First Industrial Realty Trust Inc.

02/11/2026 | Press release | Distributed by Public on 02/11/2026 15:59

Annual Report for Fiscal Year Ending 12/31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the sections of this Form 10-K titled "Forward-Looking Statements" and the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K.
Summary of 2025
Our operating results were strong in 2025, highlighted by a 32.2% average increase in cash rental rates on new and renewal commenced leases, tenant retention of 71.0% and year-end in-service occupancy of 94.4%, demonstrating healthy demand.
At December 31, 2025, we had six projects classified as under development, totaling approximately 1.1 million square feet of GLA with an aggregate estimated investment of approximately $187.1 million. This total includes two projects for which vertical construction commenced in the first quarter of 2026.
During 2025, we completed several significant real estate transactions:
•We acquired three industrial properties located in our Phoenix market, totaling approximately 1.8 million square feet of GLA, from our Joint Venture for an aggregate price of $245.3 million, excluding transaction costs. The purchase price is net of our economic share of gain on sale and incentive fees we earned on the sale as well as other deferred fees. We also acquired a 0.1 million square foot industrial property in our Baltimore/D.C. market for a purchase price of $31.4 million, excluding transaction costs.
•We acquired one income-producing land parcel in our Northern California market for a purchase price of $10.6 million, excluding transaction costs and approximately 61.4 acres of land for development in our Philadelphia market for a purchase price of $15.7 million, excluding transaction costs.
•We sold seven industrial properties totaling approximately 0.3 million square feet of GLA, along with a land parcel, for gross proceeds of $42.3 million.
We also completed the following financing activities during the year ended December 31, 2025:
•We declared an annual cash dividend of $1.78 per common share or Unit, an increase of 20.3% from 2024.
•In May, Fitch Ratings upgraded our long-term issuer default rating and underlying unsecured investments to BBB+ from BBB.
•In May, we issued $450.0 million of senior notes due January 2031, bearing a coupon rate of 5.25%.
•We exercised our first one-year extension option related to our $300.0 million term loan, extending the maturity date to August 2026 and amended our $200.0 million term loan to, among other things, extend the maturity to March 2028, with two optional one-year extensions.
•We entered into forward-starting swaps with an aggregate notional value of $350.0 million to fix SOFR on our unsecured term loans, replacing expiring swaps and extending hedge coverage through the maturity dates of our unsecured term loans.
•We amended our Unsecured Credit Facility to, among other changes, increase the borrowing capacity by $100.0 million to $850.0 million, eliminate the 10 basis point SOFR adjustment and extend the maturity date to March 2029, with two optional six-month extensions.
•At December 31, 2025, we had $664.9 million of available borrowing capacity under our Unsecured Credit Facility and held $72.7 million in cash and cash equivalents, excluding our Joint Venture partner's 6% share that we consolidate and report in our financial statements.
Results of Operations
Comparison of Year Ended December 31, 2025 to Year Ended December 31, 2024
The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2025 and 2024.
Same Store Properties:Same store properties include those that were owned and in service prior to January 1, 2024 and remained in service through December 31, 2025. Same store properties also includes developments and redevelopments placed in service prior to January 1, 2024. A property is considered placed in service when it meets one of the following criteria: (i) acquired properties with occupancy of at least 75% at acquisition, unless we anticipate tenant move-outs within two years of ownership would reduce occupancy below 75%; (ii) acquired properties with occupancy less than 75% at acquisition are placed in service upon reaching the earlier of 90% occupancy or one year subsequent to acquisition; (iii) developments, redevelopments and acquired income-producing land parcels for which our ultimate intent is to redevelop or develop on the land parcel are placed in service upon the earlier of reaching 90% occupancy or one year after construction completion; and (iv) properties acquired with occupancy greater than 75% but with anticipated move out within two years of ownership, are placed in service upon the earlier of reaching 90% occupancy or twelve months after tenant move out. Properties are moved from the same store category to the redevelopment classification when projected capital expenditures are estimated to exceed 20% of the property's undepreciated gross book value.
Acquired Properties:Acquired properties are properties that were purchased subsequent to December 31, 2023 and held as an operating property through December 31, 2025.
