Annual Statements Open main menu

FIRST INDUSTRIAL REALTY TRUST INC - Annual Report: 2009 (Form 10-K)

e10vk
Table of Contents

 
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, 2009
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 3900, 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 1/10,000 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  o     No þ
 
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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o     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.  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
             
Large accelerated filer o
  Accelerated filer þ   Non-accelerated filer o
(Do not check if a smaller reporting company)
  Smaller Reporting company 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 $175.4 million based on the closing price on the New York Stock Exchange for such stock on June 30, 2009.
 
At February 26, 2010, 61,819,661 shares of the Registrant’s Common Stock, $0.01 par value, were outstanding.
 
DOCUMENTS INCORPORATED BY REFERENCE
 
Part III incorporates certain information by reference to the Registrant’s definitive proxy statement expected to be filed with the Securities and Exchange Commission no later than 120 days after the end of the Registrant’s fiscal year.
 


 

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
TABLE OF CONTENTS
 
                 
        Page
 
      Business     4  
      Risk Factors     9  
      Unresolved SEC Comments     17  
      Properties     17  
      Legal Proceedings     22  
             
      PART II.        
      Reserved     22  
      Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities     22  
      Selected Financial Data     25  
      Management’s Discussion and Analysis of Financial Condition and Results of Operations     26  
      Quantitative and Qualitative Disclosures About Market Risk     46  
      Financial Statements and Supplementary Data     46  
      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure     46  
      Controls and Procedures     46  
      Other Information     47  
             
      PART III.        
      Directors, Executive Officers and Corporate Governance     47  
 
Item 11.
    Executive Compensation     47  
 
Item 12.
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters     47  
 
Item 13.
    Certain Relationships and Related Transactions and Director Independence     47  
 
Item 14.
    Principal Accountant Fees and Services     47  
             
      PART IV.        
      Exhibits and Financial Statement Schedules     47  
    S-25  
 EX-21
 EX-23
 EX-31.1
 EX-31.2
 EX-32


2


Table of Contents

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend 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 are 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,” “seek,” “target,” “potential,” “focus,” “may,” “should” or similar expressions. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a materially adverse effect on our operations and future prospects include, but are not limited to: changes in national, international, regional and local economic conditions generally and real estate markets specifically; changes in legislation/regulation (including changes to laws governing the taxation of real estate investment trusts) and actions of regulatory authorities (including the Internal Revenue Service); our ability to qualify and maintain our status as a real estate investment trust; the availability and attractiveness of financing (including both public and private capital) to us and to our potential counterparties; the availability and attractiveness of terms of additional debt repurchases; interest rates; our credit agency ratings; our ability to comply with applicable financial covenants; competition; changes in supply and demand for industrial properties (including land, the supply and demand for which is inherently more volatile than other types of industrial property) in the Company’s current and proposed market areas; difficulties in consummating acquisitions and dispositions; risks related to our investments in properties through joint ventures; environmental liabilities; slippages in development or lease-up schedules; tenant creditworthiness; higher-than-expected costs; changes in asset valuations and related impairment charges; changes in general accounting principles, policies and guidelines applicable to real estate investment trusts; international business risks and those additional factors described in Item 1A, “Risk Factors” and in our other filings with the Securities and Exchange Commission (the “SEC”). We caution you not to place undue reliance on forward looking statements, which reflect our outlook only and speak only as of the date of this report or the dates indicated in the statements. We assume no obligation to update or supplement forward-looking statements. Unless the context otherwise requires, the terms “Company,” “we,” “us,” and “our” refer to First Industrial Realty Trust, Inc., First Industrial, L.P. and their controlled subsidiaries. We refer to our operating partnership, First Industrial, L.P., as the “Operating Partnership.” Effective September 1, 2009, our taxable real estate investment trust subsidiary, First Industrial Investment, Inc. (the “old TRS”) merged into First Industrial Investment II, LLC (“FI LLC”), which is wholly owned by the Operating Partnership. Immediately thereafter, certain assets and liabilities of FI LLC were contributed to a new subsidiary, FR Investment Properties, LLC (“FRIP”). FRIP is 1% owned by FI LLC and 99% owned by a new taxable real estate investment trust subsidiary, First Industrial Investment Properties, Inc. (the “new TRS,” which, collectively with the old TRS and certain wholly owned taxable real estate investment trust subsidiaries of FI LLC, will be referred to as the “TRSs”), which is wholly owned by FI LLC (see Note 12 to the Consolidated Financial Statements).


3


Table of Contents

 
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”) as defined in the Internal Revenue Code of 1986 (the “Code”). We are a self-administered and fully integrated real estate company which owns, manages, acquires, sells, develops, and redevelops industrial real estate. As of December 31, 2009, our in-service portfolio consisted of 369 light industrial properties, 131 R&D/flex properties, 174 bulk warehouse properties, 89 regional warehouse properties and 20 manufacturing properties containing approximately 69.2 million square feet of gross leasable area (“GLA”) located in 28 states in the United States and one province in Canada. Beginning January 1, 2009, our 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 75% leased). Properties which are at least 75% occupied at acquisition are placed in-service. Acquired properties less than 75% occupied are placed in-service upon the earlier of reaching 90% occupancy or one year from the acquisition date. Development properties are placed in-service upon the earlier of reaching 90% occupancy or one year from the date construction is completed. Redevelopments (generally projects which require capital expenditures exceeding 25% of basis) are placed in-service upon the earlier of reaching 90% occupancy or one year from the completion of renovation construction.
 
Our interests in our properties and land parcels are held through partnerships, corporations, and limited liability companies controlled, directly or indirectly, by the Company, including the Operating Partnership, of which we are the sole general partner with an approximate 92.0% and 88.5% ownership interest at December 31, 2009 and December 31, 2008, respectively, and through the old TRS prior to September 1, 2009, and FI LLC, the new TRS and FRIP subsequent to September 1, 2009, all of whose operating data is consolidated with that of the Company as presented herein.
 
We also own noncontrolling equity interests in, and provide various services to, seven joint ventures whose purpose is to invest in industrial properties (the “2003 Net Lease Joint Venture,” the “2005 Development/Repositioning Joint Venture,” the “2005 Core Joint Venture,” the “2006 Net Lease Co-Investment Program,” the “2006 Land/Development Joint Venture,” the “2007 Canada Joint Venture,” and the “2007 Europe Joint Venture” together the “Joint Ventures”). The Joint Ventures are accounted for under the equity method of accounting. The 2007 Europe Joint Venture does not own any properties.
 
The operating data of our Joint Ventures is not consolidated with that of the Company as presented herein.
 
We utilize 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 26, 2010, we had 229 employees.
 
We maintain a website at www.firstindustrial.com. Information on this website shall not constitute part of this Form 10-K. Copies of our 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 our website as soon as reasonably practicable after such reports are filed with or furnished to the SEC. In addition, our 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 us, are all available without charge on our website or upon request to us. Amendments to, or waivers from, our Code of Business Conduct and Ethics that apply to our executive officers or directors will also be posted to our website. We also post or otherwise make available on our


4


Table of Contents

website from time to time other information that may be of interest to our investors. Please direct requests as follows:
First Industrial Realty Trust, Inc.
311 S. Wacker, Suite 3900
Chicago, IL 60606
Attention: Investor Relations
 
Business Objectives and Growth Plans
 
Our fundamental business objective is to maximize the total return to our stockholders through per share distributions and increases in the value of our properties and operations. Our long-term business growth plans include the following elements:
 
  •  Internal Growth.  We seek to grow internally by (i) increasing revenues by renewing or re-leasing spaces subject to expiring leases at higher rental levels; (ii) increasing occupancy levels at properties where vacancies exist and maintaining occupancy elsewhere; (iii) controlling and minimizing property operating and general and administrative expenses; and (iv) renovating existing properties.
 
  •  External Growth.  We seek to grow externally through (i) additional joint venture investments; (ii) the development of industrial properties; (iii) the acquisition of portfolios of industrial properties, industrial property businesses or individual properties which meet our investment parameters and target markets; and (iv) the expansion of our properties.
 
Our ability to pursue our long-term growth plans is affected by market conditions and our financial condition and operating capabilities.
 
Business Strategies
 
We utilize the following seven strategies in connection with the operation of our business:
 
  •  Organization Strategy.  We implement our decentralized property operations strategy through the deployment of experienced regional management teams and local property managers. We provide acquisition, development and financing assistance, asset management oversight and financial reporting functions from our headquarters in Chicago, Illinois to support our regional operations. We believe the size of our portfolio enables us to realize operating efficiencies by spreading overhead among many properties and by negotiating purchasing discounts.
 
  •  Market Strategy.  Our market strategy is to concentrate on the top industrial real estate markets in the United States and select industrial real estate markets in Canada. These 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) sufficient size to provide for ample transaction volume.
 
  •  Leasing and Marketing Strategy.  We have an operational management strategy designed to enhance tenant satisfaction and portfolio performance. We pursue an active leasing strategy, which includes broadly marketing available space, seeking to renew existing leases at higher rents per square foot and seeking leases which provide for the pass-through of property-related expenses to the tenant. We also have local and national marketing programs which focus on the business and real estate brokerage communities and national tenants.
 
  •  Acquisition/Development Strategy.  Our 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 and select industrial real estate markets in Canada.
 
  •  Disposition Strategy.  We continuously evaluate local market conditions and property-related factors in all of our markets for purposes of identifying assets suitable for disposition.


5


Table of Contents

 
  •  Financing Strategy.  To finance acquisitions and developments, as market conditions permit, we utilize a portion of proceeds from property sales, proceeds from mortgage financings, borrowings under our unsecured line of credit (the “Unsecured Line of Credit”) and proceeds from the issuance, when and as warranted, of additional debt and equity securities. We also continually evaluate joint venture arrangements as another source of capital. As of February 26, 2010, we had approximately $7.5 million available for additional borrowings under our Unsecured Line of Credit.
 
  •  Liquidity Strategy.  We plan to enhance our liquidity, and reduce our indebtedness, through a combination of capital retention, mortgage and equity financings, asset sales and debt reduction:
 
  •  Capital Retention — We plan to retain capital by distributing the minimum amount of dividends required to maintain our REIT status. We did not pay a common stock dividend in 2009 and may not pay dividends in 2010 depending on our taxable income. If, to maintain our REIT status, we are required to pay common stock dividends with respect to 2010, we may elect to do so by distributing a combination of cash and common shares. Also, if we are not required to pay preferred stock dividends to maintain our REIT status, we may elect to suspend some or all preferred stock dividends for one or more fiscal quarters, which would aid compliance with the fixed charge coverage covenant under our Unsecured Line of Credit.
 
  •  Mortgage Financing — During the year ended December 31, 2009, we originated $339.8 million in mortgage financings with maturities ranging from September 2012 to January 2020 and interest rates ranging from 6.42% to 7.87% (see Note 6 to the Consolidated Financial Statements). We believe these mortgage financings comply with all covenants contained in our Unsecured Line of Credit and our senior debt securities, including coverage ratios and total indebtedness, total unsecured indebtedness and total secured indebtedness limitations. We continue to engage various lenders regarding the origination of additional mortgage financings and the terms and conditions thereof. To the extent additional mortgage financing is originated, we expect the proceeds received will be used to pay down our other debt. No assurances can be made that additional mortgage financing will be obtained.
 
  •  Equity Financing — During the year ended December 31, 2009, we sold 3,034,120 shares of the Company’s common stock, generating $15.9 million in net proceeds, under the direct stock purchase component of the Company’s Dividend Reinvestment and Direct Stock Purchase Plan (“DRIP”). On October 5, 2009, we sold in an underwritten public offering 13,635,700 shares of the Company’s common stock at a price to the public of $5.25 per share. Total proceeds to us, net of underwriters’ discount and total expenses, were $67.8 million (see Note 7 to the Consolidated Financial Statements). We may opportunistically access the equity markets again, subject to contractual restrictions, and may continue to issue shares under the direct stock purchase component of the DRIP. To the extent additional equity offerings occur, we expect to use the proceeds received to reduce our indebtedness.
 
  •  Asset Sales — During the year ended December 31, 2009, we sold 15 industrial properties and several land parcels for gross proceeds of $100.2 million (see Note 9 to the Consolidated Financial Statements). We are in various stages of discussions with third parties for the sale of additional properties and plan to continue to selectively market other properties for sale throughout 2010. We expect to use sales proceeds to reduce our indebtedness. If we are unable to sell properties on an advantageous basis, this may impair our liquidity and our ability to meet our financial covenants.
 
  •  Debt Reduction — During the year ended December 31, 2009, we repurchased $271.5 million of our senior unsecured notes (including $19.3 million of our 2009 Notes prior to their repayment at maturity on June 15, 2009) (see Note 6 to the Consolidated Financial Statements). On February 8, 2010, we consummated a tender offer pursuant to which we purchased $72.7 million of our 2011 Notes, $66.2 million of our 2012 Notes and $21.1 million of our 2014 Notes. In connection with the tender offer, we will recognize approximately $0.4 million as gain on early retirement of debt. We may from time to time repay additional amounts of our outstanding debt. Any repayments would depend upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors we consider important. Future repayments may materially impact our liquidity, future tax liability and results of operations.


6


Table of Contents

 
Although we believe we will be successful in meeting our liquidity needs and maintaining compliance with other debt covenants through a combination of capital retention, mortgage and equity financings, asset sales and debt repurchases, if we were to be unsuccessful in executing one or more of the strategies outlined above, our financial condition and operating results could be materially adversely affected.
 
Recent Developments
 
During 2009, we placed in-service developments totaling 14 industrial properties and acquired one parcel of land for a total investment of approximately $218.1 million. We also sold 15 industrial properties and several parcels of land for an aggregate gross sales price of $100.2 million. At December 31, 2009, we owned 783 in-service industrial properties containing approximately 69.2 million square feet of GLA.
 
During 2009, we repurchased and retired $271.5 million of our senior unsecured notes and recognized a gain on early debt retirement of $34.6 million.
 
During 2009, we obtained $339.8 million in mortgage financings at a weighted average interest rate of 7.47%, with maturities ranging between September 2012 and January 2020.
 
Every quarter beginning March 31, 2009, the coupon rate of our Series F Preferred Stock resets at 2.375% plus the greater of i) the 30 Year U.S. Treasury rate, ii) the 10 Year U.S. Treasury rate or iii) 3-Month LIBOR (see Note 7 to the Consolidated Financial Statements). In October 2008, we entered into an interest rate swap agreement (the “Series F Agreement”) to mitigate our exposure to floating interest rates related to the forecasted reset rate of our Series F Preferred Stock. The Series F Agreement has a notional value of $50.0 million and is effective from April 1, 2009 through October 1, 2013. The Series F Agreement fixes the 30-year U.S. Treasury rate at 5.2175%. We recorded $3.2 million in mark to market gain, offset by $0.5 million in quarterly payments, which is included in Mark-to-Market Gain on Interest Rate Protection Agreements on the Consolidated Statements of Operations for the year ended December 31, 2009.
 
During the year ended December 31, 2009, we sold 3,034,120 shares of the Company’s common stock, generating approximately $15.9 million in net proceeds, under the direct stock purchase component of the DRIP. On October 5, 2009, we sold in an underwritten public offering 13,635,700 shares of the Company’s common stock at a price to the public of $5.25 per share. Total proceeds to us, net of underwriters’ discount and total expenses, were $67.8 million.
 
On August 24, 2009, the Company received a private letter ruling from the IRS granting favorable loss treatment under Sections 331 and 336 of the Code on the tax liquidation of our old TRS. As a result, the Company completed a transaction on September 1, 2009 whereby approximately 75% of the assets formerly held by the old TRS are now held by FI LLC (which is wholly owned by the Operating Partnership). The remaining 25% of the assets are now held by FRIP (which is 99% owned by the new TRS). On November 6, 2009, legislation was enacted that allows businesses with net operating losses for 2008 or 2009 to carry back those losses for up to five years. In the fourth quarter of 2009 we received a federal tax refund from the IRS of $40.4 million associated with the tax liquidation of the old TRS.
 
We committed to a plan to reduce organizational and overhead costs in October 2008 and have subsequently modified that plan with the goal of further reducing these costs. On February 25 and September 25, 2009, we committed to additional modifications to the plan consisting of further organizational and overhead cost reductions. For the year ended December 31, 2009, we recorded as restructuring costs a pre-tax charge of $7.8 million to provide for employee severance and benefits ($5.2 million), costs associated with the termination of certain office leases ($1.9 million) and other costs ($0.7 million) associated with implementing the restructuring plan.
 
Future Property Acquisitions, Developments and Property Sales
 
We and our Joint Ventures have acquisition and development programs through which we seek to identify portfolio and individual industrial property acquisitions and developments.


7


Table of Contents

We and our Joint Ventures also sell properties based on market conditions and property related factors. As a result, we and our Joint Ventures, other than our 2007 Europe Joint Venture, are currently engaged in negotiations relating to the possible sale of certain industrial properties in our portfolio.
 
When evaluating potential industrial property acquisitions and developments, as well as potential industrial property sales, we 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 office property. We believe 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, 2009, the national occupancy rate for industrial properties in the United States has ranged from 86.1%*to 90.7%*, with an occupancy rate of 86.1%* at December 31, 2009.
 
 
* Source: CBRE Econometric Advisors


8


Table of Contents

Item 1A.   Risk Factors
 
Risk Factors
 
Our operations involve various risks that could adversely affect our financial condition, results of operations, cash flow, ability to pay distributions on our common stock and the market price of our common stock. These risks, among others contained in our other filings with the SEC, include:
 
Ongoing disruptions in the financial markets could affect our ability to obtain financing and may negatively impact our liquidity, financial condition and operating results.
 
The capital and credit markets in the United States and other countries have experienced significant price volatility, dislocations and liquidity disruptions, which have caused market prices of many securities to fluctuate substantially and the spreads on prospective debt financings to widen considerably. These circumstances have materially impacted liquidity in the financial markets, making terms for certain financings less attractive, and in some cases have resulted in the unavailability of financing. A majority of our existing indebtedness was sold through capital markets transactions. We anticipate that the capital markets could be a source of refinancing of our existing indebtedness in the future, including our 7.375% Notes due on March 15, 2011 in the aggregate amount of $143.5 million and $70.8 million as of December 31, 2009 and February 26, 2010, respectively (see Note 20 to the Consolidated Financial Statements), and our 4.625% Exchangeable Notes due on September 15, 2011 in the aggregate amount of $146.9 million as of December 31, 2009. This source of refinancing may not be available if capital market volatility and disruption continues, which could have a material adverse effect on our liquidity. Furthermore, we could potentially lose access to our current available liquidity under our Unsecured Line of Credit if one or more participating lenders default on their commitments. While the ultimate outcome of these market conditions cannot be predicted, they may have a material adverse effect on our liquidity and financial condition if our ability to borrow money under our Unsecured Line of Credit or to issue additional debt or equity securities to finance future acquisitions, developments and redevelopments and Joint Venture activities were to be impaired.
 
In addition, the continuing capital and credit market price volatility could make the valuation of our properties and those of our unconsolidated Joint Ventures more difficult. There may be significant uncertainty in the valuation, or in the stability of the value, of our properties and those of our unconsolidated Joint Ventures, that could result in a substantial decrease in the value of our properties and those of our unconsolidated Joint Ventures. As a result, we may not be able to recover the carrying amount of our properties or our investments in Joint Ventures, which may require us to recognize an impairment loss in earnings.
 
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 our real estate and the revenues we derive from our properties include, among other things:
 
  •  general economic conditions;
 
  •  local, regional, national and international economic conditions and other events and occurrences that affect the markets in which we own properties;
 
  •  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.


9


Table of Contents

 
These factors may be amplified in light of the disruption of the global credit markets. Our investments in real estate assets are concentrated in the industrial sector, and the demand for industrial space in the United States is related to the level of economic output. Accordingly, reduced economic output may lead to lower occupancy rates for our properties. In addition, if any of our tenants experiences a downturn in its business that weakens its financial condition, delays lease commencement, fails to make rental payments when due, becomes insolvent or declares bankruptcy, the result could be a termination of the tenant’s lease, which could adversely affect our cash flow from operations.
 
Many real estate costs are fixed, even if income from properties decreases.
 
Our financial results depend on leasing space to tenants on terms favorable to us. Our income and funds available for distribution to our stockholders will decrease if a significant number of our tenants cannot pay their rent or we are unable to lease properties on favorable terms. In addition, if a tenant does not pay its rent, we may not be able to enforce our rights as landlord without delays and we 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.
 
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 our ability to adjust our property portfolio promptly in response to changes in economic or other conditions. The inability to respond promptly to changes in the performance of our property portfolio could adversely affect our financial condition and ability to service debt and make distributions to our stockholders. In addition, like other companies qualifying as REITs under the Code, we 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, our ability at any time to sell assets may be restricted.
 
The Company may be unable to sell properties on advantageous terms.
 
We have sold to third parties a significant number of properties in recent years and, as part of our business, we intend to continue to sell properties to third parties. Our ability to sell properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of our properties. If we are unable to sell properties on favorable terms or redeploy the proceeds of property sales in accordance with our business strategy, then our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock could be adversely affected.
 
We have also sold to our Joint Ventures a significant number of properties in recent years and, as part of our business, we intend to continue to sell or contribute properties to our Joint Ventures as opportunities arise. If we do 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 our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock.
 
The Company may be unable to complete development and re-development projects on advantageous terms.
 
As part of our business, we develop new and re-develop existing properties. In addition, we have sold to third parties or sold to our Joint Ventures a significant number of development and re-development properties in recent years, and we intend to continue to sell such properties to third parties or to sell or contribute such properties to our Joint Ventures as opportunities arise. The real estate development and re-development


10


Table of Contents

business involves significant risks that could adversely affect our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock, which include:
 
  •  we 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;
 
  •  we 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 our ability to sell such properties to third parties or to sell such properties to our Joint Ventures.
 
The Company may be unable to renew leases or find other lessees.
 
We are 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 we 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, our financial condition, results of operation, cash flow and ability to pay dividends on, and the market price of, our common stock could be adversely affected. As of December 31, 2009, leases with respect to approximately 11.8 million, 9.5 million and 8.7 million square feet of GLA, representing 21%, 17% and 15% of GLA, expire in 2010, 2011 and 2012, respectively.
 
The Company may be unable to acquire properties on advantageous terms or acquisitions may not perform as the Company expects.
 
We acquire and intend to continue to acquire primarily industrial properties. The acquisition of properties entails various risks, including the risks that our investments may not perform as expected and that our cost estimates for bringing an acquired property up to market standards may prove inaccurate. Further, we face 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, we may be unable to acquire additional properties as we desire or the purchase price may be elevated. In addition, we expect to finance future acquisitions through a combination of borrowings under the Unsecured Line of Credit, proceeds from equity or debt offerings and debt originations by the Company and proceeds from property sales, which may not be available and which could adversely affect our cash flow. Any of the above risks could adversely affect our financial condition, results of operations, cash flow and ability to pay dividends on, and the market value of, our common stock.
 
The Company might fail to qualify or remain qualified as a REIT.
 
We intend to operate so as to qualify as a REIT under the Code. Although we believe that we are 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 our control.
 
If we were to fail to qualify as a REIT in any taxable year, we would be subject to federal income tax, including any applicable alternative minimum tax, on our 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 we issue. Unless entitled to relief under certain statutory provisions, we would be disqualified from electing treatment as a REIT for the four taxable years following the year during which we failed to qualify as a REIT.


11


Table of Contents

Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on the gain attributable to the transaction.
 
As part of our business, we sell properties to third parties or sell properties to our 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 Internal Revenue Service (“IRS”) could contend that certain sales of properties by us are prohibited transactions. While we do 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 our ability to satisfy the income tests for qualification as a REIT.
 
The REIT distribution requirements may limit the Company’s ability to retain capital and require the Company to turn to external financing sources.
 
We could, in certain instances, have taxable income without sufficient cash to enable us to meet the distribution requirements of the REIT provisions of the Code. In that situation, we could be required to borrow funds or sell properties on adverse terms in order to meet those distribution requirements. In addition, because we must distribute to our stockholders at least 90% of our REIT taxable income each year, our ability to accumulate capital may be limited. Thus, to provide capital resources for our ongoing business, and to satisfy our debt repayment obligations and other liquidity needs, we 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 our 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, we intend to continue to use leverage to increase the rate of return on our investments and to allow us to make more investments than we otherwise could. Our use of leverage presents an additional element of risk in the event that the cash flow from our 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 our cash flow by increasing the amount of interest due on our floating rate debt and on our fixed rate debt as it matures and is refinanced.
 
Failure to comply with covenants in our debt agreements could adversely affect our financial condition.
 
The terms of our agreements governing our Unsecured Line of Credit and other indebtedness require that we comply with a number of financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage. Complying with such covenants may limit our operational flexibility. Moreover, our failure to comply with these covenants could cause a default under the applicable debt agreement even if we have satisfied our payment obligations. Upon the occurrence of an event of default, the lenders under our Unsecured Line of Credit will not be required to lend any additional amounts to us, and our outstanding senior debt securities as well as all outstanding borrowings under the Unsecured Line of Credit, together with accrued and unpaid interest and fees, could be accelerated and declared to be immediately due and payable. Furthermore, our Unsecured Line of Credit and senior debt securities contain certain cross-default provisions, which are triggered in the event that our other material indebtedness is in default. These cross-default provisions may require us to repay or restructure the Unsecured Line of Credit and the senior debt securities or other debt that is in default, which could adversely affect our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our stock. If repayment of any of our borrowings is accelerated, we cannot provide assurance that we will have sufficient assets to repay such indebtedness or that we would be able to borrow sufficient funds to refinance such indebtedness. Even if we are able to obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us.


12


Table of Contents

Moreover, the provisions of credit agreements and other debt instruments are complex, and some are subject to varying interpretations. Breaches of these provisions may be identified or occur in the future, and such provisions may be interpreted by the lenders under our Unsecured Line of Credit, or the trustee with respect to the senior debt securities, in a manner that could impose material costs on us.
 
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.
 
We intend to obtain additional mortgage debt financing in the future, if it is available to us. 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 our 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 us, making it difficult for us to meet both debt payment obligations and the distribution requirements of the REIT provisions of the Code. At December 31, 2009, none of our existing indebtedness was cross-collateralized with the exception of three mortgage loans payable, totaling $20.4 million, that were originated in September 2009 (see Note 6 to the Consolidated Financial Statements).
 
The Company may have to make lump-sum payments on its existing indebtedness.
 
We are required to make the following lump-sum or “balloon” payments under the terms of some of our indebtedness, including indebtedness of the Operating Partnership:
 
  •  $35.0 million aggregate principal amount of 7.750% Notes due 2032 (the “2032 Notes”)
 
  •  $190.0 million aggregate principal amount of 7.600% Notes due 2028 (the “2028 Notes”)
 
  •  Approximately $13.6 million aggregate principal amount of 7.150% Notes due 2027 (the “2027 Notes”)
 
  •  Approximately $117.8 million aggregate principal amount of 5.950% Notes due 2017 (the “2017 II Notes”)
 
  •  Approximately $87.3 million aggregate principal amount of 7.500% Notes due 2017 (the “2017 Notes”)
 
  •  Approximately $160.2 million aggregate principal amount of 5.750% Notes due 2016 (the “2016 Notes”)
 
  •  Approximately $91.9 million aggregate principal amount of 6.420% Notes due 2014 (the “2014 Notes”); (see Note 20 to the Consolidated Financial Statements)
 
  •  Approximately $77.8 million aggregate principal amount of 6.875% Notes due 2012 (the “2012 Notes”); (see Note 20 to the Consolidated Financial Statements)
 
  •  $146.9 million aggregate principal amount of 4.625% Notes due 2011 (the “2011 Exchangeable Notes”)
 
  •  Approximately $70.8 million aggregate principal amount of 7.375% Notes due 2011 (the “2011 Notes”); (see Note 20 to the Consolidated Financial Statements)
 
  •  $353.5 million in mortgage loans payable, in the aggregate, due between December 2010 and January 2020 on certain of our mortgage loans payable.
 
  •  a $500.0 million Unsecured Line of Credit under which we may borrow to finance the acquisition of additional properties and for other corporate purposes, including working capital.
 
The Unsecured Line of Credit provides for the repayment of principal in a lump-sum or “balloon” payment at maturity in 2012. As of December 31, 2009, $455.2 million was outstanding under the Unsecured Line of Credit at a weighted average interest rate of 1.256%.


13


Table of Contents

Our ability to make required payments of principal on outstanding indebtedness, whether at maturity or otherwise, may depend on our ability either to refinance the applicable indebtedness or to sell properties. We have no commitments to refinance the 2011 Notes, the 2011 Exchangeable Notes, the 2012 Notes, the 2014 Notes, the 2016 Notes, the 2017 Notes, the 2017 II Notes, the 2027 Notes, the 2028 Notes, the 2032 Notes, the Unsecured Line of Credit or the mortgage loans. Our existing mortgage loan obligations are secured by our 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.
 
As of December 31, 2009, our ratio of debt to our total market capitalization was 76.1%. We compute that percentage by calculating our total consolidated debt as a percentage of the aggregate market value of all outstanding shares of our 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. Our organizational documents do not contain any limitation on the amount or percentage of indebtedness we may incur. Accordingly, we could become more highly leveraged, resulting in an increase in debt service that could adversely affect our ability to make expected distributions to stockholders and in an increased risk of default on our obligations.
 
Rising interest rates on the Company’s Unsecured Line of Credit could decrease the Company’s available cash.
 
Our Unsecured Line of Credit bears interest at a floating rate. As of December 31, 2009, our Unsecured Line of Credit had an outstanding balance of $455.2 million at a weighted average interest rate of 1.256%. Our Unsecured Line of Credit presently bears interest at the prime rate plus 0.15% or at the LIBOR plus 1.0%, at our election. Based on the outstanding balance on our Unsecured Line of Credit as of December 31, 2009, a 10% increase in interest rates would increase interest expense by $0.5 million on an annual basis. Increases in the interest rate payable on balances outstanding under our Unsecured Line of Credit would decrease our cash available for distribution to stockholders.
 
The Company’s mortgages may impact the Company’s ability to sell encumbered properties on advantageous terms or at all.
 
As part of our plan to enhance liquidity and pay down our debt, we have originated numerous mortgage financings and we are in active discussions with various lenders regarding the origination of additional mortgage financings. Certain of our mortgages contain, and it is anticipated that some future mortgages will contain, substantial prepayment premiums which we would have to pay upon the sale of a property, thereby reducing the net proceeds to us from the sale of any such property. As a result, our willingness to sell certain properties and the price at which we may desire to sell a property may be impacted by the terms of any mortgage financing encumbering a property. If we are unable to sell properties on favorable terms or redeploy the proceeds of property sales in accordance with our business strategy, then our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock could be adversely affected.
 
Adverse market and economic conditions could cause us to recognize additional impairment charges.
 
We regularly review our real estate assets for impairment indicators, such as a decline in a property’s occupancy rate. If we determine that indicators of impairment are present, we review the properties affected by these indicators to determine whether an impairment charge is required. We use considerable judgment in making determinations about impairments, from analyzing whether there are indicators of impairment to the assumptions used in calculating the fair value of the investment. Accordingly, our subjective estimates and evaluations may not be accurate, and such estimates and evaluations are subject to change or revision.
 
Ongoing adverse market and economic conditions and market volatility will likely continue to make it difficult to value the real estate assets owned by us as well as the value of our interests in unconsolidated joint


14


Table of Contents

ventures. There may be significant uncertainty in the valuation, or in the stability of the cash flows, discount rates and other factors related to such assets due to the adverse market and economic conditions that could result in a substantial decrease in their value. We may be required to recognize additional asset impairment charges in the future, which could materially and adversely affect our business, financial condition and results of operations.
 
Earnings and cash dividends, asset value and market interest rates affect the price of the Company’s common stock.
 
As a REIT, the market value of our common stock, in general, is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash dividends. The market value of our common stock is based secondarily upon the market value of our underlying real estate assets. For this reason, shares of our common stock may trade at prices that are higher or lower than our net asset value per share. To the extent that we retain operating cash flow for investment purposes, working capital reserves, or other purposes, these retained funds, while increasing the value of our underlying assets, may not correspondingly increase the market price of our common stock. Our failure to meet the market’s expectations with regard to future earnings and cash dividends likely would adversely affect the market price of our 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 our common stock. An increase in market interest rates might lead prospective purchasers of our common stock to expect a higher distribution yield, which would adversely affect the market price of our common stock.
 
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 our 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 us or that a material environmental condition does not otherwise exist as to any of our Company’s properties. In addition, changes to existing environmental regulation to address, to among other things, climate change, could increase the scope of our potential liabilities.
 
The Company’s insurance coverage does not include all potential losses.
 
We currently carry 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 our properties and their business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties and business activities. We believe our 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 our properties, we 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.


15


Table of Contents

The Company is subject to risks and liabilities in connection with its investments in properties through Joint Ventures.
 
As of December 31, 2009, six of our Joint Ventures owned approximately 22.6 million square feet of properties. As of December 31, 2009, our net investment in Joint Ventures was $5.8 million in the aggregate, and for the year ended December 31, 2009, our Equity in Net Loss of Joint Ventures was $(6.5) million. Our organizational documents do not limit the amount of available funds that we may invest in Joint Ventures and we intend 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 our business interests or goals that would affect our ability to operate the property;
 
  •  co-members or joint venturers may have the power to act contrary to our 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 us and our co-members or joint venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and subject the properties owned by the applicable joint venture to additional risk; and
 
  •  we may in certain circumstances be liable for the actions of our co-members or joint venturers.
 
The occurrence of one or more of the events described above could adversely affect our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our 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 our investments in Joint Ventures are adversely affected by such risks our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock could be adversely affected.
 
We are subject to risks associated with our international operations.
 
Under our market strategy, we plan to acquire and develop properties in Canada. Our international operations will be subject to risks inherent in doing business abroad, including:
 
  •  exposure to the economic fluctuations in the locations in which we invest;
 
  •  difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;
 
  •  revisions in tax treaties or other laws and regulations, including those governing the taxation of our international revenues;
 
  •  obstacles to the repatriation of earnings and funds;
 
  •  currency exchange rate fluctuations between the United States dollar and foreign currencies;
 
  •  restrictions on the transfer of funds; and
 
  •  national, regional and local political uncertainty.


16


Table of Contents

 
When we acquire properties located outside of the United States, we may face risks associated with a lack of market knowledge or understanding of the local economy, forging new business relationships in the area and unfamiliarity with local government and permitting procedures. We work to mitigate such risks through extensive diligence and research and associations with experienced partners; however, there can be no guarantee that all such risks will be eliminated.
 
We also have offices outside of the United States. Our ability to effectively establish, staff and manage these offices is subject to risks associated with employment practices, labor issues, and cultural factors that differ from those with which we are familiar. In addition, we may be subject to regulatory requirements and prohibitions that differ between jurisdictions. To the extent we expand our business globally, we may have difficulty anticipating and effectively managing these and other risks that our international operations may face, which may adversely affect our business outside the United States and our financial condition and results of operations.
 
Item 1B.   Unresolved SEC Comments
 
None.
 
Item 2.   Properties
 
General
 
At December 31, 2009, we owned 783 in-service industrial properties containing an aggregate of approximately 69.2 million square feet of GLA in 28 states and one province in Canada, with a diverse base of approximately 2,000 tenants engaged in a wide variety of businesses, including manufacturing, retail, wholesale trade, distribution and professional services. The average annual rental per square foot on a portfolio basis, calculated at December 31, 2009, was $4.51. 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, 2009 was approximately 20 years. We maintain insurance on our properties that we believe is adequate.
 
We classify our 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, we use what we believe 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.


17


Table of Contents

 
Each of the properties is wholly owned by us or our consolidated subsidiaries. The following tables summarize certain information as of December 31, 2009, with respect to our 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
    666,544       11       206,826       5       3,742,667       14       386,207       5       847,950       4  
Baltimore, MD
    848,536       14       198,230       6       683,135       4                   171,000       1  
Central PA
    1,134,145       9                   3,151,350       6       117,599       3              
Chicago, IL
    1,009,429       16       248,090       4       2,729,716       15       172,851       4       421,000       2  
Cincinnati, OH
    893,839       10                   1,103,830       4       130,870       2              
Cleveland, OH
    64,000       1                   1,317,799       7                          
Columbus, OH
    217,612       2                   2,666,547       8       98,800       1              
Dallas, TX
    2,301,003       41       511,075       19       2,470,542       18       677,433       10       128,478       1  
Denver, CO
    1,276,308       23       1,053,097       24       400,498       3       343,516       5              
Detroit, MI
    2,448,835       86       487,418       16       630,780       6       759,851       18       116,250       1  
Houston, TX
    289,407       6       132,997       6       2,041,527       12       446,318       6              
Indianapolis, IN
    860,781       17       38,200       3       2,590,469       10       222,710       5       71,600       2  
Inland Empire, CA
    66,934       1                   804,355       3                          
Los Angeles, CA
    544,033       13       184,064       2       749,008       5       281,921       4              
Miami, FL
    88,820       1                   142,804       1       281,626       6              
Milwaukee, WI
    431,508       9       93,705       2       1,726,929       7       90,089       1              
Minneapolis/St. 
    1,281,625       14       172,862       2       2,095,407       11       323,805       4       355,056       4  
Paul, MN
                                                                               
N. New Jersey
    659,849       11       289,967       6       329,593       2                          
Nashville, TN
    205,205       3                   1,715,773       6                   109,058       1  
Philadelphia, PA
    166,082       5       36,802       2       799,287       3       71,912       2       178,000       2  
Phoenix, AZ
    38,560       1                   710,403       5       354,327       5              
S. New Jersey
    627,680       5                   281,100       2       158,867       2              
Salt Lake City, UT
    706,201       35       146,937       6       279,179       1                          
San Diego, CA
    213,538       8                               108,701       3              
Seattle, WA
                            100,611       1       139,435       2              
St. Louis, MO
    823,655       11                   1,728,295       7                          
Tampa, FL
    234,679       7       689,782       27       209,500       1                          
Toronto, ON
    57,540       1                   559,773       2                          
Other(a)
    696,547       8       40,000       1       1,951,456       10       88,000       1       425,017       2  
                                                                                 
Total
    18,852,895       369       4,530,052       131       37,712,333       174       5,254,838       89       2,823,409       20  
                                                                                 
 
 
(a) Properties are located in Wichita, KS, Grand Rapids, MI, Des Moines, IA, Austin, TX, Orlando, FL, Horn Lake, MS, Shreveport, LA, Kansas City, MO, San Antonio, TX, Birmingham, AL, Omaha, NE, Jefferson County, KY, Greenville, KY, Sumner, IA, and Winchester, VA.


18


Table of Contents

 
In-Service Property Summary Totals
 
                                         
    Totals  
                Average
    GLA as a %
    Encumbrances
 
          Number of
    Occupancy at
    of Total
    at 12/31/09
 
Metropolitan Area
  GLA     Properties     12/31/09     Portfolio     ($ in 000s)(b)  
 
Atlanta, GA
    5,850,194       39       73 %     8.5 %   $ 31,541  
Baltimore, MD
    1,900,901       25       81 %     2.8 %     7,950  
Central PA
    4,403,094       18       79 %     6.4 %     18,309  
Chicago, IL
    4,581,086       41       81 %     6.6 %     27,453  
Cincinnati, OH
    2,128,539       16       82 %     3.1 %     1,691  
Cleveland, OH
    1,381,799       8       95 %     2.0 %      
Columbus, OH
    2,982,959       11       78 %     4.3 %      
Dallas, TX
    6,088,531       89       77 %     8.8 %     29,982  
Denver, CO
    3,073,419       55       86 %     4.4 %     26,236  
Detroit, MI
    4,443,134       127       88 %     6.4 %      
Houston, TX
    2,910,249       30       96 %     4.2 %     21,035  
Indianapolis, IN
    3,783,760       37       89 %     5.5 %     8,531  
Inland Empire, CA
    871,289       4       33 %     1.3 %      
Los Angeles, CA
    1,759,026       24       89 %     2.5 %     32,540  
Miami, FL
    513,250       8       42 %     0.7 %      
Milwaukee, WI
    2,342,231       19       90 %     3.4 %     35,142  
Minneapolis/St. Paul, MN
    4,228,755       35       80 %     6.1 %     49,158  
N. New Jersey
    1,279,409       19       90 %     1.9 %     16,188  
Nashville, TN
    2,030,036       10       87 %     2.9 %     8,558  
Philadelphia, PA
    1,252,083       14       95 %     1.8 %     5,242  
Phoenix, AZ
    1,103,290       11       69 %     1.6 %     4,199  
S. New Jersey
    1,067,647       9       73 %     1.5 %     8,667  
Salt Lake City, UT
    1,132,317       42       83 %     1.6 %     10,567  
San Diego, CA
    322,239       11       91 %     0.5 %     2,237  
Seattle, WA
    240,046       3       100 %     0.4 %     6,499  
St. Louis, MO
    2,551,950       18       87 %     3.7 %     29,393  
Tampa, FL
    1,133,961       35       75 %     1.6 %     9,859  
Toronto, ON
    617,313       3       77 %     0.9 %      
Other(a)
    3,201,020       22       82 %     4.6 %     11,080  
                                         
Total or Average
    69,173,527       783       82 %     100.0 %   $ 402,057  
                                         
 
 
(a) Properties are located in Wichita, KS, Grand Rapids, MI, Des Moines, IA, Austin, TX, Orlando, FL, Horn Lake, MS, Shreveport, LA, Kansas City, MO, San Antonio, TX, Birmingham, AL, Omaha, NE, Jefferson County, KY, Greenville, KY, Sumner, IA, and Winchester, VA.
 
(b) Certain properties are pledged as collateral under our secured financings at December 31, 2009 (see Note 6 to the Consolidated Financial Satements). For purposes of this table, the total principal balance of a secured financing that is collateralized by a pool of properties is allocated among the properties in the pool based on each property’s investment balance. In addition to the amounts included in the table, we also have a $0.9 million encumbrance which is secured by a letter of credit.


