       2,876       86       942       2,945       3,886       119     1973     (o )
7144-7160 Ambassador Road
  Hunt Valley, MD             979       1,672       162       1,000       1,813       2,813       178     1974     (o )
7223-7249 Ambassador Road
  Hunt Valley, MD             1,283       2,674       136       1,311       2,782       4,093       260     1967/87     (o )
7200 Rutherford(j)
  Hunt Valley, MD             1,032       2,150       145       1,054       2,274       3,327       211     1978     (o )
2700 Lord Baltimore(j)
  Hunt Valley, MD             875       1,826       261       897       2,065       2,962       169     1978     (o )
9800 Martin Luther King Hwy
  Lanham, MD             1,200       2,457       309       1,200       2,766       3,966       360     1978     (o )
Central Pennsylvania
                                                                               
1214-B Freedom Road
  Cranberry Township, PA             31       994       612       200       1,438       1,637       817     1982     (o )
401 Russell Drive
  Middletown, PA             262       857       2,065       287       2,896       3,184       1,577     1990     (o )
2700 Commerce Drive
  Middletown, PA             196       997       710       206       1,697       1,903       892     1990     (o )
2701 Commerce Drive
  Middletown, PA             141       859       1,160       164       1,996       2,160       908     1989     (o )
2780 Commerce Drive
  Middletown, PA             113       743       1,090       209       1,737       1,946       902     1989     (o )


S-3


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
5020 Louise Drive
  Mechanicsburg, PA             707             2,908       716       2,899       3,615       815     1995     (o )
350 Old Silver Springs Road(j)
  Mechanicsburg, PA             510       2,890       5,281       541       8,140       8,681       1,639     1968/97     (o )
16522 Hunters Green Parkway
  Hagerstown, MD(m)             1,390       13,104       3,902       1,863       16,534       18,396       1,496     2000     (o )
18212 Shawley Drive
  Hagerstown, MD             1,000       5,847       119       1,016       5,950       6,966       484     1992     (o )
301 Railroad Avenue
  Shiremanstown, PA             1,181       4,447       1,583       1,357       5,853       7,211       614     1970     (o )
431 Railroad Avenue
  Shiremanstown, PA             1,293       7,164       204       1,340       7,321       8,661       681     1968     (o )
Golden Eagle Business Center
  Harrisburg, PA             585       3,176       68       601       3,229       3,829       169     2000     (o )
37 Valleyview Business Park
  Jessup, PA             542             2,971       542       2,972       3,513       151     2004     (o )
1351 Eisenhower Blvd., Bldg 1
  Harrisburg, PA             382       2,343       25       387       2,363       2,750       50     2003     (o )
1351 Eisenhower Blvd., Bldg 2
  Harrisburg, PA             436       1,587       19       443       1,599       2,042       39     2001     (o )
320 Museum Road
  Washington, PA             201       1,819       56       208       1,868       2,076       128     1967/75     (o )
Chicago
                                                                               
720-730 Landwehr Road
  Northbrook, IL             521       2,982       1,526       521       4,508       5,029       1,406     1978     (o )
20W201 101st Street
  Lemont, IL             967       5,554       878       968       6,431       7,399       2,107     1988     (o )
3600 West Pratt Avenue
  Lincolnwood, IL             1,050       5,767       1,158       1,050       6,925       7,975       2,179     1953/88     (o )
6750 South Sayre Avenue
  Bedford Park, IL             224       1,309       477       224       1,786       2,010       499     1975     (o )
585 Slawin Court
  Mount Prospect, IL             611       3,505       183       611       3,688       4,299       1,115     1992     (o )
2300 Windsor Court
  Addison, IL             688       3,943       590       696       4,525       5,221       1,482     1986     (o )
3505 Thayer Court
  Aurora, IL             430       2,472       71       430       2,543       2,973       788     1989     (o )
305-311 Era Drive
  Northbrook, IL             200       1,154       146       205       1,296       1,501       396     1978     (o )
12241 Melrose Street
  Franklin Park, IL             332       1,931       1,915       469       3,709       4,178       1,290     1969     (o )
3150-3160 MacArthur Boulevard
  Northbrook, IL             429       2,518       32       429       2,551       2,979       800     1978     (o )
365 North Avenue
  Carol Stream, IL             1,081       6,882       4,614       1,111       11,465       12,577       3,283     1969     (o )
305-307 East North Ave
  Carol Stream, IL             126             2,732       128       2,731       2,859       432     1999     (o )
11939 S Central Avenue
  Alsip, IL             1,208       6,843       2,523       1,305       9,268       10,573       2,132     1972     (o )
405 East Shawmut
  LaGrange, IL             368       2,083       359       387       2,422       2,809       606     1965     (o )
1010-50 Sesame Street
  Bensenville, IL             979       5,546       2,306       1,048       7,782       8,831       1,500     1976     (o )


S-4


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
7501 S. Pulaski
  Chicago, IL             318       2,038       767       318       2,805       3,123       590     1975/86     (o )
385 Fenton Lane
  West Chicago, IL             868       4,918       554       884       5,455       6,340       1,451     1990     (o )
905 Paramount
  Batavia, IL             243       1,375       439       252       1,805       2,057       401     1977     (o )
1005 Paramount
  Batavia, IL             282       1,600       451       293       2,041       2,334       472     1978     (o )
2120-24 Roberts
  Broadview, IL             220       1,248       565       231       1,802       2,033       451     1960     (o )
700 Business Center Drive
  Mount Prospect, IL             270       1,492       297       288       1,771       2,059       243     1980     (o )
800 Business Center Drive
  Mount Prospect, IL             631       3,493       233       666       3,691       4,358       561     1988/99     (o )
580 Slawin Court
  Mount Prospect, IL             233       1,292       234       254       1,505       1,760       218     1985     (o )
1150 Feehanville Drive
  Mount Prospect, IL             260       1,437       131       273       1,555       1,829       247     1983     (o )
1331 Business Center Drive
  Mount Prospect, IL             235       1,303       177       255       1,460       1,716       219     1985     (o )
19W661 101st Street
  Lemont, IL             1,200       6,643       2,227       1,220       8,850       10,069       1,243     1988     (o )
175 Wall Street
  Glendale Heights, IL             427       2,363       162       433       2,519       2,952       307     1990     (o )
800-820 Thorndale Avenue(j)
  Bensenville, IL             751       4,159       323       761       4,473       5,233       455     1985     (o )
830-890 Supreme Drive
  Bensenville, IL             671       3,714       319       679       4,025       4,704       485     1981     (o )
1661 Feehanville Drive
  Mount Prospect, IL             985       5,455       1,159       1,044       6,555       7,599       1,096     1986     (o )
2250 Arthur Avenue
  Elk Grove Village, IL             800       1,543       (6 )     809       1,529       2,337       237     1973/86     (o )
1850 Touhy & 1158-60 McCage Ave.
  Elk Grove Village, IL             1,500       4,842       57       1,514       4,885       6,399       573     1978     (o )
1088-1130 Thorndale Avenue(j)
  Bensenville, IL             2,103       3,674       4       2,108       3,673       5,781       291     1983     (o )
855-891 Busse(Route 83)
  Bensenville, IL             1,597       2,767       11       1,601       2,774       4,375       243     1983     (o )
1060-1074 W. Thorndale Ave.(j)
  Bensenville, IL             1,704       2,108       52       1,709       2,156       3,864       214     1982     (o )
400 Crossroads Parkway
  Bolingbrook, IL             1,178       9,453       264       1,181       9,714       10,895       601     1988     (o )
7609 West Industrial Drive(j)
  Forest Park, IL             1,207       2,343       182       1,213       2,518       3,732       200     1974     (o )
7801 West Industrial Drive
  Forest Park, IL             1,215       3,020       19       1,220       3,034       4,254       249     1976     (o )
825 East 26th Street(j)
  LaGrange Park, IL             1,547       2,078       106       1,617       2,115       3,731       275     1959/88     (o )
1111 Davis Road(j)
  Elgin, IL             998       1,859       646       1,046       2,458       3,503       245     1974/97     (o )
2800 Forbes Avenue
  Hoffman Estates, IL             2,157               9,931       2,158       9,931       12,088       225     2005     (o )
501 Airport Road
  Aurora, IL             694             5,267       694       5,268       5,961       659     2002     (o )
251 Airport Road
  Aurora, IL             983             6,675       983       6,675       7,658       990     2002     (o )


S-5


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
1900-1960 Devon Avenue
  Elk Grove Village, IL             1,154       2,552       319       1,167       2,858       4,025       309     1979     (o )
725 Kimberly Drive
  Carol Stream, IL             793       1,395       11       801       1,398       2,199       94     1987     (o )
17001 S. Vincennes
  Thornton, IL             497       504       29       513       518       1,030       64     1974     (o )
750 South Schmidt Road
  Bolingbrook, IL             1,894       14,416       105       1,907       14,507       16,415       208     1997     (o )
550 North West Frontage Road
  Bolingbrook, IL             2,210       23,889       324       2,240       24,183       26,423       311     2004     (o )
525 Crossroads Parkway
  Bolingbrook, IL             790       5,414       40       795       5,448       6,244       80     1998     (o )
Cincinnati
                                                                               
9900-9970 Princeton
  Cincinnati, OH             545       3,088       2,137       566       5,203       5,769       1,524     1970     (o )
2940 Highland Avenue
  Cincinnati, OH             1,717       9,730       2,279       1,772       11,954       13,726       3,577     1969/74     (o )
4700-4750 Creek Road
  Blue Ash, OH             1,080       6,118       703       1,109       6,791       7,900       1,966     1960     (o )
12072 Best Place
  Springboro, OH             426             3,177       443       3,160       3,604       710     1984     (o )
901 Pleasant Valley Drive
  Springboro, OH             304       1,721       244       316       1,954       2,269       425     1984/94     (o )
4440 Mulhauser Road
  Cincinnati, OH             655       39       5,796       655       5,835       6,490       1,395     1999     (o )
4434 Mulhauser Road
  Cincinnati, OH             444       16       4,858       463       4,854       5,318       977     1999     (o )
9449 Glades Drive
  Hamilton, OH             465             4,106       477       4,094       4,571       673     1999     (o )
420 Wars Corner Road
  Loveland, OH             600       1,083       1,040       606       2,117       2,723       393     1985     (o )
422 Wards Corner Road
  Loveland, OH             600       1,811       468       605       2,274       2,879       527     1985     (o )
4436 Muhlhauser Road
  Hamilton, OH             630             5,669       630       5,670       6,299       916     2001     (o )
4438 Muhlhauser Road
  Hamilton, OH             779             7,156       779       7,156       7,935       1,020     2000     (o )
9345 Princeton-Glendale Road
  West Chester, OH             818       1,648       27       827       1,665       2,493       69     1973     (o )
4663 Dues Drive(j)
  West Chester, OH             858       2,273       1,203       875       3,460       4,334       456     1972     (o )
Cleveland
                                                                               
2368 E. Enterprise Parkway
  Twinsburg, OH             294       1,857       29       298       1,881       2,180       105     1991/95     (o )
30311 Emerald Valley Parkway(j)
  Glenwillow, OH             681       11,838       176       691       12,003       12,694       233     2005     (o )
30333 Emerald Valley Parkway
  Glenwillow, OH             466       5,913       (363 )     475       5,541       6,016       121     2004     (o )
7800 Cochran Road
  Glenwillow, OH             972       7,033       65       980       7,090       8,070       155     1999     (o )
7900 Cochran Road
  Glenwillow, OH             775       6,244       205       801       6,424       7,224       131     2003     (o )
7905 Cochran Road
  Glenwillow, OH             920       6,174       173       945       6,322       7,267       147     2001     (o )
30600 Carter Street(j)
  Solon, OH             989       3,492       102       1,022       3,561       4,583       183     1970     (o )


S-6


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
Columbus
                                                                               
3800 Lockbourne Industrial Pkwy
  Columbus, OH             1,045       6,421       21       1,045       6,442       7,486       1,718     1986     (o )
3880 Groveport Road
  Columbus, OH             1,955       12,154       616       1,955       12,770       14,725       3,497     1986     (o )
1819 North Walcutt Road
  Columbus, OH             637       4,590       (322 )     634       4,271       4,905       1,239     1973     (o )
4300 Cemetary Road
  Hillard, OH             764       6,248       (5,628 )     764       620       1,384       10     1968/74     (o )
4115 Leap Road(c)
  Hillard, OH             756       4,297       815       756       5,111       5,867       1,022     1977     (o )
3300 Lockbourne
  Columbus, OH             708       3,920       1,504       710       5,422       6,132       1,269     1964     (o )
1076 Pittsburgh Drive
  Delaware, OH     (n )     2,497       5,103       37       2,505       5,132       7,637       426     1996     (o )
6150 Huntley Road
  Columbus, OH             986       5,162       17       990       5,175       6,165       274     2002     (o )
4985 Frusta Drive
  Obetz, OH             318       837       23       326       852       1,178       41     1979     (o )
4600 S. Hamilton Road
  Groveport, OH             681       5,941       55       688       5,989       6,677       42     1996/2003     (o )
Dallas/Fort Worth
                                                                               