Sold Properties:Sold properties are properties that were disposed of subsequent to December 31, 2023.
Developments and Redevelopments:Developments and redevelopments (collectively referred to as "(Re)Developments") include properties that were either: (i) not substantially complete 12 months prior to January 1, 2024; or (ii) not stabilized prior to January 1, 2024.
Other Revenues and Property Expenses:Other revenues are derived from the operations of properties not placed in service under one of the categories discussed above, the operations of our maintenance company, interest income, joint venture fees and other miscellaneous revenues. Other property expenses are derived from the operations of properties not placed in service under one of the categories discussed above, the operations of our maintenance company, vacant land expenses and other miscellaneous regional expenses.
During the year ended December 31, 2025, one industrial property, totaling approximately 0.1 million square feet of GLA, was taken out of service with the intent for future redevelopment. As a result of taking this industrial property out of service, the results of operations associated with this property were reclassified from the same store property classification to the other classification.
Our future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition, (re)development and sale of properties. Our future revenues and expenses may vary materially from historical rates.
Our net income was $264.1 million and $296.0 million for the years ended December 31, 2025 and 2024, respectively.
For the years ended December 31, 2025 and 2024, the average daily occupancy rate of our same store properties was 94.9% and 95.4%, respectively.
Year Ended December 31,
2025 2024 $ Change % Change
(In thousands)
REVENUES
Same Store Properties $ 659,878 $ 625,807 $ 34,071 5.4 %
Acquired Properties 12,430 1,485 10,945 737.0 %
Sold Properties 1,979 11,714 (9,735) (83.1) %
(Re) Developments 42,446 18,337 24,109 131.5 %
Other 10,343 12,298 (1,955) (15.9) %
Total Revenues $ 727,076 $ 669,641 $ 57,435 8.6 %
Revenues from same store properties increased $34.1 million primarily due to increases in rental rates and tenant recoveries, offset by a decrease in occupancy. Revenues from acquired properties increased $10.9 million due to the nine industrial properties acquired subsequent to December 31, 2023 totaling approximately 2.1 million square feet of GLA. Revenues from sold properties decreased $9.7 million due to the 29 industrial properties sold subsequent to December 31, 2023 totaling approximately 1.5 million square feet of GLA. Revenues from (re)developments increased $24.1 million due to an increase in occupancy and tenant recoveries. Revenues from other decreased $2.0 million due to a decrease in interest income, a decrease in revenues from properties that were previously occupied and a decrease in joint venture fees, offset by legal settlement proceeds.
Year Ended December 31,
2025 2024 $ Change % Change
(In thousands)
PROPERTY EXPENSES
Same Store Properties $ 161,373 $ 153,279 $ 8,094 5.3 %
Acquired Properties 2,035 390 1,645 421.8 %
Sold Properties 466 2,540 (2,074) (81.7) %
(Re) Developments 10,784 7,730 3,054 39.5 %
Other 16,822 18,882 (2,060) (10.9) %
Total Property Expenses $ 191,480 $ 182,821 $ 8,659 4.7 %
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses. Property expenses from same store properties increased $8.1 million primarily due to increases in real estate taxes and repairs and maintenance expenses. Property expenses from acquired properties increased $1.6 million due to properties acquired subsequent to December 31, 2023. Property expenses from sold properties decreased $2.1 million due to properties sold subsequent to December 31, 2023. Property expenses from (re)developments increased $3.1 million primarily due to the substantial completion of developments. Property expenses from other decreased $2.1 million primarily due to the capitalization of real estate taxes related to ongoing construction preparation activities on certain land parcels during the year ended December 31, 2025 as well as demolition costs incurred during the year ended December 31, 2024 to prepare certain land sites for construction.
General and administrative expense remained relatively unchanged.
Joint Venture development services expense, representing payments made to a third party for property development assistance within the Joint Venture, decreased by $0.9 million, or 58.9%. This decrease is primarily attributable to a reduction in development activities by our Joint Venture during the year ended December 31, 2025, compared to the year ended December 31, 2024.