19


Table of Contents

 
Property Acquisition & Development Activity
 
During 2009, we acquired one land parcel for an aggregate purchase price of approximately $0.2 million. During 2009, we placed in-service 14 developments totaling approximately 4.0 million square feet of GLA at a total cost of approximately $217.9 million, or approximately $54.48 per square foot. The developments placed in-service have the following characteristics:
 
                         
                Occupancy at
 
Metropolitan Area
  GLA    
Property Type
    12/31/09  
 
Baltimore, MD
    300,000       Bulk Warehouse       21.0 %
Central PA
    300,000       Bulk Warehouse       0.0 %
Central PA
    1,279,530       Bulk Warehouse       63.4 %
Dallas, TX
    435,179       Bulk Warehouse       35.4 %
Denver, CO
    33,413       Light Industrial       66.7 %
Denver, CO
    39,434       Light Industrial       81.9 %
Denver, CO
    33,419       Light Industrial       77.9 %
Denver, CO
    37,043       R&D/Flex       100.0 %
Indianapolis, IN
    71,281       Light Industrial       50.0 %
Los Angeles, CA
    141,100       Bulk Warehouse       0.0 %
Miami, FL
    88,820       Light Industrial       18.9 %
Milwaukee, WI
    388,800       Bulk Warehouse       100.0 %
Minneapolis/St. Paul, MN
    133,166       Bulk Warehouse       78.2 %
Nashville, TN
    700,000       Bulk Warehouse       100 %
                         
Total
    3,981,185                  
                         
 
Property Sales
 
During 2009, we sold 15 industrial properties totaling approximately 1.9 million square feet of GLA and several land parcels. Total gross sales proceeds approximated $100.2 million. The 15 industrial properties sold have the following characteristics:
 
                         
    Number of
             
Metropolitan Area
  Properties     GLA    
Property Type
 
 
Baltimore, MD
    1       71,572       Light Industrial  
Columbus, OH
    1       307,200       Bulk Warehouse  
Dallas, TX
    1       20,045       Light Industrial  
Denver, CO
    1       126,384       Manufacturing  
Indianapolis, IN
    3       628,400       Light Industrial  
Los Angeles, CA
    1       100,000       Light Industrial  
Milwaukee, WI
    1       39,468       Regional Warehouse  
N. New Jersey
    1       49,707       Light Industrial  
Philadelphia, PA
    1       22,095       Light Industrial  
Phoenix, AZ
    1       82,288       Regional Warehouse  
Salt Lake City, UT
    1       81,000       Light Industrial  
S. New Jersey
    1       52,800       Light Industrial  
Toronto, ON
    1       342,830       Bulk Warehouse  
                         
Total
    15       1,923,789          
                         


20


Table of Contents

Property Acquisitions and Sales Subsequent to Year End
 
From January 1, 2010 to February 26, 2010, we sold two industrial properties comprising approximately 0.2 million square feet of GLA and several land parcels. Gross proceeds from the sale of the two industrial properties and several land parcels were approximately $27.4 million. There were no industrial properties acquired during this period.
 
Tenant and Lease Information
 
We have a diverse base of approximately 2,000 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, 2009, approximately 82% of the GLA of our in-service properties was leased, and no single tenant or group of related tenants accounted for more than 2.6% of our rent revenues, nor did any single tenant or group of related tenants occupy more than 2.0% of the total GLA of our in-service properties as of December 31, 2009.
 
Lease Expirations(1)
 
The following table shows scheduled lease expirations for all leases for our in-service properties as of December 31, 2009.
 
                                         
    Number of
          Percentage of
    Annual Base Rent
    Percentage of Total
 
Year of
  Leases
    GLA
    GLA
    Under Expiring
    Annual Base Rent
 
Expiration
  Expiring     Expiring(2)     Expiring(2)     Leases(3)     Expiring(3)  
    (In thousands)  
 
2010
    600       11,839,452       21 %   $ 53,217       21 %
2011
    422       9,526,823       17 %     46,878       18 %
2012
    366       8,729,363       15 %     40,881       16 %
2013
    237       6,122,501       11 %     30,961       12 %
2014
    166       6,739,334       12 %     26,949       11 %
2015
    99       3,420,540       6 %     14,336       6 %
2016
    38       2,818,936       5 %     10,827       4 %
2017
    20       1,009,228       2 %     5,357       2 %
2018
    23       1,218,795       2 %     5,721       2 %
2019
    17       1,026,464       2 %     5,801       2 %
Thereafter
    22       4,132,774       7 %     14,544       6 %
                                         
Total
    2,010       56,584,210       100 %   $ 255,472       100 %
                                         
 
 
(1) Includes leases that expire on or after December 31, 2009 and assumes tenants do not exercise existing renewal, termination or purchase options.
 
(2) Does not include existing vacancies of 12,589,317 aggregate square feet.
 
(3) Annualized base rent is calculated as monthly base rent (cash basis) per the terms of the lease, as of December 31, 2009, multiplied by 12. If free rent is granted, then the first positive rent value is used. Leases denominated in foreign currencies are translated using the currency exchange rate at December 31, 2009.


21


Table of Contents

 
Item 3.   Legal Proceedings
 
We are 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.   Reserved
 
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 our common stock, which trades on the New York Stock Exchange under the trading symbol “FR.”
 
                         
            Distribution
Quarter Ended
  High   Low   Declared
 
December 31, 2009
  $ 5.95     $ 4.06     $ 0.0000  
September 30, 2009
  $ 6.79     $ 3.68     $ 0.0000  
June 30, 2009
  $ 6.30     $ 2.40     $ 0.0000  
March 31, 2009
  $ 7.42     $ 1.91     $ 0.0000  
December 31, 2008
  $ 28.39     $ 5.10     $ 0.2500  
September 30, 2008
  $ 32.13     $ 21.94     $ 0.7200  
June 30, 2008
  $ 32.68     $ 27.47     $ 0.7200  
March 31, 2008
  $ 36.54     $ 28.83     $ 0.7200  
 
We had 667 common stockholders of record registered with our transfer agent as of February 26, 2010.
 
For tax purposes, 100% of our 2009 preferred stock dividends qualified as capital gain income.
 
In order to comply with the REIT requirements of the Code, we are generally required to make common share distributions and preferred share dividends (other than capital gain distributions) to our shareholders in amounts that together at least equal i) the sum of a) 90% of our “REIT taxable income” computed without regard to the dividends paid deduction and net capital gains and b) 90% of net income (after tax), if any, from foreclosure property, minus ii) certain excess non-cash income. Under a recently issued revenue procedure, the IRS will allow us to treat a stock distribution to our shareholders in 2009, under a stock-or-cash election that meets specified conditions, including a minimum 10% cash distribution component, as a distribution qualifying for the dividends paid deduction.
 
Our common share distribution policy is determined by our board of directors and is dependent on multiple factors, including cash flow and capital expenditure requirements, as well as ensuring that we meet the minimum distribution requirements set forth in the Code. We met the minimum distribution requirements with the preferred distributions made with respect to 2009. For 2010, we intend to meet our minimum distribution requirements. We plan to retain capital by distributing the minimum amount of dividends required to maintain our REIT status. We did not pay a common stock dividend in 2009 and may not pay dividends in 2010 depending on our taxable income. If, to maintain our REIT status, we are required to pay common stock dividends with respect to 2010, we may elect to do so by distributing a combination of cash and common shares. Also, if we are not required to pay preferred stock dividends to maintain our REIT status, we may elect to suspend some or all preferred stock dividends for one or more fiscal quarters, which would aid compliance with the fixed charge coverage covenant under our Unsecured Line of Credit.


22


Table of Contents

During 2009, the Operating Partnership did not issue any Units.
 
Subject to lock-up periods and certain adjustments, Units of the Operating Partnership are convertible into common stock 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 our equity compensation plans.
 
                         
    Number of Securities
          Number of Securities
 
    to be Issued
    Weighted-Average
    Remaining Available
 
    Upon Exercise of
    Exercise Price of
    for Further Issuance
 
    Outstanding Options,
    Outstanding Options,
    Under Equity
 
Plan Category
  Warrants and Rights     Warrants and Rights     Compensation Plans  
 
Equity Compensation Plans Approved by Security Holders
                1,221,475  
Equity Compensation Plans Not Approved by Security Holders(1)
    139,700     $ 31.89       186,640  
                         
Total
    139,700     $ 31.89       1,408,115  
                         
 
 
(1) See Note 16 of the Notes to Consolidated Financial Statements contained herein for a description of the plan.


23


Table of Contents

Performance Graph*
 
The following graph provides a comparison of the cumulative total stockholder return among the Company, the NAREIT Equity REIT Total Return Index (the “NAREIT Index”) and the Standard & Poor’s 500 Index (“S&P 500”). The comparison is for the periods from December 31, 2004 to December 31, 2009 and assumes the reinvestment of any dividends. The closing price for our Common Stock quoted on the NYSE at the close of business on December 31, 2004 was $40.73 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, we 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 our request by Research Data Group, Inc., San Francisco, California.
 
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among First Industrial Realty Trust, Inc., The S&P 500 Index
And The FTSE NAREIT Equity REITs Index
 
(PERFORMANCE GRAPH)
 
*$100 invested on 12/31/04 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
 
Copyright© 2010 S&P, a division of The McGraw-Hill Companies Inc. All rights reserved.
 
                                                 
    12/04   12/05   12/06   12/07   12/08   12/09
 
FIRST INDUSTRIAL REALTY TRUST, INC. 
  $ 100.00     $ 101.45     $ 131.97     $ 104.62     $ 25.42     $ 17.61  
S&P 500
    100.00       104.91       121.48       128.16       80.74       102.11  
FTSE NAREIT Equity REITs
    100.00       112.16       151.49       127.72       79.53       101.79  
 
 
* 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 Securities Exchange Act of 1934 unless specifically treated as such.


24


Table of Contents

Item 6.   Selected Financial Data
 
The following sets forth selected financial and operating data for the Company on a historical consolidated basis. The following data should be read in conjunction with the Consolidated 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, 2009, 2008, 2007, 2006 and 2005 include the results of operations of the Company as derived from our audited financial statements, adjusted for discontinued operations and the implementation of new guidance relating to business combinations, convertible debt, noncontrolling interests and participating securities. 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) we 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, 2009, 2008, 2007, 2006 and 2005 include the balances of the Company as derived from our audited financial statements.
 
                                         
          (As Adjusted)
    (As Adjusted)
    (As Adjusted)
    (As Adjusted)
 
    Year Ended
    Year Ended
    Year Ended
    Year Ended
    Year Ended
 
    12/31/09     12/31/08     12/31/07     12/31/06     12/31/05  
    (In thousands, except per share and property data)  
 
Statement of Operations Data:
                                       
Total Revenues
  $ 411,958     $ 514,321     $ 369,874     $ 293,769     $ 237,406  
Interest Income
    3,084       3,690       1,926       1,614       1,486  
Mark-to-Market Gain (Loss) on Settlement of Interest Rate Protection Agreements
    3,667       (3,073 )           (3,112 )     811  
Property Expenses
    (123,819 )     (121,737 )     (107,653 )     (96,691 )     (77,324 )
General and Administrative Expense
    (37,835 )     (84,896 )     (92,101 )     (77,497 )     (55,812 )
Restructuring Costs
    (7,806 )     (27,349 )                  
Impairment of Real Estate
    (6,934 )                        
Interest Expense
    (115,421 )     (113,139 )     (120,894 )     (121,536 )     (108,339 )
Amortization of Deferred Financing Costs
    (3,030 )     (2,840 )     (3,171 )     (2,656 )     (2,125 )
Depreciation and Other Amortization
    (147,216 )     (156,070 )     (133,354 )     (112,426 )     (79,019 )
Construction Expenses
    (52,720 )     (139,539 )     (34,553 )     (10,263 )     (15,574 )
Gain (Loss) from Early Retirement from Debt
    34,562       2,749       (393 )           82  
Equity in (Loss) Income of Joint Ventures
    (6,470 )     (33,178 )     30,045       30,673       3,699  
Income Tax Benefit
    25,155       12,958       11,200       10,092       14,334  
                                         
Loss from Continuing Operations
    (22,825 )     (148,103 )     (79,074 )     (88,033 )     (80,375 )
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $24,206, $172,167, $244,962, $213,442 and $132,139 for the Years Ended December 31, 2009, 2008, 2007, 2006 and 2005, respectively)
    28,596       187,351       283,950       260,605       184,344  
Provision for Income Taxes Allocable to Discontinued Operations (Including $1,462, $3,732, $36,032, $47,511 and $20,529 allocable to Gain on Sale of Real Estate for the Years Ended December 31, 2009, 2008, 2007, 2006 and 2005, respectively)
    (1,816 )     (4,887 )     (38,673 )     (51,312 )     (23,895 )
Gain on Sale of Real Estate
    374       12,008       9,425       6,071       29,550  
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
    (143 )     (3,782 )     (3,082 )     (2,119 )     (10,871 )
                                         
Net Income
    4,186       42,587       172,546       125,212       98,753  
Less: Net Loss (Income) Attributable to the Noncontrolling Interest
    1,547       (2,990 )     (18,841 )     (13,465 )     (11,649 )
                                         
Net Income Attributable to First Industrial Realty Trust, Inc. 
    5,733       39,597       153,705       111,747       87,104  
Preferred Dividends
    (19,516 )     (19,428 )     (21,320 )     (21,424 )     (10,688 )
Redemption of Preferred Stock
                (2,017 )     (672 )      
                                         
Net (Loss) Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders and Participating Securities
  $ (13,783 )   $ 20,169     $ 130,368     $ 89,651     $ 76,416  
                                         
Basic and Diluted Earnings Per Weighted Average Common Share Outstanding:
                                       
Loss from Continuing Operations Available to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ (0.78 )   $ (3.23 )   $ (1.90 )   $ (2.10 )   $ (1.48 )
                                         
Net (Loss) Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ (0.28 )   $ 0.41     $ 2.90     $ 1.99     $ 1.75  
                                         
Distributions Per Share
  $ 0.00     $ 2.410     $ 2.850     $ 2.810     $ 2.785  
                                         
Basic and Diluted Weighted Average Number of Common Shares Outstanding
    48,695       43,193       44,086       44,012       42,431  
                                         


25


Table of Contents

                                         
          (As Adjusted)
    (As Adjusted)
    (As Adjusted)
    (As Adjusted)
 
    Year Ended
    Year Ended
    Year Ended
    Year Ended
    Year Ended
 
    12/31/09     12/31/08     12/31/07     12/31/06     12/31/05  
    (In thousands, except per share and property data)  
 
Net Income
  $ 4,186     $ 42,587     $ 172,546     $ 125,212     $ 98,753  
Comprehensive Income:
                                       
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
                            (159 )
Mark-to-Market of Interest Rate Protection Agreements, Net of Tax
    (383 )     (8,676 )     3,819       (2,800 )     (1,414 )
Amortization of Interest Rate Protection Agreements
    796       (792 )     (916 )     (912 )     (1,085 )
Write-off of Unamortized Settlement Amounts of Interest Rate Protection Agreements
    523       831                    
Settlement of Interest Rate Protection Agreements
                (4,261 )     (1,729 )      
Foreign Currency Translation Adjustment, Net of Tax
    1,503       (2,792 )     2,134              
                                         
Comprehensive Income
    6,625       31,158       173,322       119,771       96,095  
Comprehensive Loss (Income) Attributable to Noncontrolling Interest
    1,299       (1,599 )     (18,983 )     (12,767 )     (10,812 )
                                         
Comprehensive Income Attributable to First Industrial Realty Trust, Inc. 
  $ 7,924     $ 29,559     $ 154,339     $ 107,004     $ 85,283  
                                         
Balance Sheet Data (End of Period):
                                       
Real Estate, Before Accumulated Depreciation
  $ 3,319,764     $ 3,385,597     $ 3,326,268     $ 3,219,728     $ 3,260,761  
Real Estate, After Accumulated Depreciation
    2,724,869       2,862,489       2,816,287       2,754,310       2,850,195  
Real Estate Held for Sale, Net
    37,305       21,117       37,875       115,961       16,840  
Total Assets
    3,204,586       3,223,501       3,257,888       3,224,215       3,226,243  
Mortgage Loans Payable, Net, Unsecured Lines of Credit and Senior Unsecured Debt, Net
    1,998,332       2,032,635       1,940,747       1,827,155       1,813,702  
Total Liabilities
    2,130,339       2,232,785       2,177,832       2,041,370       2,020,361  
Total Equity
    1,074,247       990,716       1,080,056       1,182,845       1,205,882  
Other Data:
                                       
Cash Flow From Operating Activities
  $ 142,179     $ 71,185     $ 92,989     $ 59,551     $ 49,350  
Cash Flow From Investing Activities
    4,777       6,274       126,909       129,147       (371,654 )
Cash Flow From Financing Activities
    32,724       (79,754 )     (230,276 )     (180,800 )     325,617  
Total In-Service Properties
    783       728       804       858       884  
Total In-Service GLA, in Square Feet
    69,173,527       60,580,250       64,028,533       68,610,505       70,193,161  
In-Service Occupancy Percentage
    82 %     92 %*     95 %*     94 %*     92 %*
 
 
Percentage is calculated under the in-service definition in place as of the respective year end.
 
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 and Section 21E of the Securities Exchange Act of 1934. We intend 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 are 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,” “seek,” “target,” “potential,” “focus,” “may,” “should” or similar expressions. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a materially adverse effect on our operations and future prospects include, but are not limited to: changes in national, international, regional and local economic conditions generally and real estate markets specifically; changes in legislation/regulation (including changes to laws governing the taxation of REITs) and actions of regulatory authorities (including the IRS); our ability to qualify and maintain our status as a REIT; the availability and attractiveness of financing (including both public and private capital) to us and to our potential counterparties; the availability and attractiveness of terms of additional debt repurchases; interest rates; our credit agency ratings; our ability to comply with applicable financial covenants; competition; changes in supply and demand for industrial properties (including land, the supply and demand for which is inherently more volatile than other types of industrial property) in the Company’s current and proposed market areas; difficulties in consummating acquisitions and dispositions; risks related to our investments in properties through joint ventures; environmental liabilities; slippages in development or lease-up schedules; tenant creditworthiness; higher-than-expected costs; changes in asset valuations and related impairment charges; changes in general accounting principles,

26


Table of Contents

policies and guidelines applicable to REITs; international business risks and those additional factors described in Item 1A, “Risk Factors” and in our other filings with the Securities and Exchange Commission (the “SEC”). We caution you not to place undue reliance on forward looking statements, which reflect our outlook only and speak only as of the date of this report or the dates indicated in the statements. We assume no obligation to update or supplement forward-looking statements.
 
The Company was organized in the state of Maryland on August 10, 1993. We are a REIT, as defined in the Code. We began operations on July 1, 1994. Our interests in our properties and land parcels are held through partnerships, corporations, and limited liability companies controlled, directly or indirectly, by us, including First Industrial, L.P. (the “Operating Partnership”), of which we are the sole general partner, and through the old TRS prior to September 1, 2009, and FI LLC, the new TRS and FRIP subsequent to September 1, 2009. We also conduct operations through other partnerships, corporations, and limited liability companies, the operating data of which, together with that of the Operating Partnership, FI LLC, FRIP and the TRSs, are consolidated with that of the Company, as presented herein.
 
We also own noncontrolling equity interests in, and provide services to, seven joint ventures whose purpose is to invest in industrial properties (the “2003 Net Lease Joint Venture,” the “2005 Development/Repositioning Joint Venture,” the “2005 Core Joint Venture,” the “2006 Net Lease Co-Investment Program,” the “2006 Land/Development Joint Venture,” the “2007 Canada Joint Venture,” and the “2007 Europe Joint Venture” together the “Joint Ventures”). The Joint Ventures are accounted for under the equity method of accounting. The 2007 Europe Joint Venture does not own any properties.
 
The operating data of our Joint Ventures is not consolidated with that of the Company as presented herein.
 
We believe our financial condition and results of operations are, primarily, a function of our performance and our Joint Ventures’ performance in four key areas: leasing of industrial properties, acquisition and development of additional industrial properties, disposition of industrial properties, debt reduction and access to external capital.
 
We generate revenue primarily from rental income and tenant recoveries from long-term (generally three to six years) operating leases of our industrial properties and our 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. Our revenue growth is dependent, in part, on our ability to (i) increase rental income, through increasing either or both occupancy rates and rental rates at our properties and our 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 our properties and our Joint Ventures’ properties (as discussed below), for our liquidity. 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 our control. The leasing of property also entails various risks, including the risk of tenant default. If we were unable to maintain or increase occupancy rates and rental rates at our properties and our Joint Ventures’ properties or to maintain tenant recoveries and operating and certain other expenses consistent with historical levels and proportions, our revenue would decline. Further, if a significant number of our tenants and our Joint Ventures’ tenants were unable to pay rent (including tenant recoveries) or if we or our Joint Ventures were unable to rent our properties on favorable terms, our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock would be adversely affected.
 
Our revenue growth is also dependent, in part, on our ability and our Joint Ventures’ ability to acquire existing, and acquire and develop new, additional industrial properties on favorable terms. The Company itself, and through our various Joint Ventures, seeks to identify opportunities to acquire existing industrial properties on favorable terms, and, when conditions permit, also seeks to identify opportunities to acquire and develop new industrial properties on favorable terms. Existing properties, as they are acquired, and acquired and developed properties, as they are leased, generate revenue from rental income, tenant recoveries and fees, income from which, as discussed above, is a source of funds for our distributions. The acquisition and


27


Table of Contents

development of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond our control. The acquisition and development of properties also entails various risks, including the risk that our investments and our 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, we 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, we, as well as our 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, we and our Joint Ventures may not be able to finance the acquisition and development opportunities we identify. If we and our Joint Ventures were unable to acquire and develop sufficient additional properties on favorable terms, or if such investments did not perform as expected, our revenue growth would be limited and our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock would be adversely affected.
 
We also generate income from the sale of our properties and our Joint Ventures’ properties (including existing buildings, buildings which we or our Joint Ventures have developed or re-developed on a merchant basis and land). The gain/loss on, and fees from, the sale of such properties are included in our income and can be a significant source of funds, in addition to revenues generated from rental income and tenant recoveries, for our operations. Currently, a significant portion of our proceeds from sales are being used to repay outstanding debt. Market conditions permitting, however, a significant portion of our proceeds from such sales may also be 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 our control. The sale of properties also entails various risks, including competition from other sellers and the availability of attractive financing for potential buyers of our properties and our Joint Ventures’ properties. Further, our 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 we and our Joint Ventures were unable to sell properties on favorable terms, our income growth would be limited and our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock would be adversely affected.
 
We utilize a portion of the net sales proceeds from property sales, borrowings under our unsecured line of credit (the “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, refinance debt and to fund our equity commitments to our Joint Ventures. Access to external capital on favorable terms plays a key role in our financial condition and results of operations, as it impacts our cost of capital and our ability and cost to refinance existing indebtedness as it matures and to fund acquisitions, developments and contributions to our Joint Ventures or through the issuance, when and as warranted, of additional equity securities. Our ability to access external capital on favorable terms is dependent on various factors, including general market conditions, interest rates, credit ratings on our capital stock and debt, the market’s perception of our growth potential, our current and potential future earnings and cash distributions and the market price of our capital stock. If we were unable to access external capital on favorable terms, our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock would be adversely affected.
 
Current Business Risks and Uncertainties
 
The real estate markets have been significantly impacted by the disruption of the global credit markets. The current recession has resulted in downward pressure on our net operating income and has impaired our ability to sell properties.
 
Our Unsecured Line of Credit and the indentures under which our senior unsecured indebtedness is, or may be, issued contain certain financial covenants, including, among other things, coverage ratios and limitations on our ability to incur total indebtedness and secured and unsecured indebtedness. Consistent with


28


Table of Contents

our prior practice, we will, in the future, continue to interpret and certify our performance under these covenants in a good faith manner that we deem reasonable and appropriate. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our lenders in a manner that could impose and cause us to incur material costs. Any violation of these covenants would subject us to higher finance costs and fees, or accelerated maturities. In addition, our credit facilities and senior debt securities contain certain cross-default provisions, which are triggered in the event that our other material indebtedness is in default. Under the Unsecured Line of Credit, an event of default can also occur if the lenders, in their good faith judgment, determine that a material adverse change has occurred which could prevent timely repayment or materially impair our ability to perform our obligations under the loan agreement.
 
We believe that we were in compliance with our financial covenants as of December 31, 2009, and we anticipate that we will be able to operate in compliance with our financial covenants throughout 2010 based upon our earnings projections. Our belief that we will continue to meet our financial covenants through 2010 is based on internal projections of EBITDA, as defined in our Unsecured Line of Credit and our unsecured notes, which include a number of assumptions, including, among others, assumptions regarding occupancy rates, tenant retention and rental rates as well as internal projections of interest expense and preferred dividends. However, our ability to meet our financial covenants may be reduced if economic and credit market conditions limit our property sales and reduce our net operating income below our projections. We plan to enhance our liquidity, and reduce our indebtedness, through a combination of capital retention, mortgage and equity financings, asset sales and debt reduction.
 
  •  Capital Retention — We plan to retain capital by distributing the minimum amount of dividends required to maintain our REIT status. We did not pay a common stock dividend in 2009 and may not pay dividends in 2010 depending on our taxable income. If, to maintain our REIT status, we are required to pay common stock dividends with respect to 2010, we may elect to do so by distributing a combination of cash and common shares. Also, if we are not required to pay preferred stock dividends to maintain our REIT status, we may elect to suspend some or all preferred stock dividends for one or more fiscal quarters, which would aid compliance with the fixed charge coverage covenant under our Unsecured Line of Credit.
 
  •  Mortgage Financing — During the year ended December 31, 2009, we originated $339.8 million in mortgage financings with maturities ranging from September 2012 to January 2020 and interest rates ranging from 6.42% to 7.87% (see Note 6 to the Consolidated Financial Statements). We believe these mortgage financings comply with all covenants contained in our Unsecured Line of Credit and our senior debt securities, including coverage ratios and total indebtedness, total unsecured indebtedness and total secured indebtedness limitations. We continue to engage various lenders regarding the origination of additional mortgage financings and the terms and conditions thereof. To the extent additional mortgage financing is originated, we expect the proceeds received will be used to pay down our other debt. No assurances can be made that additional mortgage financing will be obtained.
 
  •  Equity Financing — During the year ended December 31, 2009, we sold 3,034,120 shares of the Company’s common stock, generating approximately $15.9 million in net proceeds, under the direct stock purchase component of the DRIP. On October 5, 2009, we sold in an underwritten public offering 13,635,700 shares of the Company’s common stock at a price to the public of $5.25 per share. Total proceeds to us, net of underwriters’ discount and total expenses, were $67.8 million (see Note 7 to the Consolidated Financial Statements). We may opportunistically access the equity markets again, subject to contractual restrictions, and may continue to issue shares under the direct stock purchase component of the DRIP. To the extent additional equity offerings occur, we expect to use the proceeds received to reduce our indebtedness.
 
  •  Asset Sales — During the year ended December 31, 2009, we sold 15 industrial properties and several land parcels for gross proceeds of $100.2 million (see Note 9 to the Consolidated Financial Statements). We are in various stages of discussions with third parties for the sale of additional properties and plan to continue to selectively market other properties for sale throughout 2010. We expect to use sales


29


Table of Contents

  proceeds to pay down additional debt. If we are unable to sell properties on an advantageous basis, this may impair our liquidity and our ability to meet our financial covenants.
 
  •  Debt Reduction — During the year ended December 31, 2009, we repurchased $271.5 million of our senior unsecured notes (including $19.3 million of our 2009 Notes prior to their repayment at maturity on June 15, 2009) (see Note 6 to the Consolidated Financial Statements). On February 8, 2010, we consummated a tender offer pursuant to which we purchased $72.7 million of our 2011 Notes, $66.2 million of our 2012 Notes and $21.1 million of our 2014. In connection with the tender offer, we will recognize approximately $0.4 million as gain on early retirement of debt. We may from time to time repay additional amounts of our outstanding debt. Any repayments would depend upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors we consider important. Future repayments may materially impact our liquidity, future tax liability and results of operations.
 
Although we believe we will be successful in meeting our liquidity needs and maintaining compliance with our debt covenants through a combination of capital retention, mortgage and equity financings, asset sales and debt repurchases, if we were to be unsuccessful in executing one or more of the strategies outlined above, our financial condition and operating results would be materially adversely affected.
 
CRITICAL ACCOUNTING POLICIES
 
Our significant accounting policies are described in more detail in Note 4 to the consolidated financial statements. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
 
  •  We maintain an allowance for doubtful accounts which is based on estimates of potential losses which could result from the inability of our tenants to satisfy outstanding billings with us. The allowance for doubtful accounts is an estimate based on our assessment of the creditworthiness of our tenants.
 
  •  Properties are classified as held for sale when all criteria within the Financial Accounting Standards Board’s (the “FASB”) guidance relating to the disposal of long lived assets are met for such properties. When properties are classified as held for sale, we cease depreciating the properties and estimate the values of such properties and measure 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, we decide not to sell a property previously classified as held for sale, we will reclassify such property as held and used. We estimate the value of such property and measure 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.
 
  •  We review our properties on a periodic basis for possible impairment and provide a provision if impairments are determined. We utilize the guidelines established under the FASB’s guidance for accounting for the impairment of long lived assets to determine if impairment conditions exist. We review 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, we 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 preparation of the undiscounted cash flows and the calculation of fair value involve subjective assumptions such as estimated occupancy, rental rates, ultimate residual value and hold period. The discount rate used to present value the cash flows for determining fair value is also subjective.
 
  •  We analyze our investments in Joint Ventures to determine whether the joint venture should be accounted for under the equity method of accounting or consolidated into our financial statements based on standards set forth under the FASB’s guidance relating to the consolidation of variable interest entities. Based on the guidance set forth in these pronouncements, we do not consolidate any of our


30


Table of Contents

  joint venture investments because either the joint venture has been determined to be a variable interest entity but we are not the primary beneficiary or the joint venture has been determined not to be a variable interest entity and we lack control of the joint venture. Our assessment of whether we are the primary beneficiary of a variable interest entity involves the consideration of various factors including the form of our ownership interest, our representation on the entity’s governing body, the size of our investment and future cash flows of the entity.
 
  •  On a periodic basis, we assess whether there are any indicators that the value of our investments in Joint Ventures may be impaired. An investment is impaired only if our estimate of the value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the fair value of the investment. Our estimates of fair value for each investment are based on a number of subjective assumptions that are subject to economic and market uncertainties including, among others, demand for space, market rental rates and operating costs, the discount rate used to value the cash flows of the properties and the discount rate used to value the Joint Ventures’ debt.
 
  •  We capitalize (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 costs requires estimates by us. Amounts included in capitalized costs are included in the investment basis of real estate assets.
 
  •  We are engaged in the acquisition of individual properties as well as multi-property portfolios. We are required to allocate purchase price between land, building, tenant improvements, leasing commissions, in-place leases, tenant relationship 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) our 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. In-place lease and tenant relationship values for acquired properties are recorded based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with the respective tenant. The value allocated to in-place lease intangible assets is amortized to depreciation and amortization expense over the remaining lease term of the respective lease. The value allocated to tenant relationship is amortized to depreciation and amortization expense over the expected term of the relationship, which includes an estimate of the probability of lease renewal and its estimated term. We also must allocate purchase price on multi-property portfolios to individual properties. The allocation of purchase price is based on our assessment of various characteristics of the markets where the property is located and the expected cash flows of the property.
 
  •  In the preparation of our consolidated financial statements, significant management judgment is required to estimate our current and deferred income tax liabilities, and our compliance with REIT qualification requirements. Our estimates are based on our interpretation of tax laws. These estimates may have an impact on the income tax expense recognized. Adjustments may be required by a change in assessment of our deferred income tax assets and liabilities, changes due to audit adjustments by federal and state tax authorities, our inability to qualify as a REIT, and changes in tax laws. Adjustments required in any given period are included within the income tax provision.
 
  •  In assessing the need for a valuation allowance against our deferred tax assets, we estimate future taxable income, considering the feasibility of ongoing tax planning strategies and the realizability of tax loss carryforwards. In the event we were to determine that we would not be able to realize all or a portion of our deferred tax assets in the future, we would reduce such amounts through a charge to


31


Table of Contents

  income in the period in which that determination is made. Conversely, if we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net carrying amounts, we would decrease the recorded valuation allowance through an increase to income in the period in which that determination is made.
 
RESULTS OF OPERATIONS
 
Comparison of Year Ended December 31, 2009 to Year Ended December 31, 2008
 
Our net (loss) income available to First Industrial Realty Trust, Inc.’s common stockholders and participating securities was $(13.8) million and $20.2 million for the years ended December 31, 2009 and 2008, respectively. Basic and diluted net (loss) income available to First Industrial Realty Trust, Inc.’s common stockholders were $(0.28) per share for the year ended December 31, 2009 and $0.41 per share for the year ended December 31, 2008.
 
The tables below summarize our revenues, property and construction expenses and depreciation and other amortization by various categories for the years ended December 31, 2009 and December 31, 2008. Same store properties are properties owned prior to January 1, 2008 and held as an operating property through December 31, 2009 and developments and redevelopments that were placed in service prior to January 1, 2008 or were substantially completed for the 12 months prior to January 1, 2008. Properties which are at least 75% occupied at acquisition are placed in service. All other properties are placed in service as they reach the earlier of a) stabilized occupancy (generally defined as 90% occupied), or b) one year subsequent to acquisition or development completion. Acquired properties are properties that were acquired subsequent to December 31, 2007 and held as an operating property through December 31, 2009. Sold properties are properties that were sold subsequent to December 31, 2007. (Re)Developments and land are land parcels and developments and redevelopments that were not: a) substantially complete 12 months prior to January 1, 2008 or b) stabilized prior to January 1, 2008. Other revenues are derived from the operations of our maintenance company, fees earned from our Joint Ventures and other miscellaneous revenues. Construction revenues and expenses represent revenues earned and expenses incurred in connection with the old TRS acting as general contractor or development manager to construct industrial properties, including industrial properties for the 2006 Development/Repositioning Joint Venture, and also include revenues and expenses related to the development of properties for third parties. Other expenses are derived from the operations of our maintenance company and other miscellaneous regional expenses.
 
Our future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. Our future revenues and expenses may vary materially from historical rates.
 
For the years ended December 31, 2009 and December 31, 2008, the occupancy rates of our same store properties were 84.2% and 88.6%, respectively.
 


32


Table of Contents

                                 
    2009     2008     $ Change     % Change  
          ($ in 000’s)        
 
REVENUES
                               
Same Store Properties
  $ 291,812     $ 310,791     $ (18,979 )     (6.1 )%
Acquired Properties
    28,594       15,202       13,392       88.1 %
Sold Properties
    5,458       38,208       (32,750 )     (85.7 )%
(Re)Developments and Land, Not Included Above
    23,043       14,894       8,149       54.7 %
Other
    17,558       28,893       (11,335 )     (39.2 )%
                                 
    $ 366,465     $ 407,988     $ (41,523 )     (10.2 )%
Discontinued Operations
    (9,464 )     (40,966 )     31,502       (76.9 )%
                                 
Subtotal Revenues
  $ 357,001     $ 367,022     $ (10,021 )     (2.7 )%
                                 
Construction Revenues
    54,957       147,299       (92,342 )     (62.7 )%
                                 
Total Revenues
  $ 411,958     $ 514,321     $ (102,363 )     (19.9 )%
                                 
 
Revenues from same store properties decreased $19.0 million due primarily to a decrease in occupancy and a decrease in tenant recoveries due to a decrease in property expenses. Revenues from acquired properties increased $13.4 million due to the 26 industrial properties acquired subsequent to December 31, 2007 totaling approximately 3.1 million square feet of GLA, as well as acquisitions of land parcels in September and October 2008 for which we receive ground rents. Revenues from sold properties decreased $32.8 million due to the 129 industrial properties sold subsequent to December 31, 2007 totaling approximately 11.1 million square feet of GLA. Revenues from (re)developments and land increased $8.1 million primarily due to an increase in occupancy. Other revenues decreased $11.3 million due primarily to a decrease in development fees earned from our Joint Ventures and a decrease in fees earned related to us assigning our interest in certain purchase contracts to third parties for consideration. Construction revenues decreased $92.3 million primarily due to the substantial completion of certain development projects for which we were acting in the capacity of development manager, offset by a development project that commenced in August 2008 for which we are acting in the capacity of development manager.
 
                                 
    2009     2008     $ Change     % Change  
    ($ in 000’s)  
 
PROPERTY AND CONSTRUCTION EXPENSES
                               
Same Store Properties
  $ 95,140     $ 101,999     $ (6,859 )     (6.7 )%
Acquired Properties
    6,852       3,324       3,528       106.1 %
Sold Properties
    1,437       12,428       (10,991 )     (88.4 )%
(Re) Developments and Land, Not Included Above
    8,588       7,444       1,144       15.4 %
Other
    14,229       10,422       3,807       36.5 %
                                 
    $ 126,246     $ 135,617     $ (9,371 )     (8.6 )%
Discontinued Operations
    (2,427 )     (13,880 )     11,453       (82.5 )%
                                 
Property Expenses
  $ 123,819     $ 121,737     $ 2,082       1.7 %
                                 
Construction Expenses
    52,720       139,539       (86,819 )     (62.2 )%
                                 
Total Property and Construction Expenses
  $ 176,539     $ 261,276     $ (84,737 )     (32.4 )%
                                 
 
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses. Property expenses from same store properties decreased $6.9 million due primarily to a decrease in real estate tax expense and repairs and maintenance expense. Property expenses from acquired properties increased $3.5 million due to properties acquired subsequent to December 31, 2007. Property expenses from sold properties decreased $11.0 million due to properties sold

33


Table of Contents

subsequent to December 31, 2007. Property expenses from (re)developments and land increased $1.1 million due to an increase in the substantial completion of developments. Expenses are no longer capitalized to the basis of a property once the development is substantially complete. The $3.8 million increase in other expense is primarily attributable to an increase in incentive compensation. Construction expenses decreased $86.8 million primarily due to the substantial completion of certain development projects for which we were acting in the capacity of development manager, offset by a development project that commenced in August 2008 for which we are acting in the capacity of development manager.
 
General and administrative expense decreased $47.1 million, or 55.4%, due primarily to a decrease in compensation resulting from the reduction in employee headcount occurring in 2008 and during 2009 as well as a decrease in professional services, marketing, travel and entertainment expenses and costs associated with the pursuit of acquisitions of real estate that were abandoned.
 
We committed to a plan to reduce organizational and overhead costs in October 2008 and have subsequently modified that plan with the goal of further reducing these costs. On February 25 and September 25, 2009, we committed to additional modifications to the plan consisting of further organizational and overhead cost reductions. For the year ended December 31, 2009, we recorded as restructuring costs a pre-tax charge of $7.8 million to provide for employee severance and benefits ($5.2 million), costs associated with the termination of certain office leases ($1.9 million) and other costs ($0.7 million) associated with implementing the restructuring plan. Due to the nature of certain expenses, we expect to record a total of approximately $0.7 million of additional restructuring charges in subsequent quarters. We also anticipate a continued reduction of general and administrative expense in 2010 compared to 2009 as a result of the employee terminations and office closings that have been a part of our restructuring plan in 2009.
 
For the year ended December 31, 2008, we incurred $27.3 million in restructuring charges related to employee severance and benefits ($24.8 million), costs associated with the termination of certain office leases ($1.2 million) and contract cancellation and other costs ($1.3 million) related to our restructuring plan to reduce overhead costs.
 
In connection with our periodic review of the carrying values of our properties and due to continuing softness of the economy in certain markets, we determined in the third quarter of 2009 that an impairment loss in the amount of $6.9 million should be recorded on one property in the Inland Empire market. The non-cash impairment charge is based upon the difference between the fair value of the property and its carrying value. Additional impairments may be necessary in the future in the event that market conditions continue to deteriorate and impact the factors used to estimate fair value.
 
                                 
    2009     2008     $ Change     % Change  
    ($ in 000’s)  
 
DEPRECIATION AND OTHER AMORTIZATION
                               
Same Store Properties
  $ 120,865     $ 135,553     $ (14,688 )     (10.8 )%
Acquired Properties
    13,657       11,038       2,619       23.7 %
Sold Properties
    2,000       11,173       (9,173 )     (82.1 )%
(Re) Developments and Land, Not Included Above
    11,149       7,951       3,198       40.2 %
Corporate Furniture, Fixtures and Equipment
    2,192       2,257       (65 )     (2.9 )%
                                 
    $ 149,863     $ 167,972     $ (18,109 )     (10.8 )%
Discontinued Operations
    (2,647 )     (11,902 )     9,255       (77.8 )%
                                 
Total Depreciation and Other Amortization
  $ 147,216     $ 156,070     $ (8,854 )     (5.7 )%
                                 
 
Depreciation and other amortization for same store properties decreased $14.7 million due primarily to accelerated depreciation and amortization taken during the year ended December 31, 2008 attributable to certain tenants who terminated their lease early. Depreciation and other amortization from acquired properties increased $2.6 million due to properties acquired subsequent to December 31, 2007. Depreciation and other


34


Table of Contents

amortization from sold properties decreased $9.2 million due to properties sold subsequent to December 31, 2007. Depreciation and other amortization for (re)developments and land and other increased $3.2 million due primarily to an increase in the substantial completion of developments.
 
Interest income decreased $0.6 million, or 16.4%, due primarily to a decrease in the weighted average interest rate earned on our cash accounts during the year ended December 31, 2009, as compared to the year ended December 31, 2008, partially offset by an increase in the weighted average mortgage loans receivable balance outstanding for the year ended December 31, 2009.
 
Interest expense increased $2.3 million, or 2.0%, primarily due to an increase in the weighted average debt balance outstanding for the year ended December 31, 2009 ($2,050.5 million), as compared to the year ended December 31, 2008 ($2,026.5 million) and a decrease in capitalized interest for the year ended December 31, 2009 due to a decrease in development activities, partially offset by a decrease in the weighted average interest rate for the year ended December 31, 2009 (5.64%), as compared to the year ended December 31, 2008 (5.97%) .
 
Amortization of deferred financing costs increased $0.2 million, or 6.7%, due primarily to loan fees related to $339.8 million in mortgage loan payables we obtained during the year ended December 31, 2009, partially offset by the write-off of loan fees related to the repurchase and retirement of certain of our senior unsecured debt.
 
In October 2008, we entered into an interest rate swap agreement (the “Series F Agreement”) to mitigate our exposure to floating interest rates related to the coupon reset of the Company’s Series F Preferred Stock. The Series F Agreement has a notional value of $50.0 million and is effective from April 1, 2009 through October 1, 2013. The Series F Agreement fixes the 30-year U.S. Treasury rate at 5.2175%. We recorded $3.2 million in mark to market gain, offset by $0.5 million payments, which is included in Mark-to-Market Gain (Loss) on Interest Rate Protection Agreements for the year ended December 31, 2009. We recorded $3.1 million in mark to market loss which is included in Mark-to-Market Gain (Loss) on Interest Rate Protection Agreements for the year ended December 31, 2008.
 
In January 2008, we entered into two forward starting swaps each with a notional value of $59.8 million, which fixed the interest rate on forecasted debt offerings. We designated both swaps as cash flow hedges. The rates on the forecasted debt issuances underlying the swaps locked on March 20, 2009 (the “Forward Starting Agreement 1”) and on April 6, 2009 (the “Forward Starting Agreement 2”), and as such, the swaps ceased to qualify for hedge accounting. The change in value of Forward Starting Agreement 1 and Forward Starting Agreement 2 from the respective day the interest rate on the underlying debt locked until settlement is $1.0 million and is included in Mark-to-Market Gain (Loss) on Interest Rate Protection Agreements for the year ended December 31, 2009.
 
