First Industrial Realty Trust, Inc.

Good day, and welcome to the first Industrial Realty Trust, Inc. first 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.

Thank you, Dave. Hello, everybody, and welcome to our call. Before we discuss our first quarter of 2024 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 18, 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. Since our last call in February, our team has signed two big development leases, and we continue to make progress on our 2024 renewals at strong cash rental rate increases, both of which I will discuss shortly. Looking at the industrial market broadly, vacancies ticked up to about 5.3% as new development projects that were started in 2023 have come online. For 2024, CBRE projects completions of approximately 300 million square feet. As those projects are delivered, we expect national vacancy to increase to the mid-6% range in the coming quarters. Importantly, the market has demonstrated some discipline with respect to new starts. No doubt that the high cost of construction debt has helped. For the past three quarters, starts have averaged just 42 million square feet, which is more than 60% below the recent peak of 114 million in the third quarter of 2022. The increased level of prospect traffic for our development that we experienced toward the end of 2023 has continued into 2024, and some significant leasing decisions have been made. To that end, we signed full building leases at our 500,000 square foot 1st Rockdale IV in Nashville and our 1 million square foot 1st Stockton Logistics Center in Northern California. Updating you on our progress on lease signings to date related to 2024 expirations, we've taken care of 68% weighted on net rent. Including the impact of new leasing, our cash flow rate increase currently stands at 45 percent, which is near the midpoint of our 40 to 52 percent full-year forecast that we provided on our last earnings call. Our results to date reflect a renewal of one of our three largest expirations, all of which are located in Southern California. For guidance purposes, we have assumed one of the remaining two will renew. Moving now to dispositions. In the first quarter, we sold nine properties comprised of 433,000 square feet for a total of $49 million. This puts us well on our way to achieving our full year sales guidance of 100 to 150 million. The largest sale was the five-building, 278,000-square-foot portfolio in Cincinnati for 33 million that we discussed on our February call. The remaining 16 million consisted of 165,000 square feet located in Chicago and Detroit. As I noted on our last call, 2024 has been a particularly challenging year to project the pace and timing of leasing in our portfolio due to the economic uncertainty, increasing volatility in the capital markets and the interest rate outlook, and the rapidly evolving geopolitical environment. Over the past few weeks, these factors have once again given some tenants reason for pause. As a result, with respect to our broad-based same-store leasing assumptions for the year, we decided to make some adjustments which are reflected in our updated guidance. With that, I'll turn it over to Scott.