1275-1281 Roundtable Drive
  Dallas, TX             117       839       53       117       892       1,009       210     1966     (o )
2406-2416 Walnut Ridge
  Dallas, TX             178       1,006       294       183       1,295       1,478       325     1978     (o )
1324-1343 Roundtable Drive
  Dallas, TX             178       1,006       227       184       1,227       1,411       273     1972     (o )
2401-2419 Walnut Ridge
  Dallas, TX             148       839       119       153       953       1,106       234     1978     (o )
900-906 Great Southwest Pkwy
  Arlington, TX             237       1,342       596       270       1,905       2,175       444     1972     (o )
3000 West Commerce
  Dallas, TX             456       2,584       530       469       3,101       3,570       681     1980     (o )
3030 Hansboro
  Dallas, TX             266       1,510       419       276       1,920       2,195       410     1971     (o )
405-407 113th
  Arlington, TX             181       1,026       462       185       1,484       1,669       308     1969     (o )
816 111th Street
  Arlington, TX             251       1,421       224       258       1,638       1,896       417     1972     (o )
7341 Dogwood Park
  Richland Hills, TX             79       435       237       84       666       750       197     1973     (o )
7427 Dogwood Park
  Richland Hills, TX             96       532       571       102       1,098       1,200       203     1973     (o )
7348-54 Tower Street
  Richland Hills, TX             88       489       213       94       696       790       147     1978     (o )
7370 Dogwood Park
  Richland Hills, TX             91       503       97       96       594       691       145     1987     (o )
7339-41 Tower Street
  Richland Hills, TX             98       541       97       104       632       735       123     1980     (o )
7437-45 Tower Street
  Richland Hills, TX             102       563       72       108       629       736       128     1977     (o )
7331-59 Airport Freeway
  Richland Hills, TX             354       1,958       394       372       2,333       2,706       539     1987     (o )
7338-60 Dogwood Park
  Richland Hills, TX             106       587       122       112       704       816       155     1978     (o )


S-7


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
7450-70 Dogwood Park
  Richland Hills, TX             106       584       122       112       700       812       166     1985     (o )
7423-49 Airport Freeway
  Richland Hills, TX             293       1,621       331       308       1,936       2,245       437     1985     (o )
7400 Whitehall Street
  Richland Hills, TX             109       603       91       115       688       804       148     1994     (o )
1602-1654 Terre Colony
  Dallas, TX             458       2,596       214       468       2,800       3,268       547     1981     (o )
3330 Duncanville Road
  Dallas, TX             197       1,114       28       199       1,139       1,338       187     1987     (o )
6851-6909 Snowden Road
  Fort Worth, TX             1,025       5,810       480       1,038       6,277       7,315       1,104     1985/86     (o )
2351-2355 Merritt Drive
  Garland, TX             101       574       134       103       706       809       145     1986     (o )
701-735 North Plano Road
  Richardson, TX             696       3,944       152       705       4,087       4,792       682     1972/94     (o )
2220 Merritt Drive
  Garland, TX             352       1,993       638       356       2,627       2,983       391     1986/2000     (o )
2010 Merritt Drive
  Garland, TX             350       1,981       469       354       2,445       2,799       390     1986     (o )
2363 Merritt Drive
  Garland, TX             73       412       117       74       529       602       85     1986     (o )
2447 Merritt Drive
  Garland, TX             70       395       89       71       483       554       81     1986     (o )
2465-2475 Merritt Drive
  Garland, TX             91       514       158       92       671       763       90     1986     (o )
2485-2505 Merritt Drive
  Garland, TX             431       2,440       415       436       2,849       3,285       427     1986     (o )
2081 Hutton Drive — Bldg 1(d)
  Carrolton, TX             448       2,540       465       453       3,000       3,453       531     1981     (o )
2150 Hutton Drive
  Carrolton, TX             192       1,089       514       194       1,601       1,795       306     1980     (o )
2110 Hutton Drive
  Carrolton, TX             374       2,117       487       377       2,600       2,977       417     1985     (o )
2025 McKenzie Drive
  Carrolton, TX             437       2,478       156       442       2,629       3,071       458     1985     (o )
2019 McKenzie Drive
  Carrolton, TX             502       2,843       529       507       3,368       3,874       524     1985     (o )
1420 Valwood Parkway — Bldg 1(c)
  Carrolton, TX             460       2,608       710       466       3,313       3,778       498     1986     (o )
1620 Valwood Parkway(d)
  Carrolton, TX             1,089       6,173       1,190       1,100       7,352       8,452       1,333     1986     (o )
1505 Luna Road — Bldg II
  Carrolton, TX             167       948       180       169       1,126       1,294       200     1988     (o )
1625 West Crosby Road
  Carrolton, TX             617       3,498       739       631       4,223       4,854       840     1988     (o )
2029-2035 McKenzie Drive
  Carrolton, TX             306       1,870       997       306       2,867       3,173       802     1985     (o )
1840 Hutton Drive(c)
  Carrolton, TX             811       4,597       687       819       5,277       6,095       791     1986     (o )
1420 Valwood Pkwy — Bldg II
  Carrolton, TX             373       2,116       343       377       2,455       2,832       387     1986     (o )
2015 McKenzie Drive
  Carrolton, TX             510       2,891       321       516       3,206       3,722       481     1986     (o )
2105 McDaniel Drive
  Carrolton, TX             502       2,844       735       507       3,573       4,080       555     1986     (o )
2009 McKenzie Drive
  Carrolton, TX             476       2,699       482       481       3,176       3,657       527     1987     (o )
1505 Luna Road — Bldg I
  Carrolton, TX             521       2,953       579       529       3,524       4,053       558     1988     (o )


S-8


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
900-1100 Avenue S
  Grand Prairie, TX             623       3,528       324       629       3,846       4,474       576     1985     (o )
15001 Trinity Blvd
  Ft. Worth, TX             529       2,998       50       534       3,043       3,578       329     1984     (o )
Plano Crossing(e)
  Plano, TX             1,961       11,112       346       1,981       11,437       13,418       1,244     1998     (o )
7413A-C Dogwood Park
  Richland Hills, TX             110       623       106       111       728       839       76     1990     (o )
7450 Tower Street
  Richland Hills, TX             36       204       191       36       394       431       50     1977     (o )
7436 Tower Street
  Richland Hills, TX             57       324       161       58       485       543       60     1979     (o )
7501 Airport Freeway
  Richland Hills, TX             113       638       50       115       686       800       91     1983     (o )
7426 Tower Street
  Richland Hills, TX             76       429       105       76       533       610       49     1978     (o )
7427-7429 Tower Street
  Richland Hills, TX             75       427       27       76       453       529       48     1981     (o )
2840-2842 Handley Ederville Rd
  Richland Hills, TX             112       635       58       113       692       805       78     1977     (o )
7451-7477 Airport Freeway
  Richland Hills, TX             256       1,453       155       259       1,605       1,864       212     1984     (o )
7415 Whitehall Street
  Richland Hills, TX             372       2,107       148       375       2,251       2,627       258     1986     (o )
7450 Whitehall Street
  Richland Hills, TX             104       591       30       105       620       725       64     1978     (o )
7430 Whitehall Street
  Richland Hills, TX             143       809       15       144       822       966       89     1985     (o )
7420 Whitehall Street
  Richland Hills, TX             110       621       35       111       655       766       80     1985     (o )
300 Wesley Way
  Richland Hills, TX             208       1,181       17       211       1,196       1,407       128     1995     (o )
825-827 Avenue H(c)
  Arlington, TX             600       3,006       300       604       3,302       3,906       395     1979     (o )
1013-31 Avenue M
  Grand Prairie, TX             300       1,504       66       302       1,568       1,870       180     1978     (o )
1172-84 113th Street(c)
  Grand Prairie, TX             700       3,509       59       704       3,564       4,268       347     1980     (o )
1200-16 Avenue H(c)
  Arlington, TX             600       2,846       30       604       2,873       3,476       311     1981/82     (o )
1322-66 N. Carrier Parkway(d)
  Grand Prairie, TX             1,000       5,012       73       1,006       5,079       6,085       522     1979     (o )
2401-2407 Centennial Dr. 
  Arlington, TX             600       2,534       141       604       2,672       3,275       287     1977     (o )
3111 West Commerce Street
  Dallas, TX             1,000       3,364       53       1,011       3,405       4,417       390     1979     (o )
4201 Kellway
  Addison, TX             306       1,342       31       317       1,361       1,679       86     1980     (o )
9150 West Royal Lane(j)
  Irving, TX             818       3,767       234       820       3,999       4,819       260     1985     (o )
13800 Senlac Drive
  Farmers Ranch, TX             823       4,042       12       825       4,052       4,877       324     1988     (o )
801-831 S. Great Southwest Pkwy(j)(y)
  Grand Prairie, TX             2,581       16,556       401       2,586       16,952       19,538       1,829     1975     (o )
801-842 Heinz Way(j)
  Grand Prairie, TX             599       3,327       74       601       3,399       4,000       250     1977     (o )
901-937 Heinz Way
  Grand Prairie, TX             493       2,823       (62 )     481       2,773       3,254       238     1997     (o )


S-9


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
2104 Hutton Drive
  Carrolton, TX             246       1,393       172       249       1,563       1,811       243     1990     (o )
7451 Dogwood Park
  Richland Hills, TX             133       753       195       134       947       1,081       209     1977     (o )
2900 Avenue E(j)
  Arlington, TX             296             1,936       296       1,936       2,232       88     1968     (o )
5801 Martin Luther King Blvd
  Lubbock, TX             1,119       35,324       74       1,125       35,391       36,516       1,163     2000     (o )
3730 Wheeler Avenue
  Fort Smith, AR             720       2,800       27       726       2,822       3,547       19     1960/97     (o )
Denver
                                                                               
7100 North Broadway — 1
  Denver, CO             201       1,141       380       217       1,505       1,722       401     1978     (o )
7100 North Broadway — 2
  Denver, CO             203       1,150       264       204       1,413       1,617       347     1978     (o )
7100 North Broadway — 3
  Denver, CO             139       787       134       140       920       1,060       232     1978     (o )
7100 North Broadway — 5
  Denver, CO             178       1,018       218       178       1,236       1,414       288     1978     (o )
7100 North Broadway — 6
  Denver, CO             269       1,526       304       271       1,828       2,099       464     1978     (o )
20100 East 32nd Avenue Parkway
  Aurora, CO             314       1,888       168       314       2,055       2,370       624     1997     (o )
700 West 48th Street
  Denver, CO             302       1,711       429       307       2,135       2,442       611     1984     (o )
702 West 48th Street
  Denver, CO             135       763       103       139       861       1,000       220     1984     (o )
6425 North Washington
  Denver, CO             374       2,118       326       385       2,433       2,817       627     1983     (o )
3370 North Peoria Street
  Aurora, CO             163       924       106       163       1,030       1,193       263     1978     (o )
3390 North Peoria Street
  Aurora, CO             145       822       104       147       924       1,071       245     1978     (o )
3508-3538 North Peoria Street
  Aurora, CO             260       1,472       505       264       1,973       2,237       612     1978     (o )
3568 North Peoria Street
  Aurora, CO             222       1,260       333       225       1,590       1,815       453     1978     (o )
4785 Elati
  Denver, CO             173       981       177       175       1,156       1,332       314     1972     (o )
4770 Fox Street
  Denver, CO             132       750       128       134       875       1,009       233     1972     (o )
1550 W. Evans
  Denver, CO             385       2,200       466       385       2,665       3,050       613     1975     (o )
3871 Revere
  Denver, CO             361       2,047       534       368       2,574       2,942       607     1980     (o )
4570 Ivy Street
  Denver, CO             219       1,239       201       220       1,438       1,658       361     1985     (o )
5855 Stapleton Drive North
  Denver, CO             288       1,630       267       290       1,896       2,186       489     1985     (o )
5885 Stapleton Drive North
  Denver, CO             376       2,129       251       380       2,376       2,756       531     1985     (o )
5977-5995 North Broadway
  Denver, CO             268       1,518       529       271       2,044       2,315       490     1978     (o )
2952-5978 North Broadway
  Denver, CO             414       2,346       690       422       3,029       3,451       764     1978     (o )
4721 Ironton Street
  Denver, CO             232       1,313       1,520       236       2,827       3,064       1,236     1969     (o )
7100 North Broadway — 7
  Denver, CO             215       1,221       186       219       1,403       1,622       368     1985     (o )


