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

PART I.
Item 1.	Business		3
Item 1A.	Risk Factors		8
Item 1B.	Unresolved SEC Comments		14
Item 2.	Properties		15
Item 3.	Legal Proceedings		21
Item 4.	Submission of Matters to a Vote of Security Holders		21

PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		22
Item 6.	Selected Financial Data		25
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		26
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		43
Item 8.	Financial Statements and Supplementary Data		43
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		43
Item 9A.	Controls and Procedures		43
Item 9B.	Other Information		44

PART III.
Item 10.	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

PART IV.
Item 15.	Exhibits and Financial Statement Schedules		44
Signatures			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.

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.

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.


	•	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

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

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


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

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

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.

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.

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.

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,

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


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.

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.


(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.

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.

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.

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.

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.

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.

Equity Compensation Plans

The following table sets forth information regarding the Company’s equity compensation plans.

Number of Securities

to be Issued

Weighted-Average

Remaining Available

Upon Exercise of

Exercise Price of

for Further Issuance

Outstanding Options,

Under Equity

Plan Category

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.

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*


	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.


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


	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.

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.

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

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


		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.


	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.


	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

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.

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.

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.


	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.

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.

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

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

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 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.

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.

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.

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.

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,

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.

(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)


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)


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)


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)


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.

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)


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)


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)


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)


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.

FIRST INDUSTRIAL REALTY TRUST, INC.

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE


	Page

FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm		56
Consolidated Balance Sheets of First Industrial Realty Trust, Inc. (the “Company”) as of December 31, 2006 and 2005		58
Consolidated Statements of Operations of the Company for the Years Ended December 31, 2006, 2005 and 2004		59
Consolidated Statements of Comprehensive Income of the Company for the Years Ended December 31, 2006, 2005 and 2004		60
Consolidated Statements of Changes in Stockholders’ Equity of the Company for the Years Ended December 31, 2006, 2005 and 2004		61
Consolidated Statements of Cash Flows of the Company for the Years Ended December 31, 2006, 2005 and 2004		62
Notes to the Consolidated Financial Statements		63
FINANCIAL STATEMENT SCHEDULE
Schedule III: Real Estate and Accumulated Depreciation		S-1

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

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

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.

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.

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.

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.

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.

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

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

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.

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

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

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.

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.

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;

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

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.

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

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

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

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

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

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

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.

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

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

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.

FIRST INDUSTRIAL REALTY TRUST, INC.

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”).

FIRST INDUSTRIAL REALTY TRUST, INC.

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

FIRST INDUSTRIAL REALTY TRUST, INC.

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

FIRST INDUSTRIAL REALTY TRUST, INC.

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

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.

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		$	—

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

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	%

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.

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

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

Outstanding

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

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.

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.

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

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

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.

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

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


									(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


							(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


							(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


							(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


							(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


									(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


							(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


							(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


							(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


							(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	)

S-11


							(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


							(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


							(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


							(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


							(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


							(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


									(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


									(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	)

S-19


							(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	)

S-20


									(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


									(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	)

S-22


							(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


							(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


							(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


							(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


							(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


									(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


									(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


									(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	)

S-30


							(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)

S-31

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.)

S-32

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

S-33

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

S-34


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

S-35