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What changed in FIRST INDUSTRIAL REALTY TRUST INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FIRST INDUSTRIAL REALTY TRUST INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+308 added−316 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-14)

Top changes in FIRST INDUSTRIAL REALTY TRUST INC's 2024 10-K

308 paragraphs added · 316 removed · 266 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

31 edited+2 added−6 removed14 unchanged
Biggest changeWe target new investments in 15 key logistics markets, with a primary emphasis on coastal markets, where developable land is more scarce and which exhibit desirable long-term growth characteristics. We seek to refine our portfolio over the coming years by focusing on bulk and regional warehouses properties and downsizing our light industrial holdings.
Biggest changeWe continually seek to upgrade our overall portfolio by making new investments and selling assets that lack strong long-term cash flow growth potential. Our focus is on 15 key logistics markets, with a primary emphasis on coastal markets, which exhibit desirable long-term growth characteristics and where developable land is relatively scarce.
We have an operational management strategy designed to enhance tenant satisfaction and portfolio performance. We pursue an active leasing strategy, which includes broadly marketing available space, seeking to renew existing leases at higher rents while minimizing re-leasing costs and seeking leases which provide for the pass-through of property-related expenses to the tenant.
We have an operational management strategy designed to enhance tenant satisfaction and portfolio performance. We pursue an active leasing strategy that includes broadly marketing available space, seeking to renew existing leases at higher rents while minimizing re-leasing costs and seeking leases which provide for the pass-through of property-related expenses to the tenant.
Our ability to pursue our long-term growth plans is affected by market conditions and our financial condition and operating capabilities. See "Summary of Significant Transactions in 2023" under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." 4 Business Strategies We utilize the following strategies in connection with the operation of our business: • Organizational Strategy.
Our ability to pursue our long-term growth plans is affected by market conditions and our financial condition and operating capabilities. See "Summary of Significant Transactions in 2024" under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." 4 Business Strategies We utilize the following strategies in connection with the operation of our business: • Organizational Strategy.
Amendments to, or waivers from, our Code of Business Conduct and Ethics that apply to our executive officers or directors will also be posted to our website.
Amendments to, or waivers from, our Code of Business Conduct and Ethics that apply to our executive officers or directors will also be posted on our website.
The noncontrolling interest in the Operating Partnership of approximately 2.5% at December 31, 2023, represents the aggregate partnership interest held by the limited partners thereof ("Limited Partner Units" and together with the General Partner Units, the "Units"). Through a wholly-owned TRS of the Operating Partnership, we own an equity interest in a joint venture (the "Joint Venture").
The noncontrolling interest in the Operating Partnership of approximately 2.7% at December 31, 2024, represents the aggregate partnership interest held by the limited partners thereof ("Limited Partner Units" and together with the General Partner Units, the "Units"). Through a wholly-owned TRS of the Operating Partnership, we own an equity interest in a joint venture (the "Joint Venture").
These markets have one or more of the following characteristics: (i) favorable industrial real estate fundamentals, including improving industrial demand and constrained future supply that can lead to long-term rent growth; (ii) favorable economic and business environments that should benefit from increases in distribution activity driven by growth in global trade and local consumption; (iii) population growth as it generally drives industrial demand; (iv) natural barriers to entry and scarcity of land which are key elements in delivering future rent growth; and (v) sufficient size to provide ample opportunity for growth through incremental investments as well as offer asset liquidity. • Leasing and Marketing Strategy.
These markets have one or more of the following characteristics: (i) favorable industrial real estate fundamentals, including improving industrial demand and constrained future supply that can lead to long-term rent growth; (ii) favorable and diversified economic and business environments that should benefit from increases in distribution activity driven by growth in global trade and local consumption; (iii) population growth as it generally drives industrial demand; (iv) natural barriers to entry and scarcity of land which are key elements in delivering future rent growth; (v) sufficient size to provide ample opportunity for growth through incremental investments and support asset liquidity; and (vi) favorable governmental, regulatory and tax environment. • Leasing and Marketing Strategy.
The Company's operations are conducted primarily through the Operating Partnership, a Delaware limited partnership formed on November 23, 1993 of which the Company is the sole general partner (the "General Partner"), with an approximate 97.5% ownership interest ("General Partner Units") at December 31, 2023.
The Company's operations are conducted primarily through the Operating Partnership, a Delaware limited partnership formed on November 23, 1993 of which the Company is the sole general partner (the "General Partner"), with an approximate 97.3% ownership interest ("General Partner Units") at December 31, 2024.
As a result, we may have to provide rent concessions, incur expenses for tenant improvements or offer other inducements to enable us to timely lease vacant space, all of which may have an adverse impact on our results of operations.
As a result, we may need to offer rent concessions, incur tenant improvement expenses or provide other inducements to enable us to timely lease vacant space, all of which may have an adverse impact on our results of operations.
We extend the same commitment to environmental excellence to our own offices, promoting sustainable practices and energy efficiency that can both reduce environmental impact and achieve lower operating costs. Our headquarters office in Chicago is an energy-efficient LEED-certified building.
We extend the same commitment to environmental excellence to our own offices, promoting sustainable practices and energy efficiency that can both reduce environmental impact and achieve lower operating costs. Our headquarters office in Chicago is an energy-efficient LEED-certified building. Social responsibility is integral to our business strategy.
We seek to grow externally through (i) the development of best-in-class industrial properties and the acquisition of individual or portfolios of industrial properties, which meet our investment parameters within our 15 key logistics markets, with a primary emphasis on coastal markets; (ii) the expansion of our existing properties; and (iii) securing additional joint venture investments. • Portfolio Enhancement.
We seek to grow externally through: (i) the development of best-in-class industrial properties and the acquisition of individual and portfolios of industrial properties, which meet our investment parameters within our 15 key logistics markets, with a primary emphasis on coastal markets; and (ii) the expansion of our existing properties. • Portfolio Enhancement.
Compliance with these laws and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results of operations and competitive position as compared to prior periods. Environmental, Social and Corporate Governance We are focused on building and maintaining a socially responsible and sustainable business that succeeds by delivering long-term value for our stockholders.
Compliance with these laws and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results of operations and competitive position as compared to prior periods. Corporate Responsibility and Governance We are focused on building and maintaining a socially responsible and sustainable business that delivers long-term value to our stockholders.
Our governance efforts are led by our Board of Directors, which is elected by our stockholders to oversee their interest in the long-term financial strength and overall success of the Company, exercising its members' business judgment using their collective experience, knowledge and skills.
Our corporate governance efforts are led by our Board of Directors, who are elected by our stockholders to oversee the long-term financial strength and overall success of the Company, exercising its members' business judgment using their collective experience, knowledge and skills.
As of February 14, 2024, we had approximately $409.9 million available for additional borrowings under the Unsecured Credit Facility. 5 Competition In connection with the acquisition of industrial properties and land for development, we compete with other public industrial property sector REITs, income-oriented non-traded REITs, private real estate funds and other real estate investors and developers, some of which have greater financial resources than we do or other competitive advantages relative to us.
As of February 13, 2025, we had approximately $480.5 million available for additional borrowings under the Unsecured Credit Facility. 5 Competition In connection with the acquisition of industrial properties and land for development, we compete with other public industrial property sector REITs, income-oriented non-traded REITs, private real estate funds and other real estate investors and developers, some of which have greater financial resources or other competitive advantages.
In addition, our Corporate Governance Guidelines, Code of Business Conduct and Ethics, charters of each committee of the Board of Directors, along with supplemental financial and operating information prepared by us, are all available without charge on the Company's website or upon request to the Company.
In addition, our Corporate Governance Guidelines, Code of Business Conduct and Ethics, charters of each committee of the Board of Directors, and supplemental financial and operating information are available without charge on our website or upon request.
As of December 31, 2023, our in-service portfolio consisted of 422 industrial properties, located in 18 states, containing an aggregate of approximately 64.9 million square feet of gross leasable area ("GLA"). We began operations on July 1, 1994.