For the years ended December 31, 2009 and 2008, we recognized a net gain from early retirement of debt of $34.6 million and $2.7 million, respectively, due to the partial repurchase of certain series of our senior unsecured debt.
 
Equity in loss of Joint Ventures decreased approximately $26.7 million, or 80.5%, due primarily to a decrease in impairment loss during the year ended December 31, 2009 as compared to the twelve months ended December 31, 2008. During 2008, we recorded impairment losses of $25.8 million, $10.1 million, $3.2 million, $2.2 million and $1.2 million related to the 2005 Development/Repositioning Joint Venture, 2006 Land/Development Joint Venture, the 2005 Core Joint Venture, the 2006 Net Lease Co-Investment Program and the 2003 Net Lease Joint Venture, respectively. During 2009, we recorded impairment losses of $5.6 million and $1.6 million related to the 2006 Net Lease Co-Investment Program and the 2003 Net Lease Joint Venture, respectively. The decrease in impairment loss recorded is offset by a decrease in our pro rata share of gain on sale of real estate and earn outs on property sales from the 2005 Core Joint Venture and from the 2005 Development/Repositioning Joint Venture during the year ended December 31, 2009 as compared to the year ended December 31, 2008.
 
The income tax benefit (included in continuing operations, discontinued operations and gain on sale) increased $18.9 million, or 440.8%, due primarily to a loss carryback generated from the tax liquidation of the


35


Table of Contents

old TRS and a decrease in state income taxes due to the reversal of prior tax expense related to a favorable court decision on business loss carryforwards in the State of Michigan.
 
The following table summarizes certain information regarding the industrial properties included in our discontinued operations for the years ended December 31, 2009 and December 31, 2008.
 
                 
    2009     2008  
    ($ in 000’s)  
 
Total Revenues
  $ 9,464     $ 40,966  
Property Expenses
    (2,427 )     (13,880 )
Depreciation and Amortization
    (2,647 )     (11,902 )
Gain on Sale of Real Estate
    24,206       172,167  
Provision for Income Taxes
    (1,816 )     (4,887 )
                 
Income from Discontinued Operations
  $ 26,780     $ 182,464  
                 
 
Income from discontinued operations for the year ended December 31, 2009 reflects the results of operations and gain on sale of real estate relating to 15 industrial properties that were sold during the year ended December 31, 2009 and the results of operations of the seven industrial properties identified as held for sale at December 31, 2009.
 
Income from discontinued operations for the year ended December 31, 2008 reflects the results of operations and gain on sale of real estate relating to 114 industrial properties that were sold during the year ended December 31, 2008, the results of operations of 15 industrial properties that were sold during the year ended December 31, 2009 and the results of operations of the seven industrial properties identified as held for sale at December 31, 2009.
 
The $0.4 million gain on sale of real estate for the year ended December 31, 2009 resulted from the sale of several land parcels that do not meet the criteria established for inclusion in discontinued operations. The $12.0 million gain on sale of real estate for the year ended December 31, 2008 resulted from the sale of one industrial property and several land parcels that do not meet the criteria for inclusion in discontinued operations.
 
Comparison of Year Ended December 31, 2008 to Year Ended December 31, 2007
 
Our net income available to First Industrial Realty Trust, Inc.’s common stockholders and participating securities was $20.2 million and $130.4 million for the years ended December 31, 2008 and 2007, respectively. Basic and diluted net income available to First Industrial Realty Trust, Inc.’s common stockholders were $0.41 per share for the year ended December 31, 2008 and $2.90 per share for the year ended December 31, 2007.
 
The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2008 and December 31, 2007. Same store properties are properties owned prior to January 1, 2007 and held as an operating property through December 31, 2008 and developments and redevelopments that were placed in service prior to January 1, 2007 or were substantially completed for the 12 months prior to January 1, 2007. Prior to January 1, 2009, properties are placed in service as they reach stabilized occupancy (generally defined as 90% occupied). Acquired properties are properties that were acquired subsequent to December 31, 2006 and held as an operating property through December 31, 2008. Sold properties are properties that were sold subsequent to December 31, 2006. (Re)Developments and land are land parcels and developments and redevelopments that were not: a) substantially complete 12 months prior to January 1, 2007 or b) stabilized prior to January 1, 2007. Other revenues are derived from the operations of our maintenance company, fees earned from our Joint Ventures and other miscellaneous revenues. Construction revenues and expenses represent revenues earned and expenses incurred in connection with the old TRS acting as general contractor or development manager to construct industrial properties, including industrial properties for the 2005 Development/Repositioning Joint Venture, and also


36


Table of Contents

include revenues and expenses related to the development of properties for third parties. Other expenses are derived from the operations of our maintenance company and other miscellaneous regional expenses.
 
Our future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. Our future revenues and expenses may vary materially from historical rates.
 
For the years ended December 31, 2008 and December 31, 2007, the occupancy rates of our same store properties were 91.1% and 91.7%, respectively.
 
                                 
    2008     2007     $ Change     % Change  
          ($ in 000’s)        
 
REVENUES
                               
Same Store Properties
  $ 288,329     $ 281,350     $ 6,979       2.5 %
Acquired Properties
    47,138       19,408       27,730       142.9 %
Sold Properties
    27,150       96,536       (69,386 )     (71.9 )%
(Re)Developments and Land, Not Included Above
    16,475       9,086       7,389       81.3 %
Other
    28,896       36,888       (7,992 )     (21.7 )%
                                 
    $ 407,988     $ 443,268     $ (35,280 )     (8.0 )%
Discontinued Operations
    (40,966 )     (109,022 )     68,056       (62.4 )%
                                 
Subtotal Revenues
  $ 367,022     $ 334,246     $ 32,776       9.8 %
                                 
Construction Revenues
    147,299       35,628       111,671       313.4 %
                                 
Total Revenues
  $ 514,321     $ 369,874     $ 144,447       39.1 %
                                 
 
Revenues from same store properties increased $7.0 million due primarily to an increase in rental rates and an increase in tenant recoveries, partially offset by a decrease in occupancy. Revenues from acquired properties increased $27.7 million due to the 131 industrial properties acquired subsequent to December 31, 2006 totaling approximately 11.7 million square feet of GLA, as well as an acquisition of land parcels in September and October 2008 for which we receive ground rents. Revenues from sold properties decreased $69.4 million due to the 278 industrial properties sold subsequent to December 31, 2006 totaling approximately 22.8 million square feet of GLA. Revenues from (re)developments and land increased $7.4 million due to an increase in occupancy. Other revenues decreased by $8.0 million due primarily to a decrease in fees earned from our Joint Ventures and a decrease in fees earned related to us assigning our interest in certain purchase contracts to third parties for consideration. Construction revenues increased $111.7 million for the year ended December 31, 2008 due primarily to three development projects that commenced in September 2007, April 2008 and August 2008 for which we are acting in the capacity of development manager.
 


37


Table of Contents

                                 
    2008     2007     $ Change     % Change  
          ($ in 000’s)        
 
PROPERTY AND CONSTRUCTION EXPENSES
                               
Same Store Properties
  $ 92,937     $ 87,065     $ 5,872       6.7 %
Acquired Properties
    15,367       4,952       10,415       210.3 %
Sold Properties
    9,531       29,975       (20,444 )     (68.2 )%
(Re) Developments and Land, Not Included Above
    7,360       4,914       2,446       49.8 %
Other
    10,422       16,603       (6,181 )     (37.2 )%
                                 
    $ 135,617     $ 143,509     $ (7,892 )     (5.5 )%
Discontinued Operations
    (13,880 )     (35,856 )     21,976       (61.3 )%
                                 
Property Expenses
  $ 121,737     $ 107,653     $ 14,084       13.1 %
                                 
Construction Expenses
    139,539       34,553       104,986       303.8 %
                                 
Total Property and Construction Expenses
  $ 261,276     $ 142,206     $ 119,070       83.7 %
                                 
 
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses and construction expenses. Property expenses from same store properties increased $5.9 million due primarily to an increase in real estate tax expense, bad debt expense and repairs and maintenance expense. Property expenses from acquired properties increased by $10.4 million due to properties acquired subsequent to December 31, 2006. Property expenses from sold properties decreased by $20.4 million due to properties sold subsequent to December 31, 2006. Property expenses from (re)developments and land increased $2.4 million due to an increase in the substantial completion of developments. Expenses are no longer capitalized to the basis of a property once the development is substantially complete. The $6.2 million decrease in other expense is primarily attributable to a decrease in incentive compensation expense. Construction expenses increased $105.0 million for the year ended December 31, 2008 due primarily to three development projects that commenced in September 2007, April 2008 and August 2008 for which we are acting in the capacity of development manager.
 
General and administrative expense decreased $7.2 million, or 7.8%, due to a decrease in incentive compensation.
 
For the year ended December 31, 2008, we incurred $27.3 million in restructuring charges related to employee severance and benefits ($24.8 million), costs associated with the termination of certain office leases ($1.2 million) and contract cancellation and other costs ($1.3 million) related to our restructuring plan to reduce overhead costs.
 
                                 
    2008     2007     $ Change     % Change  
    ($ in 000’s)  
 
DEPRECIATION AND OTHER AMORTIZATION
                               
Same Store Properties
  $ 111,671     $ 117,781     $ (6,110 )     (5.2 )%
Acquired Properties
    39,839       14,095       25,744       182.6 %
Sold Properties
    6,136       29,401       (23,265 )     (79.1 )%
(Re) Developments and Land, Not Included Above
    8,069       4,418       3,651       82.6 %
Corporate Furniture, Fixtures and Equipment
    2,257       1,837       420       22.9 %
                                 
    $ 167,972     $ 167,532     $ 440       0.3 %
Discontinued Operations
    (11,902 )     (34,178 )     22,276       (65.2 )%
                                 
Total Depreciation and Other Amortization
  $ 156,070     $ 133,354     $ 22,716       17.0 %
                                 

38


Table of Contents

Depreciation and other amortization for same store properties decreased $6.1 million primarily due to accelerated depreciation and amortization taken during the year ended December 31, 2007 attributable to certain tenants who terminated their lease early or did not renew their lease. Depreciation and other amortization from acquired properties increased by $25.7 million due to properties acquired subsequent to December 31, 2006. Depreciation and other amortization from sold properties decreased by $23.3 million due to properties sold subsequent to December 31, 2006. Depreciation and other amortization for (re)developments and land increased by $3.7 million due primarily to an increase in the substantial completion of developments.
 
Interest income increased $1.8 million, or 91.6%, due primarily to an increase in the average mortgage loans receivable outstanding during the year ended December 31, 2008, as compared to the year ended December 31, 2007.
 
Interest expense decreased by approximately $7.8 million, or 6.4%, primarily due to a decrease in the weighted average interest rate for the year ended December 31, 2008 (5.97%), as compared to the year ended December 31, 2007 (6.55%), partially offset by an increase in the weighted average debt balance outstanding for the year ended December 31, 2008 ($2,026.5 million), as compared to the year ended December 31, 2007 ($1,974.7 million) and a decrease in capitalized interest for the year ended December 31, 2008 due to a decrease in development activities.
 
Amortization of deferred financing costs decreased by $0.3 million, or 10.4%, due primarily to the amendment of our Unsecured Line of Credit in September 2007 which extended the maturity from September 2008 to September 2012. The net unamortized deferred financing fees related to the prior line of credit are amortized over the extended amortization period, except for $0.1 million, which represents the write off of unamortized deferred financing costs associated with certain lenders who did not renew the line of credit and is included in loss from early retirement of debt for the year ended December 31, 2007.
 
In October 2008, we entered into the Series F Agreement to mitigate our exposure to floating interest rates related to the forecasted reset rate of the Company’s Series F Preferred Stock. The Series F Agreement has a notional value of $50.0 million and is effective from April 1, 2009 through October 1, 2013. The Series F Agreement fixes the 30-year U.S. Treasury rate at 5.2175%. We recorded $3.1 million in mark to market loss which is included in Mark-to-Market Gain (Loss) on Interest Rate Protection Agreements for the year ended December 31, 2008.
 
For the year ended December 31, 2008, we recognized a $2.7 million gain from early retirement of debt due to the partial repurchases of our senior unsecured notes at a discount to carrying value. For the year ended December 31, 2007, we incurred a $0.4 million loss from early retirement of debt. This includes a $0.1 million write-off of financing fees associated with our previous line of credit agreement which was amended and restated on September 28, 2007. The loss from early retirement of debt also includes $0.3 million due to early payoffs on mortgage loans.
 
Equity in income of Joint Ventures decreased $63.2 million, or 210.4%, primarily due to impairment losses of $25.8 million, $10.1 million, $3.2 million, $2.2 million and $1.2 million we recorded to the 2005 Development/Repositioning Joint Venture, the 2006 Land/Development Joint Venture, the 2005 Core Joint Venture, the 2006 Net Lease Co-Investment Program and the 2003 Net Lease Joint Venture, respectively, as a result of adverse conditions in the credit and real estate markets as well as a decrease in our pro rata share of gain on sale of real estate and earn outs on property sales from the 2005 Core Joint Venture and from the 2005 Development/Repositioning Joint Venture during the twelve months ended December 31, 2008 as compared to the twelve months ended December 31, 2007. Additionally, we recognized our pro rata share ($2.7 million) of impairment losses for the 2006 Net Lease to Investment Program and the 2005 Development/Repositioning Joint Venture during the year ended December 31, 2008.
 
The year to date income tax provision (included in continuing operations, discontinued operations and gain on sale) decreased $34.8 million in the aggregate, or 114.0%, due primarily to a decrease in gains on the sale of real estate within the TRS, a decrease in equity in income of Joint Ventures and costs incurred related to the restructuring. Net income of the TRS decreased $111.6 million, or 229.0%, for the year ended December 31, 2008 compared to the year ended December 31, 2007. Included in net income for the TRS for


39


Table of Contents

the year ended December 31, 2008 is $39.1 million of impairment loss in Equity in Income of Joint Ventures. We recorded a valuation allowance to offset the deferred tax asset that was created by these impairments during the year ended December 31, 2008.
 
The following table summarizes certain information regarding the industrial properties included in our discontinued operations for the years ended December 31, 2008 and December 31, 2007.
 
                 
    2008     2007  
    ($ in 000’s)  
 
Total Revenues
  $ 40,966     $ 109,022  
Property Expenses
    (13,880 )     (35,856 )
Depreciation and Amortization
    (11,902 )     (34,178 )
Gain on Sale of Real Estate
    172,167       244,962  
Provision for Income Taxes
    (4,887 )     (38,673 )
                 
Income from Discontinued Operations
  $ 182,464     $ 245,277  
                 
 
Income from discontinued operations for the year ended December 31, 2008 reflects the results of operations and gain on sale of real estate relating to 113 industrial properties that were sold during the year ended December 31, 2008, the results of operations of 15 industrial properties that were sold during the year ended December 31, 2009 and the results of operations of the seven industrial properties identified as held for sale at December 31, 2009.
 
Income from discontinued operations for the year ended December 31, 2007 reflects the results of operations and gain on sale of real estate relating to 161 industrial properties that were sold during the year ended December 31, 2007, the results of operations of 113 industrial properties that were sold during the year ended December 31, 2008, the results of operations of 15 industrial properties that were sold during the year ended December 31, 2009 and the results of operations of the seven industrial properties identified as held for sale at December 31, 2009.
 
The $12.0 million gain on sale of real estate for the year ended December 31, 2008 resulted from the sale of one industrial property and several land parcels that do not meet the criteria for inclusion in discontinued operations. The $9.4 million gain on sale of real estate for the year ended December 31, 2007, resulted from the sale of three industrial properties and several land parcels that do not meet the criteria for inclusion in discontinued operations.
 
LIQUIDITY AND CAPITAL RESOURCES
 
At December 31, 2009, our cash and cash equivalents was approximately $182.9 million.
 
We have considered our short-term (one year or less) liquidity needs and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs. We believe that our principal short-term liquidity needs are to fund normal recurring expenses, property acquisitions, developments, renovations, expansions and other nonrecurring capital improvements, debt service requirements, mortgage financing maturities and the minimum distributions required to maintain our REIT qualification under the Code. We anticipate that these needs will be met with cash flows provided by operating and investing activities, including the disposition of select assets. In addition, we plan to retain capital by distributing the minimum amount of dividends required to maintain our REIT status. We did not pay a common stock dividend in 2009 and may not pay common stock dividends in 2010 depending on our taxable income. If we are required to pay common stock dividends in 2010, we may elect to satisfy this obligation by distributing a combination of cash and common shares. Also, if we are not required to pay preferred stock dividends to maintain our REIT qualification under the Code, we may elect to suspend some or all preferred stock dividends for one or more fiscal quarters.
 
We expect 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


40


Table of Contents

improvements through the disposition of select assets, long-term unsecured and secured indebtedness and the issuance of additional equity securities.
 
We also have financed the development or acquisition of additional properties through borrowings under our Unsecured Line of Credit and may finance the development or acquisition of additional properties through such borrowings, to the extent capacity is available, in the future. At December 31, 2009, borrowings under our Unsecured Line of Credit bore interest at a weighted average interest rate of 1.256%. Our Unsecured Line of Credit bears interest at a floating rate of LIBOR plus 1.0% or the prime rate plus 0.15%, at our election. As of February 26, 2010, we had approximately $7.5 million available for additional borrowings under our Unsecured Line of Credit. Our Unsecured Line of Credit contains certain financial covenants including limitations on incurrence of debt and debt service coverage. Our access to borrowings may be limited if we fail to meet any of these covenants. We believe that we were in compliance with our financial covenants as of December 31, 2009, and we anticipate that we will be able to operate in compliance with our financial covenants in 2010. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our lenders in a manner that could impose and cause us to incur material costs. In addition, our ability to meet our financial covenants may be reduced if economic and credit market conditions limit our property sales and reduce our net operating income below our plan. Any violation of these covenants would subject us to higher finance costs and fees, or accelerated maturities. In addition, our credit facilities and senior debt securities contain certain cross-default provisions, which are triggered in the event that our other material indebtedness is in default.
 
We currently have credit ratings from Standard & Poor’s, Moody’s and Fitch Ratings of BB/Ba3/BB-, respectively. In the event of a downgrade, we believe we would continue to have access to sufficient capital; however, our cost of borrowing would increase and our ability to access certain financial markets may be limited.
 
Year Ended December 31, 2009
 
Net cash provided by operating activities of approximately $142.2 million for the year ended December 31, 2009 was comprised primarily of net income before noncontrolling interest of approximately $4.2 million, the non-cash adjustments of approximately $113.4 million, net change in operating assets and liabilities of approximately $24.9 million and distributions from Joint Ventures of $2.3 million, partially offset by repayments of discount on senior unsecured debt of approximately $2.6 million. The adjustments for the non-cash items of approximately $113.4 million are primarily comprised of depreciation and amortization of approximately $167.9 million, the provision for bad debt of approximately $3.3 million, the impairment of real estate of $6.9 million and equity in loss of Joint Ventures of approximately $6.5 million, partially offset by the gain on sale of real estate of approximately $24.6 million, the gain on the early retirement of debt of approximately $34.6 million, mark to market gain related to the Series F Agreement and the Forward Starting Swap Agreement 1 and Forward Starting Agreement 2 of approximately $3.7 million and the effect of the straight-lining of rental income of approximately $8.3 million.
 
Net cash provided by investing activities of approximately $4.8 million for the year ended December 31, 2009 was comprised primarily of net proceeds from the sale of real estate, distributions from our Joint Ventures and the repayments on our mortgage loan receivables, partially offset by the development and acquisition of real estate, capital expenditures related to the improvement of existing real estate and contributions to, and investments in, our Joint Ventures.
 
We invested approximately $3.7 million in, and received total distributions of approximately $8.7 million from, our Joint Ventures. As of December 31, 2009, our industrial real estate Joint Ventures owned 119 industrial properties comprising approximately 22.6 million square feet of GLA and several land parcels.
 
During the year ended December 31, 2009, we sold 15 industrial properties comprising approximately 1.9 million square feet of GLA and several land parcels. Proceeds from the sales of the 15 industrial properties and several land parcels, net of closing costs and seller financing provided to the buyers, were approximately $75.0 million.


41


Table of Contents

Net cash provided by financing activities of approximately $32.7 million for the year ended December 31, 2009 was comprised primarily of proceeds from the origination of mortgage loans payable, net proceeds from the issuance of common stock and net borrowings on our Unsecured Line of Credit, partially offset by repayments on our unsecured notes and mortgage loans payable, common and preferred stock dividends and unit distributions, debt issuance costs and costs incurred in connection with the early retirement of debt, settlement of interest rate protection agreements, offering costs, the repurchase of restricted stock from our employees to pay for withholding taxes on the vesting of restricted stock and the repurchase of the equity component of the exchangeable notes.
 
During the year ended December 31, 2009, we received proceeds from the origination of $339.8 million in mortgage financing. During the year ended December 31, 2009, we paid off and retired the remaining $105.7 million outstanding 2009 Notes at their maturity. During the year ended December 31, 2009, we repurchased and retired $271.5 million of our Unsecured Notes at an aggregate purchase price of $233.1 million, including the repurchase of $19.3 million of our 2009 Notes prior to maturity.
 
During the year ended December 31, 2009, we issued 3,034,120 shares of the Company’s common stock under the direct stock purchase component of the DRIP and 13,635,700 shares of the Company’s common stock through a public offering resulting in proceeds of approximately $84.5 million.
 
Contractual Obligations and Commitments
 
The following table lists our contractual obligations and commitments as of December 31, 2009 (in thousands):
 
                                         
          Payments Due by Period  
          Less Than
                   
    Total     1 Year     1-3 Years     3-5 Years     Over 5 Years  
 
Operating and Ground Leases(1)
  $ 38,957     $ 3,001     $ 3,761     $ 2,869     $ 29,326  
Long-term Debt
    2,008,498       18,650       924,154       235,352       830,342  
Interest Expense on Long-Term Debt(1)(2)
    765,275       104,920       170,584       140,250       349,521  
                                         
Total
  $ 2,812,730     $ 126,571     $ 1,098,499     $ 378,471     $ 1,209,189  
                                         
 
 
(1) Not on balance sheet.
 
(2) Does not include interest expense on our Unsecured Line of Credit.
 
Off-Balance Sheet Arrangements
 
Letters of credit are issued in most cases as pledges to governmental entities for development purposes. At December 31, 2009, we have $6.2 million in outstanding letters of credit, none of which are reflected as liabilities on our balance sheet. We have no other off-balance sheet arrangements other than those disclosed on the Contractual Obligations and Commitments table above.
 
Environmental
 
We incurred environmental costs of approximately $0.3 million and $1.0 million in 2009 and 2008, respectively. We estimate 2010 costs of approximately $1.1 million. We estimate that the aggregate cost which needs to be expended in 2010 and beyond with regard to currently identified environmental issues will not exceed approximately $3.3 million.
 
Inflation
 
For the last several years, inflation has not had a significant impact on the Company because of the relatively low inflation rates in our markets of operation. Most of our leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our exposure to increases in costs and operating expenses resulting from inflation. In addition, many


42


Table of Contents

of the outstanding leases expire within six years which may enable us 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 our risk-management activities includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. Our business subjects us to market risk from interest rates, and to a much lesser extent, foreign currency fluctuations.
 
Interest Rate Risk
 
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 us at December 31, 2009 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, we also face risks that are either non-financial or non-quantifiable. Such risks principally include credit risk and legal risk and are not represented in the following analysis.
 
At December 31, 2009, approximately $1,593.1 million (approximately 79.7% of total debt at December 31, 2009) of our debt was fixed rate debt (including $50.0 million of borrowings under the Unsecured Line of Credit in which the interest rate was fixed via an interest rate protection agreement) and approximately $405.2 million (approximately 20.3% of total debt at December 31, 2009) was variable rate debt. Currently, we do not enter into financial instruments for trading or other speculative purposes.
 
For fixed rate debt, changes in interest rates generally affect the fair value of the debt, but not our earnings or cash flows. Conversely, for variable rate debt, changes in the base interest rate used to calculate the all-in interest rate generally do not impact the fair value of the debt, but would affect our future earnings and cash flows. The interest rate risk and changes in fair market value of fixed rate debt generally do not have a significant impact on us until we are required to refinance such debt. See Note 6 to the Consolidated Financial Statements for a discussion of the maturity dates of our various fixed rate debt.
 
Based upon the amount of variable rate debt outstanding at December 31, 2009, a 10% increase or decrease in the interest rate on our variable rate debt would decrease or increase, respectively, future net income and cash flows by approximately $0.5 million per year. The foregoing calculation assumes an instantaneous increase or decrease in the rates applicable to the amount of borrowings outstanding under our Unsecured Line of Credit at December 31, 2009. One consequence of the disruption in the capital markets has been sudden and dramatic changes in LIBOR, which could result in an increase to such rates. In addition, the calculation does not account for our option to elect the lower of two different interest rates under our borrowings or other possible actions, such as prepayment, that we might take in response to any rate increase. A 10% increase in interest rates would decrease the fair value of the fixed rate debt at December 31, 2009 by approximately $54.2 million to $1,313.9 million. A 10% decrease in interest rates would increase the fair value of the fixed rate debt at December 31, 2009 by approximately $59.3 million to $1,427.4 million.
 
The use of derivative financial instruments allows us 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, 2009, we had one outstanding interest rate protection agreement with a notional amount of $50.0 million which fixes the interest rate on borrowings on our Unsecured Line of Credit and one outstanding interest rate protection agreement with a notional amount of $50.0 million which mitigates our exposure to floating interest rates related to the reset rate of our Series F Preferred Stock. See Note 17 to the Consolidated Financial Statements.
 
Foreign Currency Exchange Rate Risk
 
Owning, operating and developing industrial property outside of the United States exposes us to the possibility of volatile movements in foreign exchange rates. Changes in foreign currencies can affect the operating results of international operations reported in U.S. dollars and the value of the foreign assets reported in U.S. dollars. The economic impact of foreign exchange rate movements is complex because such changes


43


Table of Contents

are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. At December 31, 2009, we owned several land parcels for which the U.S. dollar was not the functional currency. These land parcels are located in Ontario, Canada and use the Canadian dollar as their functional currency. Additionally, the 2007 Canada Joint Venture owned three industrial properties and several land parcels for which the functional currency is the Canadian dollar.
 
Subsequent Events
 
From January 1, 2010 to February 26, 2010, we sold two industrial properties comprising approximately 0.2 million square feet of GLA and several land parcels. Gross proceeds from the sale of the two industrial properties and several land parcels were approximately $27.4 million. There were no industrial properties acquired during this period.
 
On February 8, 2010, we consummated a tender offer pursuant to which we purchased $72.7 million of our 2011 Notes, $66.2 million of our 2012 Notes and $21.1 million of our 2014 Notes. In connection with the tender offer, we will recognize approximately $0.4 million as gain on early retirement of debt.
 
Subsequent to January 1, 2010, we obtained four mortgage loans in the amounts of $7.8 million, $7.2 million, $4.3 million and $8.3 million. The mortgages are collateralized by four industrial properties totaling approximately 0.8 million square feet of GLA. The mortgages bear interest at a fixed rate of 7.40%. The mortgages mature between February, 2015 and March, 2015.
 
On February 26, 2010, the IRS notified us of its intent to examine the tax returns filed by the old TRS for the years ended December 31, 2008 and December 31, 2009.
 
Related Party Transactions
 
We periodically engage in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of Michael W. Brennan, the former President and Chief Executive Officer and a former director of the Company, is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2008 and 2007, this relative received approximately $0.1 million and $0.2 million, respectively, in brokerage commissions or other fees for transactions with the Company and the Joint Ventures.
 
Other
 
In June 2009, the FASB issued new guidance which revises and updates previously issued guidance related to variable interest entities. This new guidance, which became effective January 1, 2010, revises the previous guidance by eliminating the exemption for qualifying special purpose entities, by establishing a new approach for determining who should consolidate a variable-interest entity and by changing when it is necessary to reassess who should consolidate a variable-interest entity. We are currently assessing the potential impact that the adoption of this guidance will have on our financial position and results of operations.
 
Effective January 1, 2009 we adopted newly issued guidance from the FASB relating to noncontrolling interests within consolidated financial statements. This guidance establishes requirements for ownership interests in subsidiaries held by parties other than the Company (formerly called “minority interests”) to be clearly identified, presented, and disclosed in the consolidated statement of financial position within equity, but separate from the parent’s equity. Changes in a parent’s ownership interest (and transactions with noncontrolling interest holders) while the parent retains its controlling financial interest in its subsidiary should be accounted for as equity transactions. The carrying amount of the noncontrolling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent. As a result of transactions with noncontrolling interest holders and changes in ownership percentages that occurred during the year ended December 31, 2009, we decreased noncontrolling interest and increased Additional Paid-in-Capital by $49,126, which represents the cumulative impact of historical changes in the parent’s ownership in the subsidiary. This guidance was effective, on a prospective basis, for fiscal years beginning after December 15, 2008, however, presentation and disclosure requirements need to be retrospectively applied to comparative financial statements. See Note 4 to the Consolidated Financial Statements for additional disclosures.


44


Table of Contents

Effective January 1, 2009 we adopted newly issued guidance from the Emerging Issues Task Force (“EITF”) regarding the determination of whether instruments granted in share-based payment transactions are participating securities. The guidance required retrospective application. Under this guidance, unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in the computation of earnings per share (“EPS”) pursuant to the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings. Certain restricted stock awards granted to employees and directors are considered participating securities as they receive non-forfeitable dividend or dividend equivalents at the same rate as common stock. The impact of adopting this guidance decreased previously filed basic and diluted EPS by $0.06, $0.06, $0.05 and $0.05 for the years ended December 31, 2008, 2007, 2006 and 2005, respectively.
 
Effective January 1, 2009 we adopted newly issued guidance from the FASB regarding business combinations. This guidance states that direct costs of a business combination of an operating property, such as transaction fees, due diligence and consulting fees no longer qualify to be capitalized as part of the business combination. Instead, these direct costs need to be recognized as expense in the period in which they are incurred. Accordingly, we retroactively expensed these types of costs in 2008 related to future operating property acquisitions.
 
Effective January 1, 2009 we adopted newly issued guidance from the Accounting Principles Board (“APB”) regarding accounting for convertible debt instruments that may be settled for cash upon conversion. This guidance requires the liability and equity components of convertible debt instruments to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The guidance requires that the value assigned to the debt component be the estimated fair value of a similar bond without the conversion feature, which would result in the debt being recorded at a discount. The resulting debt discount is then amortized over the period during which the debt is expected to be outstanding (i.e., through the first optional redemption date) as additional non-cash interest expense. Retrospective application to all periods presented is required.
 
The equity component of the 2011 Exchangeable Notes was $7.9 million and therefore we retroactively adjusted our Senior Unsecured Debt by this amount as of September 2006. This debt discount has been subsequently amortized and as of December 31, 2009 the principal amount of the 2011 Exchangeable Notes, its unamortized discount and the net carrying amount is $146.9 million, $2.0 million and $144.9 million, respectively. In addition, we reclassified $0.2 million of the original finance fees incurred in relation to the 2011 Exchangeable Notes to equity as of September 2006. For the year ended December 31, 2009, we recognized $10.6 million of interest expense related to the 2011 Exchangeable Notes of which $9.1 million relates to the coupon rate and $1.5 million relates to the debt discount amortization. We anticipate amortizing the remaining debt discount into interest expense through maturity in September 2011. We recognized $3.6 million and $(0.1) million as an adjustment to total equity as of December 31, 2008 that represents amortization expense of the discount and the loan fees, respectively, which would have been recognized had the new guidance regarding accounting for convertible debt instruments been effective since the issuance date of our 2011 Exchangeable Notes.
 
The impact to net income and the loss from continuing operations, before noncontrolling interest, related to the adoption of the guidance regarding business combinations for the year ended December 31, 2008 was an increase to general and administrative expense of $0.3 million. The impact to net income and the loss from continuing operations, before noncontrolling interest, related to the adoption of the guidance regarding convertible debt instruments for each of the years ended December 31, 2008 and 2007 was an increase to interest expense of $1.6 million and a decrease to amortization of deferred financing fees of $0.1 million.


45


Table of Contents

The impact to the balance sheet as of December 31, 2008 related to the adoption of the guidance regarding business combinations and convertible debt instruments is as follows:
 
                                 
          Adjustments
             
    Balance Sheet as
    Related to
    Adjustments
    Balance Sheet
 
    Previously
    Adoption of
    Related to
    as
 
    Filed - as of
    Business
    Adoption of
    Adjusted - as of
 
    December 31,
    Combination
    Convertible Debt
    December 31,
 
    2008     Guidance     Instrument Guidance     2008  
 
Deferred Financing Costs, Net
  $ 12,197     $     $ (106 )   $ 12,091  
Prepaid Expenses and Other Assets, Net
  $ 174,743     $ (269 )   $     $ 174,474  
Senior Unsecured Debt, Net
  $ 1,516,298     $     $ (4,343 )   $ 1,511,955  
Additional Paid-in-Capital
  $ 1,390,358     $     $ 7,666     $ 1,398,024  
Distributions in Excess of Accumulated Earnings
  $ (366,962 )   $ (255 )   $ (3,012 )   $ (370,229 )
Total First Industrial Realty Trust, Inc.’s Stockholders’ Equity
  $ 864,200     $ (255 )   $ 4,654     $ 868,599  
Noncontrolling Interest
    122,548       (14 )     (417 )     122,117  
                                 
Total Equity
  $ 986,748     $ (269 )   $ 4,237     $ 990,716  
                                 
 
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 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
 
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our 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 our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosure.
 
We carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of our 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, our principal executive officer and principal financial officer concluded that our 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
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance


46


Table of Contents

regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
 
Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2009. 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.
 
Our management has concluded that, as of December 31, 2009, our internal control over financial reporting was effective.
 
The effectiveness of our internal control over financial reporting as of December 31, 2009 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.
 
Changes in Internal Control Over Financial Reporting
 
There has been no change in our internal control over financial reporting that occurred during the fourth quarter of 2009 that has materially affected, or is reasonably likely to materially affect, our 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.
 
(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)


47


Table of Contents

         
Exhibits
 
Description
 
  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 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 .6   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 .7   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 .8   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 .9   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 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 .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 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 .3   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 .4   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)
  4 .5   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 .6   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 .7   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)

48


Table of Contents

         
Exhibits
 
Description
 
  4 .8   Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $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 .9   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 7 3/8% 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 .10   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 .11   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 .12   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 .13   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 .14   Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2028 (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 .15   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 .16   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)
  4 .17   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 .18   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 .19   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 .20   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 .21   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)

49


Table of Contents

         
Exhibits
 
Description
 
  4 .22   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 .23   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 .24   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 .25   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 .26   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)
  4 .27   Supplemental Indenture No. 11, dated as of May 7, 2007, relating to 5.95% Senior Notes due 2017, 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 May 5, 2007, File No. 1-13102)
  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)
  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†   Separation and Release Agreement between First Industrial Realty Trust, Inc. and Michael W. Brennan dated November 26, 2008 (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company filed November 28, 2008, 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)

50


Table of Contents

         
Exhibits
 
Description
 
  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†   Separation and Release Agreement between First Industrial Realty Trust, Inc. and Michael J. Havala dated December 22, 2008 (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed December 23, 2008, 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†   Separation and Release Agreement between First Industrial Realty Trust, Inc. and David P. Draft dated November 25, 2008 (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed November 28, 2008, 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   Fifth Amended and Restated Unsecured Revolving Credit Agreement, dated as of September 28, 2007, 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 October 1, 2007, 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)
  10 .23†   Amendment No. 2 to the Company’s 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2007, File No. 1-13102)
  10 .24†   Amendment No. 1 to the Company’s 1994 Stock Incentive Plan (incorporated by reference to Exhibit 10.24 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .25†   Amendment No. 1 to the Company’s 1997 Stock Incentive Plan (incorporated by reference to Exhibit 10.25 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .26†   Form of Director Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.26 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .27†   Form of Director Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.27 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .28†   Form of Employee Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.28 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .29†   Form of Employee Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.29 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .30†   Amendment No. 3 to the Company’s 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 2008, File No. 1-13102)

51


Table of Contents

         
Exhibits
 
Description
 
  10 .31†   Form of Employee Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 2008, File No. 1-13102)
  10 .32   First Amendment, dated as of August 18, 2008, to the Fifth Amended and Restated Unsecured Revolving Credit Agreement dated as of September 28, 2007 among the Operating Partnership, the Company, JPMorgan Chase Bank, N.A. and the other lenders thereunder (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed August 20, 2008, File No. 1-13102)
  10 .33†   First Amendment, dated as of December 29, 2008, to Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Johannson L. Yap (incorporated by reference to Exhibit 10.33 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, File No. 1-13102)
  10 .34†   Employment Agreement dated January 30, 2006 between First Industrial Development Services, Inc. and Gerald A. Pientka (incorporated by reference to Exhibit 10.30 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .35†   First Amendment, dated as of December 29, 2008, to Employment Agreement, dated January 30, 2006, between First Industrial Realty Trust, Inc. and Gerald A. Pientka (incorporated by reference to Exhibit 10.35 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, File No. 1-13102)
  10 .36†   Employment Agreement dated as of January 9, 2009 among First Industrial Realty Trust, Inc., First Industrial L.P. and Bruce W. Duncan (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed January 12, 2009, File No. 1-13102)
  10 .37†   Restricted Stock Unit Award Agreement dated as of January 9, 2009 between First Industrial Realty Trust, Inc. and Bruce W. Duncan (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company filed January 12, 2009, File No. 1-13102)
  10 .38†   Letter agreement dated October 24, 2008 between the Compensation Committee and W. Ed Tyler (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed October 30, 2008, File No. 1-13102)
  10 .39†   Severance Agreement and Release and Waiver of Claims between Jerry Pientka and First Industrial Investment, Inc. dated February 27, 2009 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed March 2, 2009, File No. 1-13102)
  10 .40†   2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q for the period ended June 30, 2009, File No. 1-13102)
  10 .41†   Form of Employee Service Based Bonus Agreement (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed July 15, 2009, File No. 1-13102)
  10 .42†   Form of Employee Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company filed July 15, 2009, File No. 1-13102)
  10 .43†   Amendment No. 1, dated as of February 5, 2009, to the Restricted Stock Unit Award Agreement, dated as of January 9, 2009, by and between First Industrial Realty Trust, Inc. and Bruce W. Duncan (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q for the period ended March 31, 2009, File No. 1-13102)
  21 *   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.

52


Table of Contents

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 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 .6   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 .7   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 .8   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 .9   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 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 .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 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 .3   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 .4   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)
  4 .5   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 .6   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)


53


Table of Contents

         
Exhibits
 
Description
 
  4 .7   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 .8   Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $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 .9   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 7 3/8% 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 .10   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 .11   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 .12   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 .13   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 .14   Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2028 (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 .15   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 .16   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)
  4 .17   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 .18   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 .19   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 .20   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)

54


Table of Contents

         
Exhibits
 
Description
 
  4 .21   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 .22   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 .23   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 .24   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 .25   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 .26   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)
  4 .27   Supplemental Indenture No. 11, dated as of May 7, 2007, relating to 5.95% Senior Notes due 2017, 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 May 5, 2007, File No. 1-13102)
  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)
  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)

55


Table of Contents

         
Exhibits
 
Description
 
  10 .10†   Separation and Release Agreement between First Industrial Realty Trust, Inc. and Michael W. Brennan dated November 26, 2008 (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company filed November 28, 2008, 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†   Separation and Release Agreement between First Industrial Realty Trust, Inc. and Michael J. Havala dated December 22, 2008 (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed December 23, 2008, 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†   Separation and Release Agreement between First Industrial Realty Trust, Inc. and David P. Draft dated November 25, 2008 (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed November 28, 2008, 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   Fifth Amended and Restated Unsecured Revolving Credit Agreement, dated as of September 28, 2007, 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 October 1, 2007, 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)
  10 .23†   Amendment No. 2 to the Company’s 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2007, File No. 1-13102)
  10 .24†   Amendment No. 1 to the Company’s 1994 Stock Incentive Plan (incorporated by reference to Exhibit 10.24 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .25†   Amendment No. 1 to the Company’s 1997 Stock Incentive Plan (incorporated by reference to Exhibit 10.25 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .26†   Form of Director Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.26 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .27†   Form of Director Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.27 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .28†   Form of Employee Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.28 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)

56


Table of Contents

         
Exhibits
 
Description
 
  10 .29†   Form of Employee Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.29 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .30†   Amendment No. 3 to the Company’s 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 2008, File No. 1-13102)
  10 .31†   Form of Employee Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 2008, File No. 1-13102)
  10 .32   First Amendment, dated as of August 18, 2008, to the Fifth Amended and Restated Unsecured Revolving Credit Agreement dated as of September 28, 2007 among the Operating Partnership, the Company, JPMorgan Chase Bank, N.A. and the other lenders thereunder (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed August 20, 2008, File No. 1-13102)
  10 .33†   First Amendment, dated as of December 29, 2008, to Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Johannson L. Yap (incorporated by reference to Exhibit 10.33 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, File No. 1-13102)
  10 .34†   Employment Agreement dated January 30, 2006 between First Industrial Development Services, Inc. and Gerald A. Pientka (incorporated by reference to Exhibit 10.30 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, File No. 1-13102)
  10 .35†   First Amendment, dated as of December 29, 2008, to Employment Agreement, dated January 30, 2006, between First Industrial Realty Trust, Inc. and Gerald A. Pientka (incorporated by reference to Exhibit 10.35 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, File No. 1-13102)
  10 .36†   Employment Agreement dated as of January 9, 2009 among First Industrial Realty Trust, Inc., First Industrial L.P. and Bruce W. Duncan (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed January 12, 2009, File No. 1-13102)
  10 .37†   Restricted Stock Unit Award Agreement dated as of January 9, 2009 between First Industrial Realty Trust, Inc. and Bruce W. Duncan (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company filed January 12, 2009, File No. 1-13102)
  10 .38†   Letter agreement dated October 24, 2008 between the Compensation Committee and W. Ed Tyler (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed October 30, 2008, File No. 1-13102)
  10 .39†   Severance Agreement and Release and Waiver of Claims between Jerry Pientka and First Industrial Investment, Inc. dated February 27, 2009 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed March 2, 2009, File No. 1-13102)
  10 .40†   2009 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q for the period ended June 30, 2009, File No. 1-13102)
  10 .41†   Form of Employee Service Based Bonus Agreement (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company filed July 15, 2009, File No. 1-13102)
  10 .42†   Form of Employee Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company filed July 15, 2009, File No. 1-13102)
  10 .43†   Amendment No. 1, dated as of February 5, 2009, to the Restricted Stock Unit Award Agreement, dated as of January 9, 2009, by and between First Industrial Realty Trust, Inc. and Bruce W. Duncan (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q for the period ended March 31, 2009, File No. 1-13102)
  21 *   Subsidiaries of the Registrant
  23 *   Consent of PricewaterhouseCoopers LLP

57


Table of Contents

         
Exhibits
 
Description
 
  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.