Year Ended December 31,
2025 2024 $ Change % Change
(In thousands)
DEPRECIATION AND OTHER AMORTIZATION
Same Store Properties $ 157,639 $ 155,989 $ 1,650 1.1 %
Acquired Properties 8,851 778 8,073 1,037.7 %
Sold Properties 298 1,897 (1,599) (84.3) %
(Re) Developments 16,933 10,080 6,853 68.0 %
Corporate Furniture, Fixtures and Equipment and Other 1,595 3,195 (1,600) (50.1) %
Total Depreciation and Other Amortization $ 185,316 $ 171,939 $ 13,377 7.8 %
Depreciation and other amortization from same store properties remained relatively unchanged. Depreciation and other amortization from acquired properties increased $8.1 million due to properties acquired subsequent to December 31, 2023. Depreciation and other amortization from sold properties decreased $1.6 million due to properties sold subsequent to December 31, 2023. Depreciation and other amortization from (re)developments increased $6.9 million primarily due to an increase in depreciation and amortization related to completed developments. Depreciation from corporate furniture, fixtures and equipment and other decreased $1.6 million due to certain improvements on land parcels, for which our ultimate intent is to redevelop or develop, becoming fully depreciated.
For the year ended December 31, 2025, we recognized $26.9 million of gain on sale of real estate related to the sale of seven industrial properties totaling approximately 0.3 million square feet of GLA and a land parcel. For the year ended December 31, 2024, we recognized $112.0 million of gain on sale of real estate related to the sale of 22 industrial properties totaling approximately 1.2 million square feet of GLA.
Interest expense increased by $1.9 million, or 2.3%, primarily due to a higher weighted average debt balance of $2,392.4 million for the year ended December 31, 2025, as compared to $2,220.7 million for the year ended December 31, 2024, offset by a decrease in the weighted average interest rate to 4.08% for the year ended December 31, 2025 as compared to 4.11% for the year ended December 31, 2024 and an increase in capitalized interest of $4.5 million during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Amortization of debt issuance costs increased by $1.4 million, or 38.0%, primarily due to financing costs incurred related to the amendment and restatement of the Unsecured Credit Facility, the amendment and restatement of our $200.0 million term loan and the issuance of $450.0 million of senior notes.
Equity in income of joint venture increased by $30.4 million, or 707.2%, primarily due to our pro-rata share of gain from the sales of real estate by the Joint Venture and related incentive fees. Both periods include the 6% interest held by our partner in the Joint Venture, which is consolidated and reported in our financial statements.
Income tax expense increased $9.2 million, or 151.6%, primarily due to an increase in our pro-rata share of taxable gain and incentive fees from the Joint Venture.
Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023
A discussion of changes in our results of operations between 2024 and 2023 can be found in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Critical Accounting Policies
A critical accounting policy is one that involves an estimate or assumption that is subjective and requires management judgment about the effect of a matter that is inherently uncertain and material to an entity's financial condition and results of operations. Of the significant accounting policies discussed in Note 2 to the Consolidated Financial Statements, we believe the following policies relate to the more significant judgments and estimates used in the preparation of our Consolidated Financial Statements:
•Acquisitions of Real Estate Assets: We allocate the purchase price of acquired real estate, including real estate acquired as a portfolio, based upon the fair value of the assets acquired and liabilities assumed, which generally consists of land, buildings, tenant improvements, construction in progress, leasing commissions and deferred lease intangible assets and liabilities. The purchase price is allocated to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. This valuation incorporates significant assumptions such as land comparables, discount rates, terminal capitalization rates and market rent assumptions. Above and below market lease intangibles are valued based on the present value of the difference between prevailing market rental rates and the in-place rental rates measured over a period equal to the remaining term of the lease for above market leases or the remaining term of the lease plus the term of any below market fixed rate renewal options for below market leases. The purchase price is further allocated to in-place lease values based on an estimate of the lease revenue expected during a reasonable lease-up period, assuming the property was vacant on the date of acquisition.
•Impairment of Real Estate Assets:We review the carrying value of our long-lived real estate assets for possible impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The judgments regarding the existence of indicators of impairment are based on the operating performance, market conditions, and our intent and ability to hold each property. The judgments regarding whether the carrying amounts of these assets may not be recoverable are based on estimates of future undiscounted cash flows from properties which include estimates of future operating performance and market conditions. If any real estate investment is considered permanently impaired, a loss is recorded to reduce the carrying value of the property to its estimated fair value. The impairment assessment and fair value measurement requires the use of estimates and assumptions, including the timing and amounts of cash flow projections, discount rates and terminal capitalization rates.