As of December 31, 2024, our in-service portfolio consisted of 412 industrial properties, located in 19 states, containing an aggregate of approximately 66.7 million square feet of gross leasable area ("GLA"). We began operations on July 1, 1994.
We also continually evaluate joint venture arrangements as another source of capital to finance acquisitions and developments.
We also evaluate joint venture arrangements as another source of capital to finance acquisitions and developments as well as manage investment exposure and allocation.
Directors must fulfill their responsibilities as members of the Board of Directors consistent with their fiduciary duty to our stockholders, in compliance with all applicable laws and regulations and our Code of Business Conduct and Ethics. The Board of Directors provides advice and counsel to the Chief Executive Officer and other senior officers of the Company.
Directors fulfill their responsibilities as members of the Board of Directors consistent with their fiduciary duty to our stockholders, in compliance with all applicable laws and regulations and our Code of Business Conduct and Ethics.
Because we primarily net lease the properties in our portfolio to our tenants whereby each tenant is ultimately responsible for maintaining the leased property, one of our key corporate responsibility priorities is to engage with and encourage our tenants to implement environmentally sustainable practices, such as the use of energy and water efficient fixtures and recycling programs.
Given that we primarily operate under net lease arrangements where tenants are ultimately responsible for maintaining the leased properties, one of our primary corporate responsibility priorities is to engage with and encourage our tenants to implement environmentally sustainable practices, such as the use of energy and water efficient fixtures and recycling programs.
The Board of Directors ensures that the assets of the Company are properly safeguarded, that appropriate financial and other controls are maintained, and that the Company's business is conducted wisely and in compliance with applicable laws and regulations. 6 Human Capital We believe we have the appropriate human capital resources to successfully operate our business and create value for our shareholders.
The Board of Directors provides advice and counsel to the Chief Executive Officer and other senior officers of the Company, ensuring that the Company's assets are properly safeguarded, robust financial and operational controls are maintained, and that the Company's business is conducted wisely and in compliance with applicable laws and regulations. 6 Human Capital We believe our human capital resources are well-aligned to successfully operate our business and create long-term value for our shareholders.
Copies of our respective annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports that we file with the SEC are available without charge as soon as reasonably practicable on our website at www.firstindustrial.com. These documents also may be accessed through the SEC's website at www.sec.gov.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports are available without charge on our website at www.firstindustrial.com. These reports can also be accessed through the SEC's website at www.sec.gov.
Such competition may result in an increase in the amount we must pay to acquire a property or may require us to forgo an investment in a property that would otherwise meet our investment criteria. We also face significant competition in leasing available properties to prospective tenants and in re-leasing space to existing tenants.
Such competition may increase acquisition prices or cause us to forgo an investment in a property that would otherwise meet our investment criteria. Additionally, we face significant competition in leasing available properties to prospective tenants and in renewing leases to existing tenants.
We also have local and national marketing programs which focus on the business and real estate brokerage communities and multi-national tenants. • Acquisition/Development Strategy.
Additionally, we have both local and national marketing programs that target the business and real estate brokerage communities, as well as multi-national tenants. • Acquisition/Development Strategy.
We believe such diversity of experience and background helps make us strong and achieve our mission to create long-term shareholder value by providing industrial real estate solutions that mutually benefit our customers and our stockholders. Our Board of Directors is comprised of 43% directors who identify as female, people of color or both.
We apply these policies throughout our organization, including at the senior management level and in our composition of our Board of Directors. We believe such diversity of experience and background helps make us strong and achieve our mission to create long-term shareholder value by providing industrial real estate solutions that mutually benefit our customers and our stockholders.
We have an established committee (the "Corporate Responsibility Committee") consisting of members of our team across a range of functions responsible for advising senior management, our Audit Committee and our Board of Directors on various matters related to sustainability, social responsibility and other non-financial issues that are of significance to us and our stockholders.
The Corporate Responsibility Committee advises senior management, the Audit Committee and the Board of Directors on key matters related to sustainability, social responsibility and other non-financial issues that are significant to us and our stockholders.
Available Information Our principal executive offices are located at One North Wacker Drive, 42nd Floor, Chicago, Illinois 60606. Our telephone number is (312) 344-4300.
Taken together, these efforts promote higher levels of satisfaction and employee retention, while creating an enhanced leadership pipeline. Available Information Our principal executive offices are located at One North Wacker Drive, 42nd Floor, Chicago, Illinois 60606. Our telephone number is (312) 344-4300.
In managing our business, we focus on attracting and retaining employees by providing compensation and benefits packages that are competitive within the applicable market, taking into account the skills required, responsibilities and geographic location. All employees are eligible to participate in one of our incentive plans, under which payments are tied to pre-established performance goals.
Our Board of Directors is comprised of 43% directors who identify as female, people of color or both. In managing our business, we focus on attracting and retaining employees by providing compensation and benefits packages that are competitive within the applicable market, taking into account the skills required, responsibilities and geographic location.
We are an equal opportunity employer and, as such, promote an equitable workplace that acknowledges and values differences in race, gender, age, ethnicity, sexual orientation, gender identity, national origin, abilities and religious beliefs. We apply these policies throughout our organization, including at the senior management level and in our composition of our Board of Directors.
As of December 31, 2024, we had 151 employees, 150 of whom are full-time employees. The average tenure of our workforce is approximately 12 years. We are an equal opportunity employer and, as such, promote an equitable workplace that acknowledges and values differences in race, gender, age, ethnicity, sexual orientation, gender identity, national origin, abilities and religious beliefs.
Social responsibility and engagement is an integral part of our business, as we are committed to developing and maintaining strong relationships with our customers, business partners, investors, and the communities in which we operate and invest.
We strive to develop and maintain strong relationships with our customers, business partners, investors, and the communities in which we operate and invest.
We continually evaluate local market conditions and property-related factors in all of our markets for purposes of identifying assets suitable for disposition. We look to sell properties with lower rent growth prospects and/or assets with less than optimal functionality and redeploy the capital into higher rent growth assets in key logistics markets primarily with a coastal orientation.
We continually evaluate local market conditions and property-related factors across all of our markets to identify assets suitable for disposition. Our focus is on selling properties with lower rent growth potential or that lack optimal functionality.
Additionally, as we add properties to our portfolio or enhance existing facilities, environmental sustainability is a key consideration of our efforts to improve or develop such properties. We have obtained LEED certification for certain recent development projects and are also pursuing LEED certification for the vast majority of our new development projects through a LEED volume program.
Additionally, when acquiring new properties or enhancing existing facilities, we place a strong emphasis on environmental sustainability. Many of our recent development projects have achieved LEED certification, and we are actively pursuing LEED certification for all upcoming development projects through a LEED volume program.
In addition, we endeavor to develop each of our employees’ skillsets and decision-making abilities through challenging project assignments, formal training, mentorship and recognition. Taken together, these efforts promote higher levels of satisfaction and employee retention, while creating an enhanced leadership pipeline, which is evidenced through our 2023 employee survey engagement score of 92% favorability.
All employees are eligible to participate in one of our incentive plans, under which payments are tied to pre-established performance goals. In addition, we endeavor to develop each of our employees’ skillsets and decision-making abilities through challenging project assignments, formal training, mentorship and recognition.
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We continually seek to upgrade our overall portfolio via new investments as well as through the sale of select assets that we believe do not exhibit favorable characteristics for long-term cash flow growth.
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The capital from these sales is generally reinvested into new assets identified, consistent with our investment strategy discussed above or otherwise used in a manner consistent with our business strategy. • Financing Strategy.
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We also seek to shrink our holdings of light industrial assets over time. • Financing Strategy.
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We foster a culture of sustainability throughout our operations aligned with our long-term objectives, which includes consideration of ways to minimize environmental impact, both ours and that of our tenants. We have an established committee (the "Corporate Responsibility Committee") composed of team members from diverse functions within the Company.