58


 

FIRST INDUSTRIAL REALTY TRUST, INC.
 
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
 
         
    Page
 
FINANCIAL STATEMENTS
       
    60  
    61  
    62  
    63  
    64  
    65  
    66  
FINANCIAL STATEMENT SCHEDULE
       
    S-1  


59


Table of Contents

 
Report of Independent Registered Public Accounting Firm
 
To the Board of Directors and Stockholders of
First Industrial Realty Trust, Inc.:
 
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, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009 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 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. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included 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. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
 
As discussed in Note 4 to the consolidated financial statements, on January 1, 2009, the Company changed the manner in which it accounts for noncontrolling interests, the manner in which it calculates earnings per share for participating securities under the two class method, the manner in which it accounts for debt instruments with conversion options, and the manner in which it accounts for business combinations.
 
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.
 
/s/  PricewaterhouseCoopers LLP
Chicago, Illinois
March 1, 2010


60


Table of Contents

FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED BALANCE SHEETS
 
                 
          (As Adjusted)
 
    December 31,
    December 31,
 
    2009     2008  
    (In thousands except share and per share data)  
 
ASSETS
Assets:
               
Investment in Real Estate:
               
Land
  $ 751,479     $ 776,991  
Buildings and Improvements
    2,543,573       2,551,450  
Construction in Progress
    24,712       57,156  
Less: Accumulated Depreciation
    (594,895 )     (523,108 )
                 
Net Investment in Real Estate
    2,724,869       2,862,489  
                 
Real Estate and Other Assets Held for Sale, Net of Accumulated Depreciation and Amortization of $3,341 and $2,251 at December 31, 2009 and December 31, 2008, respectively
    37,305       21,117  
Cash and Cash Equivalents
    182,943       3,182  
Restricted Cash
    102       109  
Tenant Accounts Receivable, Net
    2,243       10,414  
Investments in Joint Ventures
    8,788       16,299  
Deferred Rent Receivable, Net
    39,220       32,984  
Deferred Financing Costs, Net
    15,333       12,091  
Deferred Leasing Intangibles, Net
    60,160       90,342  
Prepaid Expenses and Other Assets, Net
    133,623       174,474  
                 
Total Assets
  $ 3,204,586     $ 3,223,501  
                 
 
LIABILITIES AND EQUITY
Liabilities:
               
Mortgage and Other Loans Payable, Net
  $ 402,974     $ 77,396  
Senior Unsecured Debt, Net
    1,140,114       1,511,955  
Unsecured Line of Credit
    455,244       443,284  
Accounts Payable, Accrued Expenses and Other Liabilities, Net
    80,684       128,828  
Deferred Leasing Intangibles, Net
    24,754       30,754  
Rents Received in Advance and Security Deposits
    26,117       26,181  
Leasing Intangibles Held for Sale, Net of Accumulated Amortization of $0 and $254 at December 31, 2009 and December 31, 2008, respectively
          541  
Dividends Payable
    452       13,846  
                 
Total Liabilities
    2,130,339       2,232,785  
                 
Commitments and Contingencies
           
Equity:
               
First Industrial Realty Trust Inc.’s Stockholders’ Equity:
               
Preferred Stock ($0.01 par value, 10,000,000 shares authorized, 500, 250, 600, and 200 shares of Series F, G, J, and K Cumulative Preferred Stock, respectively, issued and outstanding at December 31, 2009 and December 31, 2008, having a liquidation preference of $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)
           
Common Stock ($0.01 par value, 100,000,000 shares authorized, 66,169,328 and 48,976,296 shares issued and 61,845,214 and 44,652,182 shares outstanding at December 31, 2009 and December 31, 2008, respectively)
    662       490  
Additional Paid-in-Capital
    1,551,218       1,398,024  
Distributions in Excess of Accumulated Earnings
    (384,013 )     (370,229 )
Accumulated Other Comprehensive Loss
    (18,408 )     (19,668 )
Treasury Shares at Cost (4,324,114 shares at December 31, 2009 and December 31, 2008)
    (140,018 )     (140,018 )
                 
Total First Industrial Realty Trust, Inc.’s Stockholders’ Equity
    1,009,441       868,599  
Noncontrolling Interest
    64,806       122,117  
                 
Total Equity
    1,074,247       990,716  
                 
Total Liabilities and Equity
  $ 3,204,586     $ 3,223,501  
                 
 
The accompanying notes are an integral part of the consolidated financial statements.


61


Table of Contents

FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
                         
          (As Adjusted)
    (As Adjusted)
 
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2009     2008     2007  
    (In thousands except per share data)  
 
Revenues:
                       
Rental Income
  $ 266,419     $ 262,274     $ 232,659  
Tenant Recoveries and Other Income
    90,582       104,748       101,587  
Construction Revenues
    54,957       147,299       35,628  
                         
Total Revenues
    411,958       514,321       369,874  
                         
Expenses:
                       
Property Expenses
    123,819       121,737       107,653  
General and Administrative
    37,835       84,896       92,101  
Restructuring Costs
    7,806       27,349        
Impairment of Real Estate
    6,934              
Depreciation and Other Amortization
    147,216       156,070       133,354  
Construction Expenses
    52,720       139,539       34,553  
                         
Total Expenses
    376,330       529,591       367,661  
                         
Other Income (Expense):
                       
Interest Income
    3,084       3,690       1,926  
Interest Expense
    (115,421 )     (113,139 )     (120,894 )
Amortization of Deferred Financing Costs
    (3,030 )     (2,840 )     (3,171 )
Mark-to-Market Gain (Loss) on Interest Rate Protection Agreements
    3,667       (3,073 )      
Gain (Loss) From Early Retirement of Debt
    34,562       2,749       (393 )
                         
Total Other Income (Expense)
    (77,138 )     (112,613 )     (122,532 )
Loss from Continuing Operations Before Equity in (Loss) Income of Joint Ventures and Income Tax Benefit
    (41,510 )     (127,883 )     (120,319 )
Equity in (Loss) Income of Joint Ventures
    (6,470 )     (33,178 )     30,045  
Income Tax Benefit
    25,155       12,958       11,200  
                         
Loss from Continuing Operations
    (22,825 )     (148,103 )     (79,074 )
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $24,206, $172,167, and $244,962 for the Years Ended December 31, 2009, 2008 and 2007, respectively)
    28,596       187,351       283,950  
Provision for Income Taxes Allocable to Discontinued Operations (including $1,462, $3,732, and $36,032 allocable to Gain on Sale of Real Estate for the Years Ended December 31, 2009, 2008 and 2007, respectively)
    (1,816 )     (4,887 )     (38,673 )
                         
Income Before Gain on Sale of Real Estate
    3,955       34,361       166,203  
Gain on Sale of Real Estate
    374       12,008       9,425  
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
    (143 )     (3,782 )     (3,082 )
                         
Net Income
    4,186       42,587       172,546  
Less: Net Loss (Income) Attributable to the Noncontrolling Interest
    1,547       (2,990 )     (18,841 )
                         
Net Income Attributable to First Industrial Realty Trust, Inc. 
    5,733       39,597       153,705  
Less: Preferred Dividends
    (19,516 )     (19,428 )     (21,320 )
Less: Redemption of Preferred Stock
                (2,017 )
                         
Net (Loss) Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders and Participating Securities
  $ (13,783 )   $ 20,169     $ 130,368  
                         
Basic and Diluted Earnings Per Share:
                       
Loss from Continuing Operations Available to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ (0.78 )   $ (3.23 )   $ (1.90 )
                         
Income from Discontinued Operations Attributable to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ 0.49     $ 3.64     $ 4.80  
                         
Net (Loss) Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ (0.28 )   $ 0.41     $ 2.90  
                         
Weighted Average Shares Outstanding
    48,695       43,193       44,086  
                         
 
The accompanying notes are an integral part of the consolidated financial statements.


62


Table of Contents

FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
                         
          (As Adjusted)
    (As Adjusted)
 
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2009     2008     2007  
    (Dollars in thousands)  
 
Net Income
  $ 4,186     $ 42,587     $ 172,546  
Settlement of Interest Rate Protection Agreements
                (4,261 )
Mark-to-Market on Interest Rate Protection Agreements, Net of Income Tax (Provision) Benefit of $(450), $610 and $254 for the years ended December 31, 2009, 2008 and 2007, respectively
    (383 )     (8,676 )     3,819  
Amortization of Interest Rate Protection Agreements
    796       (792 )     (916 )
Write-off of Unamortized Settlement Amounts of Interest Rate Protection Agreements
    523       831        
Foreign Currency Translation Adjustment, Net of Tax (Provision) Benefit of $(2,817), $3,498 and $(1,149) for the years ended December 31, 2009, 2008 and 2007, respectively
    1,503       (2,792 )     2,134  
                         
Comprehensive Income
    6,625       31,158       173,322  
Comprehensive Loss (Income) Attributable to Noncontrolling Interest
    1,299       (1,599 )     (18,983 )
                         
Comprehensive Income Attributable to First Industrial Realty Trust, Inc. 
  $ 7,924     $ 29,559     $ 154,339  
                         
 
The accompanying notes are an integral part of the consolidated financial statements.


63


Table of Contents

FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
 
                         
          (As Adjusted)
    (As Adjusted)
 
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2009     2008     2007  
    (Dollars in thousands)  
 
Preferred Stock — Beginning of Year
  $     $     $  
Issuance of Preferred Stock
                 
Redemption of Preferred Stock
                 
                         
Preferred Stock — End of Year
  $     $     $  
                         
Common Stock — Beginning of Year
  $ 490     $ 480     $ 475  
Net Proceeds from the Issuance of Common Stock
    169              
Issuance of Restricted Stock
          6       5  
Repurchase and Retirement of Common Stock
    (1 )     (2 )      
Conversion of Units to Common Stock
    4       6        
                         
Common Stock — End of Year
  $ 662     $ 490     $ 480  
                         
Additional Paid-In-Capital — Beginning of Year
  $ 1,398,024     $ 1,362,375     $ 1,396,015  
Offering Costs
    (909 )     (321 )     (46 )
Issuance of Common Stock
    84,535       174       613  
Issuance of Restricted Stock
          (6 )     (5 )
Repurchase and Retirement of Restricted Stock/Common Stock
    (737 )     (4,579 )     (3,210 )
Redemption of Preferred Stock
                (47,997 )
Conversion of Units to Common Stock
    7,813       14,575       2,855  
Amortization of Restricted Stock and Restricted Unit Awards
    13,399       25,806       14,150  
Repurchase of Equity Component of Exchangeable Notes
    (33 )            
Reallocation of Partnership Interest
    49,126              
                         
Additional Paid-In-Capital — End of Year
  $ 1,551,218     $ 1,398,024     $ 1,362,375  
                         
Dist. In Excess of Accum. Earnings — Beginning of Year
  $ (370,229 )   $ (283,268 )   $ (285,290 )
Preferred Stock Dividends
    (19,516 )     (19,428 )     (21,320 )
Distributions $2.41 and $2.85 per Share/Unit at December 31, 2008 and 2007, respectively)
          (121,882 )     (146,126 )
Redemption of Preferred Stock
                (2,017 )
Repurchase and Retirement of Restricted Stock/Common Stock
    (1 )     (266 )     (728 )
Net Income Before Noncontrolling Interest
    4,186       42,587       172,546  
Noncontrolling Interest:
                       
Allocation of Loss (Income)
    1,547       (2,990 )     (18,841 )
Distributions ($2.41 and $2.85 per Unit at December 31, 2008 and 2007, respectively)
          15,018       18,508  
                         
Dist. In Excess of Accum. Earnings — End of Year
  $ (384,013 )   $ (370,229 )   $ (283,268 )
                         
Treasury Shares, at cost — Beginning of Year
  $ (140,018 )   $ (140,018 )   $ (70,588 )
Purchase of Treasury Shares
                (69,430 )
                         
Treasury Shares, at cost — End of Year
  $ (140,018 )   $ (140,018 )   $ (140,018 )
                         
Accum. Other Comprehensive Loss — Beginning of Year
  $ (19,668 )   $ (9,630 )   $ (10,264 )
Settlement of Interest Rate Protection Agreements
                (4,261 )
Mark-to-Market of Interest Rate Protection Agreements, Net of Tax
    (383 )     (8,676 )     3,819  
Amortization of Interest Rate Protection Agreements
    796       (792 )     (916 )
Write-off of Unamortized Settlement Amounts of Interest Rate Protection Agreements
    523       831        
Foreign Currency Translation Adjustment, Net of Tax
    1,503       (2,792 )     2,134  
Other Comprehensive Loss (Income) Allocable to Noncontrolling Interest
    (248 )     1,391       (142 )
Reallocation of Partnership Interest
    (931 )            
                         
Accum. Other Comprehensive Loss — End of Year
  $ (18,408 )   $ (19,668 )   $ (9,630 )
                         
Total Stockholders’ Equity at End of Year
  $ 1,009,441     $ 868,599     $ 929,939  
                         
 
The accompanying notes are an integral part of the consolidated financial statements.


64


Table of Contents

FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                         
          (As Adjusted)
    (As Adjusted)
 
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2009     2008     2007  
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                       
Net Income
  $ 4,186     $ 42,587     $ 172,546  
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
                       
Depreciation
    112,241       114,925       121,584  
Amortization of Deferred Financing Costs
    3,030       2,840       3,171  
Other Amortization
    52,646       72,035       56,136  
Impairment of Real Estate
    6,934              
Provision for Bad Debt
    3,259       3,346       2,212  
Mark-to-Market (Gain) Loss on Interest Rate Protection Agreements
    (3,667 )     3,073        
(Gain) Loss on Early Retirement of Debt
    (34,562 )     (2,749 )     393  
Equity in Loss (Income) of Joint Ventures
    6,470       33,178       (30,045 )
Distributions from Joint Ventures
    2,319       1,520       31,365  
Decrease in Developments for Sale Costs
    812       1,527       1,209  
Gain on Sale of Real Estate
    (24,580 )     (184,175 )     (254,387 )
Decrease (Increase) in Tenant Accounts Receivable, Prepaid Expenses and Other Assets, Net
    51,641       (12,665 )     (20,140 )
Increase in Deferred Rent Receivable
    (8,350 )     (7,189 )     (9,710 )
(Decrease) Increase in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance and Security Deposits
    (27,631 )     (216 )     18,408  
Decrease (Increase) in Restricted Cash
    7       90       (6 )
Repayments of Discount on Senior Unsecured Debt
    (2,576 )            
Cash Book Overdraft. 
          3,058       253  
                         
Net Cash Provided by Operating Activities
    142,179       71,185       92,989  
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
Purchases of and Additions to Investment in Real Estate and Lease Costs
    (75,947 )     (583,414 )     (677,461 )
Net Proceeds from Sales of Investments in Real Estate
    74,982       502,929       800,147  
Contributions to and Investments in Joint Ventures
    (3,742 )     (17,327 )     (27,696 )
Distributions from Joint Ventures
    6,333       20,985       22,863  
Funding of Notes Receivable
          (10,325 )     (8,385 )
Repayment of Notes Receivable
    3,151       68,722       26,350  
Decrease (Increase) in Restricted Cash
          24,704       (8,909 )
                         
Net Cash Provided by Investing Activities
    4,777       6,274       126,909  
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Offering Costs
    (764 )     (321 )     (46 )
Proceeds from the Issuance of Common Stock
    84,465       174       613  
Redemption of Preferred Stock
                (50,014 )
Repurchase and Retirement of Restricted Stock
    (739 )     (4,847 )     (3,938 )
Proceeds from Senior Unsecured Debt
                149,595  
Payments on Interest Rate Swap Agreement
    (320 )            
Settlement of Interest Rate Protection Agreements
    (7,491 )           (4,261 )
Repayments on Senior Unsecured Debt
    (336,196 )     (32,525 )     (150,000 )
Dividends/Distributions
    (12,614 )     (145,347 )     (146,660 )
Preferred Stock Dividends
    (20,296 )     (19,428 )     (26,023 )
Purchase of Treasury Shares
                (69,430 )
Repayments on Mortgage Loans Payable
    (13,513 )     (3,271 )     (41,475 )
Proceeds from Origination of Mortgage Loans Payable
    339,783              
Proceeds from Unsecured Line of Credit
    180,000       550,920       879,129  
Repayments on Unsecured Line of Credit
    (172,000 )     (425,030 )     (764,000 )
Debt Issuance Costs and Costs Incurred in Connection with the Early Retirement of Debt
    (7,558 )     (79 )     (3,766 )
Repurchase of Equity Component Exchangeable Notes
    (33 )            
                         
Net Cash Provided by (Used in) Financing Activities
    32,724       (79,754 )     (230,276 )
                         
Net Effect of Exchange Rate Changes on Cash and Cash Equivalents
    81       (280 )      
Net Increase (Decrease) in Cash and Cash Equivalents
    179,680       (2,295 )     (10,378 )
Cash and Cash Equivalents, Beginning of Year
    3,182       5,757       16,135  
                         
Cash and Cash Equivalents, End of Year
  $ 182,943     $ 3,182     $ 5,757  
                         
 
The accompanying notes are an integral part of the consolidated financial statements.


65


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except share and per share data)
 
1.   Organization and Formation of Company
 
First Industrial Realty Trust, Inc. (the “Company”) was organized in the state of Maryland on August 10, 1993. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code of 1986 (the “Code”). Unless the context otherwise requires, the terms “Company,” “we,” “us,” and “our” refer to First Industrial Realty Trust, Inc., First Industrial, L.P. and their other controlled subsidiaries. We refer to our operating partnership, First Industrial, L.P., as the “Operating Partnership.” Effective September 1, 2009, our taxable real estate investment trust subsidiary, First Industrial Investment, Inc. (the “old TRS”) merged into First Industrial Investment II, LLC (“FI LLC”), which is wholly owned by the Operating Partnership. Immediately thereafter, certain assets and liabilities of FI LLC were contributed to a new subsidiary, FR Investment Properties, LLC (“FRIP”). FRIP is 1% owned by FI LLC and 99% owned by a new taxable real estate investment trust subsidiary, First Industrial Investment Properties, Inc. (the “new TRS,” which, collectively with the old TRS and certain wholly owned taxable real estate investment trust subsidiaries of FI LLC, will be referred to as the “TRSs”), which is wholly owned by FI LLC (see Note 12).
 
We began operations on July 1, 1994. Our operations are conducted primarily through the Operating Partnership, of which we are the sole general partner, and through the old TRS prior to September 1, 2009, and through FI LLC, the new TRS and FRIP subsequent to September 1, 2009. We also conduct operations through other partnerships, corporations, and limited liability companies, the operating data of which, together with that of the Operating Partnership, FI LLC, FRIP and the TRSs, is consolidated with that of the Company as presented herein.
 
We also own noncontrolling equity interests in, and provide various services to, seven joint ventures whose purpose is to invest in industrial properties (the “2003 Net Lease Joint Venture,” the “2005 Development/Repositioning Joint Venture,” the “2005 Core Joint Venture,” the “2006 Net Lease Co-Investment Program,” the “2006 Land/Development Joint Venture,” the “2007 Canada Joint Venture,” and the “2007 Europe Joint Venture” together the “Joint Ventures”). The Joint Ventures are accounted for under the equity method of accounting. The 2007 Europe Joint Venture does not own any properties.
 
The operating data of our Joint Ventures is not consolidated with that of the Company as presented herein.
 
As of December 31, 2009, we owned 784 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 69.2 million square feet of gross leasable area (“GLA”).
 
Any references to the number of buildings and square footage in the financial statement footnotes are unaudited.
 
2.   Current Business Risks and Uncertainties
 
The real estate markets have been significantly impacted by disruption in the global capital markets. The current recession has resulted in downward pressure on our net operating income and has impaired our ability to sell properties.
 
Our unsecured revolving credit facility that has a borrowing capacity of $500,000 (the “Unsecured Line of Credit”) and the indentures under which our senior unsecured indebtedness is, or may be, issued, contain certain financial covenants, including, among other things, coverage ratios and limitations on our ability to incur total indebtedness and secured and unsecured indebtedness. Consistent with our prior practice, we will, in the future, continue to interpret and certify our performance under these covenants in a good faith manner that we deem reasonable and appropriate. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our lenders in a manner that could impose and cause us to incur material costs. Any violation of these covenants would subject us to higher finance costs and


66


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
fees, or accelerated maturities. In addition, our credit facilities and senior debt securities contain certain cross-default provisions, which are triggered in the event that our other material indebtedness is in default. Under the Unsecured Line of Credit, an event of default can also occur if the lenders, in their good faith judgment, determine that a material adverse change has occurred which could prevent timely repayment or materially impair our ability to perform our obligations under the loan agreement.
 
We believe that we were in compliance with our financial covenants as of December 31, 2009, and we anticipate that we will be able to operate in compliance with our financial covenants throughout 2010 based upon our earnings projections. Our belief that we will continue to meet our financial covenants through 2010 is based on internal projections of EBITDA, as defined in our Unsecured Line of Credit and our unsecured notes, which include a number of assumptions, including, among others, assumptions regarding occupancy rates, tenant retention and rental rates as well as internal projections of interest expense and preferred dividends. However, our ability to meet our financial covenants may be reduced if economic and credit market conditions limit our property sales and reduce our net operating income below our projections. We plan to enhance our liquidity, and reduce our indebtedness, through a combination of capital retention, mortgage and equity financings, asset sales and debt reduction.
 
  •  Capital Retention — We plan to retain capital by distributing the minimum amount of dividends required to maintain our REIT status. We did not pay a common stock dividend in 2009 and may not pay dividends in 2010 depending on our taxable income. If, to maintain our REIT status, we are required to pay common stock dividends with respect to 2010, we may elect to do so by distributing a combination of cash and common shares. Also, if we are not required to pay preferred stock dividends to maintain our REIT status, we may elect to suspend some or all preferred stock dividends for one or more fiscal quarters, which would aid compliance with the fixed charge coverage covenant under our Unsecured Line of Credit.
 
  •  Mortgage Financing — During the year ended December 31, 2009, we originated $339,783 in mortgage financings with maturities ranging from September 2012 to January 2020 and interest rates ranging from 6.42% to 7.87% (see Note 6). We believe these mortgage financings comply with all covenants contained in our Unsecured Line of Credit and our senior debt securities, including coverage ratios and total indebtedness, total unsecured indebtedness and total secured indebtedness limitations. We continue to engage various lenders regarding the origination of additional mortgage financings and the terms and conditions thereof. To the extent additional mortgage financing is originated, we expect to use proceeds received to pay down our other debt. No assurances can be made that additional mortgage financing will be obtained.
 
  •  Equity Financing — During the year ended December 31, 2009, we sold 3,034,120 shares of the Company’s common stock, generating $15,920 in net proceeds, under the direct stock purchase component of the Company’s Dividend Reinvestment and Direct Stock Purchase Plan (“DRIP”). On October 5, 2009, we sold in an underwritten public offering 13,635,700 shares of the Company’s common stock at a price to the public of $5.25 per share. Total proceeds to us, net of underwriter’s discount and total expenses were $67,780 (see Note 7). We may opportunistically access the equity markets again, subject to contractual restrictions, and may continue to issue shares under the direct stock purchase component of the DRIP. To the extent additional equity offerings occur, we expect to use the proceeds received to reduce our indebtedness.
 
  •  Asset Sales — During the year ended December 31, 2009 we sold 15 industrial properties and several land parcels for gross proceeds of $100,194 (see Note 9). We are in various stages of discussions with third parties for the sale of additional properties and plan to continue to selectively market other properties for sale throughout 2010. We expect to use sales proceeds to pay down additional debt. If we are unable to sell properties on an advantageous basis, this may impair our liquidity and our ability to meet our financial covenants.


67


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
 
  •  Debt Reduction — During the year ended December 31, 2009, we repurchased $271,474 of our senior unsecured notes (including $19,279 of our 2009 Notes prior to their repayment at maturity on June 15, 2009) (see Note 6). On February 8, 2010, we consummated a tender offer pursuant to which we purchased $72,702 of our 2011 Notes, $66,236 of our 2012 Notes and $21,062 of our 2014 Notes. In connection with the tender offer, we will recognize approximately $0.4 million as gain on early retirement of debt. We may from time to time repay additional amounts of our outstanding debt. Any repayments would depend upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors we consider important. Future repayments may materially impact our liquidity, future tax liability and results of operations.
 
Although we believe we will be successful in meeting our liquidity needs and maintaining compliance with other debt covenants through a combination of capital retention, mortgage and equity financings, asset sales and debt repurchases, if we were to be unsuccessful in executing one or more of the strategies outlined above, our financial condition and operating results could be materially adversely affected.
 
3.   Basis of Presentation
 
First Industrial Realty Trust, Inc. is the sole general partner of the Operating Partnership, with an approximate 92.0% and 88.5% common ownership interest at December 31, 2009 and 2008, respectively. Noncontrolling interest at December 31, 2009 and 2008 represents the approximate 8.0% and 11.5%, respectively, aggregate partnership interest in the Operating Partnership held by the limited partners thereof.
 
Our consolidated financial statements at December 31, 2009 and 2008 and for each of the years ended December 31, 2009, 2008 and 2007 include the accounts and operating results of the Company and our subsidiaries. Such financial statements present our noncontrolling equity interests in our Joint Ventures under the equity method of accounting. All intercompany transactions have been eliminated in consolidation.
 
4.   Summary of Significant Accounting Policies
 
In order to conform with generally accepted accounting principles, we are required in preparation of our financial statements 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, 2009 and 2008, and the reported amounts of revenues and expenses for each of the years ended December 31, 2009, 2008 and 2007. 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. At December 31, 2009, approximately $1,000 is subject to a compensating balance arrangement. The related balance, however, is not subject to any withdrawal restrictions.
 
Restricted Cash
 
At December 31, 2009 and 2008, restricted cash includes cash held in escrow in connection with mortgage debt requirements. 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. We review our properties on a periodic basis for impairment and provide a provision if impairments are found. To determine if an impairment may exist, we review our properties and identify those that have had either an event of change or event of circumstances warranting


68


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, we estimate 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, we will recognize an impairment loss based upon the estimated fair value of such property. For properties we consider held for sale, we cease depreciating the properties and value 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, we decide not to sell a property previously classified as held for sale, we 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, we deduct from the estimated sales price of the property the estimated costs to close the sale. We classify properties as held for sale when all criteria within the Financial Accounting Standards Board’s (the “FASB”) guidance on the impairment or disposal of long-lived assets are met.
 
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, we reclassify construction in progress to building, tenant improvements and leasing commissions. Such costs begin to be capitalized to the development projects from the point we are undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held available for occupancy. Depreciation expense is computed using the straight-line method based on the following useful lives:
 
     
    Years
 
Buildings and Improvements
  8 to 50
Land Improvements
  3 to 20
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.
 
We account for all acquisitions entered into subsequent to June 30, 2001 in accordance with the FASB’s guidance on business combinations. Upon acquisition of a property, we allocate the purchase price of the property based upon the fair value of the assets acquired and liabilities assumed, which generally consists of land, buildings, tenant improvements, leasing commissions and intangible assets including in-place leases, above market and below market leases and tenant relationships. We allocate 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 measured over a period equal to the remaining term of the lease for above market leases and the initial term plus the term of any below market fixed rate renewal options for below market leases that are considered bargain renewal options. The above market lease values are amortized as a reduction of rental revenue over the remaining term of the respective leases, and the below market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below market fixed rate renewal options that are considered bargain renewal options of the respective leases.


69


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The purchase price is further allocated to in-place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with the respective tenant. 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 for tenant relationships) 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.
 
Deferred Leasing Intangibles, exclusive of deferred leasing intangibles held for sale, included in our total assets consist of the following:
 
                 
    December 31,
    December 31,
 
    2009     2008  
 
In-Place Leases
  $ 69,785     $ 84,424  
Less: Accumulated Amortization
    (32,788 )     (30,350 )
                 
    $ 36,997     $ 54,074  
                 
Above Market Leases
  $ 7,298     $ 15,830  
Less: Accumulated Amortization
    (2,341 )     (2,607 )
                 
    $ 4,957     $ 13,223  
                 
Tenant Relationships
  $ 26,278     $ 28,717  
Less: Accumulated Amortization
    (8,072 )     (5,672 )
                 
    $ 18,206     $ 23,045  
                 
Total Deferred Leasing Intangibles, Net
  $ 60,160     $ 90,342  
                 
 
Deferred Leasing Intangibles, exclusive of deferred leasing intangibles held for sale, included in our total liabilities consist of the following:
 
                 
    December 31,
    December 31,
 
    2009     2008  
 
Below Market Leases
  $ 39,125     $ 42,856  
Less: Accumulated Amortization
    (14,371 )     (12,102 )
                 
Total Deferred Leasing Intangibles, Net
  $ 24,754     $ 30,754  
                 
 
Amortization expense related to in-place leases and tenant relationships of deferred leasing intangibles was $18,932, $30,228, and $23,913 for the years ended December 31, 2009, 2008, and 2007, respectively. Rental revenues increased by $3,414, $8,100 and $4,265 related to net amortization of above/(below) market leases for the years ended December 31, 2009, 2008, and 2007, respectively. We will recognize net


70


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
amortization expense related to deferred leasing intangibles over the next five years, for properties owned as of December 31, 2009, as follows:
 
                 
        Estimated Net Increase to
    Estimated Net Amortization
  Rental Revenues Related to
    of In-Place Leases and
  Above and Below Market
    Tenant Relationships   Leases
 
2010
  $ 11,658     $ 3,272  
2011
    8,960       1,787  
2012
    7,409       1,292  
2013
    6,284       994  
2014
    4,886       828  
 
Construction Revenues and Expenses
 
Construction revenues and expenses represent revenues earned and expenses incurred in connection with the old TRS acting as general contractor or development manager to construct industrial properties, including industrial properties for the 2006 Development/Repositioning Joint Venture, and also include revenues and expenses related to the development of properties for third parties. We use the percentage-of-completion contract method to recognize revenue. Using this method, revenues are recorded based on estimates of the percentage of completion of individual contracts. The percentage of completion estimates are based on a comparison of the contract expenditures incurred to the estimated final costs. Changes in job performance, job conditions and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined.
 
Foreign Currency Transactions and Translation
 
At December 31, 2009, we owned several land parcels located in Toronto, Canada for which the functional currency was determined to be the Canadian dollar. Additionally, the 2007 Canada Joint Venture owns three industrial properties and several land parcels in Canada for which the functional currency is the Canadian dollar. The assets and liabilities of these industrial properties and land parcels are translated to U.S. dollars from the Canadian dollar based on the current exchange rate prevailing at each balance sheet date. The income statement accounts of the industrial properties and the land parcels are translated using the average exchange rate for the period. The resulting translation adjustments are included in Accumulated Other Comprehensive Income. For the years ended December 31, 2009 and 2008, we recorded $4,320 and $(6,290) in foreign currency translation gain (loss), respectively, offset by $(2,817) and $3,498 of income tax (provision) benefit, respectively.
 
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 financing costs was $17,447 and $17,918 at December 31, 2009 and 2008, 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 our noncontrolling equity interests in our Joint Ventures. We account for our Investments in Joint Ventures under the equity method of accounting, as we do not have operational control or a majority voting interest. Under the equity method of accounting, our share of earnings or losses of our Joint Ventures is reflected in income as earned and contributions or distributions increase or decrease our Investments in Joint Ventures as paid or received, respectively. Differences between our carrying


71


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
value of our Investments in Joint Ventures and our underlying equity of such Joint Ventures are amortized over the respective lives of the underlying assets.
 
On a periodic basis, we assess whether there are any indicators that the value of our Investments in Joint Ventures may be impaired. An investment is impaired only if our estimate of the value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the fair value of the investment. Our estimates of fair value for each investment are based on a number of subjective assumptions that are subject to economic and market uncertainties including, among others, demand for space, market rental rates and operating costs, the discount rate used to value the cash flows of the properties and the discount rate used to value the Joint Ventures’ debt. As these factors are difficult to predict and are subject to future events that may alter our assumptions, our fair values estimated in the impairment analyses may not be realized.
 
Stock Based Compensation
 
We account for stock based compensation 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.
 
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 us.
 
Revenue is recognized on payments received from tenants for early lease terminations after we determine that all the necessary criteria have been met in accordance with the FASB’s guidance on accounting for leases.
 
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.
 
We provide 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 $3,235 and $2,918 as of December 31, 2009 and 2008, respectively. For accounts receivable we deem uncollectible, we use the direct write-off method.
 
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 us after completion of each sale are included in the determination of the gain on sales.
 
Income Taxes
 
We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. As a result, we generally are not subject to federal income taxation to the extent of the income which we distribute if we satisfy the requirements set forth in Section 856 of the Code (pertaining to its organization and types of


72


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
income and assets) necessary to maintain our status as a REIT. We are required to distribute annually at least 90% of our REIT taxable income, as defined in the Code, to our stockholders and we satisfy certain other requirements.
 
A benefit/provision has been made for federal income taxes in the accompanying consolidated financial statements for activities conducted in the TRSs, which has been accounted for under the FASB’s guidance on accounting for income taxes. In accordance with the guidance, the total benefit/provision has been separately allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
 
We and certain of our 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 benefit/provision for income taxes which is allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
 
We file income tax returns in the U.S., and various states and foreign jurisdictions. In general, the statutes of limitations for income tax returns remain open for the years 2006 through 2009.
 
Participating Securities
 
Net income net of preferred dividends is allocated to common stockholders and participating securities based upon their proportionate share of weighted average shares plus weighted average participating securities. Participating securities are unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents. Certain restricted stock awards and restricted unit awards granted to employees and directors are considered participating securities as they receive non-forfeitable dividend or dividend equivalents at the same rate as common stock. See Note 11 for further disclosure about participating securities.
 
Earnings Per Share (“EPS”)
 
Basic net income (loss) per common share is computed by dividing net (loss) income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net (loss) income per common share is computed by dividing net (loss) income available to common shareholders by the sum of the weighted average number of common shares outstanding and any dilutive non-participating securities for the period. See Note 11 for further disclosure about EPS.
 
Derivative Financial Instruments
 
Historically, we have used interest rate protection agreements (“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 derivative or the life of the 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 that is effective is recognized in other comprehensive income (shareholders’ equity). Agreements which do not qualify for hedge accounting are marked-to-market and any gain or loss is recognized in net (loss) income immediately. Amounts accumulated in other comprehensive income during the hedge period are reclassified to earnings in the same period during which the forecasted transaction or hedged item affects net income (loss). The credit risks associated with 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 Agreements, our exposure is limited to the current value of the


73


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
interest rate differential, not the notional amount, and our carrying value of Agreements on the balance sheet. See Note 17 for more information on Agreements.
 
Fair Value of Financial Instruments
 
Financial instruments other than our derivatives (see preceding paragraph) include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses, mortgage and other loans payable, unsecured line of credit and senior unsecured debt. The fair values of the short-term investments, tenant accounts receivable, net, accounts payable and other accrued expenses approximate their carrying or contract values. See Note 6 for the fair values of the mortgage and other loans payable, unsecured line of credit and senior unsecured debt and see Note 9 for the fair value of our mortgage notes receivable.
 
Discontinued Operations
 
The FASB’s guidance on financial reporting for the disposal of long lived assets 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) we will not have any significant continuing involvement in the operations of the property after the disposal transaction. The guidance 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 June 2009, the Financial Accounting Standards Board (the “FASB”) issued new guidance which revises and updates previously issued guidance related to variable interest entities. This new guidance, which became effective January 1, 2010, revises the previous guidance by eliminating the exemption for qualifying special purpose entities, by establishing a new approach for determining who should consolidate a variable-interest entity and by changing when it is necessary to reassess who should consolidate a variable-interest entity. We will adopt this new guidance January 1, 2010. We are currently assessing the potential impact that the adoption of this guidance will have on our financial position and results of operations.
 
Effective January 1, 2009 we adopted newly issued guidance from the FASB relating to noncontrolling interests within consolidated financial statements. This guidance establishes requirements for ownership interests in subsidiaries held by parties other than the Company (formerly called “minority interests”) to be clearly identified, presented, and disclosed in the consolidated statement of financial position within equity, but separate from the parent’s equity. Changes in a parent’s ownership interest (and transactions with noncontrolling interest holders) while the parent retains its controlling financial interest in its subsidiary should be accounted for as equity transactions. The carrying amount of the noncontrolling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent. As a result of transactions with noncontrolling interest holders and changes in ownership percentages that occurred during the year ended December 31, 2009, we decreased noncontrolling interest and increased Additional Paid-in-Capital by $49,126, which represents the cumulative impact of historical changes in the parent’s ownership in the subsidiary. This guidance was effective, on a prospective basis, for fiscal years beginning after December 15, 2008, however, presentation and disclosure requirements need to be retrospectively applied to comparative financial statements. See Note 7 for additional disclosures.


74


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
Effective January 1, 2009 we adopted newly issued guidance from the FASB relating to disclosures about derivatives and hedging activities. This guidance expands the current disclosure requirements and entities must now provide enhanced disclosures on an interim basis and annual basis regarding how and why the entity uses derivatives, how derivatives and related hedged items are accounted for and how derivatives and related hedged items affect the entity’s financial position, financial results and cash flow. See Note 17 for the required disclosures. This guidance does not impact the consolidated financial results as it is disclosure-only in nature.
 
Effective January 1, 2009 we adopted newly issued guidance from the Emerging Issues Task Force (“EITF”) regarding the determination of whether instruments granted in share-based payment transactions are participating securities. The guidance required retrospective application. Under this guidance, unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in the computation of EPS pursuant to the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings. Certain restricted stock awards granted to employees and directors are considered participating securities as they receive non-forfeitable dividend or dividend equivalents at the same rate as common stock. The impact of adopting this guidance decreased previously filed basic and diluted EPS by $0.06 and $0.06 for the years ended December 31, 2008 and 2007, respectively.
 
Effective January 1, 2009 we adopted newly issued guidance from the FASB regarding business combinations. This guidance states that direct costs of a business combination of an operating property, such as transaction fees, due diligence and consulting fees no longer qualify to be capitalized as part of the business combination. Instead, these direct costs need to be recognized as expense in the period in which they are incurred. Accordingly, we retroactively expensed these types of costs in 2008 related to future operating property acquisitions.
 
Effective January 1, 2009 we adopted newly issued guidance from the Accounting Principles Board (“APB”) regarding accounting for convertible debt instruments that may be settled for cash upon conversion. This guidance requires the liability and equity components of convertible debt instruments to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The guidance requires that the value assigned to the debt component be the estimated fair value of a similar bond without the conversion feature, which would result in the debt being recorded at a discount. The resulting debt discount is then amortized over the period during which the debt is expected to be outstanding (i.e., through the first optional redemption date) as additional non-cash interest expense. Retrospective application to all periods presented is required.
 
The equity component of our convertible unsecured notes (the “2011 Exchangeable Notes”) was $7,898 and therefore we retroactively adjusted our Senior Unsecured Debt by this amount as of September 2006. This debt discount has been subsequently amortized and as of December 31, 2009 the principal amount of the 2011 Exchangeable Notes, its unamortized discount and the net carrying amount after repurchases is $146,900, $2,030 and $144,870, respectively. In addition, we reclassified $194 of the original finance fees incurred in relation to the 2011 Exchangeable Notes to equity as of September 2006. For the year ended December 31, 2009, we recognized $10,569 of interest expense related to the 2011 Exchangeable Notes of which $9,039 relates to the coupon rate and $1,530 relates to the debt discount amortization. We anticipate amortizing the remaining debt discount into interest expense through maturity in September 2011. We recognized $3,555 and $(88) as an adjustment to total equity as of December 31, 2008 that represents amortization expense of the discount and the loan fees, respectively, which would have been recognized had the new guidance regarding accounting for convertible debt instruments been effective since the issuance date of our 2011 Exchangeable Notes.
 
The impact to net income and the loss from continuing operations, before noncontrolling interest, related to the adoption of the guidance regarding business combinations for the year ended December 31, 2008 was


75


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
an increase to general and administrative expense of $269. The impact to net income and the loss from continuing operations, before noncontrolling interest, related to the adoption of the guidance regarding convertible debt instruments for the years ended December 31, 2008 and 2007 was an increase to interest expense of $1,580 and a decrease to amortization of deferred financing fees of $39.
 
The impact to the balance sheet as of December 31, 2008 related to the adoption of the guidance regarding business combinations and convertible debt instruments is as follows:
 
                                 
          Adjustments
             
          Related to
    Adjustments
       
    Balance Sheet as
    Adoption of
    Related to
    Balance Sheet as
 
    Previously
    Business
    Adoption of
    Adjusted - as of
 
    Filed - as of
    Combination
    Convertible Debt
    December 31,
 
    December 31, 2008     Guidance     Instrument Guidance     2008  
 
Deferred Financing Costs, Net
  $ 12,197     $     $ (106 )   $ 12,091  
Prepaid Expenses and Other Assets, Net
  $ 174,743     $ (269 )   $     $ 174,474  
Senior Unsecured Debt, Net
  $ 1,516,298     $     $ (4,343 )   $ 1,511,955  
Additional Paid-in-Capital
  $ 1,390,358     $     $ 7,666     $ 1,398,024  
Distributions in Excess of Accumulated Earnings
  $ (366,962 )   $ (255 )   $ (3,012 )   $ (370,229 )
Total First Industrial Realty Trust, Inc.’s Stockholders’ Equity
  $ 864,200     $ (255 )   $ 4,654     $ 868,599  
Noncontrolling Interest
    122,548       (14 )     (417 )     122,117  
                                 
Total Equity
  $ 986,748     $ (269 )   $ 4,237     $ 990,716  
                                 
 
5.   Investments in Joint Ventures and Property Management Services
 
On September 28, 1998, we entered into the 1998 Core Joint Venture with an institutional investor to invest in industrial properties. At December 31, 2006, we owned a 10% equity interest in the 1998 Core Joint Venture and provided property and asset management services to the 1998 Core Joint Venture. On January 31, 2007, we purchased the remaining 90% equity interest from the institutional investor in the 1998 Core Joint Venture. We paid $18,458 in cash and assumed $30,340 in mortgage loans payable. As of December 31, 2007, we paid off and retired the mortgage loan payable. In connection with the early repayment of the mortgage loans payable, we incurred prepayment penalties and a write-off of unamortized deferred financing fees totaling $265.
 
