Edgar Filing: FIRST INDUSTRIAL REALTY TRUST INC

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

Form 10-Q

__________________________________



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-13102 (First Industrial Realty Trust, Inc.) 333-21873 (First Industrial, L.P.)

__________________________________

FIRST INDUSTRIAL REALTY TRUST, INC.

FIRST INDUSTRIAL, L.P.

(Exact name of Registrant as specified in its Charter)



Maryland (First Industrial Realty Trust, Inc.)		36-3935116 (First Industrial Realty Trust, Inc.)
Delaware (First Industrial, L.P.)		36-3924586 (First Industrial, L.P.)
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

311 S. Wacker Drive, Suite 3900, Chicago, Illinois		60606
(Address of principal executive offices)		(Zip Code)

(312) 344-4300

(Registrant’s telephone number, including area code)

__________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



First Industrial Realty Trust, Inc.	Yes þ No o
First Industrial, L.P.	Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



First Industrial Realty Trust, Inc.	Yes þ No o
First Industrial, L.P.	Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



First Industrial Realty Trust, Inc.:
Large accelerated filer	þ		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	o



First Industrial, L.P.:
Large accelerated filer	o		Accelerated filer	þ
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



First Industrial Realty Trust, Inc.	Yes o No þ
First Industrial, L.P.	Yes o No þ

Number of shares of Common Stock, $0.01 par value, outstanding as of October 30, 2015: 110,744,317.

EXPLANATORY NOTE

This report combines the Quarterly Reports on Form 10-Q for the period ended September 30, 2015 of First Industrial Realty Trust, Inc., a Maryland corporation (the "Company"), and First Industrial, L.P., a Delaware limited partnership (the "Operating Partnership"). Unless stated otherwise or the context otherwise requires, the terms "we," "our" and "us" refer to the Company and its subsidiaries, including the Operating Partnership and its consolidated subsidiaries.

The Company is a real estate investment trust and the general partner of the Operating Partnership. At September 30, 2015, the Company owned an approximate 96.2% common general partnership interest in the Operating Partnership. The remaining approximate 3.8% common limited partnership interests in the Operating Partnership are owned by certain limited partners. As the sole general partner of the Operating Partnership, the Company exercises exclusive and complete discretion over the Operating Partnership’s day-to-day management and control and can cause it to enter into certain major transactions, including acquisitions, dispositions, and refinancings. The management of the Company consists of the same members as the management of the Operating Partnership.

The Company and the Operating Partnership are managed and operated as one enterprise. The financial results of the Operating Partnership are consolidated into the financial statements of the Company. The Company has no significant assets other than its investment in the Operating Partnership. Substantially all of the Company’s assets are held by, and its operations are conducted through, the Operating Partnership. Therefore, the assets and liabilities of the Company and the Operating Partnership are substantially the same.

We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how the Company and the Operating Partnership operate as an interrelated, consolidated company. The main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership are:


•	Stockholders’ Equity, Noncontrolling Interest and Partners’ Capital. The 3.8% equity interest in the Operating Partnership held by entities other than the Company are classified within partners’ capital in the Operating Partnership’s financial statements and as a noncontrolling interest in the Company's financial statements.

•

Relationship to Other Real Estate Partnerships. The Company's operations are conducted primarily through the Operating Partnership and its subsidiaries, though operations are also conducted through eight other limited partnerships, which are referred to as the “Other Real Estate Partnerships." The Operating Partnership is a limited partner, holding at least a 99% interest, and the Company is a general partner, holding at least a .01% general partnership interest through eight separately wholly-owned corporations, in each of the Other Real Estate Partnerships. The Other Real Estate Partnerships are variable interest entities that both the Company and the Operating Partnership consolidate. The Company's direct general partnership interest in the Other Real Estate Partnerships is reflected as noncontrolling interest within the Operating Partnership's financial statements.

•

Relationship to Service Subsidiary. The Company has a direct wholly-owned subsidiary that does not own any real estate but provides services to various other entities owned by the Company. Since the Operating Partnership does not have an ownership interest in this entity, its operations are reflected in the consolidated results of the Company but not the Operating Partnership. Also, this entity owes certain amounts to the Operating Partnership, which a receivable is included on the Operating Partnership’s balance sheet but is eliminated on the Company’s consolidated balance sheet since both this entity and the Operating Partnership are fully consolidated by the Company.

We believe combining the Company’s and Operating Partnership’s quarterly reports into this single report results in the following benefits:


•	enhances investors' understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management views and operates the business;


•	creates time and cost efficiencies through the preparation of one combined report instead of two separate reports; and


•	eliminates duplicative disclosures and provides a more streamlined and readable presentation for our investors to review since a substantial portion of the Company’s disclosure applies to both the Company and the Operating Partnership.

To help investors understand the differences between the Company and the Operating Partnership, this report provides the following separate disclosures for each of the Company and the Operating Partnership:


•	consolidated financial statements;


•	a single set of consolidated notes to such financial statements that includes separate discussions of each entity’s stockholders’ equity or partners’ capital, as applicable; and


•	a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section that includes distinct information related to each entity.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for the Company and the Operating Partnership in order to establish that the requisite certifications have been made and that the Company and the Operating Partnership are both compliant with Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.

FIRST INDUSTRIAL REALTY TRUST, INC.

FIRST INDUSTRIAL, L.P.

FORM 10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, 2015

INDEX



			Page
PART I: FINANCIAL INFORMATION			3
Item 1.		Financial Statements	3
	First Industrial Realty Trust, Inc.:
		Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	3
		Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2014	4
		Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2015 and 2014	5
		Consolidated Statement of Changes in Stockholders' Equity for the Nine Months Ended September 30, 2015	6
		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014	7
	First Industrial, L.P.:
		Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014	8
		Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2015 and 2014	9
		Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2015 and 2014	11
		Consolidated Statement of Changes in Partner's Capital for the Nine Months Ended September 30, 2015	12
		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014	13
	First Industrial Realty Trust, Inc. and First Industrial, L.P.:
		Notes to Consolidated Financial Statements	15
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.		Controls and Procedures	41
PART II: OTHER INFORMATION			42
Item 1.		Legal Proceedings	42
Item 1A.		Risk Factors	42
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.		Defaults Upon Senior Securities	42
Item 4.		Mine Safety Disclosures	42
Item 5.		Other Information	42
Item 6.		Exhibits	42
SIGNATURES			43
EXHIBIT INDEX			44