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We continuously look for new and better ways to minimize our environmental impact as well as that of our tenants.
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In addition, we aim to provide a positive work environment for our employees by offering competitive compensation, quality benefit offerings including health and wellness and retirement plans and financial education, and career training and growth opportunities.
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At December 31, 2023, we had 156 employees, 100% of whom are full-time employees. The average tenure of our workforce is approximately 11 years.
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In addition to the sustainability efforts overseen by the Corporate Responsibility Committee, the committee also advises on ways to foster a diverse and inclusive work environment, protect the health and safety of our employees and engage our surrounding communities.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

123 edited+19 added−25 removed30 unchanged
Biggest changeThis part of our business involves significant risks, including the following: • we may not be able to obtain financing for these projects on favorable terms; • we may have delays in obtaining construction materials and may be subject to increases in costs of materials; • we may not complete construction on schedule or within budget; • we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations; • contractor and subcontractor disputes, strikes, lack of available labor, labor disputes or supply chain disruptions may occur; and • properties may perform below anticipated levels, producing cash flow below budgeted amounts, which may result in us paying too much for a property, cause the property to not be profitable and limit our ability to sell such properties to third parties.
Biggest changeAs part of our business, we develop new properties and re-develop existing properties, both of which carry significant risks, including: • we may not be able to obtain financing for these projects on favorable terms; • we may have delays in obtaining construction materials or rising material costs (including as a result of the imposition of tariffs) may occur; • we may not complete construction on schedule or within budget; • we may not be able to obtain, or may experience delays in obtaining necessary zoning, land-use, building, occupancy and other governmental permits and authorizations; • contractor and subcontractor disputes, strikes, lack of available labor, labor disputes or supply chain disruptions may occur; • contractor, subcontractor and design professionals may cause damage, design errors or other negligent actions with respect to our properties; and • properties may perform below anticipated levels, producing cash flow below budgeted amounts, which could lead to unprofitable investments or limit our ability to sell such properties.
Stockholders and unitholders are urged to consult with their own tax advisor with respect to the impact of recent legislation, the status of legislative, regulatory, or administrative developments and proposals, and their potential effect on ownership of our shares. 18 Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on the gain attributable to the transaction.
Stockholders and unitholders are urged to consult with their own tax advisor with respect to the impact of recent legislation, the status of legislative, regulatory, or administrative developments and proposals, and their potential effect on ownership of our shares. Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on the gain attributable to the transaction.
As part of our business, we sell properties to third parties as opportunities arise. Under the Code, a 100% penalty tax could be assessed on the taxable gain recognized from sales of properties that are deemed to be prohibited transactions. The question of what constitutes a prohibited transaction is based on the facts and circumstances surrounding each transaction.
As part of our business, we sell properties to third parties as opportunities arise. However, under the Code, a 100% penalty tax could be assessed on the taxable gain recognized from sales of properties that are deemed to be prohibited transactions. The question of what constitutes a prohibited transaction is based on the facts and circumstances surrounding each transaction.
Our ability to make required payments of principal on outstanding indebtedness, whether at maturity or otherwise, may depend on our ability to refinance the applicable indebtedness or to sell properties. Currently, we have no commitments to refinance any of our indebtedness. 14 Failure to hedge effectively against interest rate changes may adversely affect our results of operations.
Our ability to make required payments of principal on outstanding indebtedness, whether at maturity or otherwise, may depend on our ability to refinance the applicable indebtedness or to sell properties. Currently, we have no commitments to refinance any of our indebtedness. Failure to hedge effectively against interest rate changes may adversely affect our results of operations.
These could include attempts to gain unauthorized access to our computer systems, data and the data of third parties retained within our systems through malware, computer viruses, attachments to e-mails, persons inside our Company or persons with access to systems inside our Company, and other significant disruptions of our information technology networks and related systems.
These risks could include attempts to gain unauthorized access to our computer systems, data and the data of third parties retained within our systems through malware, computer viruses, attachments to e-mails, persons inside our Company or persons with access to systems inside our Company, and other significant disruptions of our information technology networks and related systems.
To the extent that the Company retains operating cash flow for investment purposes, working capital reserves, or other purposes, these retained funds, while increasing the value of the Company's underlying assets, may not correspondingly increase the market price of the Company's common stock.
To the extent that the Company retains operating cash flow for investment purposes, working capital reserves, or other purposes, these retained funds, while increasing the value of the Company's underlying assets, may not correspondingly increase the market price of its common stock.
The IRS, the United States Treasury Department and Congress frequently review federal income tax legislation, and we cannot predict whether, when or to what extent new federal laws, regulations, interpretations or rulings will be adopted.
The IRS, the United States Treasury Department and Congress frequently review federal income tax legislation, and we cannot predict whether, when or to what extent new federal laws, regulations, and administrative interpretations or rulings will be adopted.
We currently carry comprehensive insurance coverage to mitigate our casualty risk, in amounts and of a kind that we believe are appropriate for the markets where each of our properties and their business operations are located.
We carry comprehensive insurance coverage to mitigate our casualty risk, in amounts and of a kind that we believe are appropriate for the markets where each of our properties and their business operations are located.
For the purpose, among others, of preserving our status as a REIT under the Internal Revenue Code of 1986, as amended, our charter generally prohibits any single stockholder, or any group of affiliated stockholders, from beneficially owning more than 9.8% of our outstanding common and preferred stock unless our board of directors waives or modifies this ownership limit. • Stockholder Action by Written Consent.
For the purpose, among others, of preserving our status as a REIT under the Internal Revenue Code, our charter generally prohibits any single stockholder or group of affiliated stockholders from beneficially owning more than 9.8% of our outstanding common and preferred stock unless our board of directors waives or modifies this ownership limit. • Stockholder Action by Written Consent.
From time to time, we may acquire properties or interests in properties, with known adverse environmental conditions where we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return. In such an instance, we underwrite the costs of environmental investigation, clean-up and monitoring into the cost.
From time to time, we may acquire properties or interests in properties, with known adverse environmental conditions where we believe that the environmental liabilities are quantifiable and the acquisition will yield a superior risk-adjusted return. In such an instance, we underwrite the costs of environmental investigation, clean-up and monitoring into the cost.
However, we do not insure against all types of casualty, and we may not fully insure against certain perils including, without limitation, earthquake, windstorm, flood, pandemic, war, civil unrest and cyber risk, either because coverage is not available or because we do not deem it to be economically feasible or prudent to do so.
However, we do not insure against all types of casualty, and we may not fully insure against certain perils including, earthquake, windstorm, flood, pandemic, war, civil unrest and cyber risk, either because coverage is not available or because we do not deem it to be economically feasible or prudent to do so.
Our failure to comply with these covenants could cause a default under the applicable debt agreement even if we have satisfied our payment obligations. Consistent with our historical practice, we will continue to interpret and certify our performance under these covenants in a good faith manner that we deem reasonable and appropriate.
A failure to comply with these covenants, even if we have satisfied our payment obligations, could result in a default under the applicable debt agreement. Consistent with our historical practice, we will continue to interpret and certify our performance under these covenants in a good faith manner that we deem reasonable and appropriate.
If we determine that indicators of impairment are present, we review the properties affected by these indicators to determine whether an impairment charge is required. As a result, we may be required to recognize asset impairment, which could materially and adversely affect our business, financial condition and results of operations.
If we determine that indicators of impairment are present, we review the affected properties to determine whether an impairment charge is required. As a result, we may be required to recognize asset impairment, which could materially and adversely affect our business, financial condition and results of operations.
We may incur significant costs complying with various federal, state and local laws and regulations that are applicable to our properties including, without limitation, those related to the Americans with Disabilities Act of 1990 (the "ADA"), state and local fire and safety regulations, and greenhouse gas emissions.