Liquidity and Capital Resources
Cash Flow Activity
The following table summarizes our cash flow activity for the Company for the years ended December 31, 2025 and 2024:
Year Ended December 31,
2025 2024
(In thousands)
Net cash provided by operating activities $ 461,263 $ 352,488
Net cash used in investing activities (524,179) (131,620)
Net cash provided by (used in) financing activities 89,266 (213,030)
The following table summarizes our cash flow activity for the Operating Partnership for the years ended December 31, 2025 and 2024:
Year Ended December 31,
2025 2024
(In thousands)
Net cash provided by operating activities $ 461,336 $ 352,542
Net cash used in investing activities (524,179) (131,620)
Net cash provided by (used in) financing activities 89,193 (213,084)
Changes in cash flow for the year ended December 31, 2025, compared to the prior year are described as follows:
Operating Activities:Cash provided by operating activities increased $108.8 million, primarily due to the following:
•increase in net operating income ("NOI") from same store properties, acquired properties and recently developed properties of $56.3 million offset by a decrease in NOI due to the disposition of real estate of $7.7 million;
•increase in distributions from our Joint Venture of $54.6 million in 2025 as compared to 2024; and
•increase in accounts payable, accrued expenses, other liabilities, rents received in advance and security deposits due to timing of cash payments; offset by:
◦increase in tenant accounts receivable, prepaid expenses and other assets due to timing of cash receipts.
Investing Activities:Cash used in investing activities increased $392.6 million, primarily due to the following:
•increase of $340.9 million related to the acquisition, development and investment in real estate activity, primarily attributed to higher acquisition-related spending and increased expenditures for developments under construction during the year ended December 31, 2025 as compared to the year ended December 31, 2024; and
•decrease of $118.9 million in net proceeds received from the disposition of real estate in 2025 as compared to 2024; offset by:
◦increase in net distributions of $70.9 million resulting from our Joint Venture in 2025 as compared to 2024.
Financing Activities:Cash provided by financing activities was $89.3 million ($89.2 million for the Operating Partnership) in 2025 as compared to cash used in financing activities of $213.0 million ($213.1 million for the Operating Partnership) in 2024, resulting in an increase of cash provided by financing activities of $302.3 million, primarily due to the following:
•the issuance of senior unsecured notes in 2025 resulting in net proceeds of $443.8 million; offset by:
◦increase in net repayments of borrowings under our Unsecured Credit Facility of $82.0 million in 2025 as compared to 2024;
◦increase in dividend and unit distributions of $37.7 million due to the Company increasing the dividend rate in 2025 as well as a slight increase in common shares and units outstanding; and
◦increase in financing issuance costs of $12.4 million related to the amendment and restatement of the Unsecured Credit Facility and the $200.0 million unsecured term loan, the issuance of senior unsecured notes and the extension of the $300.0 million unsecured term loan in 2025.
Material Cash Requirements
At December 31, 2025, our cash and cash equivalents were approximately $72.7 million, excluding our Joint Venture partner's share of cash and cash equivalents that we consolidate and report in our financial statements. We also had $664.9 million of availability for additional borrowings under our Unsecured Credit Facility as of December 31, 2025.
We have considered our short-term liquidity requirements through December 31, 2026, as well as the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet those requirements. As of December 31, 2025, we had a $300.0 million unsecured term loan scheduled to mature in August 2026. On January 22, 2026, we amended and restated this unsecured term loan to, among other things, extend the maturity to January 2029, with two one-year extension options exercisable subject to the satisfaction of certain conditions, and to increase the principal amount by $75.0 million. Beyond this scheduled maturity, we believe that our principal short-term liquidity needs include funding normal recurring expenses, property acquisitions, developments, expansions, renovations and other nonrecurring capital improvements, debt service requirements, the minimum distributions required to maintain the Company's REIT status under the Code and distributions approved by the Company's Board of Directors. We anticipate meeting these short-term liquidity requirements primarily through cash flows generated by operating activities and proceeds from select asset dispositions. Additional sources of liquidity may include the issuance of other debt or equity securities or borrowings under our Unsecured Credit Facility, subject to market conditions.