PART I: FINANCIAL INFORMATION



Item 1.	Financial Statements

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS



	September 30, 2015			December 31, 2014
	(Unaudited)
	(In thousands except share and per share data)
ASSETS
Assets:
Investment in Real Estate:
Land	$	740,989		$	718,188
Buildings and Improvements	2,467,125			2,439,887
Construction in Progress	60,306			25,294
Less: Accumulated Depreciation	(820,322		)	(786,978		)
Net Investment in Real Estate	2,448,098			2,396,391
Real Estate and Other Assets Held for Sale, Net of Accumulated Depreciation and Amortization of $3,463 and $0	7,460			—
Cash and Cash Equivalents	66,939			9,500
Restricted Cash	—			1,829
Tenant Accounts Receivable, Net	5,935			7,356
Investment in Joint Venture	—			71
Deferred Rent Receivable, Net	62,918			58,130
Deferred Financing Costs, Net	13,039			10,448
Deferred Leasing Intangibles, Net	31,173			33,526
Prepaid Expenses and Other Assets, Net	71,118			64,744
Total Assets	$	2,706,680		$	2,581,995
LIABILITIES AND EQUITY
Liabilities:
Indebtedness:
Mortgage Loans Payable, Net	$	590,912		$	599,985
Senior Unsecured Notes, Net	364,932			364,861
Unsecured Term Loans	460,000			200,000
Unsecured Credit Facility	55,000			185,000
Accounts Payable, Accrued Expenses and Other Liabilities	89,639			79,733
Deferred Leasing Intangibles, Net	12,045			12,726
Rents Received in Advance and Security Deposits	39,322			36,914
Dividend Payable	15,096			11,949
Total Liabilities	1,626,946			1,491,168
Commitments and Contingencies	—			—
Equity:
First Industrial Realty Trust Inc.’s Stockholders’ Equity:
Common Stock ($0.01 par value, 150,000,000 shares authorized, 115,069,179 and 114,924,980 shares issued and 110,745,065 and 110,600,866 shares outstanding)	1,151			1,149
Additional Paid-in-Capital	1,876,258			1,872,336
Distributions in Excess of Accumulated Earnings	(683,413		)	(670,650		)
Accumulated Other Comprehensive Loss	(15,585		)	(13,867		)
Treasury Shares at Cost (4,324,114 shares)	(140,018		)	(140,018		)
Total First Industrial Realty Trust, Inc.’s Stockholders’ Equity	1,038,393			1,048,950
Noncontrolling Interest	41,341			41,877
Total Equity	1,079,734			1,090,827
Total Liabilities and Equity	$	2,706,680		$	2,581,995

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



	Three Months Ended September 30, 2015			Three Months Ended September 30, 2014			Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014
	(Unaudited)
	(In thousands except per share data)
Revenues:
Rental Income	$	71,148		$	66,276		$	209,244		$	191,866
Tenant Recoveries and Other Income	21,009			20,085			63,311			62,400
Total Revenues	92,157			86,361			272,555			254,266
Expenses:
Property Expenses	28,044			27,262			85,662			84,499
General and Administrative	5,900			5,389			19,026			17,942
Acquisition Costs	45			—			364			111
Impairment of Real Estate	626			—			626			—
Depreciation and Other Amortization	28,589			27,904			84,939			83,436
Total Expenses	63,204			60,555			190,617			185,988
Other Income (Expense):
Gain on Sale of Real Estate	2,957			—			13,084			—
Interest Income	2			681			59			2,054
Interest Expense	(16,674		)	(17,322		)	(49,679		)	(55,292		)
Amortization of Deferred Financing Costs	(781		)	(753		)	(2,291		)	(2,360		)
Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements	—			—			(11,546		)	—
Loss from Retirement of Debt	—			(32		)	—			(655		)
Total Other Income (Expense)	(14,496		)	(17,426		)	(50,373		)	(56,253		)
Income from Continuing Operations Before Equity in (Loss) Income of Joint Ventures and Income Tax Benefit (Provision)	14,457			8,380			31,565			12,025
Equity in (Loss) Income of Joint Ventures	(6		)	(14		)	61			3,508
Income Tax Benefit (Provision)	14			(103		)	(127		)	(192		)
Income from Continuing Operations	14,465			8,263			31,499			15,341
Discontinued Operations:
Income Attributable to Discontinued Operations	—			504			—			1,642
Gain on Sale of Real Estate	—			13,428			—			14,483
Income from Discontinued Operations	—			13,932			—			16,125
Net Income	14,465			22,195			31,499			31,466
Less: Net Income Attributable to the Noncontrolling Interest	(548		)	(868		)	(1,197		)	(1,137		)
Net Income Attributable to First Industrial Realty Trust, Inc.	13,917			21,327			30,302			30,329
Less: Preferred Dividends	—			—			—			(1,019		)
Less: Redemption of Preferred Stock	—			—			—			(1,462		)
Net Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders and Participating Securities	$	13,917		$	21,327		$	30,302		$	27,848
Basic Earnings Per Share:
Income from Continuing Operations Available to First Industrial Realty Trust, Inc.’s Common Stockholders	$	0.13		$	0.07		$	0.27		$	0.11
Income from Discontinued Operations Attributable to First Industrial Realty Trust, Inc.’s Common Stockholders	$	—		$	0.12		$	—		$	0.14
Net Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders	$	0.13		$	0.19		$	0.27		$	0.25

Diluted Earnings Per Share:
Income from Continuing Operations Available to First Industrial Realty Trust, Inc.’s Common Stockholders	$	0.13		$	0.07		$	0.27		$	0.11
Income from Discontinued Operations Attributable to First Industrial Realty Trust, Inc.’s Common Stockholders	$	—		$	0.12		$	—		$	0.14
Net Income Available to First Industrial Realty Trust, Inc.’s Common Stockholders	$	0.13		$	0.19		$	0.27		$	0.25
Distributions Per Share	$	0.1275		$	0.1025		$	0.3825		$	0.3075
Weighted Average Shares Outstanding - Basic	110,356			110,072			110,338			109,856
Weighted Average Shares Outstanding - Diluted	110,848			110,271			110,735			110,298