On May 16, 2003, we entered into the 2003 Net Lease Joint Venture with an institutional investor to invest in industrial properties. We own a 15% equity interest in and provide property management services to the 2003 Net Lease Joint Venture. During the year ended December 31, 2009, we recorded an impairment loss of $243 in equity in income of Joint Ventures which represents our proportionate share of the impairment loss related to one industrial property owned by the 2003 Net Lease Joint Venture. Additionally, for the year ended December 31, 2009, we recorded an impairment loss on our investment in the 2003 Net Lease Joint Venture of $1,315 in equity in income. For the year ended December 31, 2008, we recorded an impairment loss on the investment in one industrial property owned by the 2003 Net Lease Joint Venture of $1,249 in equity in income of Joint Ventures. As of December 31, 2009, the 2003 Net Lease Joint Venture owned 10 industrial properties comprising approximately 5.1 million square feet of GLA.
 
On March 18, 2005, we entered into the 2005 Development/Repositioning Joint Venture with an institutional investor to invest in, own, develop, redevelop and operate certain industrial properties. We own a 10% equity interest in and provide property management, asset management, development management, disposition, incentive and leasing management services to the 2005 Development/Repositioning Joint Venture. During the year ended December 31, 2008, we recorded an impairment loss of $483 in equity in income of


76


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
Joint Ventures which represents our proportionate share of impairment loss related to two industrial properties and one land parcel owned by the 2005 Development/Repositioning Joint Venture. Additionally, for the year ended December 31, 2008 we recorded an impairment loss on our investment in the 2005 Development/Repositioning Joint Venture of $25,332 in equity in income of Joint Ventures. As of December 31, 2009, the 2005 Development/Repositioning Joint Venture owned 46 industrial properties comprising approximately 8.2 million square feet of GLA and several land parcels.
 
On September 7, 2005, we entered into the 2005 Core Joint Venture with an institutional investor to invest in, own and operate certain industrial properties. We own a 10% equity interest in and provide property management, asset management, development management, disposition, incentive and leasing management services to the 2005 Core Joint Venture. For the year ended December 31, 2008, we recorded an impairment loss on our investment in the 2005 Core Joint Venture of $3,153 in equity in income of Joint Ventures. As of December 31, 2009, the 2005 Core Joint Venture owned 48 industrial properties comprising approximately 3.9 million square feet of GLA and several land parcels.
 
On March 21, 2006, we entered into the 2006 Net Lease Co-Investment Program with an institutional investor to invest in industrial properties. We own a 15% equity interest in and provide property management, asset management and leasing management services to the 2006 Net Lease Co-Investment Program. On September 18, 2009, we received a notice from the counterparty in the 2006 Net Lease Co-Investment Program that such counterparty is exercising the buy/sell provision in the program’s governing agreement to either purchase our 15% interests in the real property assets currently owned by the program or sell to us its interests in some or all of such assets, along with an additional real property asset in another program which we manage but in which we have no ownership interest. We have accepted the investor’s offered price. As a result, during the year ended December 31, 2009, we recorded an impairment loss of $1,747 in equity in loss of Joint Ventures which represents our proportionate share of the impairment loss related to one industrial property owned by the 2006 Net Lease Co-Investment Program and an impairment loss on our investment in the 2006 Net Lease Co-Investment Program of $3,879. During the year ended December 31, 2008, we recorded an impairment loss of $2,216 in equity in income of Joint Ventures which represents our proportionate share of the impairment loss related to two industrial properties owned by the 2006 Net Lease Co-Investment Program. As of December 31, 2009, the 2006 Net Lease Co-Investment Program owned 11 industrial properties comprising approximately 4.4 million square feet of GLA.
 
On July 21, 2006, we entered into the 2006 Land/Development Joint Venture with an institutional investor to invest in land and vertical development. We own a 10% equity interest in and provide property management, asset management, development management and leasing management services to the 2006 Land/Development Joint Venture. For the year ended December 31, 2008 we recorded an impairment loss on our investment in the 2006 Land/Development Joint Venture of $10,105 in equity in income of Joint Ventures. As of December 31, 2009, the 2006 Land/Development Joint Venture owned one industrial property comprising approximately 0.8 million square feet of GLA and several land parcels.
 
During July 2007, we entered into a management arrangement with an institutional investor to provide property management, leasing, acquisition, disposition and portfolio management services for industrial properties (the “July 2007 Fund”). We do not own an equity interest in the July 2007 Fund, however we are entitled to incentive payments if certain economic thresholds related to the industrial properties are achieved. Effective September 2, 2009, we are no longer providing management services for two of the assets in the July 2007 Fund. We received a one-time fee of approximately $866 in the third quarter of 2009 from the termination of the management agreement.
 
During December 2007, we entered into the 2007 Canada Joint Venture and the 2007 Europe Joint Venture with an institutional investor to invest in, own, develop, redevelop and operate industrial properties. We own a 10% equity interest in and will provide property management, asset management, development management and leasing management services to the 2007 Canada Joint Venture and the 2007 Europe Joint


77


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
Venture. As of December 31, 2009, and the 2007 Canada Joint Venture owned three industrial properties comprising approximately 0.2 million square feet of GLA and several land parcels. As of December 31, 2009, the 2007 Europe Joint Venture did not own any properties.
 
The 2003 Net Lease Joint Venture, 2005 Development/Repositioning Joint Venture, 2006 Land/Development Joint Venture, July 2007 Fund and the 2007 Canada Joint Venture are considered variable interest entities in accordance with the FASB’s guidance on the consolidation of variable interest entities. However, we are not considered the primary beneficiary for the ventures. As of December 31, 2009, our investments in the 2003 Net Lease Joint Venture, 2005 Development/Repositioning Joint Venture, 2006 Land/Development Joint Venture and the 2007 Canada Joint Venture are $3,154, ($2,785), $133 and $1,532, respectively. Our maximum exposure to loss is equal to our investment balance of each venture as of year end plus any future contributions we make to the ventures.
 
During the year ended December 31, 2008, we earned acquisition fees from the 2006 Land/Development Joint Venture. During the year ended December 31, 2007, we earned acquisition fees from the 2006 Land/Development Joint Venture and the July 2007 Fund. During the year ended December 31, 2006, we earned acquisition fees from the 2003 Net Lease Joint Venture, the 2005 Core Joint Venture, the 2006 Net Lease Co-Investment Program and the July 2007 Fund. We deferred 15% of the acquisition fees earned from the 2003 Net Lease Joint Venture and the 2006 Net Lease Co-Investment Program activity and 10% of the acquisition fees earned from the 2005 Core Joint Venture and the 2006 Land/Development Joint Venture activity. The deferrals reduced our investment in the Joint Ventures and are amortized into income over the life of the underlying properties, generally 25 to 40 years.
 
At December 31, 2009 and 2008, we have a receivable from the Joint Ventures and the July 2007 Fund of $1,218 and $3,939, respectively, which mainly relates to development, leasing, property management and asset management fees due to us from the Joint Ventures and the July 2007 Fund and reimbursement for development expenditures made by the TRSs who are acting in the capacity of the general contractor for development projects for the 2005 Development/Repositioning Joint Venture. These amounts are included in Prepaid Expenses and Other Assets, Net.
 
During the years ended December 31, 2009, 2008 and 2007, we invested the following amounts in, as well as received distributions from, our Joint Ventures and recognized fees from acquisition, disposition, leasing, development, incentive, property management and asset management services from our Joint Ventures and the July 2007 Fund in the following amounts:
 
                         
    Year Ended
  Year Ended
  Year Ended
    December 31,
  December 31,
  December 31,
    2009   2008   2007
 
Contributions
  $ 3,742     $ 16,623     $ 25,482  
Distributions
  $ 8,652     $ 22,505     $ 54,228  
Fees
  $ 11,174     $ 19,757     $ 25,116  


78


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The combined summarized financial information of the investments in Joint Ventures is as follows:
 
                 
    December 31,
    December 31,
 
    2009     2008  
Condensed Combined Balance Sheets
               
Gross Real Estate Investment
  $ 1,785,713     $ 1,967,717  
Less: Accumulated Depreciation
    (126,685 )     (93,215 )
                 
Net Real Estate
    1,659,028       1,874,502  
Other Assets
    159,659       186,881  
                 
Total Assets
  $ 1,818,687     $ 2,061,383  
                 
Debt
  $ 1,452,339     $ 1,442,464  
Other Liabilities
    70,544       130,407  
Equity
    295,804       488,512  
                 
Total Liabilities and Equity
  $ 1,818,687     $ 2,061,383  
                 
Company’s share of Equity
  $ 34,310     $ 56,066  
Basis Differentials(1)
    (28,507 )     (39,767 )
                 
Carrying Value of the Company’s investments in Joint Ventures
  $ 5,803     $ 16,299  
                 
 
 
(1) This amount represents the aggregate difference between our historical cost basis and the basis reflected at the joint venture level. Basis differentials are primarily comprised of impairments we recorded to reduce certain of our investments in Joint Ventures to fair value, a gain deferral related to a property we sold to the 2003 Net Lease Joint Venture, deferred fees and certain equity costs which are not reflected at the joint venture level.
 
                         
    Year Ended December 31,  
    2009     2008     2007  
 
Condensed Combined Statements of Operations
                       
Total Revenues
  $ 94,143     $ 87,900     $ 80,917  
Expenses:
                       
Operating and Other
    42,968       37,331       27,070  
Interest
    42,880       53,617       46,974  
Depreciation and Amortization
    50,956       46,944       43,887  
Impairment Loss
    150,804       9,951        
                         
Total Expenses
    287,608       147,843       117,931  
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $1,177, $34,885 and $92,652 for the years ended December 31, 2009, 2008 and 2007, respectively)
    1,291       24,932       85,687  
Gain on Sale of Real Estate
    8,603       17,093       15,523  
                         
Net (Loss) Income
  $ (183,571 )   $ (17,918 )   $ 64,196  
                         
Company’s Share of Net (Loss) Income
    (1,276 )     6,661       30,045  
Impairment on the Company’s Investments in Joint Ventures
    (5,194 )     (39,839 )      
                         
Equity in (Loss) Income of Joint Ventures
  $ (6,470 )   $ (33,178 )   $ 30,045  
                         


79


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
 
6.   Mortgage and Other Loans Payable, Net, Senior Unsecured Notes, Net and Unsecured Line of Credit
 
The following table discloses certain information regarding our mortgage and other loans, senior unsecured notes and Unsecured Line of Credit:
 
                                         
    Outstanding
          Effective
       
    Balance at     Interest
    Interest
       
          (As Adjusted)
    Rate at
    Rate at
       
    December 31,
    December 31,
    December 31,
    December 31,
    Maturity
 
    2009     2008     2009     2009     Date  
 
Mortgage and Other Loans Payable, Net
  $ 402,974     $ 77,396     5.92% - 9.25%     4.93% -9.25%       December 2010 - 
September 2024
 
Unamortized Premiums
    (1,025 )     (1,717 )                        
                                         
Mortgage Loans Payable, Gross
  $ 401,949     $ 75,679                          
                                         
Senior Unsecured Notes, Net
                                       
2016 Notes
  $ 159,843     $ 194,524     5.750%       5.91%         01/15/16  
2017 Notes
    87,187       99,914     7.500%       7.52%         12/01/17  
2027 Notes
    13,559       15,056     7.150%       7.11%         05/15/27  
2028 Notes
    189,862       199,846     7.600%       8.13%         07/15/28  
2011 Notes
    143,447       199,868     7.375%       7.39%         03/15/11  
2012 Notes
    143,837       199,546     6.875%       6.85%         04/15/12  
2032 Notes
    34,651       49,480     7.750%       7.87%         04/15/32  
2009 Notes
          124,980     5.250%       4.10%         06/15/09  
2014 Notes
    105,253       114,921     6.420%       6.54%         06/01/14  
2011 Exchangeable Notes*
    144,870       195,657     4.625%       4.63%         09/15/11  
2017 II Notes
    117,605       118,163     5.950%       6.37%         05/15/17  
                                         
Subtotal
  $ 1,140,114     $ 1,511,955                          
Unamortized Discounts
    11,191       16,545                          
                                         
Senior Unsecured Notes, Gross
  $ 1,151,305     $ 1,528,500                          
                                         
Unsecured Line of Credit
  $ 455,244     $ 443,284     1.256%       1.256%         09/28/12  
                                         
 
 
* The 2011 Exchangeable Notes have an initial exchange rate of 19.6356 shares of our common stock per $1,000 principal amount, representing an exchange price of approximately $50.93 per common share which is an exchange premium of approximately 20% based on the last reported sale price of $42.44 per share of our common stock on September 19, 2006. In connection with our offering of the 2011 Exchangeable Notes, we 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 our common stock, which represents an exchange premium of approximately 40% based on the last reported sale price of $42.44 per share of the our 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 our common stock upon exchange of the 2011 Exchangeable Notes to the extent the then market value per share of our 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 is accounted for as a hedge and included in First Industrial Realty Trust, Inc.’s Stockholders’ Equity because the derivative is indexed to our own stock and meets the scope exception within the derivative guidance.


80


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
 
Mortgage and Other Loans Payable, Net
 
During year ended December 31, 2009, we obtained the following mortgage loans:
 
                                                         
                              Number of
          Property
 
    Principal
                        Industrial
          Carrying
 
    Balance at
                        Properties
          Value at
 
Mortgage
  December 31,
    Interest
    Origination
  Maturity
  Amortization
    Collateralizing
    GLA
    December 31,
 
Financing
  2009     Rate     Date   Date   Period     Mortgage     (In millions)     2009  
 
I
  $ 14,680       7.50 %   May 7, 2009   June 5, 2016     25-year       1       0.6     $ 21,992  
II
  $ 62,500       7.75 %   May 8, 2009   June 1, 2016     25-year       26       3.1     $ 92,982  
III
  $ 77,000       7.87 %   June 3, 2009   July 1, 2019     30-year       28       2.6     $ 125,691  
IV
  $ 2,000       7.50 %   August 27, 2009   September 5, 2014     22-year       1       0.1     $ 3,582  
    $ 5,850       7.60 %   August 27, 2009   September 5, 2016     25-year       1       0.2     $ 9,862  
    $ 5,000       7.60 %   August 26, 2009   September 5, 2016     25-year       1       0.2     $ 6,562  
V
  $ 7,350       6.95 %   September 21, 2009   October 15, 2014     25-year       7       0.2     $ 8,271  
    $ 4,100       7.05 %   September 21, 2009   October 15, 2014     25-year       1       0.1     $ 5,020  
    $ 8,900       7.05 %   September 21, 2009   October 15, 2014     25-year       5       0.5     $ 11,885  
VI
  $ 13,880       6.42 %   September 24, 2009   November 1, 2014     25-year       5       0.3     $ 17,812  
VII
  $ 27,780       7.50 %   October 1, 2009   October 1, 2014     30-year       8       0.7     $ 34,505  
VIII
  $ 14,818       6.75 %   October 1, 2009   September 30, 2012*     25-year       5       0.8     $ 19,725  
IX
  $ 11,375       7.60 %   October 15, 2009   November 5, 2014     25-year       1       0.4     $ 14,929  
X
  $ 38,200       7.50 %   December 4, 2009   January 1, 2020     30-year       11       1.2     $ 56,261  
XI
  $ 27,500       6.70 %   December 18, 2009   January 1, 2015     25-year       10       0.8     $ 33,814  
XII
  $ 18,850       7.50 %   December 29, 2009   December 29, 2014     30-year       14       0.6     $ 27,249  
                                                         
    $ 339,783                                             $ 490,142  
                                                         
 
 
This mortgage loan has two one-year extension options.
 
For Mortgage Financings I, II, III, IV, VII, IX, X and XI, principal prepayments are prohibited for certain time periods up to 60 months after loan origination, depending on the agreement. For Mortgage Financings V, VI, VIII and XII, principal prepayments are allowed at any time. Prepayment premiums range from 5% to 0.5% of the loan balance (or a yield maintenance amount), typically decreasing as the loan matures.
 
On June 1, 2009 we paid off and retired our secured mortgage debt maturing in July 2009 in the amount of $5,025.
 
On December 11, 2009 we prepaid and retired without penalty our secured mortgage debt maturing in December 2019 in the amount of $4,550.
 
As of December 31, 2009, mortgage and other loans payable of $402,974 are collateralized by industrial properties with a net carrying value of $583,300 and one letter of credit. Additionally, the industrial properties that are the collateral for Mortgage Financing V are cross-collateralized. We believe the Operating Partnership and the Company were in compliance with all covenants relating to mortgage loans payable as of December 31, 2009.
 
Senior Unsecured Notes, Net
 
On June 15, 2009, we paid off and retired our 2009 Notes in the amount of $105,721.


81


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
During the years ended December 31, 2009 and December 31, 2008, we repurchased and retired the following senior unsecured debt prior to its maturity:
 
                                 
    Principal Amount Repurchased     Purchase Price  
    For the
    For the
    For the
    For the
 
    Year Ended
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
    December 31,
 
    2009     2008     2009     2008  
 
2009 Notes
  $ 19,279     $     $ 19,064     $  
2011 Notes
    56,502             52,465        
2011 Exchangeable Notes
    53,100             48,938        
2012 Notes
    55,935             48,519        
2014 Notes
    12,000             8,810        
2016 Notes
    34,821       5,000       24,511       4,488  
2017 Notes
    12,747             10,399        
2017 II Notes
    590       31,570       439       28,037  
2027 Notes
    1,500             1,078        
2028 Notes
    10,000             7,548        
2032 Notes
    15,000             11,313        
                                 
    $ 271,474     $ 36,570     $ 233,084     $ 32,525  
                                 
 
In connection with these repurchases prior to maturity, we recognized $34,562 and $2,749 as gain on early retirement of debt for the years ended December 31, 2009 and December 31, 2008, respectively, which is the difference between the repurchase amount of $233,084 and $32,525, respectively, and the principal amount retired of $271,474 and $36,570, respectively, net of the pro rata write off of the unamortized debt issue discount, the unamortized loan fees and the unamortized settlement amount of the interest rate protection agreements related to the repurchases of $2,052, $1,286 and $523, respectively, and $89, $376 and $831, respectively. In addition, we allocated $33 of the purchase price for our 2011 Exchangeable Notes to the reacquisition of the 2011 Exchangeable Notes equity component for the year ended December 31, 2009.
 
All of our senior unsecured debt (except for the 2011 Exchangeable Notes) contains certain covenants, including limitations on incurrence of debt and debt service coverage. We believe the Operating Partnership and the Company were in compliance with all covenants relating to senior unsecured debt as of December 31, 2009. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our noteholders in a manner that could impose and cause us to incur material costs.
 
Unsecured Line of Credit
 
We have maintained our Unsecured Line of Credit since 1997. The Unsecured Line of Credit matures on September 28, 2012, has a borrowing capacity of $500,000 and bears interest at a floating rate of LIBOR plus 1.0%, or the prime rate plus 0.15%, at our election. At December 31, 2009, borrowings under the Unsecured Line of Credit bore interest at a weighted average interest rate of 1.256%. The portion of the Unsecured Line of Credit available in multiple currencies is $161,000. The Unsecured Line of Credit contains certain covenants, including limitations on incurrence of debt and debt service coverage. Under the Unsecured Line of Credit, an event of default can also occur if the lenders, in their good faith judgment, determine that a material adverse change has occurred which could prevent timely repayment or materially impair our ability to perform our obligations under the loan agreement. We believe that the Operating Partnership and the Company were in compliance with all covenants relating to the Unsecured Line of Credit as of December 31, 2009. However,


82


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our lenders in a manner that could impose and cause us to incur material costs.
 
Our belief that we will continue to meet our financial covenants through 2010 is based on internal projections of EBITDA, as defined in our Unsecured Line of Credit and our unsecured notes, which include a number of assumptions, including, among others, assumptions regarding occupancy rates, tenant retention and rental rates as well as internal projections of interest expense and preferred dividends.
 
The following is a schedule of the stated maturities and scheduled principal payments of the mortgage and other loans payable, senior unsecured debt and Unsecured Line of Credit, exclusive of premiums and discounts, for the next five years ending December 31, and thereafter:
 
         
    Amount  
 
2010
  $ 18,650  
2011
    301,691  
2012
    622,463  
2013
    6,912  
2014
    228,440  
Thereafter
    830,342  
         
Total
  $ 2,008,498  
         
 
Fair Value
 
At December 31, 2009 and 2008, the fair value of our mortgage and other loans payable, senior unsecured debt and Unsecured Line of Credit were as follows:
 
                                 
    December 31, 2009     December 31, 2008  
                (As Adjusted)
       
    Carrying
    Fair
    Carrying
    Fair
 
    Amount     Value     Amount     Value  
 
Mortgage and Other Loans Payable
  $ 402,974     $ 407,706     $ 77,396     $ 75,817  
Senior Unsecured Debt
    1,140,114       960,452       1,511,955       1,101,217  
Unsecured Line of Credit
    455,244       422,561       443,284       400,849  
                                 
Total
  $ 1,998,332     $ 1,790,719     $ 2,032,635     $ 1,577,883  
                                 
 
The fair values of our mortgage loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value of the senior unsecured debt was determined by quoted market prices. The fair value of the Unsecured Line of Credit was determined by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term, assuming no repayment until maturity.
 
7.   Stockholders’ Equity
 
Preferred Stock
 
On June 6, 1997, we issued 2,000,000 Depositary Shares, each representing 1/100th of a share of our 85/8%, $0.01 par value, Series C Cumulative Preferred Stock (the “Series C Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. On June 6, 2007, the Series C Preferred Stock became redeemable for cash at our option, 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. We redeemed the Series C Preferred Stock on June 7, 2007, at a redemption price of $25.00 per Depositary Share, and paid


83


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
a prorated second quarter dividend of $0.40729 per Depositary Share, totaling approximately $815. Due to the redemption of the Series C Preferred Stock, the initial offering costs associated with the issuance of the Series C Preferred Stock of $2,017 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, 2007.
 
On May 27, 2004, we issued 50,000 Depositary Shares, each representing 1/100th of a share of our 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). The coupon rate of our Series F Preferred Stock resets every quarter beginning March 31, 2009 at 2.375% plus the greater of (i) the 30 year U.S. Treasury rate, (ii) the 10 year U.S. Treasury rate or (iii) 3-month LIBOR. On October 1, 2009, the new coupon rate was 6.405%. 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 our Common Stock and pari passu with our 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 our option, 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. In October 2008, we entered into an interest rate swap agreement to mitigate our exposure to floating interest rates related to the forecasted reset rate of the coupon rate of our Series F Preferred Stock (see Note 17 for further information on the agreement).
 
On May 27, 2004, we issued 25,000 Depositary Shares, each representing 1/100th of a share our 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 our 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 our Common Stock and pari passu with our 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 our option, 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 redemption date. The Series G Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.


84


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
On January 13, 2006, we issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of our 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) we are not subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, we 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) we cease 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 our option, within 90 days of the date upon which the depositary shares cease to be listed and we cease 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 our Common Stock and pari passu with our 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 our option, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On August 21, 2006, we issued 2,000,000 Depositary Shares, each representing 1/10,000th of a share of our 7.25%, $.01 par value, Series K Flexible Cumulative Redeemable Preferred Stock (the “Series K Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. Dividends on the Series K Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial 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 our Common Stock and pari passu with our 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 our option, 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 our preferred stock:
 
                 
    Stated Value at  
    December 31,
    December 31,
 
    2009     2008  
 
Series F Preferred Stock
  $ 50,000     $ 50,000  
Series G Preferred Stock
    25,000       25,000  
Series J Preferred Stock
    150,000       150,000  
Series K Preferred Stock
    50,000       50,000  
                 
Total
  $ 275,000     $ 275,000  
                 
 
Shares of Common Stock
 
For the years ended December 31, 2009, 2008 and 2007, 415,466, 632,492, and 119,747, shares of common stock, respectively, were converted from an equivalent number of limited partnership interests in the Operating Partnership (“Units”), resulting in a reclassification of $7,817, $14,581 and $2,855, respectively, of noncontrolling interest to First Industrial Realty Trust Inc.’s Stockholders’ Equity.


85


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
On August 8, 2008, the Company’s DRIP became effective. Under the terms of the DRIP, stockholders who participate may reinvest all or part of their dividends in additional shares of the Company at a discount from the market price, at our discretion, when the shares are issued and sold directly by us from authorized but unissued shares of the Company’s common stock. Stockholders and non-stockholders may also purchase additional shares at a discounted price, at our discretion, when the shares are issued and sold directly by us from authorized but unissued shares of the Company’s common stock, by making optional cash payments, subject to certain dollar thresholds. During the year ended December 31, 2009, we issued 3,034,120 shares under the direct stock purchase component of the DRIP for $15,920.
 
On October 5, 2009, we sold in an underwritten public offering 13,635,700 shares of the Company’s common stock at a price of $5.25 per share. Gross offering proceeds from the issuance were $71,587 in the aggregate. Proceeds to us, net of underwriters’ discount of $3,042 and total expenses of $765, were approximately $67,780.
 
During the year ended December 31, 2009, we awarded 50,445 shares of common stock to certain directors. The common stock shares had a fair value of approximately $240 upon issuance.
 
Treasury Stock
 
In March 2000 and in September 2007, our Board of Directors authorized a stock repurchase plan pursuant to which we are permitted to purchase up to $100,000 (the “March 2000 Program”) and $100,000, respectively, of our outstanding common stock. We may make purchases from time to time in the open market or in privately negotiated transactions, depending on market and business conditions. During the year ended December 31, 2007, we repurchased 1,797,714 shares at an average price per share of $38.62, including brokerage commissions. During November 2007, we completed the March 2000 Program.
 
Non-Qualified Employee Stock Options
 
For the year ended December 31, 2007, certain employees of the Company exercised 19,600 non-qualified employee stock options. Proceeds to us were approximately $613.
 
For the year ended December 31, 2008, certain employees of the Company exercised 6,300 non-qualified employee stock options. Proceeds to us were approximately $174.
 
Restricted Stock/Units
 
During the years ended December 31, 2009, 2008, and 2007 we awarded 0, 583,871, and 442,008 restricted shares of common stock, respectively, as well as 1,473,600, 4,757, and 0 restricted stock units, respectively, to certain employees of the Company and 35,145, 21,945, and 17,139 restricted shares of common stock, respectively, to certain directors of the Company. See Note 16 for further disclosure on our stock based compensation.


86


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The following table is a roll-forward of our shares of common stock outstanding, including unvested restricted shares of common stock for the three years ended December 31, 2009:
 
         
    Shares of
 
    Common Stock
 
    Outstanding  
 
Balance at December 31, 2006
    45,010,630  
         
Stock Option Exercises
    19,600  
Issuance of Restricted Stock Shares
    459,147  
Repurchase of Treasury Shares
    (1,797,714 )
Repurchase and Retirement of Restricted Stock Shares
    (139,261 )
Conversion of Operating Partnership Units
    119,747  
         
Balance at December 31, 2007
    43,672,149  
         
Stock Option Exercises
    6,300  
Issuance of Common Stock
    138  
Issuance of Restricted Stock Shares
    605,816  
Repurchase and Retirement of Restricted Stock Shares
    (264,713 )
Conversion of Operating Partnership Units
    632,492  
         
Balance at December 31, 2008
    44,652,182  
         
Issuance of Common Stock
    16,874,884  
Issuance of Restricted Stock Shares
    35,145  
Repurchase and Retirement of Restricted Stock Shares
    (132,463 )
Conversion of Operating Partnership Units
    415,466  
         
Balance at December 31, 2009
    61,845,214  
         
 
Dividends/Distributions
 
The coupon rate of our Series F Preferred Stock resets every quarter beginning March 31, 2009 at 2.375% plus the greater of (i) the 30 year U.S. Treasury rate, (ii) the 10 year U.S. Treasury rate or (iii) 3-month LIBOR. On October 1, 2009, the new coupon rate was 6.405%. See Note 16 for additional derivative information related to the Series F Preferred Stock coupon rate reset.
 
The following table summarizes dividends/distributions declared for the past three years:
 
                                                 
    Year Ended 2009   Year Ended 2008   Year Ended 2007
    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
  $ 0.0000     $     $ 2.4100     $ 121,882     $ 2.8500     $ 146,126  
Series C Preferred Stock
  $ N/A     $ N/A     $ N/A     $ N/A     $ 94.6353     $ 1,893  
Series F Preferred Stock
  $ 6,414.5700     $ 3,207     $ 6,236.0000     $ 3,118     $ 6,236.0000     $ 3,118  
Series G Preferred Stock
  $ 7,236.0000     $ 1,809     $ 7,236.0000     $ 1,809     $ 7,236.0000     $ 1,809  
Series J Preferred Stock
  $ 18,125.2000     $ 10,875     $ 18,125.2000     $ 10,875     $ 18,125.2000     $ 10,875  
Series K Preferred Stock
  $ 18,125.2000     $ 3,625     $ 18,125.2000     $ 3,625     $ 18,125.2000     $ 3,625  


87


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The following table summarizes the changes in Noncontrolling Interest for the years ended December 31, 2009, 2008 and 2007:
 
                         
    Year Ended  
          (As Adjusted)
    (As Adjusted)
 
    December 31,
    December 31,
    December 31,
 
    2009     2008     2007  
 
Noncontrolling Interest, Beginning of Year
  $ 122,117     $ 150,117     $ 152,497  
Net (Loss) Income
    (1,547 )     2,990       18,841  
Other Comprehensive Loss (Income)
    248       (1,391 )     142  
                         
Comprehensive Loss (Income)
    (1,299 )     1,599       18,983  
                         
Conversion of Units to Common Stock
    (7,817 )     (14,581 )     (2,855 )
Reallocation — Additional Paid In Capital
    (49,126 )            
Reallocation — Other Comprehensive Income
    931              
Distributions
          (15,018 )     (18,508 )
                         
Noncontrolling Interest, End of Year
  $ 64,806     $ 122,117     $ 150,117  
                         
 
8.   Acquisition and Development of Real Estate
 
In 2007, we acquired 105 industrial properties comprising, in the aggregate, approximately 8.6 million square feet of GLA and several land parcels, including 41 industrial properties comprising approximately 1.3 million square feet of GLA in connection with the purchase of the 90% equity interest from the institutional investor of the 1998 Core Joint Venture and one industrial property comprising 0.3 million square feet of GLA in connection with the redemption of the 85% equity interest in one property from the institutional investor in the 2003 Net Lease Joint Venture. The purchase price of these acquisitions totaled approximately $470,784, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. We also substantially completed development of 15 properties comprising approximately 3.7 million square feet of GLA at a cost of approximately $144,790. We reclassed the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
In 2008, we acquired 26 industrial properties comprising, in the aggregate, approximately 3.1 million square feet of GLA and several land parcels. The purchase price of these acquisitions totaled approximately $339,650, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. We also substantially completed development of eight properties comprising approximately 4.5 million square feet of GLA at a cost of approximately $148,236. We reclassed the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
In 2009, we acquired one land parcel. The purchase price of the land parcel was approximately $208, excluding costs incurred in conjunction with the acquisition of the land parcel. We also substantially completed the development of two industrial properties comprising approximately 1.1 million square feet of GLA at a cost of approximately $41,258. We reclassed the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.


88


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
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 due to real estate properties acquired for the years ended December 31, 2009 and 2008 is as follows:
 
                 
    Year Ended
  Year Ended
    December 31,
  December 31,
    2009   2008
 
In-Place Leases
  $     $ 21,054  
Above Market Leases
  $     $ 61  
Tenant Relationships
  $     $ 7,163  
Below Market Leases
  $     $ (7,070 )
 
The weighted average life in months of in-place leases, above market leases, tenant relationships and below market leases recorded as a result of the real estate properties acquired for the years ended December 31, 2009 and 2008 is as follows:
 
                 
    Year Ended
  Year Ended
    December 31,
  December 31,
    2009   2008
 
In-Place Leases
    N/A       115  
Above Market Leases
    N/A       43  
Tenant Relationships
    N/A       99  
Below Market Leases
    N/A       137  
 
9.   Sale of Real Estate, Real Estate Held for Sale and Discontinued Operations
 
In 2007, we sold 164 industrial properties comprising approximately 13.7 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 164 industrial properties and several land parcels were approximately $881,278. The gain on sale of real estate was approximately $254,387, of which $244,962 is shown in discontinued operations. One-hundred sixty-one of the 164 sold industrial properties meet the criteria to be included in discontinued operations. Therefore the results of operations and gain on sale of real estate for the 161 sold industrial properties are included in discontinued operations. The results of operations and gain on sale of real estate for the three industrial properties and several land parcels that do not meet the criteria to be included in discontinued operations are included in continuing operations.
 
In 2008, we sold 114 industrial properties comprising approximately 9.1 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 114 industrial properties and several land parcels were approximately $583,211. The gain on sale of real estate was approximately $184,175, of which $172,167 is shown in discontinued operations. One-hundred thirteen of the 114 sold industrial properties meet the criteria to be included in discontinued operations. Therefore the results of operations and gain on sale of real estate for the 113 sold industrial properties that meet the criteria are included in discontinued operations. The results of operations and gain on sale of real estate for the one industrial property and several land parcels that do not meet the criteria to be included in discontinued operations are included in continuing operations.
 
In 2009, we sold 15 industrial properties comprising approximately 1.9 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 15 industrial properties and several land parcels were approximately $100,194. The gain on sale of real estate was approximately $24,580, of which $24,206 is shown in discontinued operations. The 15 sold industrial properties meet the criteria to be included in discontinued operations. Therefore the results of operations and gain on sale of real estate for the 15 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 to be included in discontinued operations are included in continuing operations.


89


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
At December 31, 2009, we had seven industrial properties comprising approximately 0.6 million square feet of GLA held for sale. The results of operations of the seven industrial properties held for sale at December 31, 2009 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 our discontinued operations for the years ended December 31, 2009, 2008 and 2007.
 
                         
    Year Ended December 31,  
    2009     2008     2007  
 
Total Revenues
  $ 9,464     $ 40,966     $ 109,022  
Property Expenses
    (2,427 )     (13,880 )     (35,856 )
Depreciation and Amortization
    (2,647 )     (11,902 )     (34,178 )
Gain on Sale of Real Estate
    24,206       172,167       244,962  
Provision for Income Taxes
    (1,816 )     (4,887 )     (38,673 )
                         
Income from Discontinued Operations
  $ 26,780     $ 182,464     $ 245,277  
                         
 
At December 31, 2009 and 2008, we had notes receivables outstanding of approximately $60,029 and $37,512, net of a discount of $449 and $0, respectively, which is included as a component of Prepaid Expenses and Other Assets, Net. At December 31, 2009 and 2008, the fair value of the notes receivables were $56,812 and $31,061, respectively. The fair values of our notes receivables were determined by discounting the future cash flows using the current rates at which similar loans with similar remaining maturities would be made to other borrowers.


90


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
 
10.   Supplemental Information to Statements of Cash Flows
 
Supplemental disclosure of cash flow information:
 
                         
          (As Adjusted)
    (As Adjusted)
 
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2009     2008     2007  
 
Interest paid, net of capitalized interest
  $ 115,990     $ 113,062     $ 118,909  
                         
Capitalized Interest
  $ 281     $ 7,775     $ 8,413  
                         
Income Taxes (Refunded) Paid
  $ (54,173 )   $ 2,355     $ 42,169  
                         
Supplemental schedule of noncash investing and financing activities:
                       
Distribution payable on common stock/Units
  $     $ 12,614     $ 36,079  
                         
Distribution payable on preferred stock
  $ 452     $ 1,232     $ 1,232  
                         
Exchange of units for common stock:
                       
Noncontrolling interest
  $ (7,817 )   $ (14,581 )   $ (2,855 )
Common stock
    4       6        
Additional paid-in-capital
    7,813       14,575       2,855  
                         
    $     $     $  
                         
In conjunction with property and land acquisitions, the following liabilities were assumed:
                       
Accounts payable and accrued expenses
  $     $ (464 )   $ (6,095 )
                         
Mortgage debt
  $     $ (7,852 )   $ (38,590 )
                         
Write-off of fully depreciated assets
  $ (55,089 )   $ (72,406 )   $ (45,031 )
                         
In conjunction with certain property sales, we provided seller financing or assigned a mortgage loan payable:
                       
Notes receivable
  $ 20,645     $ 62,613     $ 48,282  
                         
Mortgage Note Payable
  $     $     $ 769  
                         


91


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
 
11.   Earnings Per Share (“EPS”)
 
The computation of basic and diluted EPS is presented below:
 
                         
          (As Adjusted)
    (As Adjusted)
 
    Year Ended
    Year Ended
    Year Ended
 
    December 31,
    December 31,
    December 31,
 
    2009     2008     2007  
 
Numerator:
                       
Loss from Continuing Operations, Net of Income Tax
  $ (22,825 )   $ (148,103 )   $ (79,074 )
Noncontrolling Interest Allocable to Continuing Operations
    4,297       20,656       12,964  
                         
Loss from Continuing Operations, Net of Noncontrolling Interest and Income Tax
    (18,528 )     (127,447 )     (66,110 )
Gain on Sale of Real Estate
    374       12,008       9,425  
Income Tax Provision Allocable to Gain on Sale of Real Estate
    (143 )     (3,782 )     (3,082 )
Noncontrolling Interest Allocable to Gain on Sale of Real Estate
    (24 )     (1,020 )     (802 )
Preferred Stock Dividends
    (19,516 )     (19,428 )     (21,320 )
Redemption of Preferred Stock
                (2,017 )
                         
Loss from Continuing Operations Available to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ (37,837 )   $ (139,669 )   $ (83,906 )
                         
Income from Discontinued Operations
  $ 28,596     $ 187,351     $ 283,950  
Income Tax Provision Allocable to Discontinued Operations
    (1,816 )     (4,887 )     (38,673 )
Noncontrolling Interest Allocable to Discontinued Operations
    (2,726 )     (22,626 )     (31,003 )
Discontinued Operations Allocable to Participating Securities
          (2,553 )     (2,597 )
                         
Discontinued Operations Attributable to First Industrial Realty Trust, Inc. 
  $ 24,054     $ 157,285     $ 211,677  
                         
Net (Loss) Income Available
    (13,783 )     20,169       130,368  
Net Income Allocable to Participating Securities
          (2,553 )     (2,597 )
                         
Net (Loss) Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ (13,783 )   $ 17,616     $ 127,771  
                         
Denominator:
                       
Weighted Average Shares — Basic and Diluted
    48,695,317       43,192,969       44,085,998  
Basic and Diluted EPS:
                       
Loss from Continuing Operations Available to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ (0.78 )   $ (3.23 )   $ (1.90 )
                         
Discontinued Operations Attributable to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ 0.49     $ 3.64     $ 4.80  
                         
Net (Loss) Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders
  $ (0.28 )   $ 0.41     $ 2.90  
                         
 
Participating securities include unvested restricted stock awards and restricted unit awards outstanding that participate in non-forfeitable dividends of the Company.
 


92


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
                                                 
          Allocation of
          Allocation of
          Allocation of
 
          Net Income
          Net Income
          Net Income
 
          Available to
          Available to
          Available to
 
          Participating
          Participating
          Participating
 
          Securities For
          Securities For
          Securities For
 
    Unvested Awards
    the Year
    Unvested Awards
    the Year
    Unvested Awards
    the Year
 
    Outstanding at
    Ended
    Outstanding at
    Ended
    Outstanding at
    Ended
 
    December 31,
    December 31,
    December 31,
    December 31,
    December 31,
    December 31,
 
    2009     2009     2008     2008     2007     2007  
 
Participating Securities:
                                               
Restricted Stock Awards
    355,645               757,041               909,966          
Restricted Unit Awards
                  4,619                        
                                                 
      355,645     $       761,660     $ 482       909,966     $ 2,597  
 
Participating security holders are not obligated to share in losses, therefore, none of the loss was allocated to participating securities for the year ended December 31, 2009.
 
The number of weighted average shares — diluted is the same as the number of weighted average shares — basic for the years ended December 31, 2009, 2008 and 2007 as the effect of stock options and restricted stock/unit awards was excluded as its inclusion would have been antidilutive to the loss from continuing operations available to First Industrial Realty Trust, Inc.’s common stockholders. The following awards were anti-dilutive and could be dilutive in future periods:
 
                         
    Number of
  Number of
  Number of
    Awards
  Awards
  Awards
    Outstanding At
  Outstanding At
  Outstanding At
    December 31,
  December 31,
  December 31,
    2009   2008   2007
 
Non-Participating Securities:
                       
Restricted Unit Awards
    1,218,800              
Options
    139,700       278,601       355,901  
 
The 2011 Exchangeable Notes are convertible into common shares of the Company at a price of $50.93 and were not included in the computation of diluted EPS as our average stock price did not exceed the strike price of the conversion feature.
 
12.   Income Taxes
 
For income tax purposes, distributions paid to common shareholders are classified as ordinary income, capital gain, return of capital or qualified dividends. We did not pay common share distributions for the year ended December 31, 2009. For the years ended December 31, 2008 and 2007, the distributions per common share were classified as follows:
 
                                 
          As a Percentage
          As a Percentage
 
    2008     of Distributions     2007     of Distributions  
 
Ordinary income
  $ 0.1127       4.68 %   $ 0.6158       21.61 %
Long-term capital gains
    1.3166       54.63 %     1.2950       45.44 %
Unrecaptured Section 1250 gain
    0.8141       33.78 %     0.6721       23.58 %
Return of capital
          0.00 %     0.2671       9.37 %
Qualified Dividends
    0.1666       6.91 %           0.00 %
                                 
    $ 2.4100       100.00 %   $ 2.8500       100.00 %
                                 

93


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
For income tax purposes, distributions paid to preferred shareholders are classified as ordinary income, capital gain, or qualified dividends. For the years ended December 31, 2009, 2008 and 2007, the preferred distributions per depositary share were classified as follows:
 
                 
          As a Percentage
 
Series C Preferred Stock
  2007     of Distributions  
 
Ordinary income
  $ 0.1285       23.84 %
Long-term capital gains
    0.2703       50.14 %
Unrecaptured Section 1250 gain
    0.1403       26.02 %
Qualified Dividends
          0.00 %
                 
    $ 0.5391       100.00 %
                 
 
                                                 
          As a Percentage
          As a Percentage
          As a Percentage
 
Series J Preferred Stock
  2009     of Distributions     2008     of Distributions     2007     of Distributions  
 
Ordinary income
  $       0.00 %   $ 0.0847       4.68 %   $ 0.4322       23.84 %
Long-term capital gains
    1.3697       75.57 %     0.9902       54.63 %     0.9087       50.14 %
Unrecaptured Section 1250 gain
    0.4428       24.43 %     0.6123       33.78 %     0.4716       26.02 %
Qualified Dividends
          0.00 %     0.1253       6.91 %           0.00 %
                                                 
    $ 1.8125       100.00 %   $ 1.8125       100.00 %   $ 1.8125       100.00 %
                                                 
 
                                                 
          As a Percentage
          As a Percentage
          As a Percentage
 
Series K Preferred Stock
  2009     of Distributions     2008     of Distributions     2007     of Distributions  
 
Ordinary income
  $       0.00 %   $ 0.0847       4.68 %   $ 0.4322       23.84 %
Long-term capital gains
    1.3697       75.57 %     0.9902       54.63 %     0.9087       50.14 %
Unrecaptured Section 1250 gain
    0.4428       24.43 %     0.6123       33.78 %     0.4716       26.02 %
Qualified Dividends
          0.00 %     0.1253       6.91 %           0.00 %
                                                 
    $ 1.8125       100.00 %   $ 1.8125       100.00 %   $ 1.8125       100.00 %
                                                 
 
The components of income tax benefit (expense) for the TRSs for the years ended December 31, 2009, 2008 and 2007 are comprised of the following:
 
                         
    2009     2008     2007  
 
Current:
                       
Federal
  $ 38,703     $ 5,114     $ (28,209 )
State
    372       814       (4,934 )
Foreign
    (835 )     (649 )      
Deferred:
                       
Federal
    (15,816 )     (526 )     3,977  
State
    (557 )     (107 )     571  
Foreign
    9       671        
                         
    $ 21,876     $ 5,317     $ (28,595 )
                         
 
In addition to income tax benefit (expense) recognized by the TRSs, $1,320, $(1,028) and $(1,960) of state income tax benefit (expense) was recognized by the Company and is included in income tax benefit


94


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
(expense) on the consolidated statement of operations for the years ended December 31, 2009, 2008 and 2007, respectively.
 
