First Industrial Realty Trust Inc (FR) Reports Record Rental Rate Growth and Solid Financial ...
Net Income: $2.07 EPS for full year 2023, down from $2.72 in 2022.
FFO: $2.44 per share/unit for 2023, up from $2.28 in 2022.
Cash Rental Rates: Increased by a record 58.3% in 2023.
Occupancy: In service occupancy at 95.5% at the end of Q4 2023.
Dividend: Increased Q1 2024 dividend to $0.37 per share, a 15.6% increase.
2024 Guidance: NAREIT FFO projected at $2.54 to $2.64 per share/unit.
Portfolio Expansion: Acquired properties and land sites to support future development.
On February 7, 2024, First Industrial Realty Trust Inc (NYSE:FR) released its 8-K filing, detailing its financial results for the fourth quarter and full year of 2023. The company, a leading fully integrated owner, operator, and developer of logistics real estate, reported a diluted net income available to common stockholders per share (EPS) of $0.67 for the fourth quarter, up from $0.62 a year ago. However, the full year 2023 EPS was $2.07, a decrease from $2.72 in 2022.
Financial Highlights and Portfolio Performance
First Industrial's financial achievements in 2023 include a record annual increase in cash rental rates of 58.3%, the highest in the company's history. This significant growth in rental rates is a testament to the company's strong positioning in the industrial real estate market and its ability to capitalize on favorable market conditions. The company also reported funds from operations (FFO) of $2.44 per share/unit for the full year, an increase from $2.28 in 2022. This metric is crucial for real estate investment trusts (REITs) as it provides a clearer picture of the company's operating performance by excluding the effects of depreciation and property sales.
First Industrial's portfolio performance remained robust, with in-service occupancy at 95.5% at the end of the fourth quarter of 2023. The company also experienced a cash basis same store net operating income (SS NOI) growth of 8.4% for the full year, driven by increases in rental rates on new and renewal leasing, contractual rent escalations, and lower free rent.
Investment and Disposition Activities
Investment activities included the commencement of First Pine Hills, a build-to-suit project in Orlando, and the acquisition of several fully leased buildings and land sites for future development. Disposition activities for the year resulted in the sale of 11 buildings and two land sites for a total of $125 million. These strategic property transactions demonstrate First Industrial's commitment to optimizing its portfolio and capitalizing on market opportunities.
Outlook and Guidance for 2024
Looking ahead to 2024, First Industrial anticipates continued cash flow growth and further capture of market rent growth in its leasing efforts. The company has initiated its 2024 NAREIT FFO guidance at a range of $2.54 to $2.64 per share/unit, reflecting confidence in its operational strategy and market positioning. The board of directors has also declared a common dividend of $0.37 per share/unit for the quarter ending March 31, 2024, representing a 15.6% increase from the prior rate.
First Industrial's strong balance sheet, with no debt maturities until 2026 assuming extension options, positions the company well for current and future growth. The company's focus on driving cash flow growth and executing on development opportunities is expected to support its performance in the coming year.
For a more detailed look at First Industrial Realty Trust Inc's financials and strategic initiatives, investors and interested parties can access the full earnings report and supplemental information on the company's website.
Conference Call and Additional Information
First Industrial will host its quarterly conference call to discuss these results and provide additional insights into its performance and strategy. The call will be accessible via webcast on the Investors page of the company's website at www.firstindustrial.com.
For those seeking a deeper understanding of First Industrial's financials, the company's fourth quarter and full year 2023 supplemental information is available under the "Investors" tab on its website.
As a leading U.S.-only owner, operator, developer, and acquirer of logistics properties, First Industrial Realty Trust Inc remains focused on providing high-quality facilities and industry-leading customer service to its tenants, which include multinational corporations and regional firms that are essential for their supply chains.
Explore the complete 8-K earnings release (here) from First Industrial Realty Trust Inc for further details.
This article first appeared on GuruFocus.
