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First Industrial Realty Leases in LA & York, PA

Zacks Equity Research

On Tuesday, First Industrial Realty Trust Inc. (FR), the Chicago, IL-based real estate investment trust (:REIT), announced the inking of long-term lease agreements for two recently completed buildings. This corresponds with the usual company strategy of offering high-quality facility to tenants as well as keeping its own cash-flow growth momentum going.

One of the leased-out properties is the 708,000 square foot First Logistics Center, located at I-83 in York, PA. It is leased to a multinational corporation with the lease period commencing on Sep 15, 2014. The equity REIT also leased out the 43,485 square foot First Figueroa Logistics Center, located in South Bay submarket of Los Angeles to a regional events company. For this property, lease period will start on Jun 1, 2014.

First Industrial Realty is a self-administered and fully integrated REIT, engaged in owning, managing, acquiring and developing industrial real estate. The company has a history of serving regional customers as well as multinational corporations. As of Mar 31, 2014, First Industrial Realty owned, managed and had under development an industrial space of approximately 65.8 million square feet.

We believe that the above-mentioned lease agreements by First Industrial Realty will provide it with financial flexibility and position it favorably to pursue future expansion and development activities.

First Industrial Realty reported first-quarter 2014 funds from operations (:FFO) of 24 cents per share on Apr 23, 2014, which missed the Zacks Consensus Estimate by 11.1%. Nevertheless, this came in line with the prior-year quarter figure.

First Industrial currently holds a Zacks Rank #3 (Hold). Some better-ranked equity REITs worth considering include The GEO Group, Inc. (GEO), W. P. Carey Inc. (WPC) and Terreno Realty Corp. (TRNO). All these stocks sport a Zacks Rank #1 (Strong Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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