On August 24, 2009, we received a private letter ruling from the IRS granting favorable loss treatment under Sections 331 and 336 of the Code on the tax liquidation of our old TRS. As a result, the Company completed a transaction on September 1, 2009 whereby approximately 75% of the assets formerly held by the old TRS are now held by FI LLC (which is wholly owned by the Operating Partnership). The remaining 25% of the assets are now held by FRIP (which is 99% owned by the new TRS). On November 6, 2009, legislation was signed that allows businesses with net operating losses for 2008 or 2009 to carry back those losses for up to five years. As a result, we received a refund from the IRS of $40,418 in the fourth quarter of 2009 due to the tax liquidation of the old TRS.
 
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 TRSs include the following as of December 31, 2009 and 2008.
 
                 
    2009     2008  
 
Bad debt expense
  $ 1     $ 196  
Investment in Joint Ventures
    1,679       19,621  
Fixed assets
    1,074       9,625  
Prepaid rent
    114       494  
Capitalized general and administrative expense under 263A
          3,711  
Deferred losses/gains
          71  
Accrued contingency loss
          377  
Restricted stock
    34       2,326  
Accrual for Restructuring Costs
          751  
Abandoned Project Costs
          1,150  
Federal net operating loss carrying forward
    345        
State net operating loss carrying forward
    11       131  
Foreign net operating loss carrying forward
    77        
Valuation Allowance
    (1,299 )     (19,501 )
Other
    752       836  
                 
Total deferred tax assets
  $ 2,788     $ 19,788  
                 
Straight-line rent
    (507 )     (1,936 )
Fixed assets
    (1,358 )     (53 )
Capitalized interest under 263A
          (362 )
Other
    (3 )     (243 )
                 
Total deferred tax liabilities
  $ (1,868 )   $ (2,594 )
                 
Total net deferred tax asset
  $ 920     $ 17,194  
                 
 
As of December 31, 2009 and 2008, the TRSs had net deferred tax assets of $920 and $17,194, after valuation allowances of $1,299 and $19,501, respectively. Included in net income for the old TRS for the year ended December 31, 2008 is $39,073 of impairment loss in Equity in Income of Joint Ventures. We recorded a valuation allowance to offset the deferred tax asset that was created by these impairments during the year ended December 31, 2008. The deferred tax assets and liabilities of the old TRS were eliminated on September 1, 2009 as FI LLC is a nontaxable entity. The deferred tax assets and liabilities as of December 31,


95


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
2009 represent those of the new TRS, and we have recorded a valuation allowance to offset the net deferred tax assets of the new TRS.
 
The new TRS has a net operating loss carryforward related to federal, state and foreign taxes of $433 and a tax credit carryforward of $684 at December 31, 2009.
 
The TRSs’ components of income tax benefit (expense) for the years ended December 31, 2009, 2008 and 2007 are as follows:
 
                         
    2009     2008     2007  
 
Tax expense associated with income from operations on sold properties which is included in discontinued operations
  $ (354 )   $ (1,155 )   $ (2,641 )
Tax expense associated with gains and losses on the sale of real estate which is included in discontinued operations
    (1,462 )     (3,732 )     (36,032 )
Tax expense associated with gains and losses on the sale of real estate
    (143 )     (3,782 )     (3,082 )
Income tax benefit
    23,835       13,986       13,160  
                         
Income tax benefit (expense)
  $ 21,876     $ 5,317     $ (28,595 )
                         
 
The income tax benefit pertaining to income from continuing operations and gain on sale of real estate for the TRSs differs from the amounts computed by applying the applicable federal statutory rate as follows:
 
                         
    2009     2008     2007  
 
Tax benefit at federal rate related to continuing operations
  $ 8,343     $ 28,377     $ 8,659  
State tax (expense) benefit, net of federal benefit
    493       2,799       1,066  
Non-deductible permanent items
    (1,652 )     (1,852 )     (121 )
Prior year provision to return adjustments
          7       436  
Change in valuation allowance
    16,269       (19,501 )      
Foreign taxes, net
    345       344        
Old TRS liquidation
    70              
Other
    (176 )     30       38  
                         
Net income tax benefit
  $ 23,692     $ 10,204     $ 10,078  
                         
 
Michigan Tax Issue
 
As of December 31, 2008, we had paid approximately $1,400 (representing tax and interest for the years 1997-2000) to the State of Michigan regarding business loss carryforwards the appropriateness of which is the subject of current litigation initiated by us. On December 11, 2007, the Michigan Court of Claims rendered a decision against us regarding the business loss carryforwards. Also, the court ruled against us on an alternative position involving Michigan’s Capital Acquisition Deduction. We filed an appeal to the Michigan Appeals Court in January 2008; however, as a result of the lower court’s decision approximately $800 (representing tax and interest for the year 2001) had been accrued through June 30, 2009 for both tax and financial statement purposes.
 
On August 18, 2009, the Michigan Appeals Court issued a decision in our favor on the business loss carryforward issue. The Michigan Department of Treasury appealed the decision to the Michigan Supreme Court on September 29, 2009; however, we believe there is a very low probability that the Michigan Supreme Court will accept the case. Therefore, in September 2009 the Company reversed its accrual of $800 (related to the 2001 tax year) and set up a receivable of $1,400 for the amount paid in 2006 (related to the 1997-2000 tax years), resulting in an aggregate reversal of prior tax expense of $2,200.


96


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
We had no unrecognized tax benefits as of December 31, 2009 and 2008. To the extent we have unrecognized tax benefits in the future, it will be our policy to recognize interest and penalties related to unrecognized tax benefits in income tax expense.
 
13.   Impairment Charges
 
We adopted the fair value measurement provisions as of January 1, 2009, for the impairment of long-lived assets recorded at fair value. The new guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
 
In connection with our periodic review of the carrying values of our properties and due to continuing softness of the economy in certain markets, we determined in the third quarter of 2009 that an impairment loss in the amount of $6,934 should be recorded to a certain property comprised of 0.2 million square feet of GLA in the Inland Empire market in California (“Inland Empire Property”).
 
Additionally, during the year ended December 31, 2009, we recorded $5,194 in impairment charges on our interest in the 2006 Net Lease Co-Investment Program and the 2003 Net Lease Joint Venture (see Note 5).
 
The following table presents information about our impairment charges that were measured on a fair value basis for the year ended December 31, 2009. The table indicates the fair value hierarchy of the valuation techniques we utilized to determine fair value.
 
                                         
        Fair Value Measurements at
   
        December 31, 2009 Using:    
        Quoted Prices in
           
        Active Markets for
  Significant Other
  Unobservable
  Total
    December 31,
  Identical Assets
  Observable Inputs
  Inputs
  Gains
Description
  2009   (Level 1)   (Level 2)   (Level 3)   (Losses)
 
Inland Empire Property
  $ 3,830                 $ 3,830     $ (6,934 )
Unconsolidated Joint Venture investments
  $ 3,910                 $ 3,910     $ (5,194 )
 
The non-cash impairment charge related to the Inland Empire Property is based upon the difference between the fair value of the property and its carrying value. The non-cash impairment charge related to our unconsolidated Joint Venture investments is based upon the difference between the fair value of our equity interest and our carrying value. The valuation of impaired real estate assets and investments is determined using widely accepted valuation techniques including discounted cash flow analysis on expected cash flows, the income capitalization approach considering prevailing market capitalization rates, analysis of recent comparable sale transactions and/or consideration of the amount that currently would be required to replace the asset, as adjusted for obsolescence. In general, we consider multiple valuation techniques when measuring the fair value of an investment, however; in certain circumstances, a single valuation technique may be appropriate.


97


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The following table presents a reconciliation for our impairment charges classified as Level 3 at December 31, 2009:
 
         
    Fair Value Measurements
 
    Using Significant
 
    Unobservable Inputs
 
    (Level 3)
 
    Impairment Charges  
 
Beginning balance at December 31, 2008
  $  
Total unrealized losses:
       
Impairment on Real Estate
    (12,128 )
         
Ending balance at December 31, 2009
  $ (12,128 )
         
 
14.   Restructuring Costs
 
We committed to a plan to reduce organizational and overhead costs in October 2008 and have subsequently modified that plan with the goal of further reducing these costs. On February 25 and September 25, 2009, we committed to additional modifications to the plan consisting of further organizational and overhead cost reductions.
 
For the year ended December 31, 2009, we recorded as restructuring costs a pre-tax charge of $7,806 to provide for employee severance and benefits ($5,186), costs associated with the termination of certain office leases ($1,867) and other costs ($753) associated with implementing the restructuring plan. Included in employee severance costs is $2,931 of non-cash costs which represents the accelerated recognition of restricted stock expense for certain employees for the year ended December 31, 2009. At December 31, 2009, we have $2,884 included in Accounts Payable, Accrued Expenses and Other Liabilities, Net related to severance obligations, remaining lease payments and other costs incurred but not yet paid.
 
For the year ended December 31, 2008, we recorded as reorganization costs, a pre-tax charge of $27,349 to provide for employee severance and benefits ($24,825), costs associated with the termination of certain office leases ($1,162) and contract cancellation and other costs ($1,362) associated with implementing the restructuring plan. Included in employee severance costs is $9,585 of non-cash costs which represents the accelerated recognition of restricted stock for certain employees. At December 31, 2008 the Company has $6,695 included in Accounts Payable, Accrued Expenses and Other Liabilities, Net related to severance obligations, remaining lease payments and other costs incurred but not yet paid.
 
15.   Future Rental Revenues
 
Our 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, 2009 are approximately as follows:
 
         
2010
  $ 239,435  
2011
    198,847  
2012
    157,722  
2013
    120,792  
2014
    88,445  
Thereafter
    407,387  
         
Total
  $ 1,212,628  
         


98


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
 
16.   Stock Based Compensation
 
We maintain four stock incentive plans (the “Stock Incentive Plans”) which are administered by the Compensation Committee of the Board of Directors. There are approximately 10.4 million shares reserved under the Stock Incentive Plans. Only officers, certain employees, our Independent Directors and our 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/Unit 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, 2009, stock options and restricted stock/Units covering 1.7 million shares were outstanding and 1.4 million shares were available under the Stock Incentive Plans. At December 31, 2009, 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, 2007
    355,901     $ 31.68     $ 25.13-$33.15     $ 3,669  
Exercised
    (6,300 )   $ 27.58     $ 25.13-$31.13     $ 24  
Expired or Terminated
    (71,000 )   $ 31.13     $ 31.13-$31.13          
                                 
Outstanding at December 31, 2008
    278,601     $ 31.92     $ 27.25-$33.15     $  
                                 
Expired or Terminated
    (138,901 )   $ 31.94     $ 27.69-$33.13          
                                 
Outstanding at December 31, 2009
    139,700     $ 31.89     $ 27.25-$33.15     $  
                                 
 
The following table summarizes currently outstanding and exercisable options as of December 31, 2009:
 
                         
    Number
  Weighted
  Weighted
    Outstanding
  Average
  Average
    and
  Remaining
  Exercise
Range of Exercise Price
  Exercisable   Contractual Life   Price
 
$27.25 - $30.53
    42,900       1.18     $ 30.07  
$31.05 - $33.15
    96,800       1.40     $ 32.70  
 
In September 1994, the Board of Directors approved and we adopted a 401(k)/Profit Sharing Plan. Under our 401(k)/Profit Sharing Plan, all eligible employees may participate by making voluntary contributions. We may make, but are not required to make, matching contributions. For the years ended December 31, 2009, 2008 and 2007, we made matching contributions of $0, $0, and $542, respectively.
 
For the years ended December 31, 2009, 2008 and 2007, we awarded 1,473,600, 588,628, and 442,008 restricted stock and unit awards to our employees having a fair value at grant date of $7,406, $18,860, and $20,882, respectively. We also awarded 35,145, 21,945, and 17,139 restricted stock awards to our directors having a fair value at grant date of $149, $603, and $688, respectively. Restricted stock awards granted to employees generally vest over a period of three to four years and restricted stock awards granted to directors generally vest over a period of five years. For the years ended December 31, 2009, 2008 and 2007, we recognized $13,015, $25,883, and $14,150 in restricted stock amortization related to restricted stock awards, of which $45, $1,519, and $1,707, respectively, was capitalized in connection with development activities. At December 31, 2009, we have $9,747 in unearned compensation related to unvested restricted stock awards. The weighted average period that the unrecognized compensation is expected to be incurred is 1.22 years. We did not award options to our employees or our directors during the years ended December 31, 2009, 2008 and 2007 and all outstanding options are fully vested; therefore, no stock-based employee compensation expense


99


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
related to options is included in Net (Loss) Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders and Participating Securities.
 
Restricted stock award and restricted stock unit award transactions for the years ended December 31, 2009 and 2008 are summarized as follows:
 
                 
          Weighted
 
          Average
 
          Grant Date
 
    Shares     Fair Value  
 
Outstanding at December 31, 2007
    909,966     $ 41.88  
Issued
    610,573     $ 31.88  
Vested
    (733,666 )   $ 22.97  
Forfeited
    (25,213 )   $ 35.17  
                 
Outstanding at December 31, 2008
    761,660     $ 36.00  
                 
Issued
    1,508,745     $ 5.01  
Vested
    (571,149 )   $ 28.79  
Forfeited
    (124,811 )   $ 7.51  
                 
Outstanding at December 31, 2009
    1,574,445     $ 11.17  
                 
 
During the year ended December 31, 2009, we made a grant of 1,000,000 restricted stock units to our Chief Executive Officer. These restricted stock units had a fair value of approximately $6,014 on the date of issuance. Of these restricted stock units, a total of 600,000 (the “Service Awards”) vest in four equal installments on the first, second, third and fourth year anniversary of December 31, 2008, and a total of 400,000 (the “Performance Awards I”) vest in four installments of up to 100,000 on the first, up to 200,000 on the second, up to 300,000 on the third and up to 400,000 on the fourth year anniversary of December 31, 2008, to the extent certain market conditions are met. The market conditions are met when certain stock price levels are achieved and maintained for certain time periods between the award issuance date and December 31, 2013. Both the Service Awards and Performance Awards I require the Chief Executive Officer to be employed by the Company at the applicable vesting dates, subject to certain clauses in the award agreement. The Service Awards are amortized over the four year service period. The Performance Awards I are amortized over the service period of each installment.
 
During the year ended December 31, 2009, we made a grant of 473,600 restricted stock units to certain members of management (the “Performance Awards II”). The Performance Awards II had a fair value of approximately $1,392 on the date of issuance and will vest in four installments on the first, second, third and fourth anniversary of June 30, 2009, to the extent certain service periods and market conditions are both met. The market conditions are met when certain stock price levels are achieved and maintained for certain time periods between the award issuance date and June 30, 2014. The Performance Awards II are amortized over the service period of each installment. In conjunction with the issuance of the Performance Awards II, the members of management were also granted cash awards with a fair value of $792. The cash awards vest on June 30, 2010 and compensation expense is recognized on a straight-line basis over the service period. In order to receive the Performance Awards II and the cash awards, the members of management are required to be employed by the Company at the applicable vesting dates, subject to certain clauses in the award agreements.


100


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The fair value of the Performance Awards I and the Performance Awards II at issuance was determined using a Monte Carlo simulation model with the following assumptions:
 
         
    Performance Awards I   Performance Awards II
 
Expected dividend yield
  0.0%   0.0%
Expected stock volatility
  57.18% to 119.55%   76.29% to 162.92%
Risk-free interest rate
  0.40% to 1.84%   0.43% to 2.38%
Expected life (years)
  1-4   1-4
Fair value
  $4.49   $2.94
 
On October 23, 2008, we granted stock appreciation rights (“SARs”) to our former interim Chief Executive Officer (who is currently Chairman of the Board of Directors of the Company) that entitles him to a special cash payment equal to the appreciation in value of 75,000 shares of our common stock. The payment is to be based on the excess of the closing price of our common stock on October 22, 2009 over $7.94, the closing price on the grant date. The award fully vested during the three months ended December 31, 2008 upon his acceptance of the position. Since the closing price of our stock on October 22, 2009 was less than $7.94, no payment was made. During the years ended December 31, 2009 and 2008, we recognized compensation expense of $(197) and $197 relating to the SARs.
 
17.   Derivatives
 
Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our cash flow volatility exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
 
In January 2008, we entered into two forward starting swaps each with a notional value of $59,750, which fixed the interest rate on forecasted debt offerings. We designated both swaps as cash flow hedges. The rates on the forecasted debt issuances underlying the swaps locked on March 20, 2009 (the “Forward Starting Agreement 1”) and on April 6, 2009 (the “Forward Starting Agreement 2”), and as such, the swaps ceased to qualify for hedge accounting. On March 20, 2009, the fair value of Forward Starting Agreement 1 was a liability of $4,442 and on April 6, 2009, the fair value of Forward Starting Agreement 2 was a liability of $4,023. These amounts are included in Other Comprehensive Income (“OCI”) and will be amortized over five years, which was the original life of the Forward Starting Agreement 1 and Forward Starting Agreement 2, as an increase to interest expense. On May 8, 2009, we settled the Forward Starting Agreement 1 and paid the counterparty $4,105 and on June 3, 2009 we settled the Forward Starting Agreement 2 and paid the counterparty $3,386. The change in value of Forward Starting Agreement 1 and Forward Starting Agreement 2 from the respective day the interest rate on the underlying debt was locked until settlement is $974 for the year ended December 31, 2009 and is included in Mark-to-Market Gain (Loss) on Interest Rate Protection Agreements in the statement of operations.
 
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in OCI and is subsequently reclassified to earnings through interest expense over the life of the derivative or over the life of the debt. In the next 12 months, we will amortize approximately $2,026 into net income by increasing interest expense for the Forward Starting Agreement 1 and Forward Starting Agreement 2 and similar interest rate protection agreements we settled in previous periods.
 
As of December 31, 2009, we also have an interest rate swap agreement with a notional value of $50,000 which fixed the LIBOR rate on a portion of our outstanding borrowings on our Unsecured Line of Credit at 2.4150% (the “Interest Rate Swap Agreement”). Monthly payments or receipts are treated as a component of interest expense. We designated the Interest Rate Swap Agreement as a cash flow hedge. We anticipate, based


101


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
on ongoing evaluation of effectiveness, that the Interest Rate Swap Agreement has been and will continue to be highly effective, and, as a result, the change in the fair value is shown in OCI.
 
The coupon rate of our Series F Preferred Stock resets every quarter beginning March 31, 2009 at 2.375% plus the greater of (i) the 30 year U.S. Treasury rate, (ii) the 10 year U.S. Treasury rate or (iii) 3-month LIBOR. On October 1, 2009, the new coupon rate was 6.405% (see Note 7). In October 2008, we entered into an interest rate swap agreement with a notional value of $50,000 to mitigate our exposure to floating interest rates related to the forecasted reset rate of the coupon rate of our Series F Preferred Stock (the “Series F Agreement”). This Series F Agreement fixes the 30-year U.S. Treasury rate at 5.2175%. Accounting guidance for derivatives does not permit hedge accounting treatment related to equity instruments and therefore the mark to market gains or losses related to this agreement are recorded in the statement of operations. Quarterly payments or receipts are treated as a component of the mark to market gains or losses and for the year ended December 31, 2009, and we incurred $472, of which $152 was outstanding at December 31, 2009.
 
The following is a summary of the terms of the forward starting swaps and the interest rate swaps and their fair values, which are included in Accounts Payable, Accrued Expenses and Other Liabilities, Net on the accompanying consolidated balance sheet as of December 31, 2009:
 
                                                 
                            Fair Value As of
    Fair Value As of
 
          Fixed
    Trade
    Maturity
    December 31,
    December 31,
 
Hedge Product
  Notional Amount     Pay Rate     Date     Date     2009     2008  
 
Derivatives designated as hedging instruments:
                                               
Forward-Starting Agreement 1
  $ 59,750       4.0725 %     January 2008       May 8, 2009     $     $ (3,429 )
Forward-Starting Agreement 2
    59,750       4.0770 %     January 2008       June 3, 2009             (3,452 )
Interest Rate Swap Agreement
    50,000       2.4150 %     March 2008       April 1, 2010       (267 )     (858 )
                                                 
Total derivatives designated as hedging instruments:
  $ 169,500                             $ (267 )   $ (7,739 )
Derivatives not designated as hedging instruments:
                                               
Series F Agreement*
    50,000       5.2175 %     October 2008       October 1, 2013       93       (3,073 )
                                                 
Total Derivatives
  $ 219,500                       Total     $ (174 )   $ (10,812 )
                                                 
 
 
* Fair value excludes quarterly settlement payment due on Series F Agreement. As of December 31, 2009, the outstanding payable was $152.
 
The following is a summary of the impact of the derivatives in cash flow hedging relationships on the statement of operations and the statement of OCI for the years ended December 31, 2009 and December 31, 2008.
 
                     
        Year Ended
        December 31,
  December 31,
Interest Rate Products
 
Location on Statement
  2009   2008
 
Loss Recognized in OCI
                   
(Effective Portion)
  Mark-to-Market on Interest Rate Protection Agreements (OCI)   $ (993 )   $ (7,739 )
Amortization Reclassified from OCI into Income
  Interest Expense   $ (796 )   $ 792  
Gain Recognized in Income (Unhedged Position)
  Mark-to-Market Gain on Interest Rate Protection Agreements   $ 974     $  


102


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
Additionally as of December 31, 2009, one of the Joint Ventures has interest rate protection agreements outstanding which effectively convert floating rate debt to fixed rate debt on a portion of its total variable debt. The hedge relationships are considered highly effective and as such, for the years ended December 31, 2009 and 2008, we recorded $1,060 and $(1,547) in unrealized gain (loss), respectively, representing our 10% share, offset by $(450) and $610 of income tax (provision) benefit, respectively, which is shown in Mark-to-Market on Interest Rate Protection Agreements, Net of Income Tax, in OCI.
 
Our agreements with our derivative counterparties contain provisions where if we default on any of our indebtedness, then we could also be declared in default on our derivative obligations subject to certain thresholds.
 
We adopted the fair value measurement provisions as of January 1, 2008, for financial instruments recorded at fair value. The new guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
 
The following table sets forth our financial liabilities that are accounted for at fair value on a recurring basis as of December 31, 2009:
 
                                 
        Fair Value Measurements at Reporting
        Date Using:
        Quoted Prices in
       
        Active Markets for
  Significant Other
  Unobservable
    December 31,
  Identical Assets
  Observable Inputs
  Inputs
Description
  2009   (Level 1)   (Level 2)   (Level 3)
 
Liabilities:
                               
Interest Rate Swap Agreement
  $ 267           $ 267        
Series F Agreement
  $ 59                 $ 59  
 
The valuation of the Interest Rate Swap Agreement is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the instrument. This analysis reflects the contractual terms of the agreements including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. In adjusting the fair value of the interest rate protection agreements for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements. To comply with the provisions of fair value measurement, we incorporated a credit valuation adjustment (“CVA”) to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. However, assessing significance of inputs is a matter of judgment that should consider a variety of factors. One factor we consider is the CVA and its materiality to the overall valuation of the derivatives on the balance sheet and to their related changes in fair value. We believe the inputs obtained related to our CVAs are observable and therefore fall under Level 2 of the fair value hierarchy. Accordingly, the liabilities related to the Interest Rate Swap Agreement are classified as Level 2 amounts.
 
The valuation of the Series F Agreement utilizes the same valuation technique as the Interest Rate Swap Agreement, however, we consider the Series F Agreement to be classified as Level 3 in the fair value hierarchy due to a significant number of unobservable inputs. The Series F Agreement swaps a fixed rate 5.2175% for floating rate payments based on 30-year Treasury. No market observable prices exist for long-dated Treasuries past 30 years. Therefore, we have classified the Series F Agreement in its entirety as a Level 3.


103


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The following table presents a reconciliation for our liabilities classified as Level 3 at December 31, 2009:
 
         
    Fair Value Measurements
 
    Using Significant
 
    Unobservable Inputs
 
    (Level 3)
 
    Derivatives  
 
Beginning liability balance at December 31, 2008
  $ (3,073 )
Total realized gains:
       
Mark-to-Market on Series F Agreement
    3,014  
         
Ending liability balance at December 31, 2009
  $ (59 )
         
 
18.   Related Party Transactions
 
We periodically engage in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of Michael W. Brennan, the former President and Chief Executive Officer and a former director of the Company, is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2008 and 2007 this relative received approximately $95 and $240, respectively, in brokerage commissions or other fees for transactions with the Company and the Joint Ventures.
 
19.   Commitments and Contingencies
 
Currently, we are the defendant in a suit brought in February 2009 by the trustee in the bankruptcy of a former tenant. The trustee is seeking the return of $5,000 related to letters of credit that we drew down when the tenant defaulted on its leases. The suit is in the early stages and, at this time, we are not in a position to assess what, if any, ultimate liability we may have to the bankruptcy estate. We plan to vigorously defend the suit. In addition, in the normal course of business, we are involved in other legal actions arising from the ownership of our industrial properties. Except as disclosed herein, in our opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on our consolidated financial position, operations or liquidity.
 
At December 31, 2008 our investment in the 2005 Development/Repositioning Joint Venture was $0. This investment balance was written down to $0 due to impairment losses we recorded in the year ended December 31, 2008. At December 31, 2009 our investment in the 2005 Development/Repositioning Joint Venture is $(2,785) and is included within Accounts Payable, Accrued Expenses and Other Liabilities, Net due to our current commitment to fund operations to this venture.
 
Ten 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 our depreciated cost of the asset. We have no notice of any exercise of any tenant purchase option.
 
At December 31, 2009, we had 17 letters of credit outstanding in the aggregate amount of $6,230. These letters of credit expire between January 2010 and November 2010.
 
Ground and Operating Lease Agreements
 
For the years ended December 31, 2009, 2008 and 2007, we recognized $4,181, $4,072 and $3,102 in operating and ground lease expense.


104


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
Future minimum rental payments under the terms of all non-cancelable ground and operating leases under which we are the lessee, offset by sub-lease rental payments under non-cancelable operating leases, as of December 31, 2009, are as follows:
 
         
2010
  $ 3,001  
2011
    2,121  
2012
    1,640  
2013
    1,541  
2014
    1,328  
Thereafter
    29,326  
         
Total
  $ 38,957  
         
 
20.   Subsequent Events
 
From January 1, 2010 to February 26, 2010, we sold two industrial properties comprising approximately 0.2 million square feet of GLA and several land parcels. Gross proceeds from the sale of the two industrial properties and several land parcels were approximately $27,433. There were no industrial properties acquired during this period.
 
On February 8, 2010, we consummated a tender offer pursuant to which we purchased $72,702 of our 2011 Notes, $66,236 of our 2012 Notes and $21,062 of our 2014 Notes. In connection with the tender offer, we will recognize approximately $0.4 million as gain on early retirement of debt.
 
Subsequent to January 1, 2010, we obtained four mortgage loans in the amounts of $7,780, $7,200, $4,300 and $8,250. The mortgages are collateralized by four industrial properties totaling approximately 0.8 million square feet of GLA. The mortgages bear interest at a fixed rate of 7.40%. The mortgages mature between February, 2015 and March, 2015.
 
On February 26, 2010, the IRS notified us of its intent to examine the tax returns filed by the old TRS for the years ended December 31, 2008 and December 31, 2009.


105


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
 
21.   Quarterly Financial Information (unaudited)
 
The following table summarizes our quarterly financial information. The first, second and third fiscal quarters of 2009 and all fiscal quarters in 2008 have been revised in accordance with guidance on accounting for discontinued operations.
 
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, 2009  
    First
    Second
    Third
    Fourth
 
    Quarter     Quarter     Quarter     Quarter  
 
Total Revenues
  $ 110,881     $ 106,529     $ 104,428     $ 90,120  
Equity in Income (Loss) of Joint Ventures
    29       1,551       (5,889 )     (2,161 )
Noncontrolling Interest Allocable to Continuing Operations
    2,658       1,457       1,039       (857 )
(Loss) Income from Continuing Operations, Net of Income Tax and Noncontrolling Interest
    (15,755 )     (7,138 )     (4,041 )     8,406  
Income from Discontinued Operations, Net of Income Tax
    5,410       4,784       7,751       8,835  
Noncontrolling Interest Allocable to Discontinued Operations
    (626 )     (532 )     (839 )     (729 )
Gain (Loss) on Sale of Real Estate, Net of Income Tax
    477             101       (347 )
Noncontrolling Interest Allocable to Gain (Loss) on Sale of Real Estate
    (50 )           (7 )     33  
                                 
Net (Loss) Income Attributable to First Industrial Realty Trust, Inc. 
    (10,544 )     (2,886 )     2,965       16,198  
Preferred Stock Dividends
    (4,857 )     (4,824 )     (4,913 )     (4,922 )
                                 
Net (Loss) Income Available
  $ (15,401 )   $ (7,710 )   $ (1,948 )   $ 11,276  
Income from Continuing Operations Allocable to Participating Securities
                      (18 )
Discontinued Operations Allocable to Participating Securities
                      (48 )
                                 
Net (Loss) Income Available to Common Stockholders
  $ (15,401 )   $ (7,710 )   $ (1,948 )   $ 11,210  
                                 
Basic and Diluted Earnings Per Share:
                               
(Loss) Income From Continuing Operations Available
  $ (0.46 )   $ (0.27 )   $ (0.20 )   $ 0.05  
                                 
Income from Discontinued Operations
  $ 0.11     $ 0.10     $ 0.15     $ 0.13  
                                 
Net (Loss) Income Available to Common Stockholders
  $ (0.35 )   $ (0.17 )   $ (0.04 )   $ 0.18  
                                 
Weighted Average Shares Outstanding
    44,147       44,439       45,360       60,690  
                                 
 


106


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
                                 
    (As Adjusted)  
    Year Ended December 31, 2008  
    First
    Second
    Third
    Fourth
 
    Quarter     Quarter     Quarter     Quarter  
 
Total Revenues
  $ 109,301     $ 126,421     $ 136,047     $ 145,552  
Equity in Income (Loss) of Joint Ventures
    3,302       3,268       725       (40,473 )
Noncontrolling Interest Allocable to Continuing Operations
    3,794       3,482       2,549       11,134  
Loss from Continuing Operations, Net of Income Tax and Noncontrolling Interest
    (21,090 )     (19,349 )     (12,734 )     (73,971 )
Income from Discontinued Operations, Net of Income Tax
    79,744       71,600       24,196       6,924  
Noncontrolling Interest Allocable to Discontinued Operations
    (10,175 )     (8,900 )     (3,003 )     (831 )
Gain on Sale of Real Estate, Net of Income Tax
    5,438       2,788              
Noncontrolling Interest Allocable to Gain Sale of Real Estate
    (694 )     (346 )            
                                 
Net Income (Loss) Attributable to First Industrial Realty Trust, Inc
    53,223       45,793       8,459       (67,878 )
Preferred Stock Dividends
    (4,857 )     (4,857 )     (4,857 )     (4,857 )
                                 
Net Income (Loss) Available
  $ 48,366     $ 40,936     $ 3,602     $ (72,735 )
                                 
Discontinued Operations Allocable to Participating Securities
    (1,016 )     (1,087 )     (841 )      
                                 
Net Income (Loss) Available to Common Stockholders
  $ 47,350     $ 39,849     $ 2,761     $ (72,735 )
                                 
Basic and Diluted Earnings Per Share:
                               
Loss From Continuing Operations Available
  $ (0.49 )   $ (0.50 )   $ (0.41 )   $ (1.81 )
                                 
Income from Discontinued Operations
  $ 1.59     $ 1.43     $ 0.47     $ 0.14  
                                 
Net Income (Loss) Available to Common Stockholders
  $ 1.10     $ 0.92     $ 0.06     $ (1.67 )
                                 
Weighted Average Shares Outstanding
    42,984       43,128       43,151       43,506  
                                 
 
22.   Pro Forma Financial Information (unaudited)
 
The following Pro Forma Condensed Statements of Operations for the years ended December 31, 2008 and 2007 (the “Pro Forma Statements”) are presented as if the acquisition of 20 operating industrial properties between January 1, 2008 and December 31, 2008 had occurred at the beginning of each year. The Pro Forma Statements do not include acquisitions between January 1, 2008 and December 31, 2008 for industrial properties that were vacant upon purchase, were leased back to the sellers upon purchase or were subsequently sold before December 31, 2008. The Pro Forma Condensed Statements of Operations include all necessary adjustments to reflect the occurrence of purchases and sales of properties during 2008 as of January 1, 2008 and 2007.

107


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
The Pro Forma Statements are not necessarily indicative of what our results of operations would have been for the years ended December 31, 2008 and 2007, nor do they purport to present our future results of operations.
 
Pro Forma Condensed Statements of Operations
 
                 
    (As Adjusted)     (As Adjusted)  
    Year Ended
    Year Ended
 
    December 31,
    December 31,
 
    2008     2007  
 
Pro Forma Revenues
  $ 519,691     $ 387,662  
Pro Forma Loss from Continuing Operations Available to Common Stockholders, Net of Noncontrolling Interest and Income Taxes
  $ (136,468 )   $ (64,859 )
Pro Forma Net Income Available to Common Stockholders
  $ 23,371     $ 149,415  
Per Share Data:
               
Pro Forma Basic and Diluted Earnings Per Share Data:
               
Loss from Continuing Operations Available to Common Stockholders
  $ (3.16 )   $ (1.47 )
                 
Net Income Available to Common Stockholders
  $ 0.48     $ 3.32  
                 


108


Table of Contents

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
SCHEDULE III:
 
REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2009
 
                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
Atlanta
                                                                                       
4250 River Green Parkway
      Duluth, GA   $     $ 264     $ 1,522     $ 209     $ 264     $ 1,731     $ 1,995     $ 648       1994       (l )
3450 Corporate Parkway
      Duluth, GA           506       2,904       459       506       3,363       3,869       1,412       1994       (l )
1650 Highway 155
      McDonough, GA           788       4,544       366       788       4,910       5,698       1,855       1994       (l )
1665 Dogwood Drive
      Conyers, GA           635       3,662       314       635       3,976       4,611       1,491       1994       (l )
1715 Dogwood
      Conyers, GA           288       1,675       1,287       288       2,962       3,250       766       1994       (l )
11235 Harland Drive
      Covington, GA           125       739       183       125       922       1,047       325       1994       (l )
4051 Southmeadow Parkway
      Atlanta, GA           726       4,130       875       726       5,005       5,731       1,765       1994       (l )
4071 Southmeadow Parkway
      Atlanta, GA           750       4,460       1,301       828       5,683       6,511       2,100       1994       (l )
4081 Southmeadow Parkway
      Atlanta, GA           1,012       5,918       1,652       1,157       7,425       8,582       2,691       1994       (l )
5570 Tulane Dr(d)
      Atlanta, GA     2,112       527       2,984       699       546       3,664       4,210       1,241       1996       (l )
955 Cobb Place
      Kennesaw, GA     2,952       780       4,420       684       804       5,080       5,884       1,666       1997       (l )
1005 Sigman Road
      Conyers, GA     2,246       566       3,134       419       574       3,545       4,119       871       1999       (l )
2050 East Park Drive
      Conyers, GA           452       2,504       184       459       2,681       3,140       671       1999       (l )
1256 Oakbrook Drive
      Norcross, GA     1,268       336       1,907       286       339       2,190       2,529       544       2001       (l )
1265 Oakbrook Drive
      Norcross, GA     1,348       307       1,742       637       309       2,377       2,686       661       2001       (l )
1280 Oakbrook Drive
      Norcross, GA     1,227       281       1,592       275       283       1,865       2,148       429       2001       (l )
1300 Oakbrook Drive
      Norcross, GA     1,738       420       2,381       241       423       2,619       3,042       539       2001       (l )
1325 Oakbrook Drive
      Norcross, GA     1,437       332       1,879       304       334       2,181       2,515       550       2001       (l )
1351 Oakbrook Drive
      Norcross, GA           370       2,099       375       373       2,471       2,844       569       2001       (l )
1346 Oakbrook Drive
      Norcross, GA           740       4,192       693       744       4,881       5,625       1,032       2001       (l )
1412 Oakbrook Drive
      Norcross, GA           313       1,776       262       315       2,036       2,351       480       2001       (l )
3060 South Park Blvd
      Ellenwood, GA           1,600       12,464       1,743       1,603       14,204       15,807       2,560       2003       (l )
Greenwood Industrial Park
      McDonough, GA     4,533       1,550             7,485       1,550       7,485       9,035       1,007       2004       (l )
46 Kent Drive
      Cartersville GA     1,761       794       2,252       6       798       2,254       3,052       387       2005       (l )
100 Dorris Williams
      Villa Rica GA     2,235       401       3,754       42       406       3,791       4,197       993       2005       (l )
605 Stonehill Drive
      Atlanta, GA     1,621       485       1,979       (38 )     490       1,936       2,426       792       2005       (l )
5095 Phillip Lee Drive
      Atlanta, GA           735       3,627       254       740       3,876       4,616       1,175       2005       (l )
6514 Warren Drive
      Norcross, GA           510       1,250       (66 )     513       1,181       1,694       182       2005       (l )
6544 Warren Drive
      Norcross, GA           711       2,310       (49 )     715       2,257       2,972       374       2005       (l )


S-1


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
720 Industrial Blvd
      Dublin, GA           250       2,632       40       255       2,667       2,922       1,371       2005       (l )
5356 E. Ponce De Leon
      Stone Mountain, GA     2,855       604       3,888       227       610       4,109       4,719       1,018       2005       (l )
5390 E. Ponce De Leon
      Stone Mountain, GA           397       1,791       31       402       1,817       2,219       392       2005       (l )
195 & 197 Collins Boulevard
      Athens, GA           1,410       5,344       (553 )     1,426       4,775       6,201       1,809       2005       (l )
1755 Enterprise Drive
      Buford, GA     1,596       712       2,118       60       716       2,174       2,890       412       2006       (l )
4555 Atwater Court
      Buford, GA     2,612       881       3,550       591       885       4,137       5,022       768       2006       (l )
80 Liberty Industrial Parkway
      McDonough, GA           756       3,695       213       763       3,901       4,664       473       2007       (l )
596 Bonnie Valentine
      Pendergrass, GA           2,580       21,730       1,434       2,594       23,150       25,744       1,596       2007       (l )
11415 Old Roswell Road
      Alpharetta, GA           2,403       1,912       46       2,428       1,933       4,361       160       2008       (l )
Baltimore
                                                                                       
1820 Portal
      Baltimore, MD           884       4,891       454       899       5,330       6,229       1,551       1998       (l )
9700 Martin Luther King Hwy
      Lanham, MD           700       1,920       513       700       2,433       3,133       638       2003       (l )
9730 Martin Luther King Hwy
      Lanham, MD           500       955       498       500       1,453       1,953       431       2003       (l )
4621 Boston Way
      Lanham, MD           1,100       3,070       605       1,100       3,675       4,775       921       2003       (l )
4720 Boston Way
      Lanham, MD           1,200       2,174       575       1,200       2,749       3,949       784       2003       (l )
9800 Martin Luther King Hwy
      Lanham, MD           1,200       2,457       298       1,200       2,755       3,955       662       2003       (l )
22520 Randolph Drive
      Dulles, VA     7,950       3,200       8,187       (162 )     3,208       8,017       11,225       1,314       2004       (l )
22630 Dulles Summit Court
      Dulles, VA           2,200       9,346       133       2,206       9,473       11,679       1,796       2004       (l )
4201 Forbes Boulevard
      Lanham, MD           356       1,823       323       375       2,127       2,502       365       2005       (l )
4370-4383 Lottsford Vista Rd
      Lanham, MD           279       1,358       215       296       1,556       1,852       287       2005       (l )
4400 Lottsford Vista Rd
      Lanham, MD           351       1,955       174       372       2,108       2,480       330       2005       (l )
4420 Lottsford Vista Road
      Lanham, MD           539       2,196       327       568       2,494       3,062       491       2005       (l )
11204 McCormick Road
      Hunt Valley, MD           1,017       3,132       67       1,038       3,178       4,216       623       2005       (l )
11110 Pepper Road
      Hunt Valley, MD           918       2,529       258       938       2,767       3,705       567       2005       (l )
11100-11120 Gilroy Road
      Hunt Valley, MD           901       1,455       57       919       1,494       2,413       404       2005       (l )
318 Clubhouse Lane
      Hunt Valley, MD           701       1,691       14       718       1,688       2,406       476       2005       (l )
10709 Gilroy Road
      Hunt Valley, MD           913       2,705       46       913       2,751       3,664       737       2005       (l )
10707 Gilroy Road
      Hunt Valley, MD           1,111       3,819       127       1,136       3,921       5,057       1,031       2005       (l )
38 Loveton Circle
      Sparks, MD           1,648       2,151       (250 )     1,690       1,859       3,549       326       2005       (l )
7120-7132 Ambassador Road
      Baltimore, MD           829       1,329       255       847       1,566       2,413       445       2005       (l )
7142 Ambassador Road
      Hunt Valley, MD           924       2,876       444       942       3,302       4,244       464       2005       (l )
7144-7162 Ambassador Road
      Baltimore, MD           979       1,672       188       1,000       1,839       2,839       480       2005       (l )
7223-7249 Ambassador Road
      Woodlawn, MD           1,283       2,674       92       1,311       2,738       4,049       764       2005       (l )
7200 Rutherford Road
      Baltimore, MD           1,032       2,150       22       1,054       2,150       3,204       411       2005       (l )
2700 Lord Baltimore Road
      Baltimore, MD           875       1,826       753       897       2,557       3,454       625       2005       (l )

S-2


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
1225 Bengies Road
      Baltimore, MD           2,640       270       13,266       2,823       13,353       16,176       949       2008       (l )
Central Pennsylvania
                                                                                       
