First Industrial Realty Trust, Inc.

Good day and thank you for standing by. Welcome to the first industrial first quarter earnings result call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 1 on your telephone. Please be advised that today's call is being recorded. If you require any further assistance, please press star 0. We would like to hand the conference over to your speaker today, Mr. Art Harman. Vice President of Investor Relations and Marketing. You may begin, sir.

Thank you, Sarah. Hello, everyone, and welcome to our call. Before we discuss our first quarter 2022 results and our updated guidance for the year, let me remind everyone that our call may include forward-looking statements as defined by federal securities laws. These statements are based on management's expectations, plans, and estimates of our prospects. Today's statements may be time-sensitive and accurate only as of today's date, April 21, 2022. We assume no obligation to update our statements or the other information we provide. Actual results may differ materially from our forward-looking statements, and factors which could cause this are described in our 10-K and other SEC filings. You can find a reconciliation of non-GAAP financial measures discussed in today's call in our supplemental report and our earnings release. The supplemental report, earnings release, and our SEC filings are available at firstindustrial.com under the Investors tab. Our call will begin with remarks by Peter Basile, our President and Chief Executive Officer, and Scott Musil, our Chief Financial Officer, after which we'll open it up for your questions. Also on the call today are JoJo Yap, Chief Investment Officer, Peter Schultz, Executive Vice President, Chris Schneider, Senior Vice President of Operations, and Bob Walter, Senior Vice President of Capital Markets and Asset Management. Now let me turn the call over to Peter Basile.

Thank you, Art, and thank you all for joining us today. 2022 is off to an excellent start. Our team continues to achieve strong operating results both within our in-service portfolio and key development and value-add leasing wins. As you read in our press release yesterday, we also completed an important capital markets execution in the form of a new $425 million term loan, which Scott will discuss shortly. Overall, the strong fundamentals in the industrial sector continue to drive high occupancy rates and rental rate growth. According to CBRE EA, in the first quarter, national vacancy remained at a record low level of 3% for the second quarter in a row. Net absorption was 76 million square feet, roughly in line with new completions of 69 million square feet. In our portfolio, we finished the quarter with an occupancy rate of 98%. We also successfully backfilled our largest 2022 move out of 390,000 square footer in the I-55, I-80 submarket of Chicago. There, we achieved a cash rental rate increase of nearly 30% with no downtime. We continue to capture strong rental rate increases on new and renewal leasing. Through yesterday, we had taken care of 72% of our 2022 rollovers at a cash rental rate change of 20%. For all of 2022, we anticipate that our increase on rental rates on new and renewal leasing will now be in the range of 20 to 23%. Moving on to new development and value-add activities. Since our last earnings call, we inked 167,000 square feet of leases at First Park, Miami to bring buildings 9 and 11 to 70% leased. We also signed a 31,000 square foot lease to stabilize a value-add project in Northern California. As discussed on our last earnings call, we expanded our pipeline by starting five buildings in the first quarter. These are located in Southern California, Denver, the Lehigh Valley, Chicago, and Miami, where we are building the latest addition to our first Park Miami project. These projects total 1.3 million square feet with an estimated investment of approximately $168 million. In the second quarter, we expect to start another project in the city of Fontana in in the Inland Empire to capture tenant demand in this sought after supply constrained market. The vacancy rate in the Inland Empire market currently stands at 0.2%. The estimated investment for this 83,000 square footer to be known as First Elm Logistics Center is $21 million with an estimated yield of 9.7%. This projected yield is reflective of the great work by our Southern California team in assembling the land at a low basis, as well as outsized growth in rental rates in this market over the last couple of years. Including the new second quarter development start, our developments in process total 6.3 million square feet with an investment of $751 million which are 23% leased as of yesterday. The projected cash yield for these investments is 6.8%, which represents an expected overall development margin of approximately 100%. As we have highlighted in prior calls, we are well positioned to capture additional demand and growth with our strategic land holdings. During the first quarter, we added three sites in the Inland Empire and a site in Northern California for a total of $55 million. These new sites will support more than 700,000 square feet of new development when entitled, representing $170 million of potential investment based on today's construction costs. Including these acquisitions and adjusting for our new Inland Empire start in 2Q, in total, our balance sheet land today can support an additional 14.8 million square feet. This represents approximately $2 billion of potential new investment based on today's estimated construction costs and the land at our book basis. These figures exclude our share of the land in our Phoenix joint venture. With that, I'll turn it over to Scott.