We may incur significant costs complying with various federal, state and local laws and regulations that are applicable to our properties including, without limitation, those related to zoning, zoning moratoria, the Americans with Disabilities Act of 1990 (the "ADA"), fire and safety regulations, and greenhouse gas emissions.
In addition, price volatility in the capital and credit markets could make the valuation of our properties more difficult. There may be significant uncertainty in the valuation, or in the stability of the value, of our properties that could result in a substantial decrease in the value of our properties.
Price volatility in the capital and credit markets could also make the valuation of our properties more difficult. There may be significant uncertainty in the valuation, or in the stability of the value, of our properties that could result in a substantial decrease in the value of our properties.
As a REIT, the Company must distribute to its stockholders at least 90% of its taxable income (determined without regard to the dividends-paid deduction and by excluding any net capital gain) each year, and we may be subject to additional tax to the extent our taxable income is not fully distributed.
As a REIT, the Company must distribute at least 90% of its taxable income (determined without regard to the dividends-paid deduction and by excluding any net capital gain) to its stockholders annually, and we may be subject to additional tax to the extent our taxable income is not fully distributed.
Although we employ a number of measures to prevent, detect and mitigate these threats, even the most well-protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed to not be detected and, in fact, may not be detected.
Although we employ a number of measures to prevent, detect and mitigate these threats, even the most well-protected information, networks, systems and facilities remain potentially vulnerable because the techniques and tools (including artificial intelligence) used in such attempted security breaches evolve and generally are not recognized until launched against a target and, in some cases, are designed to not be detected and, in fact, may not be detected.
More generally, these events could cause consumer confidence and spending to decrease or result in increased volatility in the worldwide financial markets and economy. These attacks or armed conflicts may adversely impact our operations or financial condition. In addition, losses resulting from these types of events may be uninsurable.
More generally, these events could cause consumer confidence and spending to decrease or result in increased volatility in the worldwide financial markets and economy. These events may adversely impact our operations or financial condition. In addition, losses resulting from these types of events may be uninsurable.
Among other coverage, we carry property, boiler and machinery, general liability, cyber liability, fire, flood, terrorism, earthquake, wind storm, owner's protective professional indemnity and rental loss insurance. Our coverage includes policy specifications and limits customarily carried for similar properties and business activities. Our insurance coverage does not insure the total replacement cost of the portfolio.
Among other coverage, we carry property, boiler and machinery, general liability, cyber liability, fire, flood, terrorism, earthquake, windstorm, owner's protective professional indemnity and rental loss insurance. Our coverage includes policy specifications and limits customarily carried for similar properties and business activities. However, our insurance coverage does not insure the total replacement cost of the portfolio.
If we are unable to sell properties on favorable terms or redeploy the proceeds of property sales in accordance with our business strategy, then our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units could be adversely affected.
If we are unable to sell properties on favorable terms or redeploy the sales proceeds in line with our business strategy, our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units could be adversely affected.
An increase in market interest rates might lead prospective purchasers of the Company's common stock to expect a higher distribution yield, which would adversely affect the market price of the Company's common stock. Any reduction in the market price of the Company's common stock would, in turn, reduce the market value of the Units.
An increase in market interest rates might lead investors to expect a higher distribution yield, which would adversely affect the market price of the Company's common stock. Any reduction in the market price of the Company's common stock would, in turn, reduce the market value of the Units.
Joint venture investments, in general, involve certain risks not present where we act alone, including: (i) joint venture partners may share certain approval rights over major decisions, which might significantly delay or make impossible actions and decisions we believe are necessary or advisable with respect to properties owned through a joint venture, and/or adversely affect our ability to develop, finance, lease or sell properties owned through a joint venture at the most advantageous time for us, if at all; (ii) joint venture partners might experience financial distress and fail to fund their share of any required capital contributions; (iii) joint venture partners might have economic or other business interests or goals that are competitive or inconsistent with our business interests or goals that would affect our ability to develop, finance, lease, operate, manage or sell any properties owned by the applicable joint venture; (iv) joint venture partners may have the power to act contrary to our policies or objectives, including our current policy with respect to maintaining the Company's qualification as a REIT; (v) joint venture agreements often restrict the transfer of a member’s or joint venture’s interest or may otherwise restrict our ability to sell our interest when we would like to or on advantageous terms; (vi) disputes between us and our joint venture partners may result in litigation or arbitration that would increase our expenses and prevent our employees, officers and directors from focusing their time and effort on our business and subject the properties owned by the applicable joint venture to additional risk; and (vii) we may in certain circumstances be liable for the actions of our joint venture partners.
However, joint venture investments involve risks not present where we act alone, including: (i) joint venture partners may have shared approval rights over major decisions, which might significantly delay or make impossible actions and decisions we believe are necessary or advisable with respect to properties owned through a joint venture, and/or adversely affect our ability to develop, finance, lease or sell properties owned through a joint venture at the most advantageous time for us, if at all; (ii) joint venture partners might experience financial distress and fail to fund their share of any required capital contributions; (iii) joint venture partners may have economic or other business goals that are competitive or inconsistent with ours that would affect our ability to develop, finance, lease, operate, manage or sell any joint venture properties; (iv) joint venture partners may have the power to act contrary to our policies or objectives, including those necessary to maintain the Company's qualification as a REIT; (v) joint venture agreements often restrict the transfer of interests or may otherwise restrict our ability to sell our interest when we would like to or on advantageous terms; (vi) disputes with joint venture partners may result in costly litigation or arbitration that would increase our expenses and prevent our employees, officers and directors from focusing their time and effort on our business and subject the properties owned by the applicable joint venture to additional risk; and (vii) we may in certain circumstances be held liable for the actions or decisions of our joint venture partners.
Our bylaws require advance notice procedures with respect to nominations of directors and shareholder proposals. • Ownership Limit.
Our bylaws require stockholders to follow advance notice procedures with respect to nominations of directors and shareholder proposals. • Ownership Limit.
This could adversely affect our financial condition and our ability to service debt and make distributions to our stockholders and unitholders.
This limitation could adversely affect our financial condition, ability to service debt and capacity to make distributions to our stockholders and unitholders.
Certain provisions of our charter and our bylaws could have the effect of discouraging, delaying or preventing transactions that involve an actual or threatened change in control of our company. These provisions include the following: • Removal of Directors.
Certain provisions of our charter and bylaws could hinder, delay or prevent a change in control of our company. Certain provisions of our charter and our bylaws could have the effect of discouraging, delaying or preventing transactions that involve an actual or threatened change in control of our company. These provisions include the following: • Removal of Directors.
Such an outbreak or pandemic could also have a material and adverse effect on our ability to successfully operate and on our financial condition, results of operations and cash flows due to, among other factors: (i) reduced economic activity which may severely impact our tenants' businesses and may cause certain of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations and/or terminate their leases early or not renew; (ii) delays to or halting of construction activities, including permitting and obtaining approvals, related to our ongoing development and redevelopment projects as well as tenant improvements; (iii) difficulty in accessing the capital and lending markets (or a significant increase in the costs of doing so), impacts to our credit ratings, a severe disruption or instability in the global financial markets, or deteriorations in credit and financing conditions, which may affect our access to capital necessary to fund business operations or address maturing debt obligations on a timely basis; (iv) potential impact on our ability to meet the financial covenants of our Unsecured Credit Facility and other debt agreements, which may result in a default or an acceleration of indebtedness, and such non-compliance could negatively impact our ability to make additional borrowings under our Unsecured Credit Facility and pay dividends; (v) any impairment in value of our tangible or intangible assets which could be recorded as a result of weaker economic conditions; (vi) a general decline in business activity and demand for real estate transactions, which could adversely affect our ability to sell or purchase properties, at attractive pricing or at all; (vii) an inability to initiate or pursue litigation due to various court closures, increased case volume and/or moratoriums on certain types of activities; (viii) the potential negative impact on the health of our employees, particularly if a significant number of them are impacted, which could result in a deterioration in our ability to ensure business continuity during the disruption and which may negatively impact our disclosure controls and procedures over financial reporting; and (ix) an extended period of remote work arrangements for our employees which could strain our business continuity plans and introduce operational risk including, but not limited to, cybersecurity risks. 19 We face risks relating to cybersecurity attacks and other disruptions to our computer systems.