1214-B Freedom Road
      Cranberry Township, PA           31       994       613       200       1,438       1,638       986       1994       (l )
401 Russell Drive
      Middletown, PA     1,280       262       857       1,670       287       2,502       2,789       1,549       1994       (l )
2700 Commerce Drive
      Middletown, PA           196       997       714       206       1,701       1,907       1,078       1994       (l )
2701 Commerce Drive
      Middletown, PA           141       859       1,174       164       2,010       2,174       1,109       1994       (l )
2780 Commerce Drive
      Middletown, PA           113       743       1,218       209       1,865       2,074       1,187       1994       (l )
350 Old Silver Spring Road
      Mechanicsburg, PA           510       2,890       5,778       541       8,637       9,178       2,484       1997       (l )
16522 Hunters Green Parkway
      Hagerstown, MD     13,538       1,390       13,104       3,903       1,863       16,534       18,397       2,719       2003       (l )
18212 Shawley Drive
      Hagerstown, MD           1,000       5,847       1,567       1,016       7,398       8,414       1,214       2004       (l )
37 Valleyview Business Park
      Jessup, PA           542             2,962       532       2,972       3,504       374       2004       (l )
301 Railroad Avenue
      Shiremanstown, PA           1,181       4,447       1,562       1,328       5,862       7,190       1,760       2005       (l )
431 Railroad Avenue
      Shiremanstown, PA           1,293       7,164       1,869       1,341       8,985       10,326       1,815       2005       (l )
6951 Allentown Blvd
      Harrisburg, PA           585       3,176       132       601       3,292       3,893       569       2005       (l )
320 Museum Road
      Washington, PA           201       1,819       57       208       1,869       2,077       457       2005       (l )
1351 Eisenhower Blvd., Bldg 1
      Harrisburg, PA     2,070       382       2,343       98       387       2,436       2,823       342       2006       (l )
1351 Eisenhower Blvd., Bldg 2
      Harrisburg, PA     1,421       436       1,587       22       443       1,602       2,045       250       2006       (l )
1490 Commerce Avenue
      Carlisle, PA           1,500             12,846       2,341       12,005       14,346       760       2008       (l )
600 First Avenue
      Gouldsboro, PA           7,022             57,413       7,019       57,416       64,435       1,896       2008       (l )
225 Cross Farm Lane
      York, PA           4,718             23,566       4,715       23,569       28,284       1,332       2008       (l )
Chicago
                                                                                       
720-730 Landwehr Road
      Northbrook, IL           521       2,982       1,118       521       4,100       4,621       1,754       1994       (l )
20W201 101st Street
      Lemont, IL     4,000       967       5,554       816       968       6,369       7,337       2,338       1994       (l )
3600 West Pratt Avenue
      Lincolnwood, IL           1,050       5,767       1,200       1,050       6,967       8,017       2,649       1994       (l )
6750 South Sayre Avenue
      Bedford Park, IL           224       1,309       642       224       1,951       2,175       834       1994       (l )
585 Slawin Court
      Mount Prospect, IL     3,299       611       3,505       2,065       615       5,566       6,181       1,922       1994       (l )
2300 Windsor Court
      Addison, IL           688       3,943       1,012       696       4,947       5,643       1,716       1994       (l )
3505 Thayer Court
      Aurora, IL           430       2,472       91       430       2,563       2,993       980       1994       (l )
305-311 Era Drive
      Northbrook, IL           200       1,154       935       205       2,084       2,289       527       1994       (l )
3150-3160 MacArthur Boulevard
      Northbrook, IL           429       2,518       33       429       2,551       2,980       992       1994       (l )
365 North Avenue
      Carol Stream, IL           1,081       6,882       3,897       1,111       10,749       11,860       4,232       1994       (l )
12241 Melrose Street
      Franklin Park, IL           332       1,931       1,307       469       3,101       3,570       1,084       1995       (l )
11939 S Central Avenue
      Alsip, IL           1,208       6,843       2,191       1,305       8,937       10,242       2,577       1997       (l )
405 East Shawmut
      LaGrange, IL           368       2,083       602       388       2,665       3,053       760       1997       (l )
1010-50 Sesame Street
      Bensenville, IL           979       5,546       2,833       1,048       8,310       9,358       2,190       1997       (l )

S-3


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
7501 South Pulaski
      Chicago, IL           318       2,038       1,516       318       3,554       3,872       952       1997       (l )
2120-24 Roberts
      Broadview, IL           220       1,248       479       231       1,716       1,947       707       1998       (l )
800 Business Center Drive
      Mount Prospect, IL           631       3,493       292       666       3,750       4,416       840       2000       (l )
580 Slawin Court
      Mount Prospect, IL           233       1,292       325       254       1,596       1,850       349       2000       (l )
1150 Feehanville Drive
      Mount Prospect, IL           260       1,437       169       273       1,593       1,866       363       2000       (l )
19W661 101st Street
      Lemont, IL     5,407       1,200       6,643       2,286       1,220       8,909       10,129       2,461       2001       (l )
175 Wall Street
      Glendale Heights, IL     1,482       427       2,363       163       433       2,520       2,953       517       2002       (l )
800-820 Thorndale Avenue
      Bensenville, IL     4,409       751       4,159       2,103       761       6,252       7,013       1,387       2002       (l )
251 Airport Road
      North Aurora, IL           983             6,767       983       6,767       7,750       1,247       2002       (l )
1661 Feehanville Drive
      Mount Prospect, IL           985       5,455       2,053       1,044       7,449       8,493       1,980       2004       (l )
1850 Touhy & 1158 McCage Ave
      Elk Grove Village, IL           1,500       4,842       (201 )     1,514       4,627       6,141       846       2004       (l )
1088-1130 Thorndale Avenue
      Bensenville, IL           2,103       3,674       145       2,108       3,814       5,922       926       2005       (l )
855-891 Busse Rd
      Bensenville, IL           1,597       2,767       (217 )     1,601       2,546       4,147       538       2005       (l )
1060-1074 W. Thorndale Ave
      Bensenville, IL           1,704       2,108       183       1,709       2,286       3,995       639       2005       (l )
400 Crossroads Pkwy
      Bolingbrook, IL     5,824       1,178       9,453       1,252       1,181       10,702       11,883       2,159       2005       (l )
7609 W. Industrial Drive
      Forest Park, IL           1,207       2,343       300       1,213       2,637       3,850       640       2005       (l )
7801 W. Industrial Drive
      Forest Park, IL           1,215       3,020       20       1,220       3,035       4,255       776       2005       (l )
825 E. 26th Street
      LaGrange, IL           1,547       2,078       2,761       1,617       4,769       6,386       1,193       2005       (l )
725 Kimberly Drive
      Carol Stream, IL           793       1,395       249       801       1,636       2,437       318       2005       (l )
17001 S. Vincennes
      Thornton, IL           497       504       103       513       591       1,104       233       2005       (l )
1111 Davis Road
      Elgin, IL           998       1,859       833       1,046       2,644       3,690       977       2006       (l )
2900 W. 166th Street
      Markham, IL           1,132       4,293       746       1,134       5,037       6,171       822       2007       (l )
555 W. Algonquin Rd
      Arlington Heights, IL     1,988       574       741       2,053       579       2,789       3,368       286       2007       (l )
7000 W. 60th Street
      Chicago, IL     1,044       609       932       106       667       980       1,647       298       2007       (l )
9501 Nevada
      Franklin Park, IL           2,721       5,630       502       2,737       6,116       8,853       673       2008       (l )
1501 Oakton Street
      Elk Grove Village, IL           3,369       6,121       139       3,482       6,147       9,629       586       2008       (l )
16500 W. 103rd Street
      Woodridge, IL           744       2,458       140       760       2,583       3,343       231       2008       (l )
Cincinnati
                                                                                       
9900-9970 Princeton
      Cincinnati, OH           545       3,088       1,836       566       4,903       5,469       1,862       1996       (l )
2940 Highland Avenue
      Cincinnati, OH           1,717       9,730       2,263       1,772       11,938       13,710       3,922       1996       (l )
4700-4750 Creek Road
      Blue Ash, OH           1,080       6,118       998       1,109       7,087       8,196       2,332       1996       (l )
901 Pleasant Valley Drive
      Springboro, OH           304       1,721       333       316       2,042       2,358       630       1998       (l )
4436 Mulhauser Road
      Hamilton, OH           630             5,046       630       5,046       5,676       982       2002       (l )
4438 Mulhauser Road
      Hamilton, OH           779             6,792       779       6,792       7,571       1,504       2002       (l )
420 Wards Corner Road
      Loveland, OH           600       1,083       932       606       2,009       2,615       662       2003       (l )

S-4


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
422 Wards Corner Road
      Loveland, OH           600       1,811       155       605       1,961       2,566       647       2003       (l )
4663 Dues Drive
      Westchester, OH           858       2,273       1,265       875       3,521       4,396       1,605       2005       (l )
9345 Princeton-Glendale Road
      Westchester, OH     1,691       818       1,648       428       840       2,054       2,894       617       2006       (l )
9525 Glades Drive
      Westchester, OH           347       1,323       87       355       1,402       1,757       237       2007       (l )
9776-9876 Windisch Road
      Westchester, OH           392       1,744       24       394       1,766       2,160       208       2007       (l )
9810-9822 Windisch Road
      Westchester, OH           395       2,541       6       397       2,545       2,942       212       2007       (l )
9842-9862 Windisch Road
      Westchester, OH           506       3,148       31       508       3,177       3,685       309       2007       (l )
9872-9898 Windisch Road
      Westchester, OH           546       3,039       65       548       3,102       3,650       296       2007       (l )
9902-9922 Windisch Road
      Westchester, OH           623       4,003       173       627       4,172       4,799       496       2007       (l )
Cleveland
                                                                                       
2368 E. Enterprise Pkwy
      Twinsburg, OH           294       1,857       (153 )     298       1,700       1,998       361       2006       (l )
30311 Emerald Valley Pkwy
      Glenwillow, OH           681       11,838       1,055       691       12,883       13,574       1,767       2006       (l )
30333 Emerald Valley Pkwy
      Glenwillow, OH           466       5,447       103       475       5,541       6,016       840       2006       (l )
7800 Cochran Road
      Glenwillow, OH           972       7,033       146       991       7,160       8,151       1,077       2006       (l )
7900 Cochran Road
      Glenwillow, OH           775       6,244       136       792       6,363       7,155       909       2006       (l )
7905 Cochran Road
      Glenwillow, OH           920       6,174       103       945       6,252       7,197       873       2006       (l )
30600 Carter Street
      Solon, OH           989       3,042       805       1,022       3,814       4,836       1,346       2006       (l )
8181 Darrow Road
      Twinsburg, OH           2,478       6,791       604       2,496       7,378       9,874       640       2008       (l )
Columbus
                                                                                       
3800 Lockbourne Industrial Pkwy
      Columbus, OH           1,045       6,421       647       1,045       7,068       8,113       2,260       1996       (l )
3880 Groveport Road
      Columbus, OH           1,955       12,154       311       1,955       12,465       14,420       4,062       1996       (l )
1819 North Walcutt Road
      Columbus, OH           637       4,590       474       634       5,067       5,701       1,540       1997       (l )
4115 Leap Road(d)
      Hillard, OH           756       4,297       1,413       756       5,710       6,466       1,622       1998       (l )
3300 Lockbourne
      Columbus, OH           708       3,920       1,234       710       5,152       5,862       1,392       1998       (l )
1076 Pittsburgh Drive
      Delaware, OH           2,265       4,733       (234 )     2,273       4,491       6,764       1,053       2005       (l )
6150 Huntly Road
      Columbus, OH           920       4,810       8       925       4,813       5,738       724       2005       (l )
4985 Frusta Drive
      Obetz, OH           318       837       255       326       1,084       1,410       242       2006       (l )
4311 Janitrol Road
      Columbus, OH           681       5,941       (221 )     670       5,731       6,401       723       2006       (l )
4600 S. Hamilton Road
      Groveport, OH           662       4,332       1,114       675       5,433       6,108       819       2007       (l )
Dallas/Fort Worth
                                                                                       
2406-2416 Walnut Ridge
      Dallas, TX           178       1,006       558       172       1,570       1,742       367       1997       (l )
2401-2419 Walnut Ridge
      Dallas, TX           148       839       278       142       1,123       1,265       314       1997       (l )
900-906 Great Southwest Pkwy
      Arlington, TX           237       1,342       575       270       1,884       2,154       651       1997       (l )
3000 West Commerce
      Dallas, TX           456       2,584       723       469       3,294       3,763       915       1997       (l )
3030 Hansboro
      Dallas, TX           266       1,510       535       276       2,035       2,311       561       1997       (l )

S-5


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
405-407 113th
      Arlington, TX           181       1,026       475       185       1,497       1,682       383       1997       (l )
816 111th Street
      Arlington, TX     873       251       1,421       128       258       1,542       1,800       466       1997       (l )
7427 Dogwood Park
      Richland Hills, TX           96       532       572       102       1,098       1,200       387       1998       (l )
7348-54 Tower Street
      Richland Hills, TX           88       489       225       94       708       802       188       1998       (l )
7339-41 Tower Street
      Richland Hills, TX           98       541       175       104       710       814       189       1998       (l )
7437-45 Tower Street
      Richland Hills, TX           102       563       113       108       670       778       178       1998       (l )
7331-59 Airport Freeway
      Richland Hills, TX           354       1,958       381       372       2,321       2,693       683       1998       (l )
7338-60 Dogwood Park
      Richland Hills, TX           106       587       128       112       709       821       194       1998       (l )
7450-70 Dogwood Park
      Richland Hills, TX           106       584       157       112       735       847       197       1998       (l )
7423-49 Airport Freeway
      Richland Hills, TX           293       1,621       387       308       1,993       2,301       572       1998       (l )
7400 Whitehall Street
      Richland Hills, TX           109       603       61       115       658       773       182       1998       (l )
1602-1654 Terre Colony
      Dallas, TX     1,870       458       2,596       801       468       3,387       3,855       739       2000       (l )
3330 Duncanville Road
      Dallas, TX           197       1,114       69       199       1,181       1,380       280       2000       (l )
2351-2355 Merritt Drive
      Garland, TX           101       574       129       103       701       804       158       2000       (l )
701-735 North Plano Road
      Richardson, TX           696       3,944       530       705       4,465       5,170       1,023       2000       (l )
2220 Merritt Drive
      Garland, TX           352       1,993       1,069       356       3,058       3,414       790       2000       (l )
2010 Merritt Drive
      Garland, TX           350       1,981       559       357       2,533       2,890       692       2000       (l )
2363 Merritt Drive
      Garland, TX           73       412       191       74       602       676       129       2000       (l )
2447 Merritt Drive
      Garland, TX           70       395       77       71       471       542       109       2000       (l )
2465-2475 Merritt Drive
      Garland, TX           91       514       145       92       658       750       143       2000       (l )
2485-2505 Merritt Drive
      Garland, TX           431       2,440       547       436       2,982       3,418       677       2000       (l )
2081 Hutton Drive — Bldg 1(e)
      Carrolton, TX     1,875       448       2,540       460       453       2,995       3,448       654       2001       (l )
2110 Hutton Drive
      Carrolton, TX           374       2,117       436       377       2,550       2,927       698       2001       (l )
2025 McKenzie Drive
      Carrolton, TX     1,583       437       2,478       348       442       2,821       3,263       666       2001       (l )
2019 McKenzie Drive
      Carrolton, TX     1,891       502       2,843       553       507       3,391       3,898       780       2001       (l )
1420 Valwood Parkway — Bldg 1(d)
      Carrolton, TX           460       2,608       751       466       3,353       3,819       732       2001       (l )
1620 Valwood Parkway(e)
      Carrolton, TX           1,089       6,173       1,354       1,100       7,516       8,616       1,633       2001       (l )
1505 Luna Road — Bldg II
      Carrolton, TX           167       948       68       169       1,014       1,183       230       2001       (l )
1625 West Crosby Road
      Carrolton, TX           617       3,498       584       631       4,068       4,699       951       2001       (l )
2029-2035 McKenzie Drive
      Carrolton, TX           306       1,870       698       306       2,568       2,874       919       2001       (l )
1840 Hutton Drive(d)
      Carrolton, TX           811       4,597       849       819       5,438       6,257       1,228       2001       (l )
1420 Valwood Pkwy — Bldg II
      Carrolton, TX           373       2,116       348       377       2,460       2,837       582       2001       (l )
2015 McKenzie Drive
      Carrolton, TX     2,086       510       2,891       434       516       3,319       3,835       772       2001       (l )
2009 McKenzie Drive
      Carrolton, TX           476       2,699       431       481       3,125       3,606       749       2001       (l )

S-6


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
1505 Luna Road — Bldg I
      Carrolton, TX           521       2,953       505       529       3,450       3,979       896       2001       (l )
2104 Hutton Drive
      Carrolton, TX           246       1,393       184       249       1,574       1,823       340       2001       (l )
900-1100 Avenue S
      Grand Prairie, TX     2,668       623       3,528       1,349       629       4,871       5,500       853       2002       (l )
Plano Crossing(f)
      Plano, TX     7,474       1,961       11,112       672       1,981       11,764       13,745       2,294       2002       (l )
7413A-C Dogwood Park
      Richland Hills, TX           110       623       150       111       772       883       140       2002       (l )
7450 Tower Street
      Richland Hills, TX           36       204       191       36       395       431       134       2002       (l )
7436 Tower Street
      Richland Hills, TX           57       324       162       58       485       543       147       2002       (l )
7426 Tower Street
      Richland Hills, TX           76       429       59       76       488       564       84       2002       (l )
7427-7429 Tower Street
      Richland Hills, TX           75       427       130       76       556       632       86       2002       (l )
2840-2842 Handley Ederville Rd
      Richland Hills, TX           112       635       59       113       693       806       134       2002       (l )
7451-7477 Airport Freeway
      Richland Hills, TX           256       1,453       235       259       1,685       1,944       342       2002       (l )
7415 Whitehall Street
      Richland Hills, TX           372       2,107       425       375       2,529       2,904       505       2002       (l )
7450 Whitehall Street
      Richland Hills, TX           104       591       110       105       700       805       122       2002       (l )
300 Wesley Way
      Richland Hills, TX     916       208       1,181       18       211       1,196       1,407       217       2002       (l )
7451 Dogwood Park
      Richland Hills, TX           133       753       43       134       795       929       155       2002       (l )
825-827 Avenue H(d)
      Arlington, TX           600       3,006       229       604       3,231       3,835       808       2004       (l )
1013-31 Avenue M
      Grand Prairie, TX           300       1,504       89       302       1,591       1,893       418       2004       (l )
1172-84 113th Street(d)
      Grand Prairie, TX     2,321       700       3,509       156       704       3,661       4,365       827       2004       (l )
1200-16 Avenue H(d)
      Arlington, TX     1,885       600       2,846       136       604       2,978       3,582       731       2004       (l )
1322-66 N. Carrier Parkway(e)
      Grand Prairie, TX           1,000       5,012       223       1,006       5,229       6,235       1,164       2004       (l )
2401-2407 Centennial Dr
      Arlington, TX     1,951       600       2,534       217       604       2,747       3,351       713       2004       (l )
3111 West Commerce Street
      Dallas, TX           1,000       3,364       63       1,011       3,416       4,427       872       2004       (l )
9150 West Royal Lane
      Irving, TX           818       3,767       351       820       4,116       4,936       828       2005       (l )
13800 Senlac Drive
      Farmers Ranch, TX           823       4,042       12       825       4,052       4,877       1,084       2005       (l )
801-831 S Great Southwest Pkwy(g)
      Grand Prairie, TX           2,581       16,556       (1,307 )     2,586       15,244       17,830       3,659       2005       (l )
801-842 Heinz Way
      Grand Prairie, TX           599       3,327       293       601       3,618       4,219       814       2005       (l )
901-937 Heinz Way
      Grand Prairie, TX           493       2,758       (14 )     481       2,756       3,237       694       2005       (l )
2900 Avenue E
      Arlington, TX           296             2,139       296       2,139       2,435       325       2005       (l )
3730 Wheeler Avenue
      Fort Smith, AR           720       2,800       28       726       2,822       3,548       356       2006       (l )
3301 Century Circle
      Irving, TX     2,589       760       3,856       204       771       4,049       4,820       336       2007       (l )
First Garland Dist Ctr
      Garland, TX           1,912             14,612       1,947       14,577       16,524       847       2008       (l )
202-210 N. Great Southwesst Pkwy
      Grand Prairie, TX           870       2,754       75       892       2,807       3,699       659       2008       (l )

S-7


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
Denver
                                                                                       
4785 Elati
      Denver, CO           173       981       109       175       1,088       1,263       344       1997       (l )
4770 Fox Street
      Denver, CO           132       750       72       134       820       954       245       1997       (l )
3871 Revere
      Denver, CO     1,465       361       2,047       612       368       2,652       3,020       932       1997       (l )
4570 Ivy Street
      Denver, CO     1,045       219       1,239       145       220       1,383       1,603       434       1997       (l )
5855 Stapleton Drive North
      Denver, CO     1,421       288       1,630       262       290       1,890       2,180       611       1997       (l )
5885 Stapleton Drive North
      Denver, CO     1,885       376       2,129       388       380       2,513       2,893       768       1997       (l )
5977-5995 North Broadway
      Denver, CO           268       1,518       350       271       1,865       2,136       568       1997       (l )
2952-5978 North Broadway
      Denver, CO           414       2,346       795       422       3,133       3,555       925       1997       (l )
4721 Ironton Street
      Denver, CO           232       1,313       7       236       1,316       1,552       458       1997       (l )
East 47th Drive — A
      Denver, CO           441       2,689       (34 )     441       2,655       3,096       850       1997       (l )
9500 West 49th Street — A
      Wheatridge, CO           283       1,625       8       287       1,629       1,916       539       1997       (l )
9500 West 49th Street — B
      Wheatridge, CO           225       1,272       108       227       1,378       1,605       438       1997       (l )
9500 West 49th Street — C
      Wheatridge, CO           600       3,409       93       601       3,501       4,102       1,116       1997       (l )
9500 West 49th Street — D
      Wheatridge, CO           246       1,537       294       247       1,830       2,077       565       1997       (l )
451-591 East 124th Avenue
      Littleton, CO           383       2,145       518       383       2,663       3,046       990       1997       (l )
608 Garrison Street
      Lakewood, CO           265       1,501       355       269       1,852       2,121       573       1997       (l )
610 Garrison Street
      Lakewood, CO           264       1,494       341       268       1,831       2,099       561       1997       (l )
15000 West 6th Avenue
      Golden, CO           913       5,174       859       918       6,028       6,946       1,919       1997       (l )
14998 West 6th Avenue Bldg E
      Golden, CO           565       3,199       173       570       3,367       3,937       1,029       1997       (l )
14998 West 6th Avenue Bldg F
      Englewood, CO           269       1,525       31       273       1,552       1,825       475       1997       (l )
12503 East Euclid Drive
      Denver, CO           1,208       6,905       1,165       1,208       8,070       9,278       2,529       1997       (l )
6547 South Racine Circle
      Englewood, CO     2,996       739       4,241       400       739       4,641       5,380       1,495       1997       (l )
1600 South Abilene
      Aurora, CO           465       2,633       72       467       2,703       3,170       832       1997       (l )
1620 South Abilene
      Aurora, CO           268       1,520       64       270       1,582       1,852       486       1997       (l )
1640 South Abilene
      Aurora, CO           368       2,085       108       382       2,179       2,561       669       1997       (l )
13900 East Florida Ave
      Aurora, CO           189       1,071       113       190       1,183       1,373       381       1997       (l )
11701 East 53rd Avenue
      Denver, CO           416       2,355       193       422       2,542       2,964       836       1997       (l )
5401 Oswego Street
      Denver, CO           273       1,547       222       278       1,764       2,042       569       1997       (l )
14818 West 6th Avenue Bldg A
      Golden, CO           468       2,799       372       468       3,171       3,639       1,023       1997       (l )
14828 West 6th Avenue Bldg B
      Golden, CO           503       2,942       375       503       3,317       3,820       1,120       1997       (l )
445 Bryant Street
      Denver, CO     6,856       1,829       10,219       2,083       1,829       12,302       14,131       3,615       1998       (l )
3811 Joliet
      Denver, CO           735       4,166       448       752       4,597       5,349       1,330       1998       (l )
12055 E 49th Ave/4955 Peoria
      Denver, CO           298       1,688       446       305       2,127       2,432       638       1998       (l )
4940-4950 Paris
      Denver, CO           152       861       184       156       1,041       1,197       313       1998       (l )

S-8


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
4970 Paris
      Denver, CO           95       537       121       97       656       753       188       1998       (l )
7367 South Revere Parkway
      Englewood, CO     3,299       926       5,124       750       934       5,866       6,800       1,765       1998       (l )
8200 East Park Meadows Drive(d)
      Lone Tree, CO           1,297       7,348       861       1,304       8,202       9,506       2,019       2000       (l )
3250 Quentin(d)
      Aurora, CO           1,220       6,911       669       1,230       7,570       8,800       1,797       2000       (l )
Highpoint Bus Ctr B
      Littleton, CO           739             3,566       781       3,524       4,305       871       2000       (l )
1130 W. 124th Ave
      Westminster, CO           441             4,489       441       4,489       4,930       1,697       2000       (l )
1070 W. 124th Ave
      Westminster, CO           374             3,042       374       3,042       3,416       650       2000       (l )
1020 W. 124th Ave
      Westminster, CO           374             2,924       374       2,924       3,298       747       2000       (l )
Jeffco Bus Ctr Phase I
      Broomfield, CO           312             1,403       370       1,345       1,715       289       2001       (l )
960 W. 124th Ave
      Westminster, CO           441             3,753       441       3,753       4,194       1,075       2001       (l )
8820 W. 116th Street
      Broomfield, CO           338       1,918       282       372       2,166       2,538       386       2003       (l )
8835 W. 116th Street
      Broomfield, CO           1,151       6,523       1,106       1,304       7,476       8,780       1,361       2003       (l )
18150 E. 32nd Street
      Aurora, CO     2,217       563       3,188       819       572       3,998       4,570       1,183       2004       (l )
3400 Fraser Street
      Aurora, CO     2,492       616       3,593       9       620       3,598       4,218       697       2005       (l )
7005 E. 46th Avenue Drive
      Denver, CO     1,513       512       2,025       60       517       2,080       2,597       331       2005       (l )
4001 Salazar Way
      Frederick, CO           1,271       6,508       26       1,276       6,529       7,805       1,006       2006       (l )
1690 S. Abilene
      Aurora, CO           406       2,814       47       411       2,856       3,267       467       2006       (l )
5909-5915 N. Broadway
      Denver, CO     1,047       495       1,268       176       500       1,439       1,939       317       2006       (l )
555 Corporate Circle
      Golden, CO           499       2,673       63       559       2,676       3,235       392       2006       (l )
Detroit
                                                                                       
1731 Thorncroft
      Troy, MI           331       1,904       143       331       2,047       2,378       793       1994       (l )
1653 E. Maple
      Troy, MI           192       1,104       156       192       1,260       1,452       477       1994       (l )
47461 Clipper
      Plymouth Township, MI           122       723       103       122       826       948       338       1994       (l )
238 Executive Drive
      Troy, MI           52       173       514       100       639       739       546       1994       (l )
301 Executive Drive
      Troy, MI           71       293       657       133       888       1,021       823       1994       (l )
449 Executive Drive
      Troy, MI           125       425       944       218       1,276       1,494       1,169       1994       (l )
501 Executive Drive
      Troy, MI           71       236       616       129       794       923       546       1994       (l )
451 Robbins Drive
      Troy, MI           96       448       861       192       1,213       1,405       1,082       1994       (l )
1095 Crooks Road
      Troy, MI           331       1,017       2,238       360       3,226       3,586       1,706       1994       (l )
1416 Meijer Drive
      Troy, MI           94       394       520       121       887       1,008       684       1994       (l )
1624 Meijer Drive
      Troy, MI           236       1,406       940       373       2,209       2,582       1,660       1994       (l )
1972 Meijer Drive
      Troy, MI           315       1,301       738       372       1,982       2,354       1,400       1994       (l )
1621 Northwood Drive
      Troy, MI           85       351       1,014       215       1,235       1,450       1,134       1994       (l )
1707 Northwood Drive
      Troy, MI           95       262       1,383       239       1,501       1,740       1,117       1994       (l )
1788 Northwood Drive
      Troy, MI           50       196       507       103       650       753       574       1994       (l )

S-9


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
1821 Northwood Drive
      Troy, MI           132       523       744       220       1,179       1,399       1,149       1994       (l )
1826 Northwood Drive
      Troy, MI           55       208       472       103       632       735       541       1994       (l )
1864 Northwood Drive
      Troy, MI           57       190       489       107       629       736       560       1994       (l )
2277 Elliott Avenue
      Troy, MI           48       188       536       104       668       772       567       1994       (l )
2451 Elliott Avenue
      Troy, MI           78       319       766       164       999       1,163       912       1994       (l )
2730 Research Drive
      Rochester Hills, MI           903       4,215       1,402       903       5,617       6,520       3,446       1994       (l )
2791 Research Drive
      Rochester Hills, MI           557       2,731       719       560       3,447       4,007       2,106       1994       (l )
2871 Research Drive
      Rochester Hills, MI           324       1,487       824       327       2,308       2,635       1,344       1994       (l )
3011 Research Drive
      Rochester Hills, MI           457       2,104       376       457       2,480       2,937       1,671       1994       (l )
2870 Technology Drive
      Rochester Hills, MI           275       1,262       280       279       1,538       1,817       1,028       1994       (l )
2900 Technology Drive
      Rochester Hills, MI           214       977       536       219       1,508       1,727       935       1994       (l )
2930 Technology Drive
      Rochester Hills, MI           131       594       379       138       966       1,104       545       1994       (l )
2950 Technology Drive
      Rochester Hills, MI           178       819       374       185       1,186       1,371       706       1994       (l )
23014 Commerce Drive
      Farmington Hills, MI           39       203       216       56       402       458       260       1994       (l )
23028 Commerce Drive
      Farmington Hills, MI           98       507       278       125       758       883       550       1994       (l )
23035 Commerce Drive
      Farmington Hills, MI           71       355       247       93       580       673       419       1994       (l )
23042 Commerce Drive
      Farmintgon Hills, MI           67       277       273       89       528       617       397       1994       (l )
23065 Commerce Drive
      Farmington Hills, MI           71       408       207       93       593       686       425       1994       (l )
23070 Commerce Drive
      Farmington Hills, MI           112       442       346       125       775       900       573       1994       (l )
23079 Commerce Drive
      Farmington Hills, MI           68       301       289       79       579       658       373       1994       (l )
23093 Commerce Drive
      Farmington Hills, MI           211       1,024       844       295       1,784       2,079       1,375       1994       (l )
23135 Commerce Drive
      Farmington Hills, MI           146       701       377       158       1,066       1,224       653       1994       (l )
23163 Commerce Drive
      Farmington Hills, MI           111       513       341       138       827       965       547       1994       (l )
23177 Commerce Drive
      Farmington Hills, MI           175       1,007       593       254       1,521       1,775       1,034       1994       (l )
23206 Commerce Drive
      Farmington Hills, MI           125       531       307       137       826       963       572       1994       (l )
23370 Commerce Drive
      Farmington Hills, MI           59       233       175       66       401       467       333       1994       (l )
6515 Cobb Drive
      Sterling Heights, MI           305       1,753       258       305       2,011       2,316       744       1994       (l )
1451 East Lincoln Avenue
      Madison Heights, MI           299       1,703       273       306       1,969       2,275       747       1995       (l )
4400 Purks Drive
      Auburn Hills, MI           602       3,410       3,201       612       6,601       7,213       2,204       1995       (l )
32450 N Avis Drive
      Madison Heights, MI           281       1,590       193       286       1,778       2,064       604       1996       (l )
12707 Eckles Road
      Plymouth Township, MI           255       1,445       237       267       1,670       1,937       529       1996       (l )
9300-9328 Harrison Rd
      Romulus, MI           147       834       395       154       1,222       1,376       358       1996       (l )
9330-9358 Harrison Rd
      Romulus, MI           81       456       280       85       732       817       246       1996       (l )
28420-28448 Highland Rd
      Romulus, MI           143       809       113       149       916       1,065       292       1996       (l )
28450-28478 Highland Rd
      Romulus, MI           81       461       500       85       957       1,042       233       1996       (l )

S-10


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
28421-28449 Highland Rd
      Romulus, MI           109       617       385       114       997       1,111       305       1996       (l )
28451-28479 Highland Rd
      Romulus, MI           107       608       335       112       938       1,050       314       1996       (l )
28825-28909 Highland Rd
      Romulus, MI           70       395       306       73       698       771       235       1996       (l )
28933-29017 Highland Rd
      Romulus, MI           112       634       286       117       915       1,032       298       1996       (l )
28824-28908 Highland Rd
      Romulus, MI           134       760       220       140       974       1,114       321       1996       (l )
28932-29016 Highland Rd
      Romulus, MI           123       694       315       128       1,004       1,132       341       1996       (l )
9710-9734 Harrison Rd
      Romulus, MI           125       706       172       130       873       1,003       260       1996       (l )
9740-9772 Harrison Rd
      Romulus, MI           132       749       219       138       962       1,100       288       1996       (l )
9840-9868 Harrison Rd
      Romulus, MI           144       815       169       151       977       1,128       337       1996       (l )
9800-9824 Harrison Rd
      Romulus, MI           117       664       165       123       823       946       281       1996       (l )
29265-29285 Airport Dr
      Romulus, MI           140       794       226       147       1,013       1,160       333       1996       (l )
29185-29225 Airport Dr
      Romulus, MI           140       792       323       146       1,109       1,255       366       1996       (l )
29149-29165 Airport Dr
      Romulus, MI           216       1,225       265       226       1,480       1,706       500       1996       (l )
29101-29115 Airport Dr
      Romulus, MI           130       738       272       136       1,004       1,140       341       1996       (l )
29031-29045 Airport Dr
      Romulus, MI           124       704       166       130       864       994       301       1996       (l )
29050-29062 Airport Dr
      Romulus, MI           127       718       153       133       865       998       287       1996       (l )
29120-29134 Airport Dr
      Romulus, MI           161       912       296       169       1,200       1,369       410       1996       (l )
29200-29214 Airport Dr
      Romulus, MI           170       963       297       178       1,252       1,430       426       1996       (l )
9301-9339 Middlebelt Rd
      Romulus, MI           124       703       239       130       936       1,066       327       1996       (l )
26980 Trolley Industrial Drive
      Taylor, MI           450       2,550       926       463       3,463       3,926       1,155       1997       (l )
32975 Capitol Avenue
      Livonia, MI           135       748       332       144       1,071       1,215       382       1998       (l )
2725 S. Industrial Highway
      Ann Arbor, MI           660       3,654       497       704       4,107       4,811       1,212       1998       (l )
32920 Capitol Avenue
      Livonia, MI           76       422       103       82       519       601       148       1998       (l )
11923 Brookfield Avenue
      Livonia, MI           120       665       278       128       935       1,063       326       1998       (l )
11965 Brookfield Avenue
      Livonia, MI           120       665       67       128       724       852       210       1998       (l )
13405 Stark Road
      Livonia, MI           46       254       85       49       336       385       89       1998       (l )
1170 Chicago Road
      Troy, MI           249       1,380       255       266       1,618       1,884       464       1998       (l )
1200 Chicago Road
      Troy, MI           268       1,483       284       286       1,749       2,035       494       1998       (l )
450 Robbins Drive
      Troy, MI           166       920       260       178       1,168       1,346       340       1998       (l )
1230 Chicago Road
      Troy, MI           271       1,498       156       289       1,636       1,925       474       1998       (l )
12886 Westmore Avenue
      Livonia, MI           190       1,050       194       202       1,232       1,434       355       1998       (l )
12898 Westmore Avenue
      Livonia, MI           190       1,050       244       202       1,282       1,484       348       1998       (l )
33025 Industrial Road
      Livonia, MI           80       442       108       85       545       630       153       1998       (l )
47711 Clipper Street
      Plymouth Township, MI           539       2,983       265       575       3,212       3,787       932       1998       (l )
32975 Industrial Road
      Livonia, MI           160       887       196       171       1,072       1,243       311       1998       (l )

S-11


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
32985 Industrial Road
      Livonia, MI           137       761       154       147       905       1,052       271       1998       (l )
32995 Industrial Road
      Livonia, MI           160       887       187       171       1,063       1,234       302       1998       (l )
12874 Westmore Avenue
      Livonia, MI           137       761       206       147       957       1,104       314       1998       (l )
33067 Industrial Road
      Livonia, MI           160       887       324       171       1,200       1,371       395       1998       (l )
1775 Bellingham
      Troy, MI           344       1,902       365       367       2,244       2,611       618       1998       (l )
1785 East Maple
      Troy, MI           92       507       162       98       663       761       172       1998       (l )
1807 East Maple
      Troy, MI           321       1,775       375       342       2,129       2,471       593       1998       (l )
980 Chicago
      Troy, MI           206       1,141       176       220       1,303       1,523       363       1998       (l )
1840 Enterprise Drive
      Rochester Hills, MI           573       3,170       323       611       3,455       4,066       994       1998       (l )
1885 Enterprise Drive
      Rochester Hills, MI           209       1,158       146       223       1,290       1,513       375       1998       (l )
1935-55 Enterprise Drive
      Rochester Hills, MI           1,285       7,144       664       1,371       7,722       9,093       2,253       1998       (l )
5500 Enterprise Court
      Warren, MI           675       3,737       636       721       4,327       5,048       1,308       1998       (l )
750 Chicago Road
      Troy, MI           323       1,790       483       345       2,251       2,596       651       1998       (l )
800 Chicago Road
      Troy, MI           283       1,567       351       302       1,899       2,201       530       1998       (l )
850 Chicago Road
      Troy, MI           183       1,016       261       196       1,264       1,460       367       1998       (l )
2805 S. Industrial Highway
      Ann Arbor, MI           318       1,762       689       340       2,429       2,769       720       1998       (l )
6833 Center Drive
      Sterling Heights, MI           467       2,583       218       493       2,775       3,268       826       1998       (l )
32201 North Avis Drive
      Madison Heights, MI           345       1,911       232       349       2,139       2,488       629       1998       (l )
1100 East Mandoline Road
      Madison Heights, MI           888       4,915       1,686       897       6,592       7,489       1,753       1998       (l )
30081 Stephenson Highway
      Madison Heights, MI           271       1,499       353       274       1,849       2,123       544       1998       (l )
1120 John A. Papalas Drive(e)
      Lincoln Park, MI           366       3,241       1,351       469       4,489       4,958       1,296       1998       (l )
4872 S. Lapeer Road
      Lake Orion Twsp, MI           1,342       5,441       792       1,412       6,163       7,575       1,882       1999       (l )
22701 Trolley Industrial
      Taylor, MI           795             7,366       849       7,312       8,161       1,738       1999       (l )
1400 Allen Drive
      Troy, MI           209       1,154       338       212       1,489       1,701       399       2000       (l )
1408 Allen Drive
      Troy, MI           151       834       133       153       965       1,118       226       2000       (l )
1305 Stephenson Hwy
      Troy, MI           345       1,907       255       350       2,157       2,507       471       2000       (l )
32505 Industrial Drive
      Madison Heights, MI           345       1,910       695       351       2,599       2,950       817       2000       (l )
1799-1813 Northfield Drive(d)
      Rochester Hills, MI           481       2,665       282       490       2,938       3,428       672       2000       (l )
28435 Automation Blvd
      Wixom, MI           621             3,810       628       3,803       4,431       577       2004       (l )
32200 N Avis Drive
      Madison Heights, MI           503       3,367       1,370       503       4,737       5,240       563       2005       (l )
100 Kay Industrial Drive
      Rion Township, MI           677       2,018       404       685       2,414       3,099       840       2005       (l )
1849 West Maple Road
      Troy, MI           1,688       2,790       (99 )     1,700       2,679       4,379       402       2005       (l )
35000 Capitol Avenue
      Livonia, MI           258       1,032       324       260       1,354       1,614       134       2005       (l )
32650 Capitol Avenue
      Livonia, MI           282       1,128       55       284       1,181       1,465       148       2005       (l )
11800 Sears Drive
      Livonia, MI           693       1,507       2,053       703       3,550       4,253       755       2005       (l )

S-12


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
1099 Chicago Road
      Troy, MI           1,277       1,332       183       1,316       1,476       2,792       530       2005       (l )
42555 Merrill Road
      Sterling Heights, MI           1,080       2,300       3,702       1,090       5,992       7,082       1,032       2006       (l )
2441 N. Opdyke Road
      Auburn Hills, MI           530       737       16       538       745       1,283       212       2006       (l )
200 Northpointe Drive
      Orion Township, MI           723       2,063       36       734       2,088       2,822       348       2006       (l )
Houston
                                                                                       
2102-2314 Edwards Street
      Houston, TX           348       1,973       1,547       382       3,486       3,868       1,017       1997       (l )
3351 Rauch St
      Houston, TX           272       1,541       267       278       1,802       2,080       523       1997       (l )
3851 Yale St
      Houston, TX           413       2,343       584       425       2,915       3,340       1,003       1997       (l )
3337-3347 Rauch Street
      Houston, TX     943       227       1,287       220       233       1,501       1,734       443       1997       (l )
8505 N Loop East
      Houston, TX     1,724       439       2,489       626       449       3,105       3,554       885       1997       (l )
4749-4799 Eastpark Dr
      Houston, TX     2,459       594       3,368       1,107       611       4,458       5,069       1,295       1997       (l )
4851 Homestead Road
      Houston, TX           491       2,782       899       504       3,668       4,172       1,083       1997       (l )
3365-3385 Rauch Street
      Houston, TX           284       1,611       398       290       2,003       2,293       596       1997       (l )
5050 Campbell Road
      Houston, TX     1,685       461       2,610       401       470       3,002       3,472       899       1997       (l )
4300 Pine Timbers
      Houston, TX           489       2,769       666       499       3,425       3,924       1,031       1997       (l )
2500-2530 Fairway Park Drive
      Houston, TX     3,174       766       4,342       1,434       792       5,750       6,542       1,595       1997       (l )
6550 Longpointe
      Houston, TX     1,393       362       2,050       458       370       2,500       2,870       731       1997       (l )
1815 Turning Basin Dr
      Houston, TX     1,885       487       2,761       637       531       3,354       3,885       988       1997       (l )
1819 Turning Basin Dr
      Houston, TX           231       1,308       489       251       1,777       2,028       585       1997       (l )
1805 Turning Basin Drive
      Houston, TX     2,201       564       3,197       775       616       3,920       4,536       1,160       1997       (l )
9835A Genard Road
      Houston, TX           1,505       8,333       3,100       1,581       11,357       12,938       2,548       1999       (l )
9835B Genard Road
      Houston, TX           245       1,357       646       256       1,992       2,248       485       1999       (l )
11505 State Highway 225
      LaPorte City, TX     4,769       940       4,675       615       940       5,290       6,230       910       2005       (l )
1500 E. Main Street
      Houston, TX           201       1,328       24       204       1,349       1,553       432       2005       (l )
700 Industrial Blvd
      Sugar Land, TX           608       3,679       341       617       4,011       4,628       444       2007       (l )
7230-7238 Wynnwood
      Houston, TX           254       764       79       259       838       1,097       159       2007       (l )
7240-7248 Wynnwood
      Houston, TX           271       726       77       276       798       1,074       150       2007       (l )
7250-7260 Wynnwood
      Houston, TX           200       481       35       203       513       716       86       2007       (l )
6400 Long Point
      Houston, TX     802       188       898       (6 )     188       892       1,080       159       2007       (l )
12705 S. Kirkwood, Ste 100-150
      Stafford, TX           154       626       20       155       645       800       103       2007       (l )
12705 S. Kirkwood, Ste 200-220
      Stafford, TX           404       1,698       109       413       1,798       2,211       288       2007       (l )
8850 Jameel
      Houston, TX           171       826       70       171       896       1,067       164       2007       (l )
8800 Jameel
      Houston, TX           163       798             163       798       961       113       2007       (l )
8700 Jameel
      Houston, TX           170       1,020       190       170       1,210       1,380       161       2007       (l )
8600 Jameel
      Houston, TX           163       818       (30 )     163       788       951       105       2007       (l )

