FIRST INDUSTRIAL REALTY TRUST INC (FR)·Q4 2024 Earnings Summary

Executive Summary

• Q4 delivered strong operating metrics: revenue grew 11.7% YoY to $175.6m, NAREIT FFO per share rose 12.7% YoY to $0.71, and cash SS NOI increased 9.3%; GAAP EPS declined to $0.52, primarily due to a smaller gain on sale of real estate vs. prior year ($18.2m vs. $48.2m) .
• 2025 outlook initiated with NAREIT FFO guidance of $2.87–$2.97 per share (~10% growth at midpoint), underpinned by 1.6m sq ft of expected development lease-up, 95–96% average in-service occupancy, and 6–7% cash SS NOI growth assumptions .
• Strategic execution remained robust: 4.7m sq ft of development leases signed in 2024 (second-highest since 2012), two new development starts (679k sq ft; $96m), and dividend raised 20.3% to $0.445 for Q1’25, aligning with anticipated cash flow growth .
• The 2025 stock narrative/catalysts: dividend step-up, visible back-half occupancy inflection as projects lease, and potential tailwinds from moderating supply/starts; watch Southern California rent trajectory (flat-to-down bias) and timing of lease decisions as key sensitivities .

What Went Well and What Went Wrong

• What Went Well

  • Strong pricing power: cash rental rates rose 41.4% in Q4 and 50.8% for FY’24 (second consecutive year >50%) .
  • Development leasing execution: 4.7m sq ft signed in 2024 across 10 markets; CEO: “delivered strong portfolio operating metrics and signed 4.7 million square feet of development leases” .
  • 2025 growth visibility: guidance implies ~10% FFO growth; CFO embedded 1.6m sq ft of development leasing, largely 2H-weighted .

• What Went Wrong

  • GAAP EPS optics: diluted EPS fell to $0.52 vs. $0.67 YoY, largely reflecting a smaller gain on sale of real estate ($18.2m vs. $48.2m), dampening GAAP comparability despite better FFO/AFFO .
  • Market cadence: decision-making remains elongated in select markets (e.g., Denver), with a “U-shaped” demand recovery vs. a sharper rebound .
  • Southern California rents: management expects SoCal rent growth to be flat to slightly down in 2025; tenant decisions are improving but still slower versus prior years .

Financial Results

Q4 YoY comparison (GAAP and Non-GAAP)

Sequential trend (Q2 → Q3 → Q4 2024)

KPIs and Operating Metrics

Context/Drivers

• EPS decline vs. Q4’23 reflects lower gains on sale despite stronger core operations; gain on sale was $18.2m in Q4’24 vs. $48.2m in Q4’23, while FFO and AFFO improved YoY on higher rents and SS NOI growth .
• Revenue growth was underpinned by rent escalations and re-leasing spreads; SS NOI growth excluded prior accelerated TI reimbursement items for comparability .

Guidance Changes

Note: FY 2024 guidance was last raised in Q3 to $2.61–$2.65 FFO/share (for context; FY completed) .

Earnings Call Themes & Trends

Management Commentary

• “Based on the midpoint of our guidance, we're expecting to grow FFO approximately 10%.” – CEO, Peter Baccile .
• “We're assuming 1.6 million square feet of development lease-up, the vast majority of it weighted to the second half of the year.” – CFO, Scott Musil .
• “The cash yield for each of the fourth quarter starts is expected to be north of 7%.” – CEO, Peter Baccile .
• “Our team also delivered a cash rental rate increase of 51% for the year, which is the second highest in our 30-year history.” – CEO, Peter Baccile .
• “We expect asset sales of up to $75 million [in 2025].” – CEO, Peter Baccile .

Q&A Highlights

• Development lease-up embedded in 2025: 1.6m sq ft focused on developments placed in service/not in service; minimal assumption for 2025 completions; contributes to FFO and potentially SS NOI depending on free rent .
• Occupancy trajectory: down in H1’25 due to a 700k sq ft move-out in Central PA and project in-service timing; expected pickup in H2’25 .
• Bad debt risk remains low: ~$0.7m in 2024 (10 bps of revenue); 2025 guidance assumes $1m .
• SoCal/market color: SoCal rents flat-to-down; broader demand recovery U-shaped; small/mid-size tenants more active; 3PLs, manufacturing, e-comm and F&B lead activity .
• Build costs/yields: 2024 construction costs down ~10%; 2025 flat to -3%; new starts in PA/TX/FL can underwrite ~7% yields at current rents .

Estimates Context

• S&P Global consensus estimates for Q4 2024 and FY 2025 were not retrievable at this time due to a temporary request limit; as a result, we cannot quantify beats/misses versus Street consensus for revenue/FFO/EPS in this report (values unavailable; will update upon access restoration). Values would be retrieved from S&P Global.

Key Takeaways for Investors

• Underlying fundamentals solid: double-digit revenue growth, expanding FFO/share, and 9.3% cash SS NOI growth in Q4 indicate pricing power despite macro normalization .
• 2025 set up for mid/late-year inflection: 1.6m sq ft of embedded development leasing and 95–96% average occupancy underpin ~10% FFO growth guidance; H2 should improve sequentially .
• Shareholder return: 20.3% dividend hike to $0.445 aligns with expected cash flow growth and signals confidence in the outlook .
• Watchlist items: timing of lease decisions (elongated), Southern California rent direction (flat-to-down bias), and lease-up of 2025 in-service projects (mostly 2H) .
• Development economics remain attractive: cost deflation (~10% in 2024; flat to -3% in 2025) supports >7% yields on new starts; sizeable land bank (~15m sq ft potential) provides multi-year growth optionality .
• Portfolio optimization largely complete: dispositions expected to moderate (up to $75m in 2025) after $2.4B sold since 2010; funding mix balanced across FCF, selective sales, and revolver .

Supporting Citations:

• Q4 2024 press release and 8-K:
• Q4 2024 earnings call transcript:
• Q3 2024 8-K:
• Q2 2024 8-K:
• Additional press release (Q4 & FY 2024 results):