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	Three Months Ended September 30, 2015			Three Months Ended September 30, 2014			Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014
	(Unaudited)
	(In thousands)
Net Income	$	14,465		$	22,195		$	31,499		$	31,466
Mark-to-Market (Loss) Gain on Interest Rate Protection Agreements	(8,393		)	3,592			(15,181		)	(905		)
Reclassification of Fair Value of Interest Rate Protection Agreements (See Note 9)	—			—			12,990			—
Amortization of Interest Rate Protection Agreements	131			131			393			1,227
Foreign Currency Translation Adjustment	—			(71		)	15			(76		)
Comprehensive Income	6,203			25,847			29,716			31,712
Comprehensive Income Attributable to Noncontrolling Interest	(234		)	(1,012		)	(1,129		)	(1,147		)
Comprehensive Income Attributable to First Industrial Realty Trust, Inc.	$	5,969		$	24,835		$	28,587		$	30,565

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY



	Common Stock		Additional Paid-in-Capital			Distributions in Excess of Accumulated Earnings			Accumulated Other Comprehensive Loss			Treasury Shares At Cost			Noncontrolling Interest			Total
	(Unaudited)
	(In thousands)
Balance as of December 31, 2014	$	1,149	$	1,872,336		$	(670,650	)	$	(13,867	)	$	(140,018	)	$	41,877		$	1,090,827
Stock Based Compensation Activity	2		3,923			(451		)	—			—			—			3,474
Conversion of Units to Common Stock	—		106			—			—			—			(106		)	—
Reallocation - Additional Paid-in-Capital	—		(107		)	—			—			—			107			—
Common Stock and Unit Distributions	—		—			(42,614		)	—			—			(1,669		)	(44,283		)
Net Income	—		—			30,302			—			—			1,197			31,499
Other Comprehensive Loss	—		—			—			(1,718		)	—			(65		)	(1,783		)
Balance as of September 30, 2015	$	1,151	$	1,876,258		$	(683,413	)	$	(15,585	)	$	(140,018	)	$	41,341		$	1,079,734

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014
	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	31,499		$	31,466
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation	69,592			70,109
Amortization of Deferred Financing Costs	2,291			2,360
Other Amortization	21,205			23,476
Impairment of Real Estate	626			—
Provision for Bad Debt	748			1,069
Equity in Income of Joint Ventures	(61		)	(3,508		)
Distributions from Joint Ventures	—			1,881
Gain on Sale of Real Estate	(13,084		)	(14,483		)
Loss from Retirement of Debt	—			655
Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements	11,546			—
Increase in Tenant Accounts Receivable, Prepaid Expenses and Other Assets, Net	(3,897		)	(4,369		)
Increase in Deferred Rent Receivable	(5,325		)	(1,224		)
Increase (Decrease) in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance and Security Deposits	5,550			(919		)
Payments of Discounts and Prepayment Penalties Associated with Retirement of Debt	—			(10,650		)
Net Cash Provided by Operating Activities	120,690			95,863
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of Real Estate	(73,179		)	(53,211		)
Additions to Investment in Real Estate and Non-Acquisition Tenant Improvements and Lease Costs	(100,799		)	(83,818		)
Net Proceeds from Sales of Investments in Real Estate	48,393			56,622
Contributions to and Investments in Joint Ventures	(200		)	(28		)
Distributions from Joint Ventures	126			2,469
Settlement of Interest Rate Protection Agreements	(11,546		)	—
Repayments of Notes Receivable	2,760			49,761
Increase in Escrows	(1,619		)	(515		)
Net Cash Used in Investing Activities	(136,064		)	(28,720		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt and Equity Issuance and Redemption Costs	(4,882		)	(2,411		)
Repurchase and Retirement of Restricted Stock	(2,101		)	(4,667		)
Common Stock and Unit Distributions Paid	(41,136		)	(33,367		)
Preferred Dividends Paid	—			(1,471		)
Redemption of Preferred Stock	—			(75,000		)
Repayments on Mortgage Loans Payable	(9,054		)	(74,944		)
Repayments of Senior Unsecured Notes	—			(71,578		)
Proceeds from Unsecured Term Loans	260,000			200,000
Proceeds from Unsecured Credit Facility	210,000			307,000
Repayments on Unsecured Credit Facility	(340,000		)	(304,000		)
Net Cash Provided by (Used in) Financing Activities	72,827			(60,438		)
Net Effect of Exchange Rate Changes on Cash and Cash Equivalents	(14		)	(23		)
Net Increase in Cash and Cash Equivalents	57,453			6,705
Cash and Cash Equivalents, Beginning of Year	9,500			7,577
Cash and Cash Equivalents, End of Year	$	66,939		$	14,259
SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS:
Interest Expense Capitalized in Connection with Development Activity	$	1,685		$	1,030
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Distribution Payable on Common Stock/Operating Partnership Units	$	15,096		$	11,886
Exchange of Operating Partnership Units for Common Stock:
Noncontrolling Interest	$	(106	)	$	(1,697	)
Common Stock	—			2
Additional Paid-in-Capital	106			1,695
Total	$	—		$	—
Assumption of Liabilities in Connection with the Acquisition of Real Estate	$	608		$	294
Accounts Payable Related to Construction in Progress and Additions to Investment in Real Estate	$	20,355		$	23,785
Write-off of Fully Depreciated Assets	$	(28,609	)	$	(29,090	)

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL, L.P.

CONSOLIDATED BALANCE SHEETS



	September 30, 2015			(As Adjusted) December 31, 2014
	(Unaudited)
	(In thousands except Unit data)
ASSETS
Assets:
Investment in Real Estate:
Land	$	740,989		$	718,188
Buildings and Improvements	2,467,125			2,439,887
Construction in Progress	60,306			25,294
Less: Accumulated Depreciation	(820,322		)	(786,978		)
Net Investment in Real Estate	2,448,098			2,396,391
Real Estate and Other Assets Held for Sale, Net of Accumulated Depreciation and Amortization of $3,463 and $0	7,460			—
Cash and Cash Equivalents	66,939			9,485
Restricted Cash	—			1,829
Tenant Accounts Receivable, Net	5,935			7,356
Investment in Joint Venture	—			71
Deferred Rent Receivable, Net	62,918			58,130
Deferred Financing Costs, Net	13,039			10,448
Deferred Leasing Intangibles, Net	31,173			33,526
Prepaid Expenses and Other Assets, Net	81,931			75,472
Total Assets	$	2,717,493		$	2,592,708
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Indebtedness:
Mortgage Loans Payable, Net	$	590,912		$	599,985
Senior Unsecured Notes, Net	364,932			364,861
Unsecured Term Loans	460,000			200,000
Unsecured Credit Facility	55,000			185,000
Accounts Payable, Accrued Expenses and Other Liabilities	89,639			79,683
Deferred Leasing Intangibles, Net	12,045			12,726
Rents Received in Advance and Security Deposits	39,322			36,914
Distributions Payable	15,096			11,949
Total Liabilities	1,626,946			1,491,118
Commitments and Contingencies	—			—
Partners’ Capital:
First Industrial L.P.'s Partners' Capital:
General Partner Units (110,745,065 and 110,600,866 units outstanding)	1,025,437			1,034,129
Limited Partners Units (4,363,625 and 4,374,637 units outstanding)	80,179			80,757
Accumulated Other Comprehensive Loss	(16,200		)	(14,376		)
Total First Industrial L.P.'s Partners’ Capital	1,089,416			1,100,510
Noncontrolling Interest	1,131			1,080
Total Partners’ Capital	1,090,547			1,101,590
Total Liabilities and Partners’ Capital	$	2,717,493		$	2,592,708

