First Industrial Realty Trust, Inc.

Hello, everyone. This is Marlies, your operator for today's call. We are going to start this call in just a few minutes, and we ask you and thank you for your patience. Thank you very much. Thank you. Good day and welcome to FIRST Industrial Realty Trust's first quarter results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one, on a touch tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Art Harmon, Vice President of Investor Relations and Marketing. Please go ahead.

Thank you, Marlise. Hello, everybody, and welcome to our call. Before we discuss our first quarter 2023 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 20th, 2023. 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 with us 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 hand the call over to Peter.

Thank you, Art, and thank you all for joining us today. 2023 is off to an excellent start. Our team continues its strong track record of leasing success maintaining high occupancy, capturing increasing rents on new and renewal leasing, and securing tenants for our new developments. As a result of our performance, we are raising our estimate for our 2023 cash rental rate and our full-year FFO guidance. Moving now to the broader U.S. industrial market, fundamentals continue to drive high rates of occupancy both nationally and within our target markets. There's a fair amount of new supply coming online this year as developers ramped up in 2022 to capture incremental demand. However, we expect new starts to decline throughout 2023 compared to last year due to higher capital costs, a constrained lending environment, and lower land acquisition volumes. Given our primary focus on land-constrained coastal markets for our new developments, We continue to feel good about the positioning of our current projects, as well as our land holdings, most of which are ready to go as market conditions warrant. Our portfolio performance continues to outpace the national market. We finished the first quarter with an occupancy rate of 98.7%, and our cash rental rate change for leases commencing in the first quarter was 58.3%. a new quarterly record for our company. On a straight-line basis, rents were up 85% in the quarter. As of yesterday, approximately 63% of our 2023 lease expirations are in the books at a cash round rate increase of 56%. Given our leases signed to date and our expectations for the remaining 2023 expirations, We anticipate that our increase on rental rates on new and renewal leasing will now be in the range of 45 to 55%. This new midpoint is five percentage points higher than the midpoint we provided on our February call. Moving on to development activity. Since our last earnings call, we signed full building leases for the 198,000 square foot First Park Miami building 10 and the 105,000-square-foot First Lehigh Logistics Center in the Lehigh Valley Market of Pennsylvania. We leased 50% of our 128,000-square-foot First Steel Building in Seattle. We also aimed a 27,000-square-foot lease at our four-building, 347,000-square-foot First Loop Logistics Park in Orlando. That newly completed project is now 56% leased. Given our development leasing progress and the favorable supply-demand dynamics in its sub-market, we broke ground on First State Crossing in the infill Philadelphia metro market. The site is located just 12 miles from the Philadelphia airport with great access to both I-95 and I-495. First State Crossing will be a 358,000 square foot facility with a total estimated investment of $61 million and a projected cash yield of 6.8%. Including the first quarter development start, our developments in process total 3.6 million square feet with an investment of 569 million, which are currently 12% leased. The projected cash yield for these investments is 7.3%, which represents an expected overall development margin of approximately 65%. In total, our balance sheet land today can support an additional 13.8 million square feet. This represents approximately 2.1 billion of potential new investment based on today's estimated construction costs and the land at our book basis. These figures exclude our remaining share of the land and our Phoenix joint venture. Speaking of that venture, In the first quarter, we sold 31 acres to a data center user for a sales price of $50 million. Our share of the gain in incentive fee before tax was approximately $24 million. In conjunction with this sale, the venture entered into an agreement with the buyer, which provides them an option to purchase an additional 71 acres within the next two years. As part of this agreement, the buyer is required to lease the ground for up to two years and our share of the ground lease rent is approximately $200,000 a month. As you can see, with little over two months' time elapsed from our fourth quarter call, we've had some great results and activity across our entire platform. With that, I'll turn it over to Scott for his comments.