We expect to meet our long-term liquidity requirements (beyond December 31, 2026) such as property acquisitions, development projects, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through a combination of select asset dispositions, long-term unsecured and secured indebtedness and the issuance of additional equity securities, subject to market conditions.
We believe that we were in compliance with our financial covenants as of December 31, 2025, and we anticipate that we will be able to operate in compliance with our financial covenants in 2026. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our lenders and noteholders in a manner that could impose and cause us to incur material costs and our access to borrowings on our Unsecured Credit Facility may be limited if we fail to meet any of these covenants. Total debt, exclusive of unamortized debt issuance costs and unamortized discounts, at December 31, 2025 and 2024 is detailed below.
Weighted Average Interest Rate at December 31, 2025 Outstanding Balance at Weighted Average Maturity in Years at December 31, 2025
December 31, 2025 December 31, 2024
(In thousands)
Mortgage Loan Payable (A)
4.17% $ 9,295 $ 9,643 2.6
Senior Unsecured Notes, Gross
Senior Unsecured Bonds(A)
5.48% 498,571 48,571 4.9
Private Placement Notes (A)
3.66% 950,000 950,000 3.9
Subtotal 1,448,571 998,571
Unsecured Term Loans, Gross
2021 Unsecured Term Loan N/A - 200,000 N/A
2022 Unsecured Term Loan II(B)(E)
4.42% 300,000 300,000 1.6
2022 Unsecured Term Loan (C)(E)
3.64% 425,000 425,000 1.8
2025 Unsecured Term Loan(D)(E)
1.83% 200,000 - 4.2
Subtotal 925,000 925,000
Unsecured Credit Facility (F)
4.44% 183,000 282,000 4.2
Total Debt $ 2,565,866 $ 2,215,214
(A)These loans have a fixed interest rate.
(B)The interest rate is based on SOFR, plus a 0.10% SOFR adjustment and a credit spread of 0.85%. We entered into interest rate swaps with an aggregate notional value of $300.0 million, that effectively fix the SOFR component and result in an all-in interest rate of 4.42% at December 31, 2025. These swaps mature in August 2027 ($150.0 million notional) and December 2028 ($150.0 million notional). The weighted average maturity reflected in the table above assumes the exercise of a one-year extension option, subject to the satisfaction of certain conditions.
(C)The interest rate is based on SOFR, plus a 0.10% SOFR adjustment and a credit spread of 0.85%. We entered into interest rate swaps with an aggregate notional value of $425.0 million, that effectively fix the SOFR component and result in an all-in interest rate of 3.64% at December 31, 2025. These swaps mature in September 2027.
(D)The interest rate is based on SOFR, plus a 0.10% SOFR adjustment and a credit spread of 0.85%. We entered into interest rate swaps with an aggregate notional value of $200.0 million, that effectively fix the SOFR component and result in an all-in interest rate of 1.83% at December 31, 2025. These swaps mature in February 2026. During the year ended December 31, 2025, we entered into forward-starting swaps commencing in February 2026, with an aggregate notional value of $200.0 million that fix SOFR at 3.15% and mature in February 2029. The weighted average maturity reflected in the table above assumes the exercise of two one-year extension options, subject to the satisfaction of certain conditions.
(E) On January 22, 2026, we refinanced our $425.0 million unsecured term loan (the "2022 Unsecured Term Loan") and our $300.0 million unsecured term loan (the "2022 Unsecured Term Loan II") and we amended our $200.0 million unsecured term loan (the "2025 Unsecured Term Loan"). See Note 15 to the Consolidated Financial Statements for additional information.
(F) The interest rate is variable and based on SOFR plus a credit spread of 0.775%, and requires us to pay a facility fee of 15 basis points. Our balance under our Unsecured Credit Facility changes depending on our cash needs and the interest rate and facility fee are each subject to adjustment based on our leverage and investment grade rating. The weighted average maturity reflected in the table above assumes the exercise of two six-month extension options, subject to the satisfaction of certain conditions. As of February 11, 2026, we had approximately $726.9 million available for additional borrowings under our Unsecured Credit Facility.