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS



	Three Months Ended September 30, 2015			(As Adjusted) Three Months Ended September 30, 2014			(As Adjusted) Nine Months Ended September 30, 2015			(As Adjusted) Nine Months Ended September 30, 2014
	(Unaudited)
	(In thousands except per Unit data)
Revenues:
Rental Income	$	71,148		$	66,276		$	209,244		$	191,866
Tenant Recoveries and Other Income	21,009			20,085			63,311			62,400
Total Revenues	92,157			86,361			272,555			254,266
Expenses:
Property Expenses	28,044			27,262			85,662			84,499
General and Administrative	5,900			5,345			18,911			17,835
Acquisition Costs	45			—			364			111
Impairment of Real Estate	626			—			626			—
Depreciation and Other Amortization	28,589			27,904			84,939			83,436
Total Expenses	63,204			60,511			190,502			185,881
Other Income (Expense):
Gain on Sale of Real Estate	2,957			—			13,084			—
Interest Income	2			681			59			2,054
Interest Expense	(16,674		)	(17,322		)	(49,679		)	(55,292		)
Amortization of Deferred Financing Costs	(781		)	(753		)	(2,291		)	(2,360		)
Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements	—			—			(11,546		)	—
Loss from Retirement of Debt	—			(32		)	—			(655		)
Total Other Income (Expense)	(14,496		)	(17,426		)	(50,373		)	(56,253		)
Income from Continuing Operations Before Equity in (Loss) Income of Joint Ventures and Income Tax Benefit (Provision)	14,457			8,424			31,680			12,132
Equity in (Loss) Income of Joint Ventures	(6		)	(14		)	61			3,508
Income Tax Benefit (Provision)	14			(103		)	(127		)	(192		)
Income from Continuing Operations	14,465			8,307			31,614			15,448
Discontinued Operations:
Income Attributable to Discontinued Operations	—			504			—			1,642
Gain on Sale of Real Estate	—			13,428			—			14,483
Income from Discontinued Operations	—			13,932			—			16,125
Net Income	14,465			22,239			31,614			31,573
Less: Net Income Attributable to the Noncontrolling Interest	(27		)	(21		)	(75		)	(50		)
Net Income Attributable to Unitholders	14,438			22,218			31,539			31,523
Less: Preferred Unit Distributions	—			—			—			(1,019		)
Less: Redemption of Preferred Units	—			—			—			(1,462		)
Net Income Available to Unitholders and Participating Securities	$	14,438		$	22,218		$	31,539		$	29,042
Basic Earnings Per Unit:
Income from Continuing Operations Available to Unitholders	$	0.13		$	0.07		$	0.27		$	0.11
Income from Discontinued Operations Attributable to Unitholders	$	—		$	0.12		$	—		$	0.14
Net Income Available to Unitholders	$	0.13		$	0.19		$	0.27		$	0.25
Diluted Earnings Per Unit:
Income from Continuing Operations Available to Unitholders	$	0.12		$	0.07		$	0.27		$	0.11
Income from Discontinued Operations Attributable to Unitholders	$	—		$	0.12		$	—		$	0.14
Net Income Available to Unitholders	$	0.12		$	0.19		$	0.27		$	0.25



Distributions Per Unit	$	0.1275	$	0.1025	$	0.3825	$	0.3075
Weighted Average Units Outstanding - Basic	114,720		114,512		114,705		114,346
Weighted Average Units Outstanding - Diluted	115,212		114,711		115,102		114,788

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	Three Months Ended September 30, 2015			(As Adjusted) Three Months Ended September 30, 2014			(As Adjusted) Nine Months Ended September 30, 2015			(As Adjusted) Nine Months Ended September 30, 2014
	(Unaudited)
	(In thousands)
Net Income Attributable to Unitholders	$	14,438		$	22,218		$	31,539		$	31,523
Mark-to-Market (Loss) Gain on Interest Rate Protection Agreements	(8,393		)	3,592			(15,181		)	(905		)
Reclassification of Fair Value of Interest Rate Protection Agreements (See Note 9)	—			—			12,990			—
Amortization of Interest Rate Protection Agreements	131			131			393			1,227
Foreign Currency Translation Adjustment	—			(71		)	(26		)	(76		)
Comprehensive Income Attributable to Unitholders	$	6,176		$	25,870		$	29,715		$	31,769

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL, L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL



	General Partner Units			Limited Partner Units			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total
	(Unaudited)
	(In thousands)
Balance as of December 31, 2014 (As Adjusted)	$	1,034,129		$	80,757		$	(14,376	)	$	1,080		$	1,101,590
Stock Based Compensation Activity	3,474			—			—			—			3,474
Conversion of Limited Partner Units to General Partner Units	106			(106		)	—			—			—
Common Unit Distributions	(42,614		)	(1,669		)	—			—			(44,283		)
Contributions from Noncontrolling Interest	—			—			—			61			61
Distributions to Noncontrolling Interest	—			—			—			(85		)	(85		)
Net Income	30,342			1,197			—			75			31,614
Other Comprehensive Loss	—			—			(1,824		)	—			(1,824		)
Balance as of September 30, 2015	$	1,025,437		$	80,179		$	(16,200	)	$	1,131		$	1,090,547