S-10


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
7100 North Broadway — 8
  Denver, CO             79       448       109       82       554       636       132     1985     (o )
6804 East 48th Avenue
  Denver, CO             253       1,435       395       256       1,827       2,084       438     1973     (o )
445 Bryant Street
  Denver, CO             1,829       10,219       1,722       1,829       11,941       13,770       2,843     1960     (o )
East 47th Drive — A
  Denver, CO             441       2,689       (25 )     441       2,664       3,105       647     1997     (o )
9500 West 49th Street — A
  Wheatridge, CO             283       1,625       328       286       1,951       2,236       561     1997     (o )
9500 West 49th Street — B
  Wheatridge, CO             225       1,272       67       226       1,338       1,564       312     1997     (o )
9500 West 49th Street — C
  Wheatridge, CO             600       3,409       126       600       3,536       4,136       846     1997     (o )
9500 West 49th Street — D
  Wheatridge, CO             246       1,537       293       246       1,830       2,076       603     1997     (o )
8100 South Park Way — A
  Littleton, CO             423       2,507       220       423       2,727       3,150       669     1997     (o )
8100 South Park Way — B
  Littleton, CO             103       582       162       104       743       847       210     1984     (o )
8100 South Park Way — C
  Littleton, CO             568       3,219       223       575       3,435       4,010       785     1984     (o )
451-591 East 124th Avenue
  Littleton, CO             383       2,145       816       383       2,961       3,344       835     1979     (o )
608 Garrison Street
  Lakewood, CO             265       1,501       404       267       1,903       2,170       455     1984     (o )
610 Garrison Street
  Lakewood, CO             264       1,494       421       266       1,913       2,179       491     1984     (o )
15000 West 6th Avenue
  Golden, CO             913       5,174       1,230       916       6,402       7,318       1,690     1985     (o )
14998 West 6th Avenue Bldg E
  Golden, CO             565       3,199       224       568       3,419       3,987       870     1995     (o )
14998 West 6th Avenue Bldg F
  Englewood, CO             269       1,525       86       271       1,610       1,881       415     1995     (o )
12503 East Euclid Drive
  Denver, CO             1,208       6,905       1,024       1,208       7,930       9,138       2,058     1986     (o )
6547 South Racine Circle
  Denver, CO             739       4,241       173       739       4,415       5,153       1,021     1996     (o )
7800 East Iliff Avenue
  Denver, CO             188       1,067       255       190       1,320       1,510       311     1983     (o )
2369 South Trenton Way
  Denver, CO             292       1,656       193       294       1,848       2,141       480     1983     (o )
2422 S. Trenton Way
  Denver, CO             241       1,364       399       243       1,762       2,005       421     1983     (o )
2452 South Trenton Way
  Denver, CO             421       2,386       269       426       2,650       3,076       624     1983     (o )
1600 South Abilene
  Aurora, CO             465       2,633       140       467       2,771       3,238       650     1986     (o )
1620 South Abilene
  Aurora, CO             268       1,520       99       270       1,617       1,887       391     1986     (o )
1640 South Abilene
  Aurora, CO             368       2,085       147       382       2,219       2,600       556     1986     (o )
13900 East Florida Ave
  Aurora, CO             189       1,071       81       190       1,151       1,341       276     1986     (o )
14401-14492 East 33rd Place
  Aurora, CO             440       2,519       288       440       2,806       3,246       675     1979     (o )
11701 East 53rd Avenue
  Denver, CO             416       2,355       193       422       2,542       2,964       575     1985     (o )
5401 Oswego Street
  Denver, CO             273       1,547       341       278       1,882       2,160       551     1985     (o )


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Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
3811 Joilet
  Denver, CO             735       4,166       448       752       4,597       5,349       977     1977     (o )
2650 West 2nd Avenue
  Denver, CO             221       1,252       190       223       1,440       1,663       349     1970     (o )
14818 West 6th Avenue Bldg A
  Golden, CO             468       2,799       300       468       3,099       3,567       754     1985     (o )
14828 West 6th Avenue Bldg B
  Golden, CO             503       2,942       566       503       3,508       4,011       943     1985     (o )
12055 E 49th Ave/4955 Peoria
  Denver, CO             298       1,688       439       305       2,120       2,424       487     1984     (o )
4940-4950 Paris
  Denver, CO             152       861       174       156       1,032       1,187       233     1984     (o )
4970 Paris
  Denver, CO             95       537       69       97       604       701       128     1984     (o )
7367 South Revere Parkway
  Englewood, CO             926       5,124       507       934       5,623       6,557       1,217     1997     (o )
8200 East Park Meadows Drive(c)
  Lone Tree, CO             1,297       7,348       1,236       1,304       8,577       9,881       1,548     1984     (o )
3250 Quentin(c)
  Aurora, CO             1,220       6,911       615       1,230       7,515       8,745       1,383     1984/2000     (o )
11585 E. 53rd Ave.(c)
  Denver, CO             1,770       10,030       1,052       1,780       11,072       12,852       1,644     1984     (o )
10500 East 54th Ave.(d)
  Denver, CO             1,253       7,098       890       1,260       7,980       9,240       1,347     1986     (o )
8835 W. 116th Street
  Broomfield, CO             1,151       6,523       869       1,304       7,239       8,543       725     2002     (o )
3101-3151 S. Platte River Dr. 
  Englewood, CO             2,500       8,549       184       2,504       8,729       11,233       825     1974     (o )
3155-3199 S. Platte River Dr. 
  Englewood, CO             1,700       7,787       199       1,702       7,983       9,686       691     1974     (o )
3201-3273 S. Platte River Dr. 
  Englewood, CO             1,600       6,592       170       1,602       6,760       8,362       708     1974     (o )
18150 E. 32nd Street
  Aurora, CO             563       3,188       1,164       572       4,344       4,915       995     2000     (o )
8820 W. 116th Street(j)
  Broomfield, CO             338       1,918       543       372       2,426       2,798       245     2001     (o )
3400 Fraser Street
  Aurora, CO             616       3,593       9       620       3,598       4,218       264     1965     (o )
7005 East 46th Avenue
  Denver, CO             512       2,025       9       517       2,029       2,546       112     1996     (o )
Hilltop Business Center I — Bldg. B(j)
  Littleton, CO             739             3,622       781       3,580       4,361       621     2001     (o )
Jeffco Business Center A
  Broomfield, CO             312             1,358       370       1,299       1,670       163     2001     (o )
Park Centre A(j)
  Westminister, CO             441             4,238       441       4,238       4,679       820     2001     (o )
Park Centre B(j)
  Westminister, CO             374             3,048       374       3,047       3,422       582     2001     (o )
Park Centre C(j)
  Westminister, CO             374             3,031       374       3,031       3,405       614     2001     (o )


S-12


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
Park Centre D(j)
  Westminister, CO             441             3,762       441       3,762       4,203       629     2001     (o )
4001 Salazar Way
  Frederick, CO             1,271       6,577       26       1,276       6,598       7,874       253     1999     (o )
1690 S. Abilene
  Aurora, CO             406       2,814       37       411       2,846       3,257       100     1985     (o )
5909-5915 N. Broadway
  Denver, CO             495       1,268       19       500       1,281       1,782       49     1972     (o )
9586 Interstate 25 East Frontage
  Longmont, CO             898       5,038       377       967       5,346       6,313       346     1997     (o )
555 Corporate Circle
  Golden, CO             397       2,673       345       448       2,968       3,416       308     1996     (o )
Des Moines
                                                                               
2250 Delaware Ave
  Des Moines, IA             277       1,609       520       277       2,130       2,407       479     1975     (o )
1021 W. First Street, Hwy 93
  Sumner, IA             99       2,540       20       100       2,559       2,659       197     1990/1995     (o )
Detroit
                                                                               
1731 Thorncroft
  Troy, MI             331       1,904       173       331       2,077       2,408       641     1969     (o )
1653 E. Maple
  Troy, MI             192       1,104       156       192       1,260       1,451       363     1990     (o )
47461 Clipper
  Plymouth Township, MI             122       723       76       122       799       921       239     1992     (o )
238 Executive Drive
  Troy, MI             52       173       554       100       679       779       606     1973     (o )
301 Executive Drive
  Troy, MI             71       293       731       133       962       1,095       789     1974     (o )
449 Executive Drive
  Troy, MI             125       425       1,030       218       1,362       1,580       1,073     1975     (o )
501 Executive Drive
  Troy, MI             71       236       678       129       856       985       487     1984     (o )
451 Robbins Drive
  Troy, MI             96       448       961       192       1,313       1,505       1,018     1975     (o )
1095 Crooks Road(j)
  Troy, MI             331       1,017       1,075       360       2,063       2,423       1,214     1986     (o )
1416 Meijer Drive
  Troy, MI             94       394       403       121       771       891       515     1980     (o )
1624 Meijer Drive
  Troy, MI             236       1,406       940       373       2,209       2,582       1,378     1984     (o )
1972 Meijer Drive
  Troy, MI             315       1,301       721       372       1,965       2,337       1,205     1985     (o )
1621 Northwood Drive
  Troy, MI             85       351       918       215       1,140       1,354       1,011     1977     (o )
1707 Northwood Drive
  Troy, MI             95       262       1,221       239       1,339       1,578       901     1983     (o )
1788 Northwood Drive
  Troy, MI             50       196       549       103       692       795       528     1977     (o )
1821 Northwood Drive
  Troy, MI             132       523       756       220       1,192       1,411       1,037     1977     (o )
1826 Northwood Drive
  Troy, MI             55       208       394       103       554       657       491     1977     (o )
1864 Northwood Drive
  Troy, MI             57       190       437       107       577       684       510     1977     (o )
2277 Elliott Avenue
  Troy, MI             48       188       501       104       633       737       512     1975     (o )
2451 Elliott Avenue
  Troy, MI             78       319       742       164       975       1,139       841     1974     (o )


S-13


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
2730 Research Drive
  Rochester Hills, MI             903       4,215       675       903       4,891       5,793       2,862     1988     (o )
2791 Research Drive
  Rochester Hills, MI             557       2,731       719       560       3,447       4,007       1,728     1991     (o )
2871 Research Drive
  Rochester Hills, MI             324       1,487       372       327       1,856       2,183       982     1991     (o )
3011 Research Drive
  Rochester Hills, MI             457       2,104       346       457       2,450       2,907       1,469     1988     (o )
2870 Technology Drive
  Rochester Hills, MI             275       1,262       290       279       1,548       1,827       886     1988     (o )
2900 Technology Drive
  Rochester Hills, MI             214       977       531       219       1,503       1,722       721     1992     (o )
2920 Technology Drive
  Rochester Hills, MI             153       671       196       153       868       1,020       444     1992     (o )
2930 Technology Drive
  Rochester Hills, MI             131       594       380       138       966       1,105       466     1991     (o )
2950 Technology Drive
  Rochester Hills, MI             178       819       223       185       1,035       1,220       552     1991     (o )
23014 Commerce Drive
  Farmington Hills, MI             39       203       169       56       355       411       225     1983     (o )
23028 Commerce Drive
  Farmington Hills, MI             98       507       247       125       727       852       464     1983     (o )
23035 Commerce Drive
  Farmington Hills, MI             71       355       262       93       596       688       374     1983     (o )
23042 Commerce Drive
  Farmintgon Hills, MI             67       277       313       89       568       657       357     1983     (o )
23065 Commerce Drive
  Farmington Hills, MI             71       408       227       93       613       706       378     1983     (o )
23070 Commerce Drive
  Farmington Hills, MI             112       442       673       125       1,102       1,227       810     1983     (o )
23079 Commerce Drive
  Farmington Hills, MI             68       301       316       79       605       685       348     1983     (o )
23093 Commerce Drive
  Farmington Hills, MI             211       1,024       844       295       1,784       2,079       1,134     1983     (o )
23135 Commerce Drive
  Farmington Hills, MI             146       701       279       158       969       1,126       555     1986     (o )
23163 Commerce Drive
  Farmington Hills, MI             111       513       350       138       836       974       468     1986     (o )
23177 Commerce Drive
  Farmington Hills, MI             175       1,007       642       254       1,570       1,824       926     1986     (o )
23206 Commerce Drive
  Farmington Hills, MI             125       531       350       137       868       1,006       514     1985     (o )
23370 Commerce Drive
  Farmington Hills, MI             59       233       308       66       534       600       347     1980     (o )
1451 East Lincoln Avenue
  Madison Heights, MI             299       1,703       248       306       1,944       2,250       586     1967     (o )
4400 Purks Drive
  Auburn Hills, MI             602       3,410       3,022       612       6,421       7,033       1,632     1987     (o )
6515 Cobb Drive
  Sterling Heights, MI             305       1,753       323       305       2,076       2,380       597     1984     (o )
32450 N Avis Drive
  Madison Heights, MI             281       1,590       193       286       1,778       2,064       469     1974     (o )
12707 Eckles Road
  Plymouth Township, MI             255       1,445       129       267       1,562       1,829       401     1990     (o )
9300-9328 Harrison Rd
  Romulus, MI             147       834       397       154       1,223       1,378       347     1978     (o )
9330-9358 Harrison Rd
  Romulus, MI             81       456       278       85       731       815       209     1978     (o )
28420-28448 Highland Rd
  Romulus, MI             143       809       220       149       1,023       1,172       305     1979     (o )
28450-28478 Highland Rd
  Romulus, MI             81       461       280       85       738       823       226     1979     (o )
28421-28449 Highland Rd
  Romulus, MI             109       617       291       114       903       1,017       258     1980     (o )


