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Diversification Pays Off for First Industrial

CHICAGO-Despite negative rent growth here and in Atlanta, First Industrial Realty Trust's strategy to spread its holdings over 25 major markets helps the REIT post a 29.3% second-quarter increase in earnings per share.

By Mark Ruda | Updated on July 26, 2001

CHICAGO-Diversification is paying off for First Industrial Realty Trust, Inc., which registered a 29.3% increase in earnings per share in the second quarter despite experiencing softness in two of its 25 major markets–here and Atlanta. The company also wrote off its only technology investment, a $660,000 expense that would have increased earnings to $0.77 per share rather than $0.75.

“Despite a challenging economic environment, First Industrial turned in an impressive quarter,” says president and CEO Michael W. Brennan.

Chicago was First Industrial’s third-weakest market in terms of first-half rental rate increases, with its local portfolio’s rents decreasing by 1.6%, while the vacancy rate stood at 9.4%. Atlanta (-4.2%, 8.9% vacancy) and Salt Lake City (-3%, 8.8% vacancy) turned in weaker performances in the first half of the year, reports executive vice president of operations David Draft. Rent increases of 29.1% and 21.4% were posted in the REIT’s Southern New Jersey and Northern New Jersey markets, where vacancy was less than 5%.

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