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Nine Months Ended September 30, 2015			(As Adjusted) Nine Months Ended September 30, 2014
	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	31,614		$	31,573
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation	69,592			70,109
Amortization of Deferred Financing Costs	2,291			2,360
Other Amortization	21,205			23,476
Impairment of Real Estate	626			—
Provision for Bad Debt	748			1,069
Equity in Income of Joint Ventures	(61		)	(3,508		)
Distributions from Joint Ventures	—			1,881
Gain on Sale of Real Estate	(13,084		)	(14,483		)
Loss from Retirement of Debt	—			655
Mark-to-Market and Settlement Loss on Interest Rate Protection Agreements	11,546			—
Increase in Tenant Accounts Receivable, Prepaid Expenses and Other Assets, Net	(3,982		)	(3,894		)
Increase in Deferred Rent Receivable	(5,325		)	(1,224		)
Increase (Decrease) in Accounts Payable, Accrued Expenses, Other Liabilities, Rents Received in Advance and Security Deposits	5,559			(915		)
Payments of Discounts and Prepayment Penalties Associated with Retirement of Debt	—			(10,650		)
Net Cash Provided by Operating Activities	120,729			96,449
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of Real Estate	(73,179		)	(53,211		)
Additions to Investment in Real Estate and Non-Acquisition Tenant Improvements and Lease Costs	(100,799		)	(83,818		)
Net Proceeds from Sales of Investments in Real Estate	48,393			56,622
Contributions to and Investments in Joint Ventures	(200		)	(28		)
Distributions from Joint Ventures	126			2,469
Settlement of Interest Rate Protection Agreements	(11,546		)	—
Repayments of Notes Receivable	2,760			49,761
Increase in Escrows	(1,619		)	(770		)
Net Cash Used in Investing Activities	(136,064		)	(28,975		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt and Equity Issuance and Redemption Costs	(4,882		)	(2,411		)
Repurchase and Retirement of Restricted Units	(2,101		)	(4,667		)
Common Unit Distributions Paid	(41,136		)	(33,367		)
Preferred Unit Distributions Paid	—			(1,471		)
Redemption of Preferred Units	—			(75,000		)
Contributions from Noncontrolling Interests	61			57
Distributions to Noncontrolling Interests	(85		)	(388		)
Repayments on Mortgage Loans Payable	(9,054		)	(74,944		)



Repayments of Senior Unsecured Notes	—			(71,578		)
Proceeds from Unsecured Term Loans	260,000			200,000
Proceeds from Unsecured Credit Facility	210,000			307,000
Repayments on Unsecured Credit Facility	(340,000		)	(304,000		)
Net Cash Provided by (Used in) Financing Activities	72,803			(60,769		)
Net Effect of Exchange Rate Changes on Cash and Cash Equivalents	(14		)	(23		)
Net Increase in Cash and Cash Equivalents	57,468			6,705
Cash and Cash Equivalents, Beginning of Year	9,485			7,562
Cash and Cash Equivalents, End of Year	$	66,939		$	14,244
SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS:
Interest Expense Capitalized in Connection with Development Activity	$	1,685		$	1,030
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Distribution Payable on General and Limited Partner Units	$	15,096		$	11,886
Exchange of Limited Partnership Units for General Partnership Units:
Limited Partnership Units	$	(106	)	$	(1,697	)
General Partnership Units	106			1,697
Total	$	—		$	—
Assumption of Liabilities in Connection with the Acquisition of Real Estate	$	608		$	294
Accounts Payable Related to Construction in Progress and Additions to Investment in Real Estate	$	20,355		$	23,785
Write-off of Fully Depreciated Assets	$	(28,609	)	$	(29,090	)

The accompanying notes are an integral part of the consolidated financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC. AND FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands except per share/Unit data)

1. Organization

First Industrial Realty Trust, Inc. (the "Company") is a self-administered and fully integrated real estate company which owns, manages, acquires, sells, develops and redevelops industrial real estate. The Company is a Maryland corporation organized on August 10, 1993 and a real estate investment trust ("REIT") as defined in the Internal Revenue Code of 1986. Unless stated otherwise or the context otherwise requires, the terms "we," "our" and "us" refer to the Company and its subsidiaries, including its operating partnership, First Industrial, L.P. (the "Operating Partnership"), and its consolidated subsidiaries.

We began operations on July 1, 1994. The Company's operations are conducted primarily through the Operating Partnership, of which the Company is the sole general partner, with an approximate 96.2% ownership interest at September 30, 2015, and through its taxable REIT subsidiaries. We also conduct operations through eight other limited partnerships (the "Other Real Estate Partnerships") and limited liability companies ("LLCs"), the operating data of which, together with that of the Operating Partnership and the taxable REIT subsidiaries, is consolidated with that of the Company as presented herein. The Operating Partnership holds at least a 99% limited partnership interest in each of Other Real Estate Partnerships. The general partners of the Other Real Estate Partnerships are separate corporations, wholly-owned by the Company, each with at least a .01% general partnership interest in the Other Real Estate Partnerships. The Other Real Estate Partnerships' operating data is presented herein on a consolidated basis. See Note 2 to the Consolidated Financial Statements. The Company does not have any significant assets or liabilities other than its investment in the Operating Partnership and its 100% ownership interest in the general partners of the Other Real Estate Partnerships. Noncontrolling interest of approximately 3.8% at September 30, 2015 represents the aggregate partnership interest in the Operating Partnership held by the limited partners thereof.

Profits, losses and distributions of the Operating Partnership, the LLCs and the Other Real Estate Partnerships are allocated to the general partner and the limited partners or the members, as applicable, of such entities in accordance with the provisions contained within their respective organizational documents.

We also provide various services to two joint ventures (the "2003 Net Lease Joint Venture" and the "2007 Europe Joint Venture," collectively the "Joint Ventures"). Our noncontrolling equity ownership interests in the 2003 Net Lease Joint Venture and 2007 Europe Joint Venture are 15% and 10%, respectively. During the nine months ended September 30, 2015, the 2003 Net Lease Joint Venture sold its last remaining industrial property comprising approximately 0.8 million square feet of gross leasable area ("GLA"). At September 30, 2015, the 2007 Europe Joint Venture did not own any properties. The Joint Ventures are accounted for under the equity method of accounting.

As of September 30, 2015, we owned 629 industrial properties located in 25 states, containing an aggregate of approximately 63.9 million square feet of GLA. Of the 629 properties owned on a consolidated basis, none of them are directly owned by the Company.