S-14


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
28451-28479 Highland Rd
  Romulus, MI             107       608       302       112       905       1,017       204     1980     (o )
28825-28909 Highland Rd
  Romulus, MI             70       395       236       73       627       700       162     1981     (o )
28933-29017 Highland Rd
  Romulus, MI             112       634       137       117       766       883       188     1982     (o )
28824-28908 Highland Rd
  Romulus, MI             134       760       244       140       997       1,137       256     1982     (o )
28932-29016 Highland Rd
  Romulus, MI             123       694       330       128       1,019       1,147       275     1982     (o )
9710-9734 Harrison Rd
  Romulus, MI             125       706       149       130       850       980       239     1987     (o )
9740-9772 Harrison Rd
  Romulus, MI             132       749       164       138       906       1,044       236     1987     (o )
9840-9868 Harrison Rd
  Romulus, MI             144       815       146       151       954       1,105       253     1987     (o )
9800-9824 Harrison Rd
  Romulus, MI             117       664       126       123       785       907       191     1987     (o )
29265-29285 Airport Dr
  Romulus, MI             140       794       220       147       1,008       1,155       258     1983     (o )
29185-29225 Airport Dr
  Romulus, MI             140       792       258       146       1,044       1,191       279     1983     (o )
29149-29165 Airport Dr
  Romulus, MI             216       1,225       377       226       1,592       1,818       380     1984     (o )
29101-29115 Airport Dr
  Romulus, MI             130       738       306       136       1,038       1,175       272     1985     (o )
29031-29045 Airport Dr
  Romulus, MI             124       704       144       130       842       972       216     1985     (o )
29050-29062 Airport Dr
  Romulus, MI             127       718       133       133       845       978       239     1986     (o )
29120-29134 Airport Dr
  Romulus, MI             161       912       244       169       1,149       1,317       277     1986     (o )
29200-29214 Airport Dr
  Romulus, MI             170       963       352       178       1,307       1,485       378     1985     (o )
9301-9339 Middlebelt Rd
  Romulus, MI             124       703       186       130       883       1,013       244     1983     (o )
26980 Trolley Industrial Drive
  Taylor, MI             450       2,550       1,014       463       3,551       4,014       925     1997     (o )
32975 Capitol Avenue
  Livonia, MI             135       748       332       144       1,071       1,215       251     1978     (o )
2725 S. Industrial Highway
  Ann Arbor, MI             660       3,654       470       704       4,080       4,784       850     1997     (o )
32920 Capitol Avenue
  Livonia, MI             76       422       88       82       504       586       109     1973     (o )
11923 Brookfield Avenue
  Livonia, MI             120       665       495       128       1,151       1,280       431     1973     (o )
11965 Brookfield Avenue
  Livonia, MI             120       665       67       128       724       852       156     1973     (o )
13405 Stark Road
  Livonia, MI             46       254       136       49       387       436       97     1980     (o )
1170 Chicago Road
  Troy, MI             249       1,380       256       266       1,618       1,885       328     1983     (o )
1200 Chicago Road
  Troy, MI             268       1,483       274       286       1,739       2,025       350     1984     (o )
450 Robbins Drive
  Troy, MI             166       920       257       178       1,165       1,343       227     1976     (o )
1230 Chicago Road
  Troy, MI             271       1,498       156       289       1,636       1,925       349     1996     (o )
12886 Westmore Avenue
  Livonia, MI             190       1,050       194       202       1,232       1,434       257     1981     (o )
12898 Westmore Avenue
  Livonia, MI             190       1,050       235       202       1,273       1,475       283     1981     (o )


S-15


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
33025 Industrial Road
  Livonia, MI             80       442       130       85       567       652       133     1980     (o )
47711 Clipper Street
  Plymouth Township, MI             539       2,983       265       575       3,212       3,787       691     1996     (o )
32975 Industrial Road
  Livonia, MI             160       887       341       171       1,217       1,388       298     1984     (o )
32985 Industrial Road
  Livonia, MI             137       761       149       147       900       1,047       193     1985     (o )
32995 Industrial Road
  Livonia, MI             160       887       180       171       1,056       1,227       242     1983     (o )
12874 Westmore Avenue
  Livonia, MI             137       761       239       147       990       1,137       220     1984     (o )
33067 Industrial Road
  Livonia, MI             160       887       305       171       1,181       1,352       256     1984     (o )
1775 Bellingham
  Troy, MI             344       1,902       297       367       2,176       2,543       447     1987     (o )
1785 East Maple
  Troy, MI             92       507       86       98       587       685       126     1985     (o )
1807 East Maple
  Troy, MI             321       1,775       210       342       1,964       2,306       427     1984     (o )
980 Chicago
  Troy, MI             206       1,141       176       220       1,303       1,523       265     1985     (o )
1840 Enterprise Drive
  Rochester Hills, MI             573       3,170       371       611       3,503       4,114       767     1990     (o )
1885 Enterprise Drive
  Rochester Hills, MI             209       1,158       115       223       1,259       1,482       273     1990     (o )
1935-55 Enterprise Drive
  Rochester Hills, MI             1,285       7,144       701       1,371       7,759       9,130       1,679     1990     (o )
5500 Enterprise Court
  Warren, MI             675       3,737       447       721       4,138       4,859       886     1989     (o )
750 Chicago Road
  Troy, MI             323       1,790       381       345       2,149       2,494       468     1986     (o )
800 Chicago Road
  Troy, MI             283       1,567       519       302       2,067       2,369       577     1985     (o )
850 Chicago Road
  Troy, MI             183       1,016       262       196       1,265       1,461       258     1984     (o )
2805 S. Industrial Highway
  Ann Arbor, MI             318       1,762       402       340       2,142       2,482       474     1990     (o )
6833 Center Drive
  Sterling Heights, MI             467       2,583       220       493       2,777       3,270       613     1998     (o )
32201 North Avis Drive
  Madison Heights, MI             345       1,911       519       349       2,427       2,776       709     1974     (o )
1100 East Mandoline Road
  Madison Heights, MI             888       4,915       1,452       897       6,357       7,255       1,621     1967     (o )
30081 Stephenson Highway
  Madison Heights, MI             271       1,499       389       274       1,884       2,158       418     1967     (o )
1120 John A. Papalas Drive(d)
  Lincoln Park, MI             586       3,241       843       593       4,077       4,670       849     1985     (o )
4872 S. Lapeer Road
  Lake Orion Twsp, MI             1,342       5,441       2,007       1,412       7,378       8,790       1,994     1999     (o )
22701 Trolley Industrial
  Taylor, MI             795             7,224       849       7,169       8,018       1,027     1999     (o )
1400 Allen Drive
  Troy, MI             209       1,154       120       212       1,271       1,483       192     1979     (o )
1408 Allen Drive
  Troy, MI             151       834       171       153       1,003       1,156       226     1979     (o )
1305 Stephenson Hwy
  Troy, MI             345       1,907       171       350       2,072       2,423       359     1979     (o )
32505 Industrial Drive
  Madison Heights, MI             345       1,910       418       351       2,322       2,673       449     1979     (o )


S-16


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
1799-1813 Northfield Drive(c)
  Rochester Hills, MI             481       2,665       266       490       2,922       3,412       473     1980     (o )
32200 N. Avis(j)
  Madison Heights, MI             503       3,367       865       503       4,232       4,735       146     1973     (o )
100 Kay Industrial
  Orion, MI             677       2,018       403       685       2,414       3,098       269     1987     (o )
1849 West Maple Road
  Troy, MI             1,688       2,790       29       1,700       2,808       4,507       163     1986     (o )
42555 Merrill Road
  Sterling Heights, MI             1,080       2,300       3,550       1,090       5,840       6,930       175     1979/2006     (o )
28435 Automation Blvd. 
  Wixom, MI             621               3,804       628       3,797       4,425       217     2004     (o )
2441 N. Opdyke Road
  Auburn Hills, MI             530       737       16       538       745       1,283       16     1989/94     (o )
200 Northpointe Drive
  Orion Township, MI             723       2,063       35       734       2,088       2,821       27     1997     (o )
12163 Globe Street(j)
  Detroit, MI             595       979       154       596       1,132       1,728       135     1980     (o )
32500 Capitol Avenue
  Livonia, MI             258       1,032       154       260       1,185       1,444       35     1970     (o )
32650 Capitol Avenue
  Livonia, MI             282       1,128       54       284       1,181       1,464       44     1970     (o )
11800 Sears Drive(j)
  Livonia, MI             693       1,507       1,222       703       2,718       3,422       254     1971     (o )
1099 Church Road
  Troy, MI             702       1,332       45       721       1,358       2,079       147     1980     (o )
Grand Rapids
                                                                               
5050 Kendrick Court(j)
  Grand Rapids, MI             1,721       11,433       7,167       1,721       18,600       20,320       5,158     1988/94     (o )
5015 52nd Street SE
  Grand Rapids, MI             234       1,321       143       234       1,464       1,698       492     1987     (o )
Houston
                                                                               
2102-2314 Edwards Street
  Houston, TX             348       1,973       1,174       382       3,113       3,496       631     1961     (o )
4545 Eastpark Drive
  Houston, TX             235       1,331       735       240       2,061       2,301       530     1972     (o )
3351 Rauch St
  Houston, TX             272       1,541       189       278       1,724       2,002       382     1970     (o )
3851 Yale St
  Houston, TX             413       2,343       680       425       3,012       3,437       777     1971     (o )
3337-3347 Rauch Street
  Houston, TX             227       1,287       217       233       1,499       1,731       337     1970     (o )
8505 N Loop East
  Houston, TX             439       2,489       744       449       3,223       3,672       737     1981     (o )
4749-4799 Eastpark Dr
  Houston, TX             594       3,368       1,159       611       4,510       5,121       1,112     1979     (o )
4851 Homestead Road
  Houston, TX             491       2,782       913       504       3,682       4,186       846     1973     (o )
3365-3385 Rauch Street
  Houston, TX             284       1,611       119       290       1,724       2,014       388     1970     (o )
5050 Campbell Road
  Houston, TX             461       2,610       330       470       2,930       3,401       669     1970     (o )
4300 Pine Timbers
  Houston, TX             489       2,769       597       499       3,355       3,854       751     1980     (o )
2500-2530 Fairway Park Drive
  Houston, TX             766       4,342       764       792       5,080       5,872       1,157     1974     (o )
6550 Longpointe
  Houston, TX             362       2,050       549       370       2,591       2,961       589     1980     (o )


S-17


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
1815 Turning Basin Dr
  Houston, TX             487       2,761       522       531       3,239       3,770       731     1980     (o )
1819 Turning Basin Dr
  Houston, TX             231       1,308       567       251       1,854       2,105       424     1980     (o )
1805 Turning Basin Drive
  Houston, TX             564       3,197       655       616       3,800       4,415       856     1980     (o )
9835A Genard Road
  Houston, TX             1,505       8,333       3,310       1,581       11,568       13,149       2,245     1980     (o )
9835B Genard Road
  Houston, TX             245       1,357       463       256       1,809       2,065       302     1980     (o )
10325-10415 Landsbury Drive(d)
  Houston, TX             696       3,854       499       704       4,345       5,049       569     1982     (o )
8705 City Park Loop
  Houston, TX             710       2,983       933       714       3,912       4,626       452     1982     (o )
11505 State Highway 225
  LaPorte City, TX             940       4,675       615       940       5,290       6,230       338     2003     (o )
6955 Portwest Drive
  Houston, TX             314       1,686       213       320       1,892       2,213       91     1985     (o )
6925 Portwest Drive(j)
  Houston, TX             402       1,360       230       407       1,585       1,992       112     1985     (o )
600 Kenrick(j)
  Houston, TX             900       1,791       235       913       2,013       2,926       280     1981     (o )
1500 E. Main
  LaPorte City, TX             201       1,328       24       204       1,348       1,553       121     1972/1982     (o )
Indianapolis
                                                                               