S-13


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
Indianapolis
                                                                                       
2900 N Shadeland Avenue
      Indianapolis, IN           2,057       13,565       4,106       2,057       17,671       19,728       6,249       1996       (l )
1445 Brookville Way
      Indianapolis, IN           459       2,603       693       476       3,279       3,755       1,101       1996       (l )
1440 Brookville Way
      Indianapolis, IN           665       3,770       1,091       685       4,841       5,526       1,898       1996       (l )
1240 Brookville Way
      Indianapolis, IN           247       1,402       346       258       1,737       1,995       616       1996       (l )
1345 Brookville Way
      Indianapolis, IN           586       3,321       808       601       4,114       4,715       1,443       1996       (l )
1350 Brookville Way
      Indianapolis, IN           205       1,161       308       212       1,462       1,674       482       1996       (l )
1341 Sadlier Circle E Dr
      Indianapolis, IN           131       743       197       136       935       1,071       313       1996       (l )
1322-1438 Sadlier Circle E Dr
      Indianapolis, IN           145       822       188       152       1,003       1,155       328       1996       (l )
1327-1441 Sadlier Circle E Dr
      Indianapolis, IN           218       1,234       383       225       1,610       1,835       595       1996       (l )
1304 Sadlier Circle E Dr
      Indianapolis, IN           71       405       181       75       582       657       169       1996       (l )
1402 Sadlier Circle E Dr
      Indianapolis, IN           165       934       349       171       1,277       1,448       485       1996       (l )
1504 Sadlier Circle E Dr
      Indianapolis, IN           219       1,238       391       226       1,622       1,848       519       1996       (l )
1311 Sadlier Circle E Dr
      Indianapolis, IN           54       304       109       57       410       467       151       1996       (l )
1365 Sadlier Circle E Dr
      Indianapolis, IN           121       688       295       126       978       1,104       357       1996       (l )
1352-1354 Sadlier Circle E Dr
      Indianapolis, IN           178       1,008       348       184       1,350       1,534       488       1996       (l )
1335 Sadlier Circle E Dr
      Indianapolis, IN           81       460       326       85       782       867       295       1996       (l )
1327 Sadlier Circle E Dr
      Indianapolis, IN           52       295       51       55       343       398       116       1996       (l )
1425 Sadlier Circle E Dr
      Indianapolis, IN           21       117       39       23       154       177       53       1996       (l )
6951 E 30th St
      Indianapolis, IN           256       1,449       222       265       1,662       1,927       574       1996       (l )
6701 E 30th St
      Indianapolis, IN           78       443       59       82       498       580       167       1996       (l )
6737 E 30th St
      Indianapolis, IN           385       2,181       307       398       2,475       2,873       921       1996       (l )
6555 E 30th St
      Indianapolis, IN     3,611       484       4,760       1,521       484       6,281       6,765       2,286       1996       (l )
8402-8440 E 33rd St
      Indianapolis, IN           222       1,260       542       230       1,794       2,024       595       1996       (l )
8520-8630 E 33rd St
      Indianapolis, IN           326       1,848       595       336       2,433       2,769       832       1996       (l )
8710-8768 E 33rd St
      Indianapolis, IN           175       993       506       187       1,487       1,674       471       1996       (l )
3316-3346 N. Pagosa Court
      Indianapolis, IN     1,430       325       1,842       512       335       2,344       2,679       924       1996       (l )
7901 West 21st St. 
      Indianapolis, IN           1,048       6,027       248       1,048       6,275       7,323       1,959       1997       (l )
1225 Brookville Way
      Indianapolis, IN           60             461       68       453       521       153       1997       (l )
6751 E 30th St
      Indianapolis, IN           728       2,837       271       741       3,095       3,836       934       1997       (l )
9200 East 146th Street
      Noblesville, IN           181       1,221       872       181       2,093       2,274       625       1998       (l )
6575 East 30th Street
      Indianapolis, IN           118             2,081       128       2,071       2,199       589       1998       (l )
6585 East 30th Street
      Indianapolis, IN           196             3,192       196       3,192       3,388       944       1998       (l )
9210 E. 146th Street
      Noblesville, IN           66       684       818       66       1,502       1,568       751       1998       (l )
5705-97 Park Plaza Ct
      Indianapolis, IN     2,236       600       2,194       409       609       2,594       3,203       554       2003       (l )

S-14


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
9319-9341 Castlegate Drive
      Indianapolis, IN           530       1,235       1,083       544       2,304       2,848       698       2003       (l )
1133 Northwest L Street
      Richmond, IN     1,254       201       1,358       (90 )     208       1,261       1,469       432       2006       (l )
14425 Bergen Blvd
      Noblesville, IN           647             3,861       743       3,765       4,508       310       2007       (l )
Inland Empire
                                                                                       
3411 N. Perris Boulevard
      Riverside, CA           8,125       7,150       99       8,560       6,814       15,374       1,423       2007       (l )
100 West Sinclair
      Riverside, CA           6,042       4,298       (5,789 )     2,245       2,306       4,551       754       2007       (l )
14050 Day Street
      Moreno Valley, CA           2,538       2,538       288       2,565       2,798       5,363       222       2008       (l )
12925 Marlay Avenue
      Fontana, CA           6,072       7,891       (28 )     6,090       7,845       13,935       771       2008       (l )
Los Angeles
                                                                                       
1944 Vista Bella Way
      Rancho Domingue, CA     3,444       1,746       3,148       584       1,822       3,656       5,478       729       2005       (l )
2000 Vista Bella Way
      Rancho Domingue, CA     1,397       817       1,673       295       853       1,932       2,785       382       2005       (l )
2835 East Ana Street
      Rancho Domingue, CA     3,015       1,682       2,750       141       1,772       2,801       4,573       708       2005       (l )
665 N. Baldwin Park Blvd. 
      City of Industry, CA     4,575       2,124       5,219       1,662       2,143       6,862       9,005       873       2006       (l )
27801 Avenue Scott
      Santa Clarita, CA           2,890       7,020       580       2,902       7,588       10,490       927       2006       (l )
2610&2660 Columbia St
      Torrance, CA     4,749       3,008       5,826       344       3,031       6,147       9,178       717       2006       (l )
433 Alaska Avenue
      Torrance, CA           681       168       5       684       170       854       78       2006       (l )
4020 S. Compton Ave
      Los Angeles, CA           3,800       7,330       71       3,825       7,376       11,201       760       2006       (l )
21730-21748 Marilla St. 
      Chatsworth, CA     3,129       2,585       3,210       149       2,608       3,336       5,944       415       2007       (l )
8015 Paramount
      Pico Rivera, CA           3,616       3,902       61       3,657       3,922       7,579       495       2007       (l )
3365 E. Slauson
      Vernon, CA           2,367       3,243       40       2,396       3,254       5,650       433       2007       (l )
3015 East Ana
      Rancho Domingue, CA           19,678       9,321       7,451       20,144       16,306       36,450       1,522       2007       (l )
19067 Reyes Ave
      Rancho Domingue, CA           9,281       3,920       119       9,381       3,939       13,320       602       2007       (l )
1250 Rancho Conejo Blvd. 
      Thousand Oaks, CA           1,435       779       36       1,441       809       2,250       111       2007       (l )
1260 Rancho Conejo Blvd. 
      Thousand Oaks, CA           1,353       722       227       1,359       943       2,302       102       2007       (l )
1270 Rancho Conejo Blvd. 
      Thousand Oaks, CA           1,224       716       21       1,229       732       1,961       116       2007       (l )
1280 Rancho Conejo Blvd. 
      Thousand Oaks, CA     3,213       2,043       3,408       40       2,051       3,440       5,491       397       2007       (l )
1290 Rancho Conejo Blvd
      Thousand Oaks, CA     2,769       1,754       2,949       35       1,761       2,977       4,738       346       2007       (l )
18201-18291 Santa Fe
      Rancho Domingue, CA           6,720             8,946       6,897       8,769       15,666       451       2008       (l )
1011 Rancho Conejo
      Thousand Oaks, CA     6,249       7,717       2,518       46       7,752       2,528       10,280       447       2008       (l )
2300 Corporate Center Drive
      Thousand Oaks, CA           6,506       4,885       51       6,541       4,901       11,442       624       2008       (l )
20700 Denker Avenue
      Rancho Domingue, CA           5,767       2,538       2,458       5,964       4,800       10,764       317       2008       (l )
18408 Laurel Park Road
      Rancho Domingue, CA           2,850       2,850       643       2,874       3,469       6,343       204       2008       (l )
19021 S. Reyes Ave
      Rancho Domingue, CA           8,183       7,501       549       8,545       7,688       16,233       310       2008       (l )
Miami
                                                                                       
4700 NW 15th Ave
      Ft. Lauderdale, FL           908       1,883       155       912       2,034       2,946       234       2007       (l )

S-15


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
4710 NW 15th Ave
      Ft. Lauderdale, FL           830       2,722       194       834       2,912       3,746       296       2007       (l )
4720 NW 15th Ave
      Ft. Lauderdale, FL           937       2,455       105       942       2,555       3,497       262       2007       (l )
4740 NW 15th Ave
      Ft. Lauderdale, FL           1,107       3,111       209       1,112       3,315       4,427       328       2007       (l )
4750 NW 15th Ave
      Ft. Lauderdale, FL           947       3,079       521       951       3,596       4,547       346       2007       (l )
4800 NW 15th Ave
      Ft. Lauderdale, FL           1,092       3,308       367       1,097       3,670       4,767       542       2007       (l )
Medley Industrial Center
      Medley, FL           857       3,428       2,826       864       6,247       7,111       383       2007       (l )
Pan American Business Park
      Medley, FL           2,521             7,105       2,588       7,038       9,626             2008       (l )
Milwaukee
                                                                                       
N25 W23050 Paul Road
      Pewaukee, WI           474       2,723       1,937       485       4,649       5,134       1,906       1994       (l )
N25 W23255 Paul Road
      Pewaukee, WI     2,231       569       3,270       379       573       3,645       4,218       1,329       1994       (l )
6523 N Sydney Place
      Glendale, WI           172       976       356       176       1,328       1,504       482       1995       (l )
5355 South Westridge Drive
      New Berlin, WI     5,674       1,630       7,058       46       1,646       7,088       8,734       1,197       2004       (l )
320-334 W. Vogel Avenue
      Milwaukee, WI           506       3,199       46       508       3,243       3,751       938       2005       (l )
4950 South 6th Avenue
      Milwaukee, WI           299       1,565       47       301       1,610       1,911       556       2005       (l )
1711 Paramount Court
      Waukesha, WI     1,327       308       1,762       41       311       1,800       2,111       317       2005       (l )
17005 W. Ryerson Road
      New Berlin, WI           403       3,647       16       405       3,661       4,066       860       2005       (l )
W140 N9059 Lilly Road
      Menomonee Falls, WI           343       1,153       248       366       1,378       1,744       383       2005       (l )
200 W. Vogel Avenue-Bldg B
      Milwaukee, WI           301       2,150             302       2,149       2,451       537       2005       (l )
4921 S. 2nd Street
      Milwaukee, WI           101       713       15       101       728       829       182       2005       (l )
1500 Peebles Drive
      Richland Center, WI           1,577       1,018       (211 )     1,603       781       2,384       620       2005       (l )
16600 West Glendale Ave
      New Berlin, WI           704       1,923       436       715       2,348       3,063       658       2006       (l )
2905 S. 160th Street
      New Berlin, WI           261       672       153       265       821       1,086       157       2007       (l )
2855 S. 160th Street
      New Berlin, WI           221       628       128       225       752       977       163       2007       (l )
2485 Commerce Drive
      New Berlin, WI           483       1,516       216       491       1,724       2,215       267       2007       (l )
14518 Whittaker Way
      Menomonee Falls, WI           437       1,082       83       445       1,157       1,602       254       2007       (l )
Rust-Oleum BTS
      Kenosha, WI     14,561       4,100             18,448       3,212       19,336       22,548       556       2008       (l )
Menomonee Falls-Barry Land
      Menomonee Falls, WI     11,349       1,188             14,076       1,204       14,060       15,264       335       2008       (l )
Minneapolis/St. Paul
                                                                                       
6201 West 111th Street
      Bloomington, MN     4,700       1,358       8,622       5,013       1,499       13,494       14,993       7,867       1994       (l )
7251-7267 Washington Avenue
      Edina, MN           129       382       624       182       953       1,135       736       1994       (l )
7301-7325 Washington Avenue
      Edina, MN           174       391       (55 )     193       317       510       79       1994       (l )
7101 Winnetka Avenue North
      Brooklyn Park, MN     5,955       2,195       6,084       3,996       2,228       10,047       12,275       5,913       1994       (l )
9901 West 74th Street
      Eden Prairie, MN     3,484       621       3,289       3,271       639       6,542       7,181       4,371       1994       (l )
1030 Lone Oak Road
      Eagan, MN     2,326       456       2,703       541       456       3,244       3,700       1,168       1994       (l )
1060 Lone Oak Road
      Eagan, MN     3,118       624       3,700       635       624       4,335       4,959       1,747       1994       (l )

S-16


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
5400 Nathan Lane
      Plymouth, MN     2,981       749       4,461       935       757       5,388       6,145       1,983       1994       (l )
6655 Wedgewood Road
      Maple Grove, MN     6,878       1,466       8,342       3,196       1,466       11,538       13,004       3,942       1994       (l )
10120 W 76th Street
      Eden Prairie, MN           315       1,804       1,404       315       3,208       3,523       845       1995       (l )
12155 Nicollet Ave
      Burnsville, MN           286             1,731       288       1,729       2,017       619       1995       (l )
4100 Peavey Road
      Chaska, MN           277       2,261       843       277       3,104       3,381       1,047       1996       (l )
5205 Highway 169
      Plymouth, MN           446       2,525       988       740       3,219       3,959       1,059       1996       (l )
7100-7198 Shady Oak Road
      Eden Prairie, MN           715       4,054       1,209       736       5,242       5,978       1,628       1996       (l )
7500-7546 Washington Square
      Eden Prairie, MN           229       1,300       830       235       2,124       2,359       613       1996       (l )
7550-7558 Washington Square
      Eden Prairie, MN           153       867       203       157       1,066       1,223       325       1996       (l )
5240-5300 Valley Industrial Blvd S
      Shakopee, MN           362       2,049       801       371       2,841       3,212       1,015       1996       (l )
500-530 Kasota Avenue SE
      Minneapolis, MN           415       2,354       775       434       3,110       3,544       935       1998       (l )
2530-2570 Kasota Avenue
      St. Paul, MN           407       2,308       972       467       3,220       3,687       975       1998       (l )
5775 12th Avenue
      Shakopee, MN     4,034       590             5,827       590       5,827       6,417       1,389       1998       (l )
1157 Valley Park Drive
      Shakopee, MN     4,487       760             6,377       888       6,249       7,137       1,627       1999       (l )
9600 West 76th Street
      Eden Prairie, MN           1,000       2,450       48       1,034       2,464       3,498       464       2004       (l )
9700 West 76th Street
      Eden Prairie, MN           1,000       2,709       170       1,038       2,841       3,879       532       2004       (l )
7600 69th Avenue
      Greenfield, MN           1,500       8,328       1,808       1,510       10,126       11,636       2,041       2004       (l )
5017 Boone Avenue North
      New Hope, MN     1,676       1,000       1,599       (57 )     1,009       1,533       2,542       400       2005       (l )
2300 West Highway 13
      Burnsville, MN           2,517       6,069       (499 )     2,524       5,563       8,087       1,936       2005       (l )
1087 Park Place
      Shakopee, MN           1,195       4,891       (114 )     1,198       4,774       5,972       968       2005       (l )
5391 12th Avenue SE
      Shakopee, MN     4,995       1,392       8,149       (10 )     1,395       8,136       9,531       1,405       2005       (l )
4701 Valley Industrial Blvd S
      Shakopee, MN           1,296       7,157       (99 )     1,299       7,055       8,354       1,598       2005       (l )
316 Lake Hazeltine Drive
      Chaska, MN           714       944       84       729       1,013       1,742       317       2006       (l )
6455 City West Parkway
      Eden Prairie, MN           659       3,189       (304 )     665       2,879       3,544       405       2006       (l )
1225 Highway 169 North
      Plymouth, MN           1,190       1,979       391       1,207       2,353       3,560       508       2006       (l )
7102 Winnetka Avene North
      Brooklyn Park, MN     4,524       1,275             6,849       1,343       6,781       8,124       628       2007       (l )
9200 10th Avenue
      Golden Valley, MN           892       2,306       102       902       2,398       3,300       467       2007       (l )
139 Eva Street
      St. Paul, MN           2,132       3,105       90       2,175       3,152       5,327       201       2008       (l )
Nashville
                                                                                       
1621 Heil Quaker Boulevard
      Nashville, TN     2,451       413       2,383       1,699       430       4,065       4,495       1,666       1995       (l )
3099 Barry Drive
      Portland, TN           418       2,368       162       421       2,527       2,948       836       1996       (l )
3150 Barry Drive
      Portland, TN           941       5,333       5,954       981       11,247       12,228       2,096       1996       (l )
5599 Highway 31 West
      Portland, TN           564       3,196       288       571       3,477       4,048       1,104       1996       (l )
1650 Elm Hill Pike
      Nashville, TN           329       1,867       349       332       2,213       2,545       698       1997       (l )
1931 Air Lane Drive
      Nashville, TN           489       2,785       276       493       3,057       3,550       940       1997       (l )

S-17


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
4640 Cummings Park
      Nashville, TN           360       2,040       375       365       2,410       2,775       587       1999       (l )
1740 River Hills Drive
      Nashville, TN     3,223       848       4,383       1,161       888       5,504       6,392       1,812       2005       (l )
211 Ellery Court
      Nashville, TN     2,884       606       3,192       488       616       3,670       4,286       586       2007       (l )
Rockdale BTS
      Gallatin, TN           1,778             24,216       1,778       24,216       25,994       584       2008       (l )
Northern New Jersey
                                                                                       
14 World’s Fair Drive
      Franklin, NJ           483       2,735       574       503       3,289       3,792       1,091       1997       (l )
12 World’s Fair Drive
      Franklin, NJ           572       3,240       554       593       3,773       4,366       1,153       1997       (l )
22 World’s Fair Drive
      Franklin, NJ           364       2,064       614       375       2,667       3,042       855       1997       (l )
26 World’s Fair Drive
      Franklin, NJ           361       2,048       423       377       2,455       2,832       778       1997       (l )
24 World’s Fair Drive
      Franklin, NJ           347       1,968       519       362       2,472       2,834       873       1997       (l )
20 World’s Fair Drive Lot 13
      Sumerset, NJ           9             2,544       691       1,862       2,553       446       1999       (l )
45 Route 46
      Pine Brook, NJ           969       5,491       948       978       6,430       7,408       1,619       2000       (l )
43 Route 46
      Pine Brook, NJ           474       2,686       273       479       2,954       3,433       662       2000       (l )
39 Route 46
      Pine Brook, NJ           260       1,471       198       262       1,667       1,929       394       2000       (l )
26 Chapin Road
      Pine Brook, NJ           956       5,415       759       965       6,165       7,130       1,467       2000       (l )
30 Chapin Road
      Pine Brook, NJ           960       5,440       778       969       6,209       7,178       1,605       2000       (l )
20 Hook Mountain Road
      Pine Brook, NJ           1,507       8,542       2,892       1,534       11,407       12,941       2,597       2000       (l )
30 Hook Mountain Road
      Pine Brook, NJ           389       2,206       377       396       2,576       2,972       654       2000       (l )
55 Route 46
      Pine Brook, NJ           396       2,244       157       403       2,394       2,797       575       2000       (l )
16 Chapin Rod
      Pine Brook, NJ     3,804       885       5,015       412       901       5,411       6,312       1,229       2000       (l )
20 Chapin Road
      Pine Brook, NJ     4,861       1,134       6,426       506       1,154       6,912       8,066       1,688       2000       (l )
Sayreville Lot 4
      Sayreville, NJ     3,632       944             4,630       944       4,630       5,574       867       2002       (l )
Sayreville Lot 3
      Sayreville, NJ           996             5,337       996       5,337       6,333       741       2003       (l )
309-319 Pierce Street
      Somerset, NJ     3,891       1,300       4,628       1,069       1,309       5,688       6,997       1,160       2004       (l )
Philadelphia
                                                                                       
230-240 Welsh Pool Road
      Exton, PA           154       851       294       170       1,129       1,299       297       1998       (l )
264 Welsh Pool Road
      Exton, PA           147       811       293       162       1,089       1,251       303       1998       (l )
254 Welsh Pool Road
      Exton, PA           152       842       403       184       1,213       1,397       329       1998       (l )
251 Welsh Pool Road
      Exton, PA           144       796       498       159       1,279       1,438       381       1998       (l )
253-255 Welsh Pool Road
      Exton, PA           113       626       152       125       766       891       213       1998       (l )
151-161 Philips Road
      Exton, PA           191       1,059       257       229       1,278       1,507       391       1998       (l )
216 Philips Road
      Exton, PA           199       1,100       218       220       1,297       1,517       379       1998       (l )
14 McFadden Road
      Palmer, PA     1,686       600       1,349       56       625       1,380       2,005       420       2004       (l )
2801 Red Lion Road
      Philadelphia, PA           950       5,916       (542 )     964       5,360       6,324       1,188       2005       (l )
3240 S. 78th Street
      Philadelphia, PA           515       1,245       71       540       1,291       1,831       260       2005       (l )

S-18


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
200 Cascade Drive, Bldg. 1
      Allen Town, PA           2,133       17,562       902       2,769       17,828       20,597       2,476       2007       (l )
200 Cascade Drive, Bldg. 2
      Allen Town, PA           310       2,268       117       316       2,379       2,695       285       2007       (l )
6300 Bristol Pike
      Levittown, PA           1,074       2,642       71       1,077       2,710       3,787       556       2008       (l )
2455 Boulevard of Generals
      Norristown, PA     3,556       1,200       4,800       1,088       1,226       5,862       7,088       571       2008       (l )
Phoenix
                                                                                       
1045 South Edward Drive
      Tempe, AZ           390       2,160       164       396       2,318       2,714       586       1999       (l )
50 South 56th Street
      Chandler, AZ           1,206       3,218       98       1,207       3,315       4,522       590       2004       (l )
4701 W. Jefferson
      Phoenix, AZ           926       2,195       443       929       2,635       3,564       685       2005       (l )
7102 W. Roosevelt
      Phoenix, AZ           1,613       6,451       1,028       1,620       7,472       9,092       1,229       2006       (l )
4137 West Adams Street
      Phoenix, AZ           990       2,661       146       1,033       2,764       3,797       385       2006       (l )
245 W. Lodge
      Tempe, AZ           898       3,066       78       914       3,128       4,042       281       2007       (l )
1590 E Riverview Dr. 
      Phoenix, AZ           1,293       5,950       69       1,292       6,020       7,312       392       2008       (l )
14131 N. Rio Vista Dr. 
      Peoria, AZ           2,563       9,388       676       2,563       10,064       12,627       722       2008       (l )
8716 W. Ludlow Drive
      Peoria, AZ           2,709       10,970       160       2,709       11,130       13,839       654       2008       (l )
3815 W. Washington St. 
      Phoenix, AZ     4,199       1,675       4,514       146       1,719       4,616       6,335       231       2008       (l )
690 91st Avenue
      Tolleson, AZ           1,904       6,805       2,101       1,923       8,887       10,810       549       2008       (l )
Salt Lake City
                                                                                       
512 Lawndale Drive(i)
      Salt Lake City, UT           2,705       15,749       2,746       2,705       18,495       21,200       5,610       1997       (l )
1270 West 2320 South
      West Valley, UT           138       784       142       143       921       1,064       308       1998       (l )
1275 West 2240 South
      West Valley, UT           395       2,241       474       408       2,702       3,110       878       1998       (l )
1288 West 2240 South
      West Valley, UT           119       672       111       123       779       902       236       1998       (l )
2235 South 1300 West
      West Valley, UT           198       1,120       270       204       1,384       1,588       530       1998       (l )
1293 West 2200 South
      West Valley, UT           158       896       99       163       990       1,153       299       1998       (l )
1279 West 2200 South
      West Valley, UT           198       1,120       156       204       1,270       1,474       355       1998       (l )
1272 West 2240 South
      West Valley, UT           336       1,905       258       347       2,152       2,499       609       1998       (l )
1149 West 2240 South
      West Valley, UT           217       1,232       100       225       1,324       1,549       405       1998       (l )
1142 West 2320 South
      West Valley, UT           217       1,232       77       225       1,301       1,526       401       1998       (l )
1152 West 2240 South
      West Valley, UT           2,067             2,517       1,083       3,501       4,584       884       2000       (l )
2323 South 900 W
      Salt Lake City, UT           886       2,995       59       898       3,042       3,940       822       2006       (l )
1815-1957 South 4650 West
      Salt Lake City, UT     7,240       1,707       10,873       116       1,713       10,983       12,696       1,259       2006       (l )
2100 Alexander Street
      West Valley, UT     1,225       376       1,670             376       1,670       2,046       170       2007       (l )
1815-1957 South 4650 West
      West Valley, UT     2,102       864       2,771       82       869       2,848       3,717       308       2007       (l )
San Diego
                                                                                       
16275 Technology Drive
      San Diego, CA           2,848       8,641       42       2,859       8,672       11,531       1,376       2005       (l )
6305 El Camino Real
      Carlsbad, CA           1,590       6,360       7,497       1,590       13,857       15,447       1,187       2006       (l )

S-19


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
2325 Camino Vida Roble
      Carlsbad, CA           1,441       1,239       651       1,446       1,885       3,331       230       2006       (l )
2335 Camino Vida Roble
      Carlsbad, CA           817       762       97       821       855       1,676       162       2006       (l )
2345 Camino Vida Roble
      Carlsbad, CA           562       456       58       565       511       1,076       104       2006       (l )
2355 Camino Vida Roble
      Carlsbad, CA           481       365       70       483       433       916       100       2006       (l )
2365 Camino Vida Roble
      Carlsbad, CA           1,098       630       (16 )     1,102       610       1,712       123       2006       (l )
2375 Camino Vida Roble
      Carlsbad, CA           1,210       874       149       1,214       1,019       2,233       213       2006       (l )
6451 El Camino Real
      Carlsbad, CA           2,885       1,931       344       2,895       2,265       5,160       378       2006       (l )
8572 Spectrum Lane
      San Diego, CA     2,237       806       3,225       429       807       3,653       4,460       323       2007       (l )
13100 Gregg Street
      Poway, CA           1,040       4,160       474       1,073       4,601       5,674       531       2007       (l )
Seattle
                                                                                       
1901 Raymond Ave SW
      Renton, WA     2,228       4,458       2,659       197       4,594       2,720       7,314       215       2008       (l )
19014 64th Avenue South
      Kent, WA     3,382       1,990       3,979       177       2,042       4,105       6,147       309       2008       (l )
18640 68th Ave. South
      Kent, WA     889       1,218       1,950       84       1,258       1,994       3,252       164       2008       (l )
Southern New Jersey
                                                                                       
8 Springdale Road
      Cherry Hill, NJ           258       1,436       771       258       2,207       2,465       647       1998       (l )
111 Whittendale Drive
      Morrestown, NJ     1,781       522       2,916       112       522       3,028       3,550       787       2000       (l )
7851 Airport Highway
      Pennsauken, NJ           160       508       368       163       873       1,036       268       2003       (l )
103 Central
      Mt. Laurel, NJ           610       1,847       1,143       619       2,981       3,600       772       2003       (l )
999 Grand Avenue
      Hammonton, NJ     5,555       969       8,793       1,018       979       9,801       10,780       2,151       2005       (l )
7890 Airport Hwy/7015 Central
      Pennsauken, NJ     1,331       300       989       511       425       1,375       1,800       401       2006       (l )
600 Creek Road
      Delanco, NJ           2,125       6,504       (5 )     2,127       6,497       8,624       1,259       2007       (l )
1070 Thomas Busch Mem Hwy
      Pennsauken, NJ           1,054       2,278       318       1,084       2,566       3,650       449       2007       (l )
1601 Schlumberger Drive
      Moorestown, NJ           560       2,240       733       608       2,925       3,533       335       2007       (l )
St. Louis
                                                                                       
8921-8971 Fost Avenue
      Hazelwood, MO           431       2,479       437       431       2,916       3,347       983       1994       (l )
9043-9083 Frost Avenue
      Hazelwood, MO           319       1,838       2,210       319       4,048       4,367       975       1994       (l )
10431-10449 Midwest Industrial Blvd
      Olivette, MO           237       1,360       373       237       1,733       1,970       616       1994       (l )
10751 Midwest Industrial Boulevard
      Olivette, MO           193       1,119       570       194       1,688       1,882       735       1994       (l )
6951 N Hanley(d)
      Hazelwood, MO           405       2,295       1,480       419       3,761       4,180       1,139       1996       (l )
1067 Warson-Bldg A
      St. Louis, MO           246       1,359       696       251       2,050       2,301       453       2002       (l )
1067 Warson-Bldg B
      St. Louis, MO           380       2,103       1,975       388       4,070       4,458       809       2002       (l )
1067 Warson-Bldg C
      St. Louis, MO           303       1,680       1,256       310       2,929       3,239       691       2002       (l )
1067 Warson-Bldg D
      St. Louis, MO           353       1,952       949       360       2,894       3,254       605       2002       (l )
6821-6857 Hazelwood Avenue
      Berkeley, MO     4,977       985       6,205       917       985       7,122       8,107       1,545       2003       (l )

S-20


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
13701 Rider Trail North
      Earth City, MO           800       2,099       700       804       2,795       3,599       732       2003       (l )
1908-2000 Innerbelt(d)
      Overland, MO           1,590       9,026       984       1,591       10,009       11,600       2,719       2004       (l )
9060 Latty Avenue
      Berkeley, MO           687       1,947       30       694       1,970       2,664       938       2006       (l )
21-25 Gateway Commerce Center
      Edwardsville, IL     24,416       1,874       31,958       191       1,928       32,095       34,023       3,052       2006       (l )
601 Cannonball Lane
      O’Fallon, MO           584       2,336       522       595       2,847       3,442       208       2007       (l )
6647 Romiss Court
      St. Louis, MO           230       681       72       241       742       983       97       2008       (l )
Tampa
                                                                                       
5313 Johns Road
      Tampa, FL           204       1,159       231       257       1,337       1,594       431       1997       (l )
5525 Johns Road
      Tampa, FL           192       1,086       355       200       1,433       1,633       478       1997       (l )
5709 Johns Road
      Tampa, FL           192       1,086       165       200       1,243       1,443       377       1997       (l )
5711 Johns Road
      Tampa, FL           243       1,376       172       255       1,536       1,791       470       1997       (l )
5453 W Waters Avenue
      Tampa, FL           71       402       135       82       526       608       153       1997       (l )
5455 W Waters Avenue
      Tampa, FL           307       1,742       390       326       2,113       2,439       643       1997       (l )
5553 W Waters Avenue
      Tampa, FL           307       1,742       423       326       2,146       2,472       659       1997       (l )
5501 W Waters Avenue
      Tampa, FL           215       871       446       242       1,290       1,532       380       1997       (l )
5503 W Waters Avenue
      Tampa, FL           98       402       162       110       552       662       159       1997       (l )
5555 W Waters Avenue
      Tampa, FL           213       1,206       215       221       1,413       1,634       416       1997       (l )
5557 W Waters Avenue
      Tampa, FL           59       335       44       62       376       438       111       1997       (l )
5463 W Waters Avenue
      Tampa, FL           497       2,751       647       560       3,335       3,895       945       1998       (l )
5461 W Waters
      Tampa, FL           261             1,438       265       1,434       1,699       436       1998       (l )
5481 W. Waters Avenue
      Tampa, FL           558             2,496       561       2,493       3,054       596       1999       (l )
4515-4519 George Road
      Tampa, FL     2,528       633       3,587       820       640       4,400       5,040       995       2001       (l )
6089 Johns Road
      Tampa, FL     898       180       987       77       186       1,058       1,244       217       2004       (l )
6091 Johns Road
      Tampa, FL     715       140       730       134       144       860       1,004       187       2004       (l )
6103 Johns Road
      Tampa, FL     1,133       220       1,160       148       226       1,302       1,528       253       2004       (l )
6201 Johns Road
      Tampa, FL     1,028       200       1,107       124       205       1,226       1,431       278       2004       (l )
6203 Johns Road
      Tampa, FL     1,314       300       1,460       118       311       1,567       1,878       446       2004       (l )
6205 Johns Road
      Tampa, FL     1,342       270       1,363       75       278       1,430       1,708       213       2004       (l )
6101 Johns Road
      Tampa, FL     901       210       833       107       216       934       1,150       238       2004       (l )
4908 Tampa West Blvd
      Tampa, FL           2,622       8,643       (337 )     2,635       8,293       10,928       1,592       2005       (l )
7201-7245 Bryan Dairy Road(d)
      Largo, FL           1,895       5,408       570       1,879       5,994       7,873       984       2006       (l )
11701 Belcher Road South
      Largo, FL           1,657       2,768       628       1,669       3,384       5,053       551       2006       (l )
4900-4914 Creekside Drive(h)
      Clearwater, FL           3,702       7,338       645       3,730       7,955       11,685       1,276       2006       (l )
12345 Starkey Road
      Largo, FL           898       2,078       395       905       2,466       3,371       374       2006       (l )

S-21


Table of Contents

                                                                                         
                        (c)
                       
                        Costs
                       
                        Capitalized
                       
                        Subsequent to
                       
                        Acquisition or
  Gross Amount Carried
           
                (b)
  Completion
  At Close of Period 12/31/09   Accumulated
  Year
  Depreciable
        Location
  (a)
  Initial Cost   and Valuation
      Building and
      Depreciation
  Acquired/
  Lives
Building Address
     
(City/State)
  Encumbrances   Land   Buildings   Provision   Land   Improvements   Total   12/31/2009   Constructed   (Years)
                        (Dollars in thousands)                    
 
Toronto
                                                                                       
135 Dundas Street
      Cambridge, ON           3,128       4,958       (700 )     3,179       4,207       7,386       1,420       2005       (l )
678 Erie Street
      Stratford, ON           786       557       (236 )     829       278       1,107       205       2005       (l )
114 Packham Rd
      Stratford, ON           1,000       3,526       525       1,012       4,039       5,051       1,275       2007       (l )
Other
                                                                                       
3501 Maple Street
      Abilene, TX           67       1,057       1,478       266       2,336       2,602       1,269       1994       (l )
4200 West Harry Street(e)
      Wichita, KS           193       2,224       1,777       532       3,662       4,194       2,407       1994       (l )
5050 Kendrick Court
      Grand Rapids, MI           1,721       11,433       7,579       1,721       19,012       20,733       7,310       1994       (l )
5015 52nd Street SE
      Grand Rapids, MI           234       1,321       70       234       1,391       1,625       547       1994       (l )
2250 Delaware Ave
      Des Moines, IA           277       1,609       591       277       2,200       2,477       598       1998       (l )
9601A Dessau Road
      Austin, TX     1,139       255             1,782       366       1,671       2,037       421       1999       (l )
9601C Dessau Road
      Austin, TX     1,406       248             2,265       355       2,158       2,513       967       1999       (l )
9601B Dessau Road
      Austin, TX     1,175       248             1,852       355       1,745       2,100       459       2000       (l )
6266 Hurt Road
      Horn Lake, MS           427             3,537       427       3,537       3,964       361       2004       (l )
6266 Hurt Road Building B
      Horn Lake, MS                       868       99       769       868       180       2004       (l )
6301 Hazeltine National Drive
      Orlando, FL     4,090       909       4,613       262       920       4,864       5,784       921       2005       (l )
12626 Silicon Drive
      San Antonio, TX     3,270       768       3,448       266       779       3,703       4,482       798       2005       (l )
3100 Pinson Valley Parkway
      Birmingham, AL           303       742       22       310       757       1,067       161       2005       (l )
1021 W. First Street, Hwy 93
      Sumner, IA           99       2,540       (96 )     101       2,442       2,543       538       2005       (l )
1245 N. Hearne Avenue
      Shreveport, LA           99       1,263       34       102       1,294       1,396       326       2005       (l )
10330 I Street
      Omaha, NE           1,808       8,340       15       1,809       8,354       10,163       2,450       2006       (l )
3200 Pond Station
      Jefferson County, KY           2,074             9,679       2,119       9,634       11,753       654       2007       (l )
Ozburn Hessey Logistics
      Winchester, VA           2,320             10,855       2,401       10,774       13,175       689       2007       (l )
Pure Fishing BTS
      Kansas City, MO           4,152             13,602       4,228       13,526       17,754       411       2008       (l )
600 Greene Drive
      Greenville, KY           294       8,570       3       296       8,571       8,867       1,462       2008       (l )
Redevelopments /Developments / Developable Land(j)
                  183,630       1,048       7,675 (m)     186,848       5,508       192,356       340                  
                                                                                         
Total
          $ 402,057     $ 753,454     $ 1,860,763     $ 712,694     $ 767,724 (k)   $ 2,559,190 (k)   $ 3,326,914     $ 597,461 (k)                
                                                                                         

S-22


Table of Contents

 
NOTES:
 
(a) See description of encumbrances in Note 6 to Notes to Consolidated Financial Statements.
 
(b) Initial cost for each respective property is tangible purchase price allocated in accordance with FASB’s guidance on business combinations.
 
(c) Improvements are net of write-off of fully depreciated assets.
 
(d) Comprised of two properties.
 
(e) Comprised of three properties.
 
(f) Comprised of four properties.
 
(g) Comprised of five properties.
 
(h) Comprised of eight properties.
 
(i) Comprised of 28 properties.
 
(j) These properties represent developable land and redevelopments that have not been placed in service.
 
(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*     2009*  
 
Land
  $ 16,245     $ 751,479     $ 767,724  
Buildings & Improvements
    15,617       2,543,573       2,559,190  
Accumulated Depreciation
    (2,566 )     (594,895 )     (597,461 )
                         
Subtotal
    29,296       2,700,157       2,729,453  
Construction in Progress
          24,712       24,712  
                         
Net Investment in Real Estate
    29,296       2,724,869       2,754,165  
                         
Leasing Commissions, Net, Deferred Leasing Intangibles, Net and Deferred Rent Receivable, Net
    8,009                  
                         
Total at December 31, 2009
  $ 37,305                  
                         
 
  Amounts exclude $60,160 of above market and other deferred leasing intangibles, net.
 
(l) Depreciation is computed based upon the following estimated lives:
 
     
Buildings and Improvements
  8 to 50 years
Tenant Improvements, Leasehold Improvements
  Life of lease
 
(m) Includes foreign currency translation adjustments.


S-23


Table of Contents

At December 31, 2009, the aggregate cost of land and buildings and equipment for federal income tax purpose was approximately $3.1 billion (excluding construction in progress.)
 
The changes in total real estate assets, including real estate held for sale, for the three years ended December 31, 2009 are as follows:
 
                         
    2009     2008     2007  
    (Dollars in thousands)  
 
Balance, Beginning of Year
  $ 3,406,729     $ 3,365,500     $ 3,331,382  
Acquisition of Real Estate Assets
    208       319,431       440,664  
Construction Costs and Improvements
    47,716       186,997       237,135  
Disposition of Real Estate Assets
    (73,015 )     (429,106 )     (619,785 )
Write-off of Fully Depreciated Assets
    (30,012 )     (36,093 )     (23,896 )
                         
Balance, End of Year
  $ 3,351,626     $ 3,406,729     $ 3,365,500  
                         
 
The changes in accumulated depreciation, including accumulated depreciation for real estate held for sale, for the three years ended December 31, 2009 are as follows:
 
                         
    2009     2008     2007  
 
Balance, Beginning of Year
  $ 524,865     $ 512,781     $ 473,882  
Depreciation for Year
    112,241       114,795       121,714  
Disposition of Assets
    (9,633 )     (66,618 )     (58,919 )
Write-off of Fully Depreciated Assets
    (30,012 )     (36,093 )     (23,896 )
                         
Balance, End of Year
  $ 597,461     $ 524,865     $ 512,781  
                         


S-24


Table of Contents

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/  Bruce W. Duncan
Bruce W. Duncan
President, Chief Executive Officer and Director
(Principal Executive Officer)
 
Date: March 1, 2010
 
  By: 
/s/  Scott A. Musil
Scott A. Musil
Chief Financial and Accounting Officer
(Principal Financial and Accounting Officer)
 
Date: March 1, 2010
 
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/  W. Edwin Tyler

W. Edwin Tyler
  Chairman of the Board of Directors   March 1, 2010
         
/s/  Bruce W. Duncan

Bruce W. Duncan
  President, Chief Executive Officer and Director   March 1, 2010
         
/s/  Michael G. Damone

Michael G. Damone
  Director of Strategic Planning and Director   March 1, 2010
         
/s/  H. Patrick Hackett, Jr.

H. Patrick Hackett, Jr.
  Director   March 1, 2010
         
/s/  Kevin W. Lynch

Kevin W. Lynch
  Director   March 1, 2010
         
/s/  John E. Rau

John E. Rau
  Director   March 1, 2010
         
/s/  Jay H. Shidler

Jay H. Shidler
  Director   March 1, 2010
         
/s/  Robert J. Slater

Robert J. Slater
  Director   March 1, 2010
         
/s/  J. Steven Wilson

J. Steven Wilson
  Director   March 1, 2010


S-25