2. Summary of Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the accounting policies described in the consolidated financial statements and related notes included in the Company's and the Operating Partnership's respective annual reports on Form 10-K for the year ended December 31, 2014 ("2014 Forms 10-K") and should be read in conjunction with such consolidated financial statements and related notes. The 2014 year end consolidated balance sheet data included in this Form 10-Q filing was derived from the audited consolidated financial statements in our respective 2014 Forms 10-K, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). The Operating Partnership's 2014 year end consolidated balance data has also been adjusted as a result of the adoption of the recent consolidation accounting pronouncement (discussed hereafter). The following notes to these interim consolidated financial statements highlight significant changes to the notes included in the December 31, 2014 audited consolidated financial statements included in our respective 2014 Forms 10-K and present interim disclosures as required by the Securities and Exchange Commission. In order to conform with GAAP, in preparation of our consolidated financial statements we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of September 30, 2015 and December 31, 2014, and the reported amounts of revenues and expenses for the three and nine months ended September 30, 2015 and 2014. Actual results could differ from those estimates. In our opinion, the accompanying unaudited interim consolidated financial statements reflect all adjustments necessary for a fair statement of our financial position as of September 30, 2015 and December 31, 2014, the

results of our operations and comprehensive income for each of the three and nine months ended September 30, 2015 and 2014, and our cash flows for each of the nine months ended September 30, 2015 and 2014; all adjustments are of a normal recurring nature.

Reclassifications

Certain reclassifications have been made to the 2014 financial statements to conform to the 2015 presentation.

Discontinued Operations

Effective January 1, 2015, we adopted Accounting Standards Update ("ASU") No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" ("ASU 2014-08") for all properties not previously sold. ASU 2014-08 revised the reporting requirements to only allow a component of an entity, or group of components of an entity, to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Going forward, we expect the majority of our property dispositions will not qualify as discontinued operations and the results of the dispositions, including the gain on sale of real estate, will be presented in Income from Continuing Operations.

Recent Accounting Pronouncements

In February 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015-02, "Consolidation (Topic 810) - Amendments to the Consolidation Analysis" (“ASU 2015-02”). ASU 2015-02 updates consolidation guidance for legal entities such as limited partnerships, limited liability companies and securitization structures in an attempt to simplify consolidation accounting. ASU 2015-02 eliminates the presumption that a general partner should consolidate a limited partnership, modifies the evaluation of whether limited partnerships are variable interest entities ("VIE") or voting interest entities ("VOE") and adds requirements that limited partnerships must meet to qualify as VOEs. ASU 2015-02 is effective for fiscal years beginning after December 15, 2015, with early adoption permitted.

Since formation of each Other Real Estate Partnership, the Company, which wholly-owns the corporations that act as general partner of each Other Real Estate Partnership and is also the general partner of the Operating Partnership, which holds at least a 99% limited partnership interest in each of the Other Real Estate Partnership, has fully consolidated the financial information of the Other Real Estate Partnerships within its financial statements. The Operating Partnership has in the past accounted for each of the Other Real Estate Partnerships under the equity method of accounting based on the VOE classification and the presumption that the corporations owned by the Company that act as the general partners of the Other Real Estate Partnerships controlled the partnerships. However, under ASU 2015-02, the Operating Partnership determined that each Other Real Estate Partnership meets the criteria of a VIE and that it is the primary beneficiary for each Other Real Estate Partnership. As a result, the Operating Partnership has concluded that it should cease accounting for the Other Real Estate Partnerships under the equity method of accounting and consolidate the financial information of the Other Real Estate Partnerships within its financial statements.

During the three and nine months ended September 30, 2015, the Operating Partnership elected early adoption of ASU 2015-02. The election is a full retrospective adoption approach which requires previously reported periods to be restated. The impact of this adoption on the Operating Partnership's previously reported periods is as follows:



	Balance Sheet as Previously Filed as of December 31, 2014		Impact of the Adoption of ASU 2015-02		Balance Sheet as Adjusted as of December 31, 2014
Total Assets	$	2,514,246	$	78,462	$	2,592,708
Total Liabilities	$	1,413,736	$	77,382	$	1,491,118
Total Noncontrolling Interest	$	—	$	1,080	$	1,080

The following table summarizes the assets and liabilities of the Other Real Estate Partnerships included in our consolidated balance sheets:



	September 30, 2015		December 31, 2014
ASSETS
Assets:
Net Investment in Real Estate	$	299,533	$	278,720
Other Assets, Net	20,433		21,078
Total Assets	$	319,966	$	299,798
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Mortgage Loans Payable	$	80,023	$	81,231
Other Liabilities, Net	26,171		10,656
Partners’ Capital	213,772		207,911
Total Liabilities and Partners’ Capital	$	319,966	$	299,798

In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"), which amends the current presentation of debt issuance costs in the financial statements. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of as an asset. The amendments are to be applied retrospectively and are effective for interim and annual periods beginning after December 15, 2015. The adoption of ASU 2015-03 is not expected to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"). ASU 2014-09 requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those good or services. Most significantly for the real estate industry, leasing transactions are not within the scope of the new standard. A majority of our tenant-related revenue is recognized pursuant to lease agreements. In July 2015, the FASB deferred the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted for annual periods beginning after December 15, 2016. We are currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements.

3. Investment in Real Estate

Acquisitions

During the nine months ended September 30, 2015, we acquired three industrial properties comprising approximately 0.6 million square feet of GLA and several land parcels. The purchase price of these acquisitions totaled approximately $72,961, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels.

The purchase price of the industrial properties and land parcels acquired was allocated as follows:



	Nine Months Ended September 30, 2015
Land	$	34,950
Building and Improvements	35,023
Other Assets	440
Deferred Leasing Intangibles, Net	2,548
Total Purchase Price	$	72,961

Intangible Assets (Liabilities) Subject To Amortization in the Period of Acquisition

The fair value at the date of acquisition of in-place leases and below market leases recorded due to the real estate properties acquired for the nine months September 30, 2015, which are recorded as deferred leasing intangibles, is as follows:



	Nine Months Ended September 30, 2015
In-Place Leases	$	2,914
Below Market Leases	$	(366	)

The weighted average life, in months, of in-place leases and below market leases recorded at the time of acquisition as a result of the real estate properties acquired for the nine months ended September 30, 2015 is as follows:



	Nine Months Ended September 30, 2015
In-Place Leases	36
Below Market Leases	37

Real Estate Held for Sale

At September 30, 2015, we had seven industrial properties comprising approximately 0.3 million square feet of GLA held for sale. There can be no assurance that the industrial properties held for sale will be sold.