2900 N Shadeland Avenue
  Indianapolis, IN             2,057       13,565       3,327       2,057       16,892       18,949       4,698     1957/1992     (o )
7901 West 21st St. 
  Indianapolis, IN             1,048       6,027       427       1,048       6,454       7,502       1,661     1985     (o )
1445 Brookville Way
  Indianapolis, IN             459       2,603       737       476       3,323       3,799       967     1989     (o )
1440 Brookville Way
  Indianapolis, IN             665       3,770       1,080       685       4,831       5,516       1,219     1990     (o )
1240 Brookville Way
  Indianapolis, IN             247       1,402       308       258       1,700       1,958       496     1990     (o )
1345 Brookville Way
  Indianapolis, IN     (o )     586       3,321       910       601       4,215       4,816       1,196     1992     (o )
1350 Brookville Way
  Indianapolis, IN             205       1,161       179       212       1,333       1,544       379     1994     (o )
1341 Sadlier Circle E Dr
  Indianapolis, IN     (p )     131       743       374       136       1,112       1,248       352     1971/1992     (o )
1322-1438 Sadlier Circle E Dr
  Indianapolis, IN     (p )     145       822       283       152       1,099       1,251       337     1971/1992     (o )
1327-1441 Sadlier Circle E Dr
  Indianapolis, IN     (p )     218       1,234       426       225       1,653       1,877       484     1992     (o )
1304 Sadlier Circle E Dr
  Indianapolis, IN     (p )     71       405       153       75       554       629       175     1971/1992     (o )
1402 Sadlier Circle E Dr
  Indianapolis, IN     (p )     165       934       437       171       1,365       1,536       425     1970/1992     (o )
1504 Sadlier Circle E Dr
  Indianapolis, IN     (p )     219       1,238       318       226       1,549       1,774       381     1971/1992     (o )
1311 Sadlier Circle E Dr
  Indianapolis, IN     (p )     54       304       105       57       405       462       105     1971/1992     (o )
1365 Sadlier Circle E Dr
  Indianapolis, IN     (p )     121       688       287       126       970       1,096       240     1971/1992     (o )
1352-1354 Sadlier Circle E Dr
  Indianapolis, IN     (p )     178       1,008       383       184       1,384       1,568       385     1970/1992     (o )


S-18


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
1335 Sadlier Circle E Dr
  Indianapolis, IN     (p )     81       460       139       85       594       679       158     1971/1992     (o )
1327 Sadlier Circle E Dr
  Indianapolis, IN     (p )     52       295       80       55       372       427       120     1971/1992     (o )
1425 Sadlier Circle E Dr
  Indianapolis, IN     (p )     21       117       39       23       154       177       40     1971/1992     (o )
1230 Brookville Way
  Indianapolis, IN             103       586       90       109       672       780       175     1995     (o )
6951 E 30th St
  Indianapolis, IN             256       1,449       238       265       1,678       1,943       486     1995     (o )
6701 E 30th St
  Indianapolis, IN             78       443       43       82       482       564       131     1995     (o )
6737 E 30th St
  Indianapolis, IN             385       2,181       307       398       2,474       2,873       722     1995     (o )
1225 Brookville Way
  Indianapolis, IN             60             458       68       450       518       94     1997     (o )
6555 E 30th St
  Indianapolis, IN             484       4,760       1,874       484       6,634       7,118       1,900     1969/1981     (o )
8402-8440 E 33rd St
  Indianapolis, IN             222       1,260       638       230       1,890       2,120       518     1977     (o )
8520-8630 E 33rd St
  Indianapolis, IN             326       1,848       706       336       2,545       2,881       733     1976     (o )
8710-8768 E 33rd St
  Indianapolis, IN             175       993       405       187       1,385       1,572       384     1979     (o )
3316-3346 N. Pagosa Court
  Indianapolis, IN             325       1,842       605       335       2,436       2,771       696     1977     (o )
6751 E 30th St
  Indianapolis, IN             728       2,837       256       741       3,079       3,820       740     1997     (o )
9200 East 146th Street
  Noblesville, IN             181       1,221       1,045       181       2,266       2,446       566     1961/1981     (o )
6575 East 30th Street
  Indianapolis, IN             118             1,997       128       1,987       2,115       415     1998     (o )
6585 East 30th Street
  Indianapolis, IN             196             3,293       196       3,292       3,489       685     1998     (o )
8525 E. 33rd Street
  Indianapolis, IN             1,300       2,091       1,230       1,308       3,314       4,621       937     1978     (o )
5705-97 Park Plaza Ct
  Indianapolis, IN     (q )     600       2,194       872       609       3,057       3,666       701     1977     (o )
8219 Northwest Blvd. 
  Indianapolis, IN             900       3,081       397       902       3,476       4,378       467     1990     (o )
8227 Northwest Blvd. 
  Indianapolis, IN             600       5,502       699       602       6,198       6,801       772     1990     (o )
9319-9341 Castlegate Drive
  Indianapolis, IN             530       1,235       1,111       544       2,332       2,876       478     1983     (o )
9332-9350 Castlegate Drive
  Indianapolis, IN             420       646       663       429       1,300       1,729       290     1983     (o )
2855 Michigan Road
  Madison, IN             504       1,169       49       521       1,201       1,722       625     1962     (o )
1133 Northwest L Street
  Richmond, IN     (r )     201       1,358       26       208       1,378       1,586       150     1955/92     (o )
1380 Perry Road
  Plainfield, IN             781       5,156       35       785       5,187       5,972       352     1997     (o )
9210 East 146th Street
  Noblesville, IN             66       684       799       66       1,483       1,549       520     1978     (o )
4640 Martin Luther King Jr. Boulevard
  Anderson, IN             161       664       6       163       669       831       67     1999     (o )
6512 Production Drive
  Anderson, IN             58       281       3       58       284       342       19     1995     (o )
6628 Production Drive
  Anderson, IN             150       680       7       151       686       837       48     1995     (o )
2902 Enterprise Drive
  Anderson, IN             230       4,573       44       232       4,615       4,847       224     1995     (o )


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Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
Los Angeles
                                                                               
12616 Yukon Ave
  Hawthorne, CA             685       3,884       217       696       4,090       4,786       457     1987     (o )
333 Turnbull Canyon Road
  City of Industry, CA             2,700       1,824       572       2,700       2,396       5,096       362     1968/1985     (o )
350-390 Manville St. 
  Compton, CA             2,300       3,768       103       2,313       3,857       6,171       377     1979     (o )
1944 Vista Bella Way
  Rancho Dominguez, CA             1,746       3,148       586       1,821       3,660       5,480       244     1976     (o )
2000 Vista Bella Way
  Rancho Dominguez, CA             817       1,673       292       852       1,931       2,782       126     1971     (o )
2835 East Ana Street Drive
  Rancho Dominguez, CA             1,682       2,750       133       1,770       2,796       4,565       186     1972/2000     (o )
665 N. Baldwin Park Blvd
  City of Industry, CA             2,124       5,219       53       2,139       5,257       7,396       228     1965/92     (o )
27801 Avenue Scott(j)
  Santa Clarita, CA             2,890       7,020       192       2,899       7,203       10,102       69     1984     (o )
2610 & 2660 Columbia Street
  Torrance, CA             3,008       5,826       36       3,021       5,849       8,870       153     1969     (o )
433 Alaska Avenue
  Torrance, CA             681       168       4       684       169       853       4     1962     (o )
201 West Manville Avenue
  Compton, CA             7,639       5,022       310       7,807       5,164       12,971       434     1956     (o )
14300 Bonelli Street(j)
  City of Industry, CA             2,000       8,000       1,130       2,096       9,034       11,130       309     1973/2002     (o )
4020 S. Compton Ave
  Los Angeles, CA             3,800       7,330       71       3,825       7,376       11,201       109     1986     (o )
Louisville
                                                                               
9001 Cane Run Road
  Louisville, KY             524             5,817       560       5,781       6,341       1,675     1998     (o )
9101 Cane Run Road
  Louisville, KY             608             6,114       608       6,113       6,722       917     2000     (o )
Milwaukee
                                                                               
N25 W23050 Paul Road
  Pewaukee, WI             474       2,723       1,932       485       4,645       5,130       1,266     1989     (o )
N25 W23255 Paul Road
  Pewaukee, WI             569       3,270       128       569       3,398       3,967       1,030     1987     (o )
N27 W23293 Roundy Drive
  Pewaukee, WI             412       2,837       81       420       2,910       3,330       891     1989     (o )
6523 N Sydney Place
  Glendale, WI             172       976       189       176       1,163       1,338       316     1978     (o )
4560 N 124th Street
  Wauwatosa, WI             118       667       85       129       741       870       177     1976     (o )
4410-80 North 132nd Street
  Butler, WI             355             4,023       359       4,019       4,378       680     1999     (o )
5355 South Westridge Drive
  New Berlin, WI             1,630       7,058       92       1,646       7,134       8,780       565     1997     (o )
320-34 W. Vogel
  Milwaukee, WI             506       3,199       41       508       3,238       3,746       375     1970     (o )
4950 S. 6th Avenue
  Milwaukee, WI             299       1,565       85       301       1,648       1,949       230     1970     (o )
1711 Paramount Court
  Waukesha, WI             308       1,762       19       311       1,778       2,089       122     1997     (o )
17005 W. Ryerson Road
  New Berlin, WI             403       3,647       32       405       3,676       4,082       287     1985/88     (o )
W 140 N9059 Lilly Road
  Iomonee Falls, WI             343       1,153       242       366       1,372       1,738       100     1995     (o )


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Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
200 W. Vogel Ave., Bldg B
  Milwaukee, WI             301       2,150       13       302       2,162       2,464       225     1970     (o )
16600 West Glendale Avenue
  New Berlin, WI             704       1,923       385       715       2,298       3,012       177     1969/84     (o )
4921 S. 2nd Street
  Milwaukee, WI             101       713       2       101       715       816       68     1970     (o )
1500 Peebles Drive
  Richland Center, WI             1,577       1,018       34       1,603       1,027       2,629       358     1967/72     (o )
Minneapolis/St. Paul
                                                                               
6507-6545 Cecilia Circle
  Bloomington, MN             357       1,320       1,289       386       2,580       2,966       1,444     1980     (o )
6201 West 111th Street
  Bloomington, MN     (s )     1,358       8,622       4,139       1,499       12,620       14,119       6,307     1987     (o )
6403-6545 Cecilia Drive
  Bloomington, MN             366       1,363       1,141       395       2,475       2,870       1,455     1980     (o )
7251-7267 Washington Avenue
  Edina, MN             129       382       715       182       1,044       1,226       769     1972     (o )
7301-7325 Washington Avenue
  Edina, MN             174       391       103       193       475       668       150     1972     (o )
7101 Winnetka Avenue North
  Brooklyn Park, MN             2,195       6,084       3,707       2,228       9,758       11,986       5,183     1990     (o )
7600 Golden Triangle Drive
  Eden Prairie, MN             566       1,394       1,418       615       2,764       3,378       1,489     1989     (o )
9901 West 74th Street
  Eden Prairie, MN             621       3,289       3,211       639       6,482       7,121       3,440     1983/88     (o )
12220-12222 Nicollet Avenue
  Burnsville, MN             105       425       400       114       817       930       518     1989/90     (o )
12250-12268 Nicollet Avenue
  Burnsville, MN             260       1,054       523       296       1,540       1,837       715     1989/90     (o )
12224-12226 Nicollet Avenue
  Burnsville, MN             190       770       715       207       1,468       1,675       650     1989/90     (o )
1030 Lone Oak Road
  Eagan, MN             456       2,703       575       456       3,278       3,734       966     1988     (o )
1060 Lone Oak Road
  Eagan, MN             624       3,700       701       624       4,401       5,026       1,349     1988     (o )
5400 Nathan Lane
  Plymouth, MN             749       4,461       1,302       757       5,754       6,512       2,059     1990     (o )
10120 W 76th Street
  Eden Prairie, MN             315       1,804       1,378       315       3,181       3,496       1,498     1987     (o )
7615 Golden Triangle
  Eden Prairie, MN             268       1,532       785       268       2,317       2,585       612     1987     (o )
7625 Golden Triangle
  Eden Prairie, MN             415       2,375       1,107       415       3,482       3,897       1,129     1987     (o )
2605 Fernbrook Lane North
  Plymouth, MN             443       2,533       672       445       3,203       3,647       835     1987     (o )
12155 Nicollet Ave
  Burnsville, MN             286             1,731       288       1,729       2,017       482     1995     (o )
6655 Wedgewood Road
  Maple Grove, MN             1,466       8,342       3,291       1,466       11,633       13,099       3,183     1989     (o )
900 Apollo Road
  Eagan, MN             1,029       5,855       1,178       1,030       7,032       8,062       2,003     1970     (o )


