First Industrial Realty Trust, Inc.

Good day, and welcome to the first Industrial Realty Trust, Inc. fourth quarter results 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, Senior Vice President of Investor Relations and Marketing. Please go ahead.

Thanks very much, Dave. Hello, everybody, and welcome to our call. Before we discuss our fourth quarter and full year 2023 results and our initial 24 guidance, 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, February 8, 2024. 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, Executive Vice President of Operations, and Bob Walter, Executive 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. And thank you to all of the members of the FIRST Industrial team who navigated a challenging 2023 to once again produce some great results. We delivered another record year of cash rental rate growth on new and renewal leasing and have laid the groundwork for another strong year in 2024. We executed on both sides of the transaction ledger with attractive new investments and impactful sales. We finished the year with some key leasing wins in our in-service portfolio and our developments. Moving now to the broader industrial market, the increased level of tenant traffic we saw towards the end of 2023 has continued into 2024. With the overall economic picture and interest rate environment becoming a bit more clear and with slightly lower market volatility, more businesses are revisiting their space needs for growth. On the supply side, as you know, starts nationally ramped up in 2022 and early 2023 to meet customer demand, driving national vacancy to around 5%, still low by historical standards. Those projects have made and are making their way into inventory with completions for 2023 totaling 487 million square feet compared to net absorption of 239 million square feet according to CBRE. Importantly, the market has responded to this imbalance appropriately with new starts down around two-thirds from the peak. Within our portfolio, broader activity has resulted in several signed leases in both our in-service portfolio and new developments. We're pleased to announce two big long-term leasing wins in Baltimore. We leased 100% of the 644,000 square foot Old Toast Road asset to a government-related 3PL and 50% of our neighboring 349,000 square foot asset. In our development portfolio, inclusive of our Phoenix joint venture, we signed a total of 651,000 square feet of leases since our last call. In the fourth quarter, we signed a 209,000 square foot lease at our first Park 94 building in the Kenosha sub-market of Chicago. We also signed a 26,000 square foot lease at our first loop development in Orlando. So far in 2024, we've signed a 40,000 square foot lease at our first 76 logistics center in Denver. Also in our Phoenix joint venture, we signed two leases at the 376,000 square footer to bring that building to 100% leased prior to completion. We've now fully leased two of the three JV buildings with the third slated to be completed in the second quarter. For the developments we placed in service in the third and fourth quarters of 2023 that are not currently fully leased, we have approximately 240 basis points of occupancy opportunity. We're seeing prospect activity at most of these assets, so we hope to have more progress to report throughout 2024. As I mentioned in my opening remarks, we set a new annual record for cash rental rate increase for new and renewal leasing in 2023 of 58.3%. 2024 is also off to a good start. To date, regarding lease signings related to 2024 commencements, we've taken care of 53% by rental income at a cash rental rate change of 39%. We have a few leasing opportunities within our Southern California portfolio over the balance of the year, which we expect will bolster this metric. Overall, for 2024, we're currently forecasting cash rental rate growth on new and renewal leasing of 40% to 52%. Moving now to the investment side, we brought home a few attractive deals during the fourth quarter for an aggregate purchase price of $37 million. In southeast Houston, we added a fully leased 54,000 square foot building at our Energy Commerce Business Center asset. With this addition, we now own all five buildings totaling 676,000 square feet in this well-located park with frontage on Beltway 8. We also completed a sale-leaseback transaction for a 69,000 square footer in the Inland Empire West. Longer term, this investment provides us an opportunity to build a new 175,000 square foot building on the site when the lease expires. Lastly, we acquired a nine acre land site in Orlando for which we have a built to suit tenant in tow for a 112,000 square foot project. Our total investment, including the land, will be approximately $21 million and the tenant is expected to take occupancy in 2025. Moving now to dispositions. In the fourth quarter, we sold 785,000 square feet for $64 million. The largest sales were two buildings in Cincinnati for $23 million and a 264,000 square footer in Central PA for $21 million. For the year, we sold 1 million square feet plus two land sites for a total of $125 million. With these property sales, we ended the year with 95% of our rental income in our 15 target markets, meeting the goal we laid out at our 2020 Investor Day, and 57% in our coastal markets, which exceeded the 55% high end of our target range. Scott will update you shortly on how we performed on our $260 million ASSO opportunity. Thus far in 2024, we closed on a five-building, 278,000-square-foot sale in Cincinnati for $33 million. For the full year 2024, we expect sales of $100 to $150 million. Regarding our dividend, given our performance and outlook for growth, our Board of Directors has declared a dividend of 37 cents per share for the first quarter of 2024, or an annualized rate of $1.48. This represents a 15.6% increase from the prior rate and a low payout ratio of approximately 70% based on our anticipated 2024 AFFO as defined in our supplemental. With that, I'll turn it over to Scott to provide additional details on our performance and our 2024 guidance. Thanks, Peter.