Sales and Discontinued Operations

During the nine months ended September 30, 2015, we sold 15 industrial properties comprising approximately 1.0 million square feet of GLA and several land parcels. Gross proceeds from the sales of the industrial properties and several land parcels were approximately $50,060. The gain on sale of real estate was approximately $13,084.

The industrial properties sold prior to January 1, 2015 that met the criteria to be classified as discontinued operations are presented as discontinued operations in the Consolidated Statements of Operations. Income from discontinued operations for the nine months ended September 30, 2014 reflects the results of operations of the 29 industrial properties that were sold during the year ended December 31, 2014 and the gain on sale of real estate relating to 20 industrial properties that were sold during the nine months ended September 30, 2014.

The following table discloses certain information regarding the industrial properties included in our discontinued operations for the three and nine months ended September 30, 2014:



	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014
Total Revenues	$	1,560		$	6,316
Property Expenses	(652		)	(2,444		)
Depreciation and Amortization	(404		)	(2,230		)
Gain on Sale of Real Estate	13,428			14,483
Income from Discontinued Operations	$	13,932		$	16,125

Impairment Charges

The impairment charges of $626 recorded during the nine months ended September 30, 2015 were due to marketing certain properties for sale and our assessment of the likelihood and timing of a potential sale transaction.

The following table presents information about our real estate assets that were measured at fair value on a non-recurring basis and for which impairment charges were recorded during the nine months ended September 30, 2015. The table indicates the fair value hierarchy of the valuation techniques we utilized to determine fair value.



	Fair Value Measurements on a Non-Recurring Basis Using:
Description	At September 30, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Unobservable Inputs (Level 3)		Total Impairment for the Nine Months Ended
Operating Properties Not Held for Sale	$	17,850	—	—	$	17,850	$	(626	)

The following table presents quantitative information about the Level 3 fair value measurements at September 30, 2015.



Quantitative Information about Level 3 Fair Value Measurements:
Description	Fair Value		Valuation Technique	Unobservable Inputs	Range
23 industrial properties comprising approximately 0.7 million square feet of GLA	$	17,850	Contracted Price	(A)	N/A


(A)	The fair value for the properties were based upon the value of a third party purchase contract, which was subject to our corroboration for reasonableness.

4. Indebtedness

The following table discloses certain information regarding our indebtedness:



	Outstanding Balance at						Interest Rate at September 30, 2015	Effective Interest Rate at Issuance	Maturity Date
	September 30, 2015			December 31,2014			Interest Rate at September 30, 2015	Effective Interest Rate at Issuance	Maturity Date
Mortgage Loans Payable, Net	$	590,912		$	599,985		4.03% – 8.26%	4.03% – 8.26%	February 2016 –September 2022
Unamortized Premiums	(71		)	(90		)
Mortgage Loans Payable, Gross	$	590,841		$	599,895
Senior Unsecured Notes, Net
2016 Notes	$	159,663		$	159,621		5.75%	5.91%	1/15/2016
2017 Notes	54,969			54,966			7.50%	7.52%	12/1/2017
2027 Notes	6,067			6,066			7.15%	7.11%	5/15/2027
2028 Notes	31,885			31,884			7.60%	8.13%	7/15/2028
2032 Notes	10,522			10,518			7.75%	7.87%	4/15/2032
2017 II Notes	101,826			101,806			5.95%	6.37%	5/15/2017
Subtotal	$	364,932		$	364,861
Unamortized Discounts	170			241
Senior Unsecured Notes, Gross	$	365,102		$	365,102
Unsecured Term Loans
Unsecured Term Loan I *	$	200,000		$	200,000		1.90%	N/A	1/29/2021
Unsecured Term Loan II *	260,000			—			1.80%	N/A	9/12/2022
Total of Unsecured Term Loans	$	460,000		$	200,000
Unsecured Credit Facility**	$	55,000		$	185,000		1.34%	N/A	3/11/2019

* We entered into interest rate protection agreements, with an aggregate notional value of $460,000, to effectively convert the variable rate to a fixed rate. See Note 9.

** The maturity date may be extended an additional year at our election, subject to certain restrictions.

Mortgage Loans Payable, Net

As of September 30, 2015, mortgage loans payable are collateralized, and in some instances cross-collateralized, by industrial properties with a net carrying value of $722,430. We believe the Operating Partnership and the Company were in compliance with all covenants relating to mortgage loans payable as of September 30, 2015.

Unsecured Term Loans

On September 11, 2015, we entered into a seven-year, $260,000 unsecured loan (the "Unsecured Term Loan II"; together with the Unsecured Term Loan I (as described in Note 9), the "Unsecured Term Loans") with a syndicate of financial institutions. The Unsecured Term Loan II requires interest only payments and bears interest at a variable rate based on LIBOR, as defined in the loan agreement, plus a specified spread based on our leverage ratio or credit ratings. We also entered into interest rate protection agreements, with an aggregate notional value of $260,000, to effectively convert the variable rate to a fixed rate. See Note 9 for more information on the interest rate protection agreements.

Unsecured Credit Facility

On March 10, 2015, we amended and restated our $625,000 revolving credit agreement (the "Old Credit Facility") with a new $625,000 revolving credit agreement (as amended and restated, the "Unsecured Credit Facility"). We have the right to request that the borrowing capacity under the Unsecured Credit Facility be increased to $900,000, subject to certain restrictions. The amendment extended the maturity date from September 29, 2017 to March 11, 2019 with an option to extend an additional one year at our election, subject to certain restrictions. At September 30, 2015, the Unsecured Credit Facility provides for interest only payments at LIBOR plus 115 basis points. The interest rate on the Unsecured Credit Facility varies based on our leverage ratio.

Indebtedness

The following is a schedule of the stated maturities and scheduled principal payments of our indebtedness, exclusive of premiums and discounts, for the next five years as of September 30, and thereafter:



	Amount
Remainder of 2015	$	3,104
2016	251,870
2017	168,723
2018	168,341
2019	131,423
Thereafter	747,482
Total	$	1,470,943

The Unsecured Credit Facility, the Unsecured Term Loans and the indentures governing our senior unsecured notes contain certain financial covenants, including limitations on incurrence of debt and debt service coverage. Under the Unsecured Credit Facility and Unsecured Term Loans, an event of default can occur if the lenders, in their good faith judgment, determine that a material adverse change has occurred which could prevent timely repayment or materially impair our ability to perform our obligations under the loan agreements. We believe that the Operating Partnership and the Company were in compliance with all covenants relating to the Unsecured Credit Facility, Unsecured Term Loans and indentures governing our senior unsecured notes as of September 30, 2015. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our lenders and noteholders in a manner that could impose and cause us to incur material costs.