S-21


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
7316 Aspen Lane North
  Brooklyn Park, MN             368       2,156       822       377       2,969       3,346       875     1978     (o )
4100 Peavey Road
  Chaska, MN             277       2,261       795       277       3,056       3,333       768     1988     (o )
11300 Hamshire Ave South
  Bloomington, MN             527       2,985       1,460       541       4,430       4,972       980     1983     (o )
375 Rivertown Drive
  Woodbury, MN             1,083       6,135       2,720       1,503       8,435       9,938       1,987     1996     (o )
5205 Highway 169
  Plymouth, MN             446       2,525       1,000       740       3,230       3,970       793     1960     (o )
6451-6595 Citywest Parkway
  Eden Prairie, MN             525       2,975       1,258       538       4,220       4,758       1,116     1984     (o )
7100-7198 Shady Oak Road
  Eden Prairie, MN             715       4,054       1,212       736       5,245       5,981       1,747     1982/2002     (o )
7500-7546 Washington Square
  Eden Prairie, MN             229       1,300       795       235       2,090       2,325       515     1975     (o )
7550-7558 Washington Square
  Eden Prairie, MN             153       867       184       157       1,048       1,205       251     1975     (o )
5240-5300 Valley Industrial Blvd S
  Shakopee, MN             362       2,049       1,011       371       3,049       3,421       816     1973     (o )
6477-6525 City West Parkway
  Eden Prairie, MN             810       4,590       984       819       5,564       6,384       1,355     1984     (o )
1157 Valley Park Drive
  Shakopee, MN             760             6,160       888       6,032       6,920       1,145     1997     (o )
500-530 Kasota Avenue SE
  Minneapolis, MN             415       2,354       998       432       3,335       3,767       913     1976     (o )
770-786 Kasota Avenue SE
  Minneapolis, MN             333       1,888       512       347       2,386       2,733       504     1976     (o )
800 Kasota Avenue SE
  Minneapolis, MN             524       2,971       743       597       3,641       4,238       872     1976     (o )
2530-2570 Kasota Avenue
  St. Paul, MN             407       2,308       780       465       3,030       3,495       707     1976     (o )
1280 Energy Park Drive
  St. Paul, MN             700       2,779       83       705       2,857       3,562       271     1984     (o )
9600 West 76th Street
  Eden Prairie, MN             1,000       2,450       36       1,034       2,451       3,486       188     1997     (o )
9700 West 76th Street
  Eden Prairie, MN             1,000       2,709       101       1,038       2,772       3,810       227     1984/97     (o )
5017 Boone Avenue North
  New Hope, MN     (t )     1,000       1,599       58       1,009       1,648       2,657       263     1971/74     (o )
2300 West Highway 13(I-35 Dist Ctr)
  Burnsville, MN             2,517       6,069       579       2,524       6,640       9,165       1,218     1970/76     (o )
1087 Park Place
  Shakopee, MN             1,195       4,891       15       1,198       4,903       6,101       372     1996/2000     (o )
5391 12th Avenue SE
  Shakopee, MN             1,392       8,149       230       1,395       8,375       9,771       580     1998     (o )
4701 Valley Industrial Boulevard
  Shakopee, MN             1,296       7,157       (81 )     1,299       7,073       8,372       518     1997     (o )
Park 2000 III(j)
  Shakopee, MN             590             4,953       590       4,953       5,543       619     2001     (o )
7600 69th Avenue
  Greenfield, MN             1,500       8,328       1,808       1,510       10,126       11,636       945     2004     (o )


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Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
316 Lake Hazeltine Drive
  Chaska, MN             714       944       155       729       1,084       1,813       108     1986     (o )
6455 City West Parkway
  Eden Prairie, MN             659       3,189       48       666       3,229       3,895       257     1995/97     (o )
1225 Highway 169 North
  Plymouth, MN             1,190       1,979       59       1,207       2,022       3,228       39     1968     (o )
Nashville
                                                                               
1621 Heil Quaker Boulevard
  Nashville, TN             413       2,383       1,467       430       3,833       4,263       1,133     1975     (o )
3099 Barry Drive
  Portland, TN             418       2,368       192       421       2,557       2,978       702     1995     (o )
3150 Barry Drive
  Portland, TN             941       5,333       477       981       5,770       6,750       1,447     1993     (o )
5599 Highway 31 West
  Portland, TN             564       3,196       211       571       3,400       3,971       950     1995     (o )
1650 Elm Hill Pike
  Nashville, TN             329       1,867       172       332       2,036       2,368       486     1984     (o )
1931 Air Lane Drive
  Nashville, TN             489       2,785       273       493       3,054       3,547       722     1984     (o )
470 Metroplex Drive(c)
  Nashville, TN             619       3,507       1,216       626       4,716       5,342       1,405     1986     (o )
1150 Antiock Pike
  Nashville, TN             661       3,748       523       669       4,264       4,932       1,033     1987     (o )
4640 Cummings Park
  Nashville, TN             360       2,040       181       365       2,216       2,581       390     1986     (o )
556 Metroplex Drive
  Nashville, TN             227       1,285       124       231       1,405       1,636       234     1983     (o )
1740 River Hills Drive
  Nashville, TN             848       4,383       515       888       4,858       5,746       614     1978     (o )
Northern New Jersey
                                                                               
14 World’s Fair Drive
  Franklin, NJ             483       2,735       553       503       3,268       3,771       787     1980     (o )
12 World’s Fair Drive
  Franklin, NJ             572       3,240       539       593       3,757       4,350       920     1981     (o )
22 World’s Fair Drive
  Franklin, NJ             364       2,064       302       375       2,355       2,730       528     1983     (o )
26 World’s Fair Drive
  Franklin, NJ             361       2,048       293       377       2,325       2,703       553     1984     (o )
24 World’s Fair Drive
  Franklin, NJ             347       1,968       487       362       2,441       2,802       620     1984     (o )
20 World’s Fair Drive Lot 13
  Sumerset, NJ             9             2,632       691       1,950       2,641       365     1999     (o )
45 Route 46
  Pine Brook, NJ             969       5,491       790       978       6,272       7,250       1,045     1974/1987     (o )
43 Route 46
  Pine Brook, NJ             474       2,686       454       479       3,136       3,614       582     1974/1987     (o )
39 Route 46
  Pine Brook, NJ             260       1,471       179       262       1,647       1,909       286     1970     (o )
26 Chapin Road
  Pine Brook, NJ             956       5,415       520       965       5,925       6,890       970     1983     (o )
30 Chapin Road
  Pine Brook, NJ             960       5,440       592       969       6,023       6,992       997     1983     (o )
20 Hook Mountain Road
  Pine Brook, NJ             1,507       8,542       1,050       1,534       9,566       11,100       1,488     1972/1984     (o )
30 Hook Mountain Road
  Pine Brook, NJ             389       2,206       368       396       2,567       2,963       424     1972/1987     (o )
55 Route 46
  Pine Brook, NJ             396       2,244       211       403       2,448       2,851       396     1978/1994     (o )
16 Chapin Road
  Pine Brook, NJ             885       5,015       323       901       5,323       6,223       881     1987     (o )


S-23


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
20 Chapin Road
  Pine Brook, NJ             1,134       6,426       523       1,154       6,929       8,083       1,144     1987     (o )
Sayreville Lot 3
  Sayreville, NJ             996             5,301       996       5,301       6,297       318     2002     (o )
Sayreville Lot 4
  Sayreville, NJ             944             4,749       944       4,749       5,693       532     2001     (o )
400 Raritan Center Parkway
  Edison, NJ             829       4,722       552       851       5,253       6,104       769     1983     (o )
300 Columbus Circle
  Edison, NJ             1,257       7,122       950       1,277       8,052       9,329       1,180     1983     (o )
400 Apgar
  Franklin Township, NJ             780       4,420       624       822       5,002       5,824       639     1987     (o )
500 Apgar
  Franklin Township, NJ             361       2,044       440       368       2,476       2,845       367     1987     (o )
201 Circle Dr. North
  Piscataway, NJ             840       4,760       696       857       5,439       6,296       634     1987     (o )
1 Pearl Ct. 
  Allendale, NJ             623       3,528       1,304       649       4,806       5,454       498     1978     (o )
2 Pearl Ct. 
  Allendale, NJ             255       1,445       1,280       403       2,577       2,980       267     1979     (o )
3 Pearl Ct. 
  Allendale, NJ             440       2,491       203       458       2,675       3,133       327     1978     (o )
4 Pearl Ct. 
  Allendale, NJ             450       2,550       613       469       3,144       3,613       440     1979     (o )
5 Pearl Ct. 
  Allendale, NJ             505       2,860       510       526       3,349       3,875       403     1977     (o )
6 Pearl Ct. 
  Allendale, NJ             1,160       6,575       774       1,177       7,332       8,509       807     1980     (o )
7 Pearl Ct. 
  Allendale, NJ             513       2,907       260       520       3,159       3,680       349     1979     (o )
59 Route 17
  Allendale, NJ             518       2,933       1,122       539       4,033       4,572       631     1979     (o )
309-319 Pierce Street
  Somerset, NJ             1,300       4,628       340       1,309       4,958       6,268       412     1986     (o )
50 Triangle Blvd
  Carlstadt, NJ             497       2,195       203       532       2,363       2,895       154     1967     (o )
Orlando
                                                                               
Lake Point IV
  Tampa, FL             909       4,613       137       920       4,739       5,659       348     1987     (o )
Philadelphia
                                                                               
230-240 Welsh Pool Road
  Exton, PA             154       851       128       170       963       1,133       210     1975/1997     (o )
264 Welsh Pool Road
  Exton, PA             147       811       121       162       918       1,079       206     1975/1996     (o )
254 Welsh Pool Road
  Exton, PA             152       842       463       184       1,273       1,457       332     1975/1998     (o )
213 Welsh Pool Road
  Exton, PA             149       827       171       173       974       1,147       217     1975/1998     (o )
251 Welsh Pool Road
  Exton, PA             144       796       274       159       1,056       1,214       206     1975/1991     (o )
253-255 Welsh Pool Road
  Exton, PA             113       626       176       125       790       915       171     1975/1980     (o )
151-161 Philips Road
  Exton, PA             191       1,059       303       229       1,324       1,553       318     1975/1990     (o )
216 Philips Road
  Exton, PA             199       1,100       238       220       1,317       1,537       290     1985     (o )
964 Postal Road
  Lehigh, PA             215       1,216       116       224       1,322       1,546       192     1986     (o )
966 Postal Road
  Lehigh, PA             268       1,517       125       279       1,630       1,910       245     1987     (o )


S-24


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
999 Postal Road
  Lehigh, PA             439       2,486       644       458       3,112       3,569       454     1988     (o )
7331 William Avenue
  Lehigh, PA             311       1,764       144       325       1,894       2,219       271     1989     (o )
7350 William Ave. 
  Lehigh, PA             552       3,128       699       576       3,803       4,379       766     1989     (o )
7377 William Ave. 
  Lehigh, PA             290       1,645       229       303       1,861       2,164       307     1989     (o )
2000 Cabot Boulevard West
  Langhorne, PA             414       2,346       646       424       2,982       3,406       362     1984     (o )
2005 Cabot Boulevard West
  Langhorne, PA             315       1,785       218       322       1,995       2,317       262     1984     (o )
2010 Cabot Boulevard West
  Langhorne, PA             513       2,907       596       525       3,490       4,015       525     1984     (o )
2200 Cabot Boulevard West
  Langhorne, PA             428       2,427       346       438       2,763       3,201       400     1979     (o )
2260-2270 Cabot Boulevard West
  Langhorne, PA             361       2,044       453       369       2,488       2,858       351     1980     (o )
3000 Cabot Boulevard West
  Langhorne, PA             509       2,886       733       521       3,607       4,128       561     1986     (o )
180 Wheeler Court
  Langhorne, PA             447       2,533       178       458       2,700       3,157       346     1974     (o )
2512 Metropolitan Drive
  Trevose, PA             242       1,369       218       248       1,581       1,828       221     1981     (o )
2515 Metropolitan Drive
  Trevose, PA             259       1,466       97       265       1,557       1,822       221     1974     (o )
2450 Metropolitan Drive
  Trevose, PA             571       3,234       725       586       3,944       4,530       589     1983     (o )
4667 Somerton Road
  Trevose, PA             637       3,608       751       652       4,344       4,996       736     1974     (o )
835 Wheeler Way
  Langhorne, PA             293       1,658       477       319       2,107       2,427       366     1974     (o )
14 McFadden Road
  Palmer, PA             600       1,349       56       625       1,380       2,005       176     1994/2000     (o )
2801 Red Lion Road
  Philadelphia, PA             950       5,916       88       964       5,990       6,954       865     1969/90     (o )
3240 S.78th Street
  Philadelphia, PA             515       1,245       70       539       1,291       1,830       73     1980     (o )
Phoenix
                                                                               