As of December 31, 2025, our senior unsecured notes have been assigned credit ratings from Standard & Poor's, Moody's and Fitch Ratings of BBB/Stable, Baa2/Stable and BBB+/Stable, respectively. A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization. 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.
Our other material cash requirements from known contractual and other obligations as of December 31, 2025 include an estimate of remaining payments on the completion of development projects under construction for the Company of $87.0 million which includes all costs necessary to place the properties into service.
Off-Balance Sheet Arrangements
At December 31, 2025, we had letters of credit and performance bonds outstanding in an aggregate amount of $35.9 million. The letters of credit and performance bonds are not reflected as liabilities on our balance sheet. We have no other off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results of operation or liquidity and capital resources.
Environmental
We paid approximately $0.8 million and $0.8 million during the years ended December 31, 2025 and 2024, respectively, related to environmental expenditures. We estimate 2026 expenditures of approximately $1.8 million, which has been accrued at December 31, 2025. We further estimate that aggregate expenditures for currently identified environmental issues to be incurred in 2026 and beyond will not exceed approximately $4.5 million, which has been accrued at December 31, 2025.
Inflation
Inflation had a minimal impact on the operating performance of our industrial properties across our markets prior to 2021, due to relatively low inflation rates. However, inflation increased significantly in 2021 and 2022, and although it has moderated since 2023, it remains elevated relative to pre-2021 levels. The future direction of inflation rates is uncertain. If inflation rates increase, this could impact our operations and financial performance. Many of our leases contain provisions designed to mitigate the adverse impact of inflation, including contractual rent escalations and requirements for tenants to pay their proportionate share of property operating expenses. Such expenses include common area expenses, utilities, insurance, real estate taxes, and certain capital expenditures for property maintenance. These measures help reduce our exposure to inflation-driven increases in property operating expenses. However, we remain exposed to certain non-reimbursable property operating expenses, such as costs associated with vacant premises. In addition, while some of our existing leases are below current market rental rates, we believe that lease renewals or re-leasing opportunities will allow us to adjust rental rates upward, aligning them more closely with current market rates. These adjustments could help offset inflationary pressures on our operating expenses. Inflation also continues to affect our development portfolio. Rising costs for materials and other costs increase the expense of property development, impacting our ability to achieve anticipated returns on these projects. With respect to our outstanding indebtedness, we periodically evaluate our exposure to interest rate fluctuations, and may continue to enter into derivative instruments that mitigate, but do not eliminate, the impact of interest rate changes on our Unsecured Credit Facility and other variable-rate debt.
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, as described below.
Interest Rate Risk
The following analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments that are held by us at December 31, 2025 that are sensitive to changes in 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, 2025, $2,379.9 million, or 92.9%, of our total debt, excluding unamortized debt issuance costs, was fixed rate debt, while $183.0 million, or 7.1%, was variable rate debt. At December 31, 2024, $1,933.2 million, or 87.3%, of our total debt, excluding unamortized debt issuance costs, was fixed rate debt, while $282.0 million, or 12.7%, was variable rate debt. The fixed rate debt amounts at December 31, 2025 and 2024 include variable rate debt that has been effectively swapped to a fixed rate through the use of derivative instruments with an aggregate notional amount outstanding of $925.0 million. These derivatives mitigate our exposure to our Unsecured Term Loans' variable interest rates, which are based on SOFR. The use of derivative financial instruments allows us to manage the risk of interest rate increases and the related impact on our earnings and cash flows. We designated all of the swaps related to our Unsecured Term Loans as cash flow hedges. Currently, we do not enter into financial instruments for trading or other speculative purposes. See "Material Cash Requirements" for further details on the derivative instruments. As of December 31, 2025 and 2024, the estimated fair value of our debt was approximately $2,525.4 million and $2,125.3 million, respectively, based on our estimate of the then-current market interest rates.
During the year ended December 31, 2025, we entered into forward-starting swaps with an aggregate notional value of $350.0 million to fix SOFR on our unsecured term loans, replacing expiring swaps and extending hedge coverage. We designated the swaps as cash flow hedges. See Note 12 to the Consolidated Financial Statements for a discussion of the swaps.
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 4 to the Consolidated Financial Statements for a discussion of the maturity dates of our various fixed rate debt.
Our variable rate debt is subject to risk based upon prevailing market interest rates. If the SOFR rate component relevant to our variable rate debt were to have increased 10%, we estimate that our interest expense during the years ended December 31, 2025 and 2024 would have increased by approximately $0.8 million and $1.5 million, respectively, based on our average outstanding floating-rate debt during the years ended December 31, 2025 and 2024. Additionally, if weighted average interest rates on our weighted average fixed rate debt were to have increased by 10% due to refinancing, interest expense would have increased by approximately $9.0 million and $7.5 million during the years ended December 31, 2025 and 2024, respectively.
Supplemental Earnings Measure
Investors in and industry analysts following the real estate industry utilize funds from operations ("FFO") and NOI as supplemental performance measures of an equity REIT. Historical cost accounting for real estate assets in accordance with accounting principles generally accepted in the United States of America ("GAAP") implicitly assumes that the value of real estate assets diminishes predictably over time through depreciation. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors prefer to supplement operating results that use historical cost accounting with measures such as FFO and NOI, among others. We provide information related to FFO and same store NOI ("SS NOI") both because such industry analysts are interested in such information, and because our management believes FFO and SS NOI are important performance measures. FFO and SS NOI are factors used by management in measuring our performance, including for purposes of determining the compensation of our executive officers under our 2025 incentive compensation plan.
Neither FFO nor SS NOI should be considered as a substitute for net income, or any other measures derived in accordance with GAAP. Neither FFO nor SS NOI represents cash generated from operating activities in accordance with GAAP and neither should be considered as an alternative to cash flow from operating activities as a measure of our liquidity, nor is either indicative of funds available for our cash needs, including our ability to make cash distributions. Additionally, our method for calculating FFO and SS NOI may differ from those used by other real estate companies, limiting comparability.
Funds From Operations
The National Association of Real Estate Investment Trusts ("NAREIT") has recognized and defined for the real estate industry a supplemental measure of REIT operating performance, FFO, that excludes historical cost depreciation, among other items, from net income determined in accordance with GAAP. FFO is a non-GAAP financial measure. FFO is calculated by us in accordance with the definition adopted by the Board of Governors of NAREIT and may not be comparable to other similarly titled measures of other companies. In accordance with the NAREIT definition of FFO, we calculate FFO to be equal to net income available to First Industrial Realty Trust, Inc.'s common stockholders and participating securities, plus depreciation and other amortization of real estate, plus impairment of real estate, minus gain or plus loss on sale of real estate, net of any income tax provision or benefit associated with the sale of real estate. We also exclude the same adjustments from our share of net income from an unconsolidated joint venture.
Management believes that the use of FFO available to common stockholders and participating securities, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful. Management believes that, by excluding gains or losses related to sales of real estate assets, impairment of real estate assets and real estate asset depreciation and amortization, investors and analysts are able to identify the operating results of the long-term assets that form the core of a REIT's activity and use these operating results for assistance in comparing these operating results between periods or to those of different companies.
The following table shows a reconciliation of net income available to common stockholders and participating securities to the calculation of FFO available to common stockholders and participating securities as follows:
Year Ended December 31,
2025 2024 2023 2022 2021
(In thousands)
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities $ 247,443 $ 287,554 $ 274,816 $ 359,134 $ 270,997
Adjustments:
Depreciation and Other Amortization of Real Estate 184,682 171,207 162,098 146,448 130,062
Depreciation and Other Amortization of Real Estate in the Joint Venture 2,614 2,758 - - -
Gain on Sale of Real Estate (26,905) (111,970) (95,650) (128,268) (150,310)
Gain on Sale of Real Estate (Including Incentive Fees) from the Joint Venture (34,184) (1,756) (28,034) (115,024) -
Income Tax Provision - Excluded from FFO 13,909 4,542 7,311 23,658 4,853
Noncontrolling Interest Share of Adjustments 4,217 (1,850) 2,126 15,222 357
Funds from Operations Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities
$ 391,776 $ 350,485 $ 322,667 $ 301,170 $ 255,959
Same Store Net Operating Income
We consider cash basis SS NOI to be a useful non-GAAP supplemental measure of our operating performance. We believe SS NOI enhances the comparability of a company's real estate portfolio to that of other real estate companies. SS NOI reflects the results of operations of properties that were owned and placed in service prior to January 1, 2024, and remained in service through the end of the reporting period.
We define SS NOI as revenues minus property expenses such as real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses. SS NOI is further adjusted to exclude the NOI of properties that are not included in the same store pool. Additionally, we exclude the impact of straight-line rent, above and below market rent amortization and lease termination fees, as we believe excluding them provides a more meaningful reflection of cash-basis rental growth and allows for a more consistent year-over-year analysis of property-level performance. SS NOI does not include depreciation and amortization, general and administrative expense, interest expense, income tax benefit and expense, equity in income or loss from joint venture, joint venture fees and joint venture development services expense.
The primary factors influencing SS NOI are occupancy levels, changes in rental rates and fluctuations in tenant recoveries. Our ability to grow SS NOI is largely dependent on our success in leasing space and recovering property operating costs from tenants under existing lease agreements.
The following table shows a reconciliation of the same store revenues and property expenses, as disclosed in the results of operations and reconciled to revenues and expenses reflected on the statements of operations, to SS NOI for the years ended December 31, 2025 and 2024.
Year Ended December 31,
2025 2024
(In thousands)
Same Store Revenues $ 659,878 $ 625,807
Same Store Property Expenses (161,373) (153,279)
Same Store Net Operating Income Before Same Store Adjustments $ 498,505 $ 472,528
Same Store Adjustments:
Straight-line Rent
(8,080) (9,102)
Above (Below) Market Lease Amortization
(2,117) (3,038)
Lease Termination Fees
(685) (589)
Same Store Net Operating Income $ 487,623 $ 459,799
The following table shows a reconciliation of net income available to common stockholders and participating securities to cash basis SS NOI without lease termination fees for the years ended December 31, 2025 and 2024.
Year Ended December 31,
2025 2024
(In thousands)
Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities $ 247,443 $ 287,554
Interest Expense 84,886 82,973
Depreciation and Other Amortization of Real Estate 184,682 171,207
Depreciation and Other Amortization of Real Estate in the Joint Venture 2,614 2,758
Income Tax Provision - Allocable to FFO 1,373 1,533
Net Income Attributable to the Noncontrolling Interests 16,636 8,434
Equity in FFO from Joint Venture Attributable to the Noncontrolling Interest (372) (636)
Amortization of Debt Issuance Costs 5,033 3,646
Depreciation of Corporate FF&E 634 732
Gain on Sale of Real Estate (26,905) (111,970)
Gain on Sale of Real Estate from Joint Venture (34,184) (1,756)
Income Tax Provision - Excluded from FFO 13,909 4,542
General and Administrative 41,945 40,935
Equity in FFO from Joint Venture, Net of Noncontrolling Interest (2,727) (4,661)
Net Operating Income $ 534,967 $ 485,291
Non-Same Store Net Operating Income (36,462) (12,763)
Same Store Net Operating Income Before Same Store Adjustments $ 498,505 $ 472,528
Straight-line Rent (8,080) (9,102)
Above (Below) Market Lease Amortization (2,117) (3,038)
Lease Termination Fees (685) (589)
Same Store Net Operating Income (Cash Basis without Termination Fees) $ 487,623 $ 459,799
Subsequent Events
On January 22, 2026, we refinanced the 2022 Unsecured Term Loan to, among other things, extend its maturity date to January 2030 (with our option to extend the maturity date of the loan by one year) and eliminate the 10 basis point SOFR adjustment. We also refinanced the 2022 Unsecured Term Loan II to, among other things, extend its maturity date to January 2029 (with our option to extend the maturity date two years via two one-year extension options), increase the principal amount of the loan to $375.0 million and eliminate the 10 basis point SOFR adjustment. In conjunction with these refinancings, we also amended the 2025 Unsecured Term Loan to, among other things, eliminate the 10 basis point SOFR adjustment.
First Industrial Realty Trust Inc. published this content on February 11, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 11, 2026 at 21:59 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]