The adverse effects on our business, financial condition, results of operations and cash flows could include: (i) reduced economic activity which may severely impact our tenants' businesses and may cause certain of our tenants to be unable to meet their obligations to us in full, or at all, attempt to terminate early or non-renew of their leases or otherwise seek modifications of their obligations to us; (ii) delays to or halting of construction activities, including permitting and obtaining approvals, related to our ongoing development, redevelopment and tenant improvements projects; (iii) difficulty in accessing the capital and lending markets (or a significant increase in the costs of doing so), impacts to our credit ratings, a severe disruption or instability in the global financial markets, or deterioration in credit and financing conditions, which may affect our access to capital necessary to fund business operations or address maturing debt obligations on a timely basis; (iv) potential impact on our ability to meet the financial covenants of our Unsecured Credit Facility and other debt agreements, which may result in a default or an acceleration of indebtedness, and such non-compliance could negatively impact our ability to make additional borrowings under our Unsecured Credit Facility and pay dividends; (v) any impairment in value of our tangible or intangible assets which could be recorded as a result of weaker economic conditions; (vi) a general decline in business activity and demand for real estate transactions, which could adversely affect our ability to sell or purchase properties, at attractive pricing or at all; (vii) an inability to initiate or pursue litigation due to various court closures, increased case volume and/or moratoriums on certain types of activities; (viii) the potential negative impact on the health of our employees, particularly if a significant number of them are impacted, which could result in a deterioration in our ability to ensure business continuity during the disruption and which may negatively impact our disclosure controls and procedures over financial reporting; and (ix) extended remote work arrangements for our employees could strain our business continuity plans and introduce operational inefficiencies risk including, but not limited to, cybersecurity risks.
Item 1A. Risk Factors Our operations involve various risks that could adversely affect our business, including our financial condition, our results of operations, our cash flow, our liquidity, our ability to make distributions to holders of the Company's common stock and the Operating Partnership's Units, the market price of the Company's common stock and the market value of the Units.
Item 1A. Risk Factors Our operations involve various risks that could adversely affect our business, including our financial condition, our results of operations, our cash flow, our liquidity, our ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units.
The terms of our agreements governing our indebtedness require that we comply with a number of financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage. Complying with such covenants may limit our operational flexibility.
Covenants in our debt agreements could limit our flexibility and adversely affect our financial condition. The terms of our agreements governing our indebtedness require that we comply with a number of financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage. Complying with such covenants may limit our operational flexibility.
There can be no assurance that we will be able to maintain any credit rating and, in the event any credit rating is downgraded, we could incur higher borrowing costs or may be unable to access certain or any capital markets.
There is no assurance that we will be able to maintain any credit rating and, in the event any credit rating is downgraded, or the perception that a downgrade is imminent, we could incur higher borrowing costs or may be unable to access certain or any capital markets.
Our operating performance could be adversely affected if conditions become less favorable in any of the markets in which we have a concentration of properties. Conditions such as an oversupply of logistics space or a reduction in demand for logistics space, among other factors, may impact operating conditions.
Our operating performance could be adversely affected if market conditions deteriorate in any of the markets in which we have a concentration of properties. Factors such as an oversupply of logistics space or a reduction in demand for such space, among other factors, may negatively impact operating conditions.
Under our charter, subject to the rights of one or more classes or series of preferred stock to elect one or more directors, a director may be removed only for cause and only by the affirmative vote of at least a majority of all votes entitled to be cast by our stockholders generally in the election of directors. • Preferred Stock.
Under our charter, a director may be removed only for cause and only by the affirmative vote of at least a majority of all votes entitled to be cast by our stockholders generally in the election of directors, subject to the rights of any preferred stockholders to elect directors, • Preferred Stock.
Environmental laws and regulations often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous or toxic materials. The presence of such materials, or the failure to address those conditions properly, may adversely affect our ability to rent or sell a property or to borrow using a property as collateral.
These laws and regulations often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous or toxic materials. The presence of such materials, or the failure to address those conditions properly, may adversely affect our ability to rent or sell a property or use it as collateral for a financing.
Certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flows, expose us to increased risks that would be uninsured, and/or adversely impact our ability to attract officers and directors.
Furthermore, certain litigation or their outcomes may affect the availability, terms or cost of our insurance coverage, which could adversely impact our results of operations and cash flows, expose us to increased risks that would be uninsured, and/or adversely impact our ability to attract officers and directors.
Under various federal, state and local laws and regulations, we may, as a current or previous owner, developer or operator of real estate, be liable for the costs of clean-up of certain conditions relating to the presence of hazardous or toxic materials on, in or emanating from a property and any related damages to natural resources.
Under various federal, state and local laws and regulations, we may, as a current or previous owner, developer or operator of real estate, be liable for the costs of cleaning up hazardous or toxic materials found on, in or emanating from a property as well as for any related damages to natural resources.
We may be unable to sell properties when appropriate or at all because real estate investments are not as liquid as certain other types of assets. Real estate investments generally cannot be sold quickly, which could limit our ability to adjust our property portfolio in response to changes in economic conditions or in the performance of the portfolio.
We may be unable to sell properties when appropriate or at all because real estate investments are not as liquid as certain other types of assets. Real estate assets are inherently less liquid than other types of investments, which could limit our ability to adjust our property portfolio in response to changes in economic conditions or portfolio performance.
The IRS could contend that certain sales of properties by us are prohibited transactions. While we implement controls to avoid prohibited transactions, if a dispute were to arise that was successfully argued by the IRS, the 100% penalty tax could be assessed against the Company's profits from these transactions.
The IRS could contend that certain sales of properties by us are prohibited transactions. While we implement controls to avoid prohibited transactions, if a dispute were to arise that was successfully argued by the IRS, the 100% penalty tax could be assessed against the Company's profits from these transactions, which could materially and adversely impact our financial results.
We are subject to the risks that, upon expiration, leases may not be renewed, the space subject to such leases may not be relet or the terms of renewal or reletting, including the cost of required renovations, may be less favorable than the expiring lease terms.
We are subject to the risk that expiring leases may not be renewed, or the spaces subject to such leases may not be relet or the terms of renewal or reletting, including the cost of required renovations, may be less favorable than the expiring lease terms.
Any of the above risks could adversely affect our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units.
These risks, individually or collectively, could adversely affect our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units.
We have routinely sold properties to third parties as conditions warrant and, as part of our business, we intend to continue to do so. However, our ability to sell properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers.
We sell properties from time to time to third parties as market conditions warrant and we intend to continue doing so. However, our ability to sell properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers.
Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.
Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk. Moreover, our risk exposure extends beyond our internal systems.
Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting. The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations.
Deficiencies in our disclosure controls and procedures or internal control over financial reporting could adversely impact our business and financial performance. The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations.
Under our charter, our board of directors has the power to issue preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of our stockholders. • Advance Notice Bylaws.
Under our charter, our board of directors has the power to issue preferred stock in one or more series, with terms, preferences and rights determined by the board of directors, all without approval of our stockholders. • Advance Notice Bylaws.
Terrorist attacks and other acts of violence or war may affect the market for the Company's common stock, the industry in which we conduct our operations and our profitability. Acts of violence, including terrorist attacks, could occur in the localities in which we conduct business.
Terrorist attacks, acts of violence or war may affect the market for the Company's common stock, the industry in which we conduct our operations and our profitability. Acts of violence, including terrorism and armed conflicts, or other destabilizing events could occur in areas where we conduct business.
The market price of our common stock may fluctuate significantly in response to many factors, including: • actual or anticipated variations in our operating results, funds from operations, cash flows or liquidity; • changes in our earnings estimates or those of analysts; • changes in asset valuations and related impairment charges; • changes in our dividend policy; • publication of research reports about us or the real estate industry generally; • the ability of our tenants to pay rent to us and meet their obligations to us under the current lease terms and our ability to re-lease space as leases expire; • increases in market interest rates that lead purchasers of our common stock to demand a higher dividend yield; • changes in market valuations of similar companies; • adverse market reaction to the amount of our debt outstanding at any time, the amount of our debt maturing in the near- and medium-term and our ability to refinance our debt, or our plans to incur additional debt in the future; • our ability to comply with applicable financial covenants under our unsecured line of credit and the indentures under which our senior unsecured indebtedness is, or may be, issued; • additions or departures of key management personnel; • actions by institutional stockholders; • speculation in the press or investment community; and • general market and economic conditions.
The market price of our common stock may fluctuate significantly in response to many factors, including: • actual or anticipated variations in our operating results, funds from operations, cash flows or liquidity; • changes in our earnings estimates or those of analysts; • changes in asset valuations and related impairment charges; • changes to our dividend policy; • research reports about us or the real estate industry generally; • the ability of our tenants to meet rent obligations and our ability to re-lease space as leases expire; • increases in market interest rates, which may lead investors to demand a higher dividend yield; • changes in market valuations of similar companies; • adverse market reaction to our debt levels, upcoming debt maturities, refinancing plans or anticipated debt incurrences; • our ability to comply with financial covenants under our unsecured line of credit and the indentures under which our senior unsecured indebtedness is, or may be, issued; • additions or departures of key management personnel; • actions by institutional stockholders; • speculation in the media or investment community; and • general market and economic conditions.
These policies may be amended or revised at any time and from time to time at the discretion of the Company's Board of Directors without notice to or a vote of its stockholders. This could result in us conducting operational matters or making investments differently or pursuing alternate business or growth strategies.
These policies may be amended or revised at the discretion of the Company's Board of Directors at any time and without notice to or a vote of its stockholders. Such changes could result in us conducting operational matters or making investments differently or pursuing alternate business or growth strategies, potentially exposing ourselves to new and more significant risks.
A change in these policies could have an adverse effect on our financial condition, results of operations, cash flow, ability to satisfy our principal and interest obligations, ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units . 17 Certain provisions of our charter and bylaws could hinder, delay or prevent a change in control of our company.
A change in these policies could have an adverse effect on our financial condition, results of operations, cash flow, ability to satisfy our principal and interest obligations, ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units .
Under our Unsecured Credit Facility and our unsecured term loans, an event of default can also occur if the lenders, in their good faith judgment, determine that a material adverse change has occurred that could prevent timely repayment or materially impair our ability to perform our obligations under the loan agreement.
Under our Unsecured Credit Facility and our unsecured term loans, an event of default can also occur if the lenders, in their good faith judgment, determine that a material adverse change has occurred that could prevent timely repayment or materially impair our ability to perform our obligations under the loan agreement. 13 In the event of default, we would be subject to higher finance costs and fees, and the lenders under our Unsecured Credit Facility would not be required to provide additional funding.
The seller of a property often sells such property in its "as is" condition on a "where is" basis and "with all faults," without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing.
Moreover, properties are often sold "as is," "where is," and "with all faults," without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase agreements may contain only limited warranties, representations and indemnifications that will only survive for a limited period after the closing.
In the normal course of business, we use derivatives to manage our exposure to interest rate volatility on debt instruments, including hedging for future debt issuances. At other times we may utilize derivatives to increase our exposure to floating interest rates. There can be no assurance that these hedging arrangements will have the desired beneficial impact.
In the normal course of business, we use derivatives to manage our exposure to interest rate volatility associated with our debt issuances, anticipated future debt issuances and variable rate borrowings. At times we may also use derivatives to increase our exposure to floating interest rates. There can be no assurance that these hedging arrangements will have the desired beneficial impact.
We rely extensively on computer systems to manage our business, and our business is at risk from and may be impacted by cybersecurity attacks and security breaches.
We face risks relating to cybersecurity attacks and other disruptions to our computer systems. We rely extensively on computer systems to manage our business, and our business is at risk from and may be impacted by cybersecurity attacks, data breaches and other system disruptions.
In addition, holders of preferred stock are normally entitled to receive a preference payment in the event of liquidation, dissolution or winding up before any payment is made to our common stockholders, which would reduce the amount our common stockholders and unitholders might otherwise receive upon such an occurrence.
In addition, holders of preferred stock are normally entitled to receive a preference payment in the event of liquidation, dissolution or winding up, which would reduce the amount available to our common stockholders and unitholders.
The occurrence of one or more of these events could adversely affect our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units.
The occurrence of one or more of these events could adversely affect our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units. 11 We own certain properties subject to ground leases that expose us to risks.
It is impossible to provide any assurance that the market price of our common stock will not fall in the future, and it may be difficult for holders to resell shares of our common stock at prices they find attractive, or at all. 16 Risks Related to Our Organization and Structure: The Company is authorized to issue preferred stock.
We cannot provide any assurance that the market price of our common stock will remain stable or not fall in the future, and it may be difficult for holders to resell shares of our common stock at prices they find attractive, or at all. 15 Risks Related to Our Organization and Structure: The Company's ability to issue preferred stock could adversely affect holders of the Company's common stock.
A successful cybersecurity attack or other disruption of our computer systems could, among other things: (i) disrupt the proper functioning of our networks and systems, and therefore our operations and/or those of certain of our tenants; (ii) result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes; (iii) result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines; (iv) result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; (v) require significant management attention and resources to remedy any damages that result; (vi) subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; (vii) subject us to legal liability; or (viii) damage our reputation among our tenants, investors and associates.
A successful cybersecurity attack or system disruption could have severe consequences, including: (i) disrupt the proper functioning of our networks and systems, and therefore our operations and/or those of certain of our tenants; (ii) result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes; (iii) result in misstated financial reports, violations of loan covenants or missed reporting deadlines; (iv) result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; (v) divert significant management resources to remedy any damages and restore systems; (vi) subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; (vii) subject us to legal liability or regulatory actions stemming from data breaches or disruptions; or (viii) damage our reputation among our tenants, investors and stakeholders. 18 While we continuously work to strengthen our defenses, the evolving nature of cyber threats makes it impossible to entirely eliminate this risk.
In addition, we may issue capital stock that is senior to our common stock in the future for a number of reasons, including to finance our operations and business strategy, to adjust our ratio of debt to equity or for other reasons. 15 The market price of our common stock may fluctuate significantly.
In addition, we may in the future issue capital stock senior to our common stock for various reasons, including to finance our operations and business strategy, to adjust our ratio of debt to equity or other strategic reasons.
At December 31, 2023, operating properties located in California (Northern California and Southern California markets) and Pennsylvania represented 24.8% and 11.2%, respectively, of our consolidated net operating income for the year ended December 31, 2023.
At December 31, 2024, operating properties located in California (Northern California and Southern California markets) and Pennsylvania, our two largest regions, represented 25.6% and 11.4%, respectively, of our consolidated net operating income for the year ended December 31, 2024.
If our ability to issue additional debt or equity securities or to borrow under our Unsecured Credit Facility were to be impaired by volatility in or disruption of the capital markets, it could have a material adverse effect on our liquidity and financial condition.
A lack of access to debt or equity securities or to borrow under our Unsecured Credit Facility were to be impaired by volatility in or disruption of the capital markets, it could have a material adverse effect on our liquidity and financial condition. Debt financing, the degree of leverage and rising interest rates could reduce our cash flow.
If repayment of any of our indebtedness is accelerated, we cannot provide assurance that we would be able to borrow sufficient funds to refinance such indebtedness or that we would be able to sell sufficient assets to repay such indebtedness.
If repayment of any of our indebtedness is accelerated, we cannot provide assurance that we would be able to borrow sufficient funds to refinance such indebtedness or that we would be able to sell sufficient assets to repay such indebtedness. Even if new financing is available, it may not be on commercially reasonable or acceptable terms.
Further, in connection with property dispositions, we may agree to remain responsible for, and to bear the cost of, remediating or monitoring certain environmental conditions on the properties. We may incur significant costs complying with various federal, state and local laws and regulations that are applicable to our properties.
Additionally, in property dispositions, we may agree to retain responsibility for certain environmental conditions, including costs associated with monitoring and/or remediating such conditions. We may incur significant costs complying with various federal, state and local laws and regulations that are applicable to our properties.
The market value of the Company's common stock is also based upon the value of the Company's underlying real estate assets. For this reason, shares of the Company's common stock may trade at prices that are higher or lower than the Company's net asset value per share.
For this reason, shares of the Company's common stock may trade at prices higher or lower than the Company's net asset value per share.
Furthermore, our Unsecured Credit Facility, our unsecured term loans and the indentures governing our senior unsecured notes contain certain cross-default provisions that may be triggered in the event that our other material indebtedness is in default.
In addition, our indebtedness, together with accrued and unpaid interest and fees, could be accelerated and declared immediately due and payable. Furthermore, our Unsecured Credit Facility, unsecured term loans and the indentures governing our senior unsecured notes contain cross-default provisions that may be triggered in the event that our other material indebtedness is in default.
As a result, we may not be able to recover the carrying amount of our properties, which may require us to recognize an impairment loss in earnings .
As a result, we may not be able to recover the carrying amount of our properties, which may require us to recognize an impairment loss in earnings . Additionally, adverse events in the banking or financial services sections could directly or indirectly affect our liquidity.
Many of the factors listed above are beyond our control. Those factors may cause the market price of our common stock to decline significantly, regardless of our financial condition, results of operations and prospects.
These factors, many of which outside our control, could cause the market price of our common stock to decline significantly, regardless of our financial condition, results of operations and future prospects.
In addition, like other companies qualifying as REITs under the Code, our ability to sell assets may be restricted by tax laws that potentially result in punitive taxation on asset sales that fail to meet certain safe harbor rules or other criteria established under case law. 9 We may be unable to sell properties on advantageous terms.
In addition, as a REIT, our ability to sell properties is further restricted by tax laws, including punitive taxation on asset sales that fail to meet safe harbor rules or other established criteria. 9 We may be unable to sell properties on advantageous terms.
In addition, if a tenant does not pay its rent, we may not be able to enforce our rights as landlord without delays and we may incur substantial legal costs. Costs associated with real property, such as real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the property.
In addition, if a tenant defaults on its rent payments or declares bankruptcy, we may face delays in enforcing our rights as a landlord and incur substantial legal costs. Costs associated with real property, such as real estate taxes and maintenance, generally are not reduced when income from the property declines.
Even if we qualify as a REIT for U.S. federal income tax purposes, we may be subject to federal, state and local taxes on our income and property. From time to time changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability.
Although we intend to maintain our qualification as a REIT for U.S. federal income tax purposes, we may still be subject to federal, state and local taxes on our income and property. Changes in state and local tax laws and regulations, or increases in tax rates may result in an increase in our tax liabilities over time.
Deficiencies, including any material weakness, in our internal control over financial reporting which may occur could result in misstatements of our results of operations, restatements of our financial statements, a decline in the price/value of our securities, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity. 20 We may be unable to retain and attract key management personnel.
Deficiencies, including any material weakness, in such internal controls could result in misstatements of our results of operations, restatements of our financial statements, a decline in the price/value of our securities, damage to our business reputation or otherwise materially adversely affect our business, results of operations, financial condition or liquidity.
In addition, rising interest rates would reduce our cash flow by increasing the amount of interest due on our floating rate debt and on our fixed rate debt as it matures and is refinanced.
In addition, increased interest rates would reduce our cash flow by increasing the amount of interest due on our floating rate debt and on our fixed rate debt as it matures and is refinanced. Our organizational documents do not contain any limitation on the amount or percentage of indebtedness we may incur.
Moreover, security events or disruptions impacting our vendors, sub-processors and service providers could also impact our data and operations or the data of third parties retained within our system via unauthorized access to information or disruption of services.
Cybersecurity events or disruptions impacting our vendors, sub-processors and service providers could impact our data and operations or the data of third parties retained within our system via unauthorized access to information or disruption of services. Our computer systems are essential to our day-to-day operations and, in some cases, may be critical to the operations of certain of our tenants.
If we were unable to promptly renew a significant number of expiring leases or to promptly relet the spaces covered by such leases, or if the rental rates upon renewal or reletting were significantly lower than the current rates, our financial condition, results of operation, cash flow and ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units could be adversely affected.
If we are unable to promptly renew a significant number of expiring leases or to relet the spaces at competitive rental rates, our financial condition, results of operation, cash flow and ability to make distributions to our stockholders and unitholders could be adversely affected.
We use considerable judgment in making determinations about impairments, from analyzing whether there are indicators of impairment, to the assumptions used in calculating the fair value of the investment.
We use considerable judgment in making determinations about impairments, from analyzing whether there are indicators of impairment, to the assumptions used in calculating the fair value of the investment. Accordingly, our subjective estimates and evaluations may not be accurate, and such estimates and evaluations are subject to change or revision.
Adverse market and economic conditions could cause us to recognize impairment charges. We regularly review our real estate assets for impairment indicators, such as a decline in a property's occupancy rate, decline in general market conditions or a change in the expected hold period of an asset.
Adverse market and economic conditions could result in impairment charges. We regularly review our real estate assets for impairment indicators, such as declines in occupancy rates, deteriorating market conditions or changes in the anticipated hold period of an asset.
Further, if we sell properties by providing financing to purchasers, defaults by the purchasers would adversely affect our operations and financial condition. We may be unable to complete development and re-development projects on advantageous terms. As part of our business, we develop new properties and re-develop existing properties as conditions warrant.
Further, if we provide financing to purchasers as part of a sale, defaults by the purchasers could further harm our operations and financial condition. We may be unable to complete development and re-development projects on advantageous terms.
Our revenues from, and the value of, our properties located in California and Pennsylvania may be affected by local real estate conditions (such as an oversupply of or reduced demand for industrial properties) and the local economic climate. Business layoffs, downsizing, industry slowdowns, changing demographics and other factors may adversely impact California’s and Pennsylvania's economic climate.
The revenues generated from, and the value of, these properties are subject to local real estate conditions, such as oversupply or reduced demand for industrial properties, as well as the local economic climate. Factors like business layoffs, industry slowdowns, demographics shifts and other economic changes may adversely impact the economies of California and Pennsylvania.
In the normal course of business, certain of our legal entities have undergone tax audits and may undergo audits in the future. There can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations.
There can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations. 17 General Risk Factors: A future contagious disease outbreak or pandemic may adversely affect our business.
General Risk Factors: A future outbreak of highly infectious or contagious diseases similar to COVID-19 may adversely affect our business. A future contagious disease outbreak or pandemic could cause disruptions to regional and global economies and significant volatility and negative pressure in the financial markets.
A future contagious disease outbreak or pandemic could cause disruptions to regional and global economies and significant volatility and negative pressure in the financial markets.
Additionally, if any of our tenants or other parties with whom we conduct business are unable to access funds from their bank or financial institutions, such parties’ ability to pay their obligations to us could be adversely affected. Debt financing, the degree of leverage and rising interest rates could reduce our cash flow.
Additionally, if any of our tenants or other parties with whom we conduct business are unable to access funds from their bank or financial institutions, such parties’ ability to pay their obligations to us could be adversely affected. Furthermore, our access to liquidity under our Unsecured Credit Facility depends on the continued performance of the participating lenders.
All of our properties were subject to a Phase I or similar environmental assessment by independent environmental consultants at the time of acquisition. Phase I assessments are intended to discover and evaluate information regarding the environmental condition of the surveyed property and surrounding properties.
At acquisition, all of our properties are subject to a Phase I or similar environmental assessment conducted by an independent consultant. These assessments are intended to discover and evaluate information regarding the environmental condition of the surveyed property and surrounding areas but typically do not include soil sampling, subsurface investigation, remediation or asbestos surveys.
Any such laws or regulations could also impose substantial costs on our tenants, thereby impacting the financial condition of our tenants and their ability to meet their lease obligations and to lease or re-lease our properties.
Noncompliance with these laws and regulations could result in the imposition of fines or the award of damages or attorneys’ fees to private litigants. Any such laws or regulations could also impose substantial costs on our tenants, potentially impacting their financial condition and ability to meet lease obligations, which could impact leasing or re-leasing our properties.
The acquisition of properties entails various risks, including risks that our investments may not perform as expected and that our cost estimates for bringing an acquired property up to market standards, if necessary, may prove inaccurate. Further, we face significant competition for attractive investment opportunities from other well-capitalized real estate investors, including publicly-traded REITs and private investors.
As part of our investment strategy, we routinely acquire real estate from third parties and we intend to continue to do so. However, the acquisition of properties entails various risks, including risks that our investments may not perform as expected and that our cost estimates for bringing an acquired property up to market standards, if necessary, may prove inaccurate.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Chief Information Officer, our Senior Director of Information Technology, our Director of Business Systems Applications and our Information Technology Security Manager oversee our cybersecurity program. Collectively, the team has decades of information technology experience and our Information Technology Security Manager holds a masters degree in Network Security.
Biggest changeOur cybersecurity program is overseen by a highly experienced team, including the Chief Information Officer (who reports directly to our Chief Executive Officer), our Senior Director of Information Technology, our Senior Director of Business Systems Applications and our Information Technology Security Manager.
In connection with this phase, we do the following: • Run extended detection and response software on our network at all times, which is comprehensive company-wide personal computer device security monitoring and active threat remediation software that is fully supported by staff and backed by a prevention warranty; • Engage third-party specialists to periodically perform: (i) penetration testing, which is a simulated cyberattack against our computer system, in order to assess our ability to resist potential threats and attacks from external and internal sources; (ii) cyber dwelling, which determines if a threat actor has made its way or could make its way into our computer network and if confidential information was or could be compromised; and (iii) tabletop mock ransomware exercises to gauge our ability to react to an attack; • Evaluate the technical control structure and competency for all new third-party software vendors and review “cloud” third-party software vendor’s Service Organization Control reports, or reasonable substitutes, which give comfort on the maturity of the vendor’s security controls; and • Perform monthly mock phishing email exercises with our employees and provide additional training if needed.
In connection with this phase, we do the following: • Run extended detection and response software on our network at all times, which is comprehensive company-wide personal computer device security monitoring and active threat remediation software that is fully supported by staff and backed by a prevention warranty; • Engage third-party specialists to periodically perform: (i) penetration testing, which is a simulated cyberattack against our computer system, in order to assess our ability to resist potential threats and attacks from external and internal sources; (ii) cyber dwelling, which determines if a threat actor has made its way or could make its way into our computer network and if confidential information was or could be compromised; and (iii) tabletop mock cybersecurity incident exercises to gauge our ability to react to an attack; • Evaluate the technical control structure and competency for all new third-party software vendors and review “cloud” third-party software vendor’s Service Organization Control reports, or reasonable substitutes, which give comfort on the maturity of the vendor’s security controls; and • Perform monthly mock phishing email exercises with our employees and provide additional training if needed.
We have plans in place in order to Respond to detected cybersecurity incidents: • Maintain written playbooks, which provide sequential instructions on the appropriate steps to take in the wake of various cyberattacks, including a playbook for each of the following: ransomware attack, a data breach, loss of third-party data and partial and full disaster recovery plans; and • Retain a leading provider of incident response to assist us with a security incident as well as an attorney that serves as our data breach coach who specializes in data privacy and cyber security, and has relationships with third-party forensics investigators, crisis communications professionals and other services and organization we may need if a data breach is encountered.
We have plans in place in order to r espond to detected cybersecurity incidents: • Maintain written playbooks, which provide sequential instructions on the appropriate steps to take in the wake of various cyberattacks, including a playbook for each of the following: ransomware attack, a data breach, loss of third-party data and partial and full disaster recovery plans; and • Retain a leading incident response provider to assist with security incidents as well as an attorney that serves as our data breach coach who specializes in data privacy and cyber security, and has relationships with third-party forensics investigators, crisis communications professionals and other services and organization we may need if a data breach is encountered.
Our processes and controls to mitigate these cyber risks, categorized by five functional areas, Identify, Protect, Detect, Respond and Recover, are addressed below. The first step in our process is to Identify the risks related to our data, personnel, devices, systems and facilities.
Our processes and controls to mitigate these cyber risks, categorized by five functional areas, Identify, Protect, Detect, Respond and Recover, are addressed below. The first step in our process is to i dentify the risks related to our data, personnel, devices, systems and facilities.
In connection with this phase, we do the following: • Maintain controls and processes over access to our networks and computer systems including: (i) approval and restriction to appropriate personnel as well as ensuring powerful privileges are restricted and segregated to select information technology employees; (ii) utilize a password manager to protect encrypted passwords of power users; (iii) disable system and physical access of terminated employees in a timely manner; (iv) utilize two-factor authentication for remote access to the network; and (v) segregate internal network through the use of internal firewalls; • Maintain physical security at our data center and backup recovery location including door access control system at the primary data center with surveillance; • Block data intrusion to maintain confidentiality and integrity of our data via the following: (i) capacity of our servers and networks have an automated monitoring system; (ii) patch management controls on our key software including monitoring resources for patch criticality and reported issues as well as running vulnerability scans; (iii) 21 change logs are kept and updated on all of our key software; (iv) all major changes to hardware and infrastructure devices are performed and approved prior to production migration; (v) remote access is fully encrypted for all users; and (vi) internal firewalls are used to limit access to sensitive systems and applications; and • Maintain controls and processes relating to payments we make to third parties by using a combination of internal controls around the setup, maintenance and archiving of records to reduce fraud and erroneous payments.
In connection with this phase, we do the following: • Maintain controls and processes over access to our networks and computer systems including: (i) approval and restriction to appropriate personnel as well as ensuring powerful privileges are restricted and segregated to select information technology employees; (ii) utilize a password manager to protect encrypted passwords of power users; (iii) disable system and physical access of terminated employees in a timely manner; (iv) utilize two-factor authentication for remote access to the network; and (v) segregate internal network through the use of internal firewalls; • Maintain physical security at our data center and backup recovery location including door access control system with surveillance; • Block data intrusion to maintain confidentiality and integrity of our data via the following: (i) capacity of our servers and networks have an automated monitoring system; (ii) patch management controls on our key software including monitoring resources for patch criticality and reported issues as well as running vulnerability scans; (iii) change logs are kept and updated on all of our key software; (iv) all major changes to hardware and infrastructure devices are performed and approved prior to production migration; (v) remote access is fully encrypted for all users; and (vi) internal firewalls are used to limit access to sensitive systems and applications; and • Maintain controls and processes relating to payments we make to third parties by using a combination of internal controls around the setup, maintenance and archiving of records to reduce fraud and erroneous payments. 20 We continually monitor our information system in order to d etect anomalous activity and verify the effectiveness of our protective measures.
In connection with this phase, we do the following: • Perform global risk assessments which include information technology risk areas including cyber and, in conjunction with this assessment, we engage leading security and technology vendors to periodically perform specific technical information technology risk assessments; • Maintain a matrix that delineates roles and responsibilities for information security supporting significant financial applications, database and networks; • Participate in various consortiums, associations and groups allowing us to share threat intelligence and collaborate with organizations across different industries to share best practices, fight cybercