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 1 on a touch-tone phone. To withdraw your question, please press star, then 2. 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 a lot, Dave. Hello, everybody, and welcome to our call. Before we discuss our fourth quarter and full year 2024 results and our initial guidance for 2025, 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 6, 2025. 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 it over to Peter.

Thank you, Art, and thank you all for joining us today. The FIRST Industrial team wrapped up a successful 2020-2024 and highlighted by delivering strong cash rental rate growth on leasing and achieving our second highest volume year for development lease signing since we relaunched our program in 2012. We're equally excited about the impact this success is having on our 2025 FFO growth. Based on the midpoint of our guidance, we're expecting to grow FFO approximately 10%. Scott will walk you through the details later when he addresses our guidance. Before getting into specifics of our performance, let me comment on the industrial market broadly. CBRE EA reports U.S. industrial market vacancy hit 6.1% at year end, a 30 basis point rise from Q3 24. New construction start volume is 62% lower than the third quarter 2022 peak with just 43 million square feet breaking ground in Q4 24. In our 15 target markets, space under construction totals 143 million square feet, signaling future quarterly completions could fall well below the 46 million square feet delivered in the fourth quarter of 24. On the demand side, net absorption nationally was 24 million square feet in the fourth quarter, 15 million of which was in our target markets. With the election behind us We're hopeful that this reduction in uncertainty will lead to a stronger commitment to growth investing and, in turn, a more consistent pace in development leasing. From a portfolio point of view, we ended the year with in-service occupancy of 96.2%, aided by some fourth quarter development leasing, which I will touch upon shortly. Our team also delivered a cash rental rate increase of 51% for the year. which is the second highest in our 30-year history. This marks back-to-back years of 50-plus percent for this metric. Looking at our 2025 lease expirations, we're making solid progress and are now through 59% by square footage. Together with new leasing, our cash rental rate increase for leases signed with 2025 commencement date is 33%. Excluding the 1.3 million square foot fixed rate renewal in central Pennsylvania we discussed on our last call, 2025 signed leases to date had a cash rental rate increase of 42%. For the full year, we expect cash rental rate growth to range from 30% to 40% overall and 35% to 45%, excluding the aforementioned central PA renewal. We ended the fourth quarter on a positive note with about 1 million square feet of signed development leasing on balance sheet and another 463,000 square feet in our Phoenix joint venture. On balance sheet, we signed a full building lease for our 542,000 square footer in Nashville with a repeat customer nine months ahead of the anticipated building completion. We also leased the remaining 350,000 square feet at our first logistics center at 283 Building B in Pennsylvania and 100% of our 83,000 square foot first L building in the Inland Empire. As I noted at the start of the call, our team delivered an excellent year of development leasing. In total for 2024, we signed 4.7 million square feet of development leases inclusive of our joint venture. This compares to a budgeted number of 2.8 million square feet in our original 2024 guidance. Not only were we pleased with the amount of leasing, the signings were broad-based, representing 10 of our 15 target markets, which were Northern and Southern California, Nashville, Central Pennsylvania, Phoenix, Houston, Chicago, Seattle, Miami, and Denver. Many thanks to our regional teams for this fantastic performance. We've also started two new developments which will contribute to our long-term growth. On the heels of the 542,000 square foot lease at our first Rockdale Park in Nashville, we've started a 317,000 square foot building. Our total projected investment is $33 million. Nashville's long-term growth drivers and current fundamentals are strong as vacancy stands around 3%, and unleased new supply represents 1.7% of total stock. In the Lehigh Valley, in the I-78-81 corridor, we started our first phase at First Park 33. There, we're constructing two buildings, totaling 362,000 square feet, with a total estimated investment of $63 million. The building sizes and depths will allow us to target the smaller tenant segment, which we believe is underserved by new construction, as most availabilities are targeting tenants 200,000 square feet and up. The cash yield for each of the fourth quarter starts is expected to be north of 7%, We're also well positioned for future development opportunities as sub-market conditions warrant. In the fourth quarter, we were pleased to close on the final land parcel at our first Park Miami project for $16 million. With this addition, we can now develop an additional 1.1 million square feet of product at what will ultimately be a 2.5 million square foot park. In total, our land positions across our target markets can accommodate 15 million square feet of growth. Moving now to dispositions. We sold five buildings totaling 214,000 square feet for 25 million in the fourth quarter to bring our total for the year to 163 million. Since 2010, we've completed the sale of 2.4 billion of legacy assets, achieving portfolio objectives for location, functionality, and growth prospects. Therefore, moving forward, you should assume property sales volumes will be lower than prior years. For 2025, we expect asset sales of up to $75 million. Lastly, with respect to our dividend, given our performance and outlook, our Board of Directors declared a dividend of 44.5 cents per share. This is an increase of 20.3%, which is aligned with our anticipated cash flow growth. Before I turn it over to Scott, I'd like to express our heartfelt sympathies to the people of Southern California who have been impacted by the wildfires. The physical and emotional destruction is tragic and unprecedented, and FR will continue to do what we can to support the impacted communities. With respect to our people and properties, we are fortunate and thankful to be able to say our teammates and their families are safe and sound, and none of our buildings have been affected. With that, I'll turn it over to Scott.