Fair Value

At September 30, 2015 and December 31, 2014, the fair value of our indebtedness was as follows:



	September 30, 2015				December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage Loans Payable, Net	$	590,912	$	632,104	$	599,985	$	640,818
Senior Unsecured Notes, Net	364,932		386,086		364,861		395,320
Unsecured Term Loans	460,000		461,016		200,000		200,575
Unsecured Credit Facility	55,000		55,000		185,000		185,747
Total	$	1,470,844	$	1,534,206	$	1,349,846	$	1,422,460

The fair values of our mortgage loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made based upon similar remaining maturities. The current market rates we utilized were internally estimated. The fair value of the senior unsecured notes were determined by using rates, as advised by our bankers, that are based upon recent trades within the same series of the senior unsecured notes, recent trades for senior unsecured notes with comparable maturities, recent trades for fixed rate unsecured notes from companies with profiles similar to ours, as well as overall economic conditions. The fair value of the Unsecured Credit Facility and Unsecured Term Loans was determined by discounting the future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term, assuming no repayment until maturity. We have concluded that our determination of fair value for each of our mortgage loans payable, senior unsecured notes, Unsecured Term Loans and Unsecured Credit Facility was primarily based upon Level 3 inputs.

5. Stockholders’ Equity of the Company and Partners' Capital of the Operating Partnership

Conversion of Limited Partnership Interests into Shares of Common Stock

During the nine months ended September 30, 2015 and 2014, 11,012 and 175,333 limited partnership interests in the Operating Partnership ("Units"), respectively, were converted into an equivalent number of shares of common stock of the Company, resulting in a reclassification of $106 and $1,697, respectively, of noncontrolling interest to the Company's stockholders’ equity.

Noncontrolling Interest of the Company

The following table summarizes the changes in noncontrolling interest for the Company for the nine months ended September 30, 2015 and 2014:



	September 30, 2015			September 30, 2014
Noncontrolling Interest, Beginning of Period	$	41,877		$	44,369
Net Income	1,197			1,137
Unit Distributions	(1,669		)	(1,368		)
Other Comprehensive (Loss) Income (Including a Reallocation of $3 and $6)	(65		)	16
Conversion of Units to Common Stock	(106		)	(1,697		)
Reallocation - Additional Paid-in-Capital	107			(48		)
Noncontrolling Interest, End of Period	$	41,341		$	42,409

Noncontrolling Interest of the Operating Partnership

The following table summarizes the changes in noncontrolling interest for the Operating Partnership for the nine months ended September 30, 2015 and 2014:



	September 30, 2015			September 30, 2014
Noncontrolling Interest, Beginning of Period	$	1,080		$	1,095
Net Income	75			50
Contributions	61			57
Distributions	(85		)	(388		)
Noncontrolling Interest, End of Period	$	1,131		$	814

Dividends/Distributions

During the nine months ended September 30, 2015, we accrued $44,283 common stock dividends and Unit distributions.

6. Accumulated Other Comprehensive Loss

The following table summarizes the changes in accumulated other comprehensive loss by component for the Company for the nine months ended September 30, 2015:



	Interest Rate Protection Agreements			Foreign Currency Translation Adjustment			Comprehensive Income (Loss) Attributable to Noncontrolling Interest		Total
Balance as of December 31, 2014	$	(14,402	)	$	(15	)	$	550	$	(13,867	)
Other Comprehensive (Loss) Income Before Reclassifications	(18,601		)	15			65		(18,521		)
Amounts Reclassified from Accumulated Other Comprehensive Loss	16,803			—			—		16,803
Net Current Period Other Comprehensive (Loss) Income	(1,798		)	15			65		(1,718		)
Balance as of September 30, 2015	$	(16,200	)	$	—		$	615	$	(15,585	)

The following table summarizes the changes in accumulated other comprehensive loss by component for the Operating Partnership for the nine months ended September 30, 2015:



	Interest Rate Protection Agreements			Foreign Currency Translation Adjustment			Total
Balance as of December 31, 2014	$	(14,402	)	$	26		$	(14,376	)
Other Comprehensive Loss Before Reclassifications	(18,601		)	(26		)	(18,627		)
Amounts Reclassified from Accumulated Other Comprehensive Loss	16,803			—			16,803
Net Current Period Other Comprehensive Loss	(1,798		)	(26		)	(1,824		)
Balance as of September 30, 2015	$	(16,200	)	$	—		$	(16,200	)

The following table summarizes the reclassifications out of accumulated other comprehensive loss for both the Company and the Operating Partnership for the three and nine months ended September 30, 2015 and 2014:



	Amount Reclassified from Accumulated Other Comprehensive Loss
Details about Accumulated Other Comprehensive Loss Components	Three Months Ended September 30, 2015		Three Months Ended September 30, 2014		Nine Months Ended September 30, 2015		Nine Months Ended September 30, 2014		Affected Line Item in the Consolidated Statements of Operations
Interest Rate Protection Agreements:
Reclassification of Fair Value of Interest Rate Protection Agreements (See Note 9)	$	—	$	—	$	12,990	$	—	Mark-to-Market Loss on Interest Rate Protection Agreements
Amortization of Interest Rate Protection Agreements (Previously Settled)	131		131		393		1,227		Interest Expense
Settlement Payments to our Counterparties	1,299		1,090		3,420		2,902		Interest Expense
	$	1,430	$	1,221	$	16,803	$	4,129	Total

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in other comprehensive income (loss) and is subsequently reclassified to earnings through interest expense over the life of the derivative or over the life of the debt. In the next 12 months, we expect to amortize approximately $425 into net income by increasing interest expense for interest rate protection agreements we settled in previous periods. Additionally, recurring settlement amounts on the Group I Swaps and Group II Swaps, as defined in Note 9, will also be reclassified to net income. See Note 9 for more information about our derivatives.

7. Earnings Per Share/Unit ("EPS"/"EPU")

The computation of basic and diluted EPS of the Company is presented below:



	Three Months Ended September 30, 2015			Three Months Ended September 30, 2014		Nine Months Ended September 30, 2015		Nine Months Ended September 30, 2014
Numerator:
Income from Continuing Operations	$	14,465		$	8,263	$	31,499	$	15,341
Noncontrolling Interest Allocable to Continuing Operations	(548		)