1045 South Edward Drive
  Tempe, AZ             390       2,160       86       394       2,242       2,636       433     1976     (o )
46 N. 49th Ave. 
  Phoenix, AZ             283       1,704       732       283       2,436       2,719       459     1986     (o )
240 N. 48th Ave. 
  Phoenix, AZ             482       1,913       96       482       2,009       2,491       293     1977     (o )
220 N. 48th Ave. 
  Phoenix, AZ             530       1,726       252       531       1,977       2,508       257     1977     (o )
54 N. 48th Ave. 
  Phoenix, AZ             130       625       50       131       674       805       94     1977     (o )
64 N. 48th Ave. 
  Phoenix, AZ             180       458       55       181       512       693       79     1977     (o )
236 N. 48th Ave. 
  Phoenix, AZ             120       322       42       120       363       484       50     1977     (o )
10 S. 48th Ave. 
  Phoenix, AZ             510       1,687       170       513       1,855       2,367       249     1977     (o )
115 E. Watkins St. 
  Phoenix, AZ             170       816       112       171       928       1,098       120     1979     (o )
135 E. Watkins St. 
  Phoenix, AZ             380       1,962       127       382       2,087       2,469       280     1977     (o )
10220 S. 51st Street
  Phoenix, AZ             400       1,493       42       406       1,529       1,935       174     1985     (o )


S-25


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
50 South 56th Street
  Chandler, AZ             1,200       3,333       (49 )     1,207       3,277       4,484       236     1991/97     (o )
4701 W. Jefferson
  Phoenix, AZ             926       2,195       628       929       2,820       3,749       322     1984     (o )
8150 S. Kyrene Road
  Tempe, AZ             1,597       4,065       107       1,633       4,137       5,769       178     1999     (o )
7102 W. Roosevelt(j)
  Phoenix, AZ             1,613       6,451       88       1,620       6,532       8,152       65     1998     (o )
4137 West Adams Street
  Phoenix, AZ             990       2,661       131       1,029       2,753       3,782       30     1985/92     (o )
Portland
                                                                               
2315 NW 21st Place
  Portland, OR             301       1,247       38       309       1,277       1,586       59     1966/79     (o )
Salt Lake City
                                                                               
512 Lawndale Drive(f)
  Salt Lake City, UT             2,705       15,749       2,985       2,705       18,733       21,438       4,806     1981     (o )
1270 West 2320 South
  West Valley, UT             138       784       144       143       924       1,067       232     1986/92     (o )
1275 West 2240 South
  West Valley, UT             395       2,241       473       408       2,702       3,109       652     1986/92     (o )
1288 West 2240 South
  West Valley, UT             119       672       180       123       849       971       249     1986/92     (o )
2235 South 1300 West
  West Valley, UT             198       1,120       259       204       1,373       1,577       376     1986/92     (o )
1293 West 2200 South
  West Valley, UT             158       896       202       163       1,093       1,256       309     1986/92     (o )
1279 West 2200 South
  West Valley, UT             198       1,120       56       204       1,170       1,374       270     1986/92     (o )
1272 West 2240 South
  West Valley, UT             336       1,905       437       347       2,331       2,677       694     1986/92     (o )
1149 West 2240 South
  West Valley, UT             217       1,232       99       225       1,324       1,549       294     1986/92     (o )
1142 West 2320 South
  West Valley, UT             217       1,232       139       225       1,364       1,588       346     1997     (o )
1152 West 2240 South
  West Valley, UT             2,067             3,549       2,114       3,503       5,617       542     1999     (o )
369 Orange Street
  Salt Lake City, UT             600       2,855       170       602       3,022       3,625       375     1980     (o )
2323 South 900 W
  Salt Lake City, UT             886       2,995       55       898       3,037       3,936       209     1972     (o )
9140 South 150 East-Eckman
  Sandy City, UT             1,417       3,668       192       1,580       3,697       5,277       65     1984/2006     (o )
4625 West 1730 South
  Salt Lake City, UT             903       4,005       17       907       4,018       4,925       43     1997     (o )
1815-1957 South 4650 West
  Salt Lake City, UT             1,707       10,873       161       1,713       11,028       12,741       101     1997     (o )
1330 W. 3300 South Avenue
  Ogden, UT             1,100       2,353       654       1,100       3,007       4,107       448     1982     (o )
4517 West 1730 South
  Salt Lake City, UT             704       2,737       220       748       2,913       3,661       29     1989     (o )
San Diego
                                                                               
9051 Siempre Viva Rd
  San Diego, CA             540       1,598       189       541       1,786       2,327       224     1989     (o )
9163 Siempre Viva Rd
  San Diego, CA             430       1,621       210       431       1,830       2,261       227     1989     (o )
9295 Siempre Viva Rd
  San Diego, CA             540       1,569       123       541       1,691       2,232       195     1989     (o )


S-26


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
9255 Customhouse Plaza
  San Diego, CA             3,230       11,030       902       3,234       11,928       15,162       1,401     1989     (o )
16275 Technology Drive
  San Diego, CA             2,848       8,641       42       2,859       8,672       11,531       367     1963/85     (o )
6305 El Camino Real(j)
  Carlsbad, CA             1,590       6,360       0       1,590       6,360       7,950       85     1980     (o )
42374 Avenida Alvarado(c)
  Temecula, CA             447       2,529       336       462       2,849       3,311       283     1987     (o )
9375 Customhouse Plaza
  San Diego, CA             430       1,384       287       431       1,670       2,101       227     1989     (o )
9465 Customhouse Plaza
  San Diego, CA             430       1,437       226       431       1,662       2,093       237     1989     (o )
9485 Customhouse Plaza
  San Diego, CA             1,200       2,792       286       1,201       3,077       4,278       364     1989     (o )
2675 Customhouse Court
  San Diego, CA             590       2,082       388       591       2,469       3,060       259     1989     (o )
2325 Camino Vida Roble(j)
  Carlsbad, CA             1,441       1,239       37       1,446       1,271       2,717       52     1981/98     (o )
2335 Camino Vida Roble
  Carlsbad, CA             817       762       27       820       786       1,606       39     1981/98     (o )
2345 Camino Vida Roble
  Carlsbad, CA             562       456       28       564       481       1,046       25     1981/98     (o )
2355 Camino Vida Roble
  Carlsbad, CA             481       365       33       483       396       879       23     1981/98     (o )
2365 Camino Vida Roble
  Carlsbad, CA             1,098       630       8       1,102       634       1,736       43     1981/98     (o )
2375 Camino Vida Roble(j)
  Carlsbad, CA             1,210       874       121       1,214       991       2,205       50     1981/98     (o )
6451 El Camino Real(j)
  Carlsbad, CA             2,885       1,931       52       2,894       1,973       4,868       98     1986/98     (o )
Southern New Jersey
                                                                               
5 North Olnev Ave
  Cherry Hill, NJ             157       1,524       (451 )     157       1,073       1,229       204     1963/1985     (o )
4 Springdale Road(c)
  Cherry Hill, NJ             332       1,853       1,271       332       3,124       3,456       594     1963/85     (o )
8 Springdale Road
  Cherry Hill, NJ             258       1,436       874       258       2,311       2,568       505     1966     (o )
2050 Springdale Road
  Cherry Hill, NJ             277       1,545       1,149       277       2,693       2,970       626     1965     (o )
16 Springdale Road
  Cherry Hill, NJ             240       1,336       134       240       1,471       1,710       312     1967     (o )
5 Esterbrook Lane
  Cherry Hill, NJ             240       1,336       236       240       1,572       1,812       329     1966/88     (o )
2 Pin Oak Lane
  Cherry Hill, NJ             314       1,757       695       314       2,452       2,766       552     1968     (o )
28 Springdale Road
  Cherry Hill, NJ             190       1,060       211       190       1,272       1,462       270     1967     (o )
3 Esterbrook Lane
  Cherry Hill, NJ             198       1,102       486       198       1,588       1,786       328     1968     (o )
4 Esterbrook Lane(j)
  Cherry Hill, NJ             232       1,294       44       232       1,338       1,570       291     1969     (o )
26 Springdale Road
  Cherry Hill, NJ             226       1,257       555       226       1,811       2,037       375     1968     (o )
1 Keystone Ave
  Cherry Hill, NJ             218       1,223       973       218       2,196       2,415       473     1969     (o )
21 Olnev Ave
  Cherry Hill, NJ             68       380       75       68       455       523       93     1969     (o )
19 Olnev Ave
  Cherry Hill, NJ             200       1,119       1,160       200       2,279       2,479       444     1971     (o )
2 Keystone Ave
  Cherry Hill, NJ             214       1,194       559       214       1,753       1,967       404     1970     (o )
18 Olnev Ave
  Cherry Hill, NJ             247       1,382       428       247       1,810       2,057       327     1974     (o )


S-27


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
2030 Springdale Rod
  Cherry Hill, NJ             523       2,914       1,417       523       4,331       4,854       972     1977     (o )
111 Whittendale Drive
  Morrestown, NJ             522       2,916       130       522       3,046       3,568       547     1991/96     (o )
9 Whittendale
  Morrestown, NJ             337       1,911       100       343       2,005       2,348       277     2000     (o )
1931 Olney Road
  Cherry Hill, NJ             262       1,486       101       267       1,582       1,849       182     1969     (o )
7851 Airport
  Pennsauken, NJ             160       508       382       163       888       1,050       157     1966     (o )
103 Central
  Mt. Laurel, NJ             610       1,847       1,561       619       3,398       4,018       625     1970     (o )
7890 Airport Hwy/7015 Central
  Pennsauken, NJ             300       989       1,062       425       1,926       2,351       442     1969     (o )
999 Grand Avenue
  Hammonton, NJ     (u )     969       8,793       713       979       9,495       10,475       940     1980     (o )
7860-7870 Airport
  Pennsauken, NJ             120       366       286       122       650       772       114     1968     (o )
855 Hylton Road(j)
  Pennsauken, NJ             264       1,025       105       269       1,125       1,394       37     1986     (o )
St. Louis
                                                                               
8921-8971 Fost Avenue
  Hazelwood, MO             431       2,479       114       431       2,593       3,025       834     1971     (o )
9043-9083 Frost Avenue
  Hazelwood, MO             319       1,838       750       319       2,588       2,907       771     1970/77     (o )
10431-10449 Midwest Industrial Blvd
  Olivette, MO             237       1,360       524       237       1,884       2,121       689     1967     (o )
10751 Midwest Industrial Boulevard
  Olivette, MO             193       1,119       355       194       1,474       1,667       527     1965     (o )
6951 N Hanley(c)
  Hazelwood, MO             405       2,295       1,398       419       3,679       4,098       922     1965     (o )
1037 Warson — Bldg A(j)
  St. Louis, MO             246       1,359       364       251       1,718       1,969       178     1968     (o )
1037 Warson — Bldg B(j)
  St. Louis, MO             380       2,103       1,604       388       3,698       4,086       330     1968     (o )
1037 Warson — Bldg C
  St. Louis, MO             303       1,680       1,085       310       2,759       3,068       309     1968     (o )
1037 Warson — Bldg D(j)
  St. Louis, MO             353       1,952       364       360       2,308       2,668       253     1968     (o )
6821-6857 Hazelwood Ave
  Berkeley, MO             985       6,205       702       985       6,907       7,892       868     2001     (o )
13701 Rider Trail North
  Earth City, MO             800       2,099       545       804       2,640       3,444       516     1985     (o )
1908-2000 Innerbelt(c)
  Overland, MO             1,590       9,026       826       1,591       9,852       11,442       1,454     1987     (o )
8449-95 Mid-County Industrial
  Vinita Park, MO             520       1,590       217       520       1,807       2,327       294     1988     (o )
84104-76 Mid County Industrial
  Vinita Park, MO             540       2,109       50       540       2,159       2,699       312     1989     (o )
2001 Innerbelt Business Center
  Overland, MO             1,050       4,451       169       1,050       4,620       5,670       673     1987     (o )
9060 Latty Avenue
  Berkeley, MO             687       1,947       38       698       1,974       2,672       193     1965     (o )


S-28


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
21-25 Gateway Commerce Center
  Edwardsville, IL     (v )     1,874       31,958       942       1,927       32,847       34,774       392     2003/06     (o )
Tampa
                                                                               
6202 Benjamin Road
  Tampa, FL             203       1,151       512       211       1,655       1,866       486     1981     (o )
6204 Benjamin Road
  Tampa, FL             432       2,445       560       454       2,982       3,436       689     1982     (o )
6206 Benjamin Road
  Tampa, FL             397       2,251       481       416       2,713       3,129       667     1983     (o )
6302 Benjamin Road
  Tampa, FL             214       1,212       236       224       1,438       1,662       338     1983     (o )
6304 Benjamin Road
  Tampa, FL             201       1,138       216       209       1,346       1,555       333     1984     (o )
6306 Benjamin Road
  Tampa, FL             257       1,457       261       269       1,706       1,975       386     1984     (o )
6308 Benjamin Road
  Tampa, FL             345       1,958       313       362       2,254       2,616       531     1984     (o )
5313 Johns Road
  Tampa, FL             204       1,159       220       257       1,326       1,583       301     1991     (o )
5525 Johns Road
  Tampa, FL             192       1,086       389       200       1,468       1,667       266     1993     (o )
5709 Johns Road
  Tampa, FL             192       1,086       160       200       1,239       1,438       318     1990     (o )
5711 Johns Road
  Tampa, FL             243       1,376       174       255       1,537       1,793       341     1990     (o )
5453 W Waters Avenue
  Tampa, FL             71       402       116       82       507       589       125     1987     (o )
5455 W Waters Avenue
  Tampa, FL             307       1,742       377       326       2,101       2,426       475     1987     (o )
5553 W Waters Avenue
  Tampa, FL             307       1,742       262       326       1,986       2,312       448     1987     (o )
5501 W Waters Avenue
  Tampa, FL             154       871       169       142       1,051       1,194       276     1990     (o )
5503 W Waters Avenue
  Tampa, FL             71       402       40       66       447       513       108     1990     (o )
5555 W Waters Avenue
  Tampa, FL             213       1,206       140       221       1,337       1,559       325     1990     (o )
5557 W Waters Avenue
  Tampa, FL             59       335       47       62       379       442       86     1990     (o )
5463 W Waters Avenue
  Tampa, FL             497       2,751       770       560       3,458       4,018       770     1996     (o )
5461 W Waters
  Tampa, FL             261             1,226       265       1,222       1,487       240     1998     (o )
5481 W. Waters Avenue
  Tampa, FL             558             2,307       561       2,304       2,865       453     1999     (o )
4515-4519 George Road
  Tampa, FL             633       3,587       491       640       4,072       4,712       616     1985     (o )
6301 Benjamin Road
  Tampa, FL             292       1,657       84       295       1,738       2,033       254     1986     (o )
5723 Benjamin Road
  Tampa, FL             406       2,301       251       409       2,548       2,958       326     1986     (o )
6313 Benjamin Road
  Tampa, FL             229       1,296       267       231       1,561       1,792       245     1986     (o )
5801 Benjamin Road
  Tampa, FL             564       3,197       163       569       3,355       3,924       477     1986     (o )
5802 Benjamin Road
  Tampa, FL             686       3,889       607       692       4,491       5,183       672     1986     (o )
5925 Benjamin Road
  Tampa, FL             328       1,859       370       331       2,227       2,557       323     1986     (o )
6089 Johns Road
  Tampa, FL     (w )     180       987       93       186       1,074       1,260       103     1985     (o )


S-29


Table of Contents

                                                                                 
                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
6091 Johns Road
  Tampa, FL     (w )     140       730       33       144       759       903       72     1986     (o )
6103 Johns Road
  Tampa, FL     (w )     220       1,160       60       226       1,214       1,440       114     1986     (o )
6201 Johns Road
  Tampa, FL     (w )     200       1,107       96       205       1,198       1,403       134     1981     (o )
6203 Johns Road
  Tampa, FL     (w )     300       1,460       111       311       1,560       1,871       179     1987     (o )
6205 Johns Road
  Tampa, FL     (w )     270       1,363       32       278       1,388       1,665       92     2000     (o )
6101 Johns Road
  Tampa, FL             210       833       71       216       898       1,114       97     1981     (o )
4908 Tampa West Blvd
  Tampa, FL             2,622       8,643       36       2,635       8,666       11,301       558     1979/83     (o )
7201-7245 Bryan Dairy Road(j)(c)
  Largo, FL             1,895       5,408       59       1,909       5,453       7,362       195     1988     (o )
11701 Belcher Road South(j)
  Largo, FL             1,657       2,768       109       1,669       2,864       4,533       123     1985     (o )
4900-4914 Creekside Drive(aa)
  Clearwater, FL             3,702       7,338       108       3,730       7,418       11,148       325     1985     (o )
4908 Creekside Drive(j)
  Clearwater, FL             506       645       17       509       659       1,168       30     1985     (o )
7381-7431 114th Avenue North(j)(z)
  Largo, FL             1,711       6,662       12       1,362       7,023       8,385       432     1986     (o )
12345 Starkey Road(j)
  Largo, FL             898       2,078       15       905       2,087       2,992       77     1980     (o )
Toronto
                                                                               
135 Dundas Street
  Cambridge Ontario, Canada             3,128       4,958       137       3,179       5,044       8,223       724     1953/59     (o )
678 Erie Street
  Stratford Ontario, Canada             786       557       77       828       592       1,420       261     1955/76     (o )
777 Bayly Street West
  Ajax Ontario, Canada             7,224       13,156       828       7,539       13,669       21,208       120     1987     (o )
Other
                                                                               
3501 Maple Street(j)
  Abilene, TX             67       1,057       1,422       266       2,280       2,546       1,057     1980     (o )
4200 West Harry Street(d)
  Wichita, KS             193       2,224       1,777       532       3,662       4,194       2,040     1972     (o )
6601 S. 33rd Street
  McAllen, TX             231       1,276       166       233       1,440       1,673       304     1975     (o )
9601A Dessau Road
  Austin, TX             255             2,204       366       2,094       2,459       544     1999     (o )
9601B Dessau Road
  Austin, TX             248             1,747       355       1,639       1,994       282     1999     (o )
9601C Dessau Road
  Austin, TX             248             2,204       355       2,097       2,452       819     1999     (o )
6266 Hurt Road
  Horn Lake, MS             427             3,211       427       3,212       3,638       346     1963     (o )
6266 Hurt Road Building B(j)
  Horn Lake, MS                         868       99       769       868       48     1963     (o )
6266 Hurt Road Building C
  Horn Lake, MS                         292       278       14       292       1     1963     (o )
7601 NW 107th Terrace
  Kansas City, MO             746       4,712       30       750       4,738       5,488       578     1982/87     (o )


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                          (s)
                                   
                          Costs
                                   
                          Capitalized
                                   
                          Subsequent to
                                   
                          Acquisition or
    Gross Amount Carried
                 
              (b)
    Completion
    At Close of Period 12/31/06     Accumulated
           
    Location
  (a)
    Initial Cost     and Valuation
          Building and
          Depreciation
    Year Built/
  Depreciable
 
Building Address
 
(City/State)
  Encumbrances     Land     Buildings     Provision     Land     Improvements     Total     12/31/06     Renovated   Lives (Years)  
    (Dollars in thousands)  
 
12626 Silicon Drive
  San Antonio, TX             768       3,448       22       779       3,459       4,238       253     1981/95     (o )
3100 Pinson Valley Parkway
  Birmingham, AL             303       742       20       310       756       1,065       45     1970     (o )
1245 N. Hearne Avenue
  Shreveport, LA             99       1,263       32       102       1,292       1,394       91     1981/2004     (o )
10330 I Street
  Omaha, NE             1,808       8,340       5       1,809       8,344       10,153       448     1979/2005     (o )
                                                                                 
Redevelopments/Developments/ Developable Land
                62,777       3,203       59,052       66,297       58,738       125,035       759              
                                                                                 
                  556,544     $ 2,151,303     $ 581,553     $ 574,654     $ 2,714,749     $ 3,289,403     $ 473,882 (k)            
                                                                                 


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NOTES:
 
(a) See description of encumbrances in Note 5 to Notes to Consolidated Financial Statements.
 
(b) Initial cost for each respective property is tangible purchase price allocated in accordance with SFAS No. 141.
 
(c) Comprised of two properties.
 
(d) Comprised of three properties.
 
(e) Comprised of four properties.
 
(f) Comprised of 28 properties.
 
(g) These properties represent developable land and redevelopments that have not been placed in service.
 
(h) Improvements are net of write-off of fully depreciated assets.
 
(j) Property is not in-service as of December 31, 2006.
 
(k)
 
                         
                Gross Amount
 
    Amounts
          Carried At
 
    Included
    Amounts Within
    Close of Period
 
    in Real Estate
    Net Investment
    December 31,
 
    Held for Sale     in Real Estate     2006  
 
Land
  $ 16,229     $ 558,425     $ 574,654  
Buildings & Improvements
    88,465       2,626,284       2,714,749  
Accumulated Depreciation
    (8,464 )     (465,418 )     (473,882 )
                         
Subtotal
    96,230       2,719,291       2,815,521  
Construction in Progress
    6,960       35,019       41,979  
Leasing Commissions, Net and Deferred Leasing Intangibles
    12,771             12,771  
                         
Total at December 31, 2006
  $ 115,961     $ 2,754,310     $ 2,870,271  
                         
 
(l) This property collateralizes a $3.0 million mortgage loan which matures on May 1, 2016.
 
(m) This property collateralizes a $15.2 million mortgage loan which matures on December 1, 2010.
 
(n) This property collateralizes a $5.1 million mortgage loan which matures on December 1, 2019.
 
(o) This property collateralizes a $1.6 million mortgage loan which matures on January 1, 2013.
 
(p) These properties collateralize a $1.8 million mortgage loan which matures on September 1, 2009.
 
(q) This property collateralizes a $2.4 million mortgage loan which matures on January 1, 2012.
 
(r) This property collateralizes a $1.9 million mortgage loan which matures on June 1, 2014.
 
(s) This property collateralizes a $5.3 million mortgage loan which matures on December 1, 2019.
 
(t) This property collateralizes a $1.9 million mortgage loan which matures on September 30, 2024.
 
(u) This property collateralizes a $6.7 million mortgage loan which matures on March 1, 2011.
 
(v) This property collateralizes a $14.2 million mortgage loan and a $12.0 million mortgage loan which both mature on January 1, 2014.
 
(w) These properties collateralize a $6.0 million mortgage loan which matures on July 1, 2009.
 
(x) This property collateralizes a $0.8 million mortgage loan which matures on February 1, 2017.
 
(y) Comprised of five properties.
 
(z) Comprised of six properties.
 
(aa) Comprised of 8 properties.
 
At December 31, 2006, the aggregate cost of land and buildings and equipment for federal income tax purpose was approximately $3.1 billion (excluding construction in progress.)

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FIRST INDUSTRIAL REALTY TRUST, INC.
 
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
As of December 31, 2006
 
The changes in total real estate assets for the three years ended December 31, 2006 are as follows:
 
                         
    2006     2005     2004  
    (Dollars in thousands)  
 
Balance, Beginning of Year
  $ 3,278,740     $ 2,910,468     $ 2,738,034  
Acquisition, Construction Costs and Improvements
    763,571       875,028       508,572  
Disposition of Assets
    (693,159 )     (473,743 )     (313,940 )
Write-off of Fully Depreciated Assets
    (17,770 )     (33,013 )     (22,198 )
                         
Balance, End of Year
  $ 3,331,382     $ 3,278,740     $ 2,910,468  
                         
 
The changes in accumulated depreciation for the three years ended December 31, 2006 are as follows:
 
                         
    2006     2005     2004  
 
Balance, Beginning of Year
  $ 412,039     $ 381,297     $ 349,252  
Depreciation for Year
    121,347       99,338       82,757  
Disposition of Assets
    (41,734 )     (35,946 )     (28,514 )
Write-off of Fully Depreciated Assets
    (17,770 )     (32,650 )     (22,198 )
                         
Balance, End of Year
  $ 473,882     $ 412,039     $ 381,297  
                         


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SIGNATURES
 
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
  By: 
/s/  Michael W. Brennan
Michael W. Brennan
President, Chief Executive Officer and Director
(Principal Executive Officer)
 
Date: February 28, 2007
 
  By: 
/s/  Michael J. Havala
Michael J. Havala
Chief Financial Officer
(Principal Financial Officer)
 
Date: February 28, 2007
 
  By: 
/s/  Scott A. Musil
Scott A. Musil
Chief Accounting Officer
(Principal Accounting Officer)
 
Date: February 28, 2007
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
             
Signature
 
Title
 
Date
 
/s/  Jay H. Shidler

Jay H. Shidler
  Chairman of the Board of Directors   February 28, 2007
         
/s/  Michael W. Brennan

Michael W. Brennan
  President, Chief Executive Officer and Director   February 28, 2007
         
/s/  Michael G. Damone

Michael G. Damone
  Director of Strategic Planning and Director   February 28, 2007
         
/s/  Kevin W. Lynch

Kevin W. Lynch
  Director   February 28, 2007
         
/s/  Robert D. Newman

Robert D. Newman
  Director   February 28, 2007


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Signature
 
Title
 
Date
 
/s/  John E. Rau

John E. Rau
  Director   February 28, 2007
         
/s/  Robert J. Slater

Robert J. Slater
  Director   February 28, 2007
         
/s/  W. Edwin Tyler

W. Edwin Tyler
  Director   February 28, 2007
         
/s/  J. Steven Wilson

J. Steven Wilson
  Director   February 28, 2007


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