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FI

FIRST INDUSTRIAL REALTY TRUST INC (FR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was operationally solid with strong pricing power but modest headline misses vs S&P Global consensus: FFO/share $0.68 vs $0.70 consensus (miss), GAAP EPS $0.36 vs $0.37 (miss), and revenue of ~$177.1M slightly above ~$176.6M consensus (beat) . Estimates from S&P Global are marked with an asterisk and described below.*
  • Pricing and internal growth remained robust: cash same-store NOI +10.1% and cash rental rate change +41.7% on new/renewal leases; occupancy ended 95.3% (down 90 bps q/q as expected) .
  • 2025 guidance maintained at FFO/share $2.87–$2.97; net income guidance nudged lower ($1.52–$1.62 vs prior $1.57–$1.67), while occupancy (95–96%) and cash SS NOI growth (6–7%) assumptions are unchanged .
  • Capital position strengthened: upsized/extended $850M revolver and refinanced $200M term loan in March; post-quarter priced $450M 5.25% senior notes due 2031, extending liquidity and term at attractive spreads .
  • Key near-term catalysts/risk: timing of development lease-up (management pegs only ~$0.02/share risk if 4Q lease-up slips), tariff visibility impacting decision cycles, and activity improvement in SoCal as supply digests .

What Went Well and What Went Wrong

  • What Went Well

    • Strong internal growth: cash SS NOI +10.1% y/y; cash rent change +41.7% on Q1 commencements; leases signed to-date for 2025 commencement imply ~30% cash rent uplift (36% ex the 1.3M sf fixed-rate renewal) .
    • Portfolio/investments: acquired two 100%-leased Phoenix buildings (796k sf) at an effective 6.4% cash yield (above market cap rates per management), and secured two high-8% yield development starts in Dallas/Philadelphia for 2Q .
    • Balance sheet/liquidity: upsized revolver to $850M (SOFR+77.5 bps, no SOFR add-on); refinanced $200M term loan; both structured off BBB+/Baa1 level pricing with leverage covenant cushion .

  • What Went Wrong

    • Modest consensus misses: FFO/share $0.68 vs ~$0.70; EPS $0.36 vs ~$0.37; revenue beat was marginal vs consensus . S&P Global consensus values marked with asterisks.*
    • Occupancy dipped to 95.3% (–90 bps q/q) with an expected trough in 2Q before rebuilding by year-end; leasing decision-making pacing slowed by tariff uncertainty .
    • G&A elevated by accelerated stock-based comp for tenured employees (nonrecurring nature noted on the call), contributing to higher reported G&A in Q1 .

Financial Results

Quarterly trend (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Total Revenues ($M)$167.6 $175.6 $177.1
Net Income Avail. to Common & Participating ($M)$99.4 $68.4 $48.1
Diluted EPS (GAAP)$0.75 $0.52 $0.36
NAREIT FFO per share/unit (diluted)$0.68 $0.71 $0.68
Adjusted EBITDA ($M)$114.8 $117.6 $113.7
NOI ($M)$122.6 $127.2 $128.5
AFFO ($M)$74.2 $70.7 $89.1

YoY comparison (Q1 2024 vs Q1 2025)

MetricQ1 2024Q1 2025
Total Revenues ($M)$162.3 $177.1
Diluted EPS (GAAP)$0.52 $0.36
NAREIT FFO per share/unit (diluted)$0.60 $0.68
Adjusted EBITDA ($M)$104.2 $113.7
NOI ($M)$114.8 $128.5
AFFO ($M)$75.5 $89.1

Consensus vs actual (Q1 2025)

MetricConsensusActualResult
Total Revenue ($M)$176.6*$177.1 Beat
FFO / Share (REIT)$0.70*$0.68 Miss
Primary EPS (GAAP)$0.37*$0.36 Miss
  • All consensus values marked with an asterisk are from S&P Global and may reflect S&P’s standardized actuals versus company-reported figures.*

Margins (S&P Global)

MetricQ3 2024Q4 2024Q1 2025
EBITDA Margin %———
EBIT Margin %———
Net Income Margin %———
  • Note: Margin percentages are not disclosed in the company press releases. If required, S&P Global margin series can be provided; values would be marked with asterisks and sourced to S&P Global.*

KPIs

KPIQ3 2024Q4 2024Q1 2025
In-Service Occupancy (end of period)95.0% 96.2% 95.3%
Cash SS NOI Growth (ex term. fees)7.6% 9.3% 10.1%
Cash Rental Rate Change on New/Renewal Leases—41.4% 41.7%
2025 Leases Signed To-Date Cash Uplift33% (37% of exp. signed) 33% (59% signed); 42% ex fixed 30% (73% signed); 36% ex fixed

Balance Sheet (end of period)

MetricDec 31, 2024Mar 31, 2025
Total Assets ($B)$5.26 $5.45
Debt ($B)$2.21 $2.38
Total Equity ($B)$2.75 $2.74

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
NAREIT FFO/shareFY 2025$2.87–$2.97 $2.87–$2.97 Maintained
Net Income/shareFY 2025$1.57–$1.67 $1.52–$1.62 Lowered
Avg qtr-end In-Service OccupancyFY 202595.0%–96.0% 95.0%–96.0% Maintained
Cash SS NOI Growth (ex term. fees)FY 20256%–7% 6%–7% Maintained
Interest CapitalizedFY 2025~$0.09/share ~$0.09/share Maintained
G&A ExpenseFY 2025$40.5–$41.5M $40.5–$41.5M Maintained
Dividend/ShareQ1 2025$0.445 (declared) $0.445 (declared/paid) Maintained
Dividend/ShareQ2 2025—$0.445 (declared) Maintained

Management reiterated that development lease-up assumptions are weighted to 4Q; if not achieved, the estimated 2025 impact is ~$0.02/share, which would still keep results near the low end of the range .

Earnings Call Themes & Trends

TopicQ3 2024 (Previous)Q4 2024 (Previous)Q1 2025 (Current)Trend
Tariffs/MacroNoted net absorption solid; uncertainty weighed on decision speed More foot traffic post-election; modest rent growth ex-SoCal Tariffs top of mind; some prospects paused; majority still active; not quantifiable yet Headwind to decision timing
Development Lease-Up TimingSlower/lumpy pacing; 4Q leasing shifted into 2025 1.6M sf embedded in 2025 guidance; weighted to 2H 1.5M sf assumed in 4Q; $0.02/sh sensitivity if not leased Improving engagement; still timing risk
Southern California/Inland EmpireAlternatives gradually shrinking; AB 98 a long-term supply constraint tailwind Expect flat to slightly down rents; construction costs easing; select assets leasing Large-box activity active; IE pipeline improving; vacancy ticked down; still methodical Bottoming; methodical healing
Regional StrengthNashville, Lehigh Valley, Houston, South FL strong Focus for new starts: PA, TX, FL; Nashville very strong 2Q starts in Dallas/Philadelphia targeting underserved smaller tenants Consistent; targeted growth
Construction Costs/YieldsN/A2024 construction costs down ~10%; 2025 flat to –3% expected; yields high-6% to >7% Two new starts targeting ~8% cash yields Input costs supportive of yields
Tenant Risk/Bad DebtBoohoo sublease dynamics; LC covers ~12 months Bad debt 2024 ~$0.7M; 2025 planning $1.0M Chinese 3PL exposure de minimis (~450k sf); stress test supports low-end guide if needed Risk contained
Capital Markets/LiquidityNo maturities until 2026 with extensions Funding dev via cash flow, modest sales, line Revolver upsized + term loan extended; post-quarter $450M notes priced Enhanced flexibility
Large Tenant Activity (Amazon)N/AN/AAmazon active; focus on same-day fulfillment; RFPs in multiple markets Incremental demand driver

Management Commentary

  • “We’re off to a solid start in 2025, advancing our leasing objectives and closing on a few attractive new investments… Top of mind for everyone is the evolving landscape surrounding tariffs… it could further impact the operating environment and decision-making on new investments in growth.” — CEO, Peter Baccile .
  • “NAREIT funds from operations were $0.68 per fully diluted share… cash same-store NOI growth… was 10.1%. We finished the quarter with in-service occupancy of 95.3%.” — CFO, Scott Musil .
  • “For the full year, we continue to expect overall cash rental rate growth of 30% to 40% and 35% to 45%, excluding the fixed rate renewal.” — CEO, Peter Baccile .
  • “Our FFO and key guidance assumptions are unchanged… If you want to do a sensitivity analysis… not leasing any of [the 4Q development leasing] is only about $0.02 per share.” — CFO, Scott Musil .
  • “We acquired [two Phoenix buildings]… at a 6.4% cash yield, significantly exceeding market cap rates.” — CEO, Peter Baccile .

Q&A Highlights

  • Tariff uncertainty and leasing pace: Management is seeing some “pause” in conversations but emphasized it’s early; majority of tenants remain active; renewal activity remains healthy and typically concluded ~6 months in advance .
  • Development lease-up sensitivity: About 1.5M sf assumed in 4Q; missing that would be only ~$0.02/share impact; still comfortable with the low end of FFO range in tougher scenarios .
  • Tenant exposure: Minimal direct exposure to Chinese 3PLs (~450k sf). Auto tenants skew to design/assembly vs heavy manufacturing; no significant concerns reported .
  • Market color: Large space activity in the Inland Empire is “pretty active,” with two >1M sf leases signed in Q1; IE vacancy and under-construction pipeline trending favorably; demand strongest in smaller/mid-size footprints broadly .
  • Capital allocation: New starts focused on markets with unmet demand (TX/PA/FL); flexible multi-tenant design; speculative development cap usage remains conservative .

Estimates Context

  • Against S&P Global consensus, Q1 2025 delivered: revenue slight beat (~$177.1M vs ~$176.6M), FFO/share modest miss ($0.68 vs ~$0.70), GAAP EPS modest miss ($0.36 vs $0.37). Management held full-year FFO guidance, citing limited P&L sensitivity ($0.02/share) to 4Q lease-up timing .
  • Directionally, consensus may need to reflect: (i) lower near-term occupancy (2Q trough), (ii) tariff-related decision timing, and (iii) strong embedded pricing (30–40% cash rent growth) and favorable development yields (high-7% to ~8%) that support FY25 FFO trajectory if lease-up timing holds .

All consensus values in this section marked with an asterisk come from S&P Global and are provided without company citations.*

Key Takeaways for Investors

  • Embedded growth intact: Double-digit cash SS NOI growth and 30–41% cash rent spreads highlight powerful internal growth, offsetting modest occupancy drift and timing noise .
  • Guidance credibility: Unchanged FY25 FFO guidance with clear sensitivity (~$0.02/share) to 4Q lease-up suggests limited downside if timing slips; management expressed confidence in at least the low end .
  • Balance sheet and cost of capital: Upsized revolver, extended term loans, and new $450M 2031 notes price the curve; liquidity and term profile support continued development at attractive yields .
  • Market cycle positioning: SoCal/IE supply overhang is methodically healing; AB 98 should constrain new supply over time and benefit existing assets; Nashville/Texas/Lehigh Valley show favorable fundamentals .
  • Risk monitor: Tariff clarity is the key macro swing factor for leasing velocity; tenant credit risk remains contained (bad debt plan ~$1M; de minimis direct China 3PL exposure) .
  • Trading setup: Expect intra-year earnings cadence to be back-half weighted given occupancy trough in 2Q and development lease-up assumptions in 4Q; watch updates on 1.5M sf 4Q assumption and Central PA 708k sf .
  • Capital deployment: Management remains selective/opportunistic, adding projects where yields (~7–8%) exceed stabilized cap rates; Phoenix JV take-outs at effective 6.4% cash yield underscore discipline .

Additional details and sources:

  • Q1 2025 press release/8-K: operating metrics, financials, and guidance .
  • Q1 2025 earnings call: tariff impact, leasing assumptions/sensitivity, regional trends, tenant exposure .
  • Prior quarters for trend: Q4 2024 and Q3 2024 press releases and calls .
  • Capital markets actions: revolver/term loan (Mar 18, 2025) and $450M notes (May 12, 2025) .

*Values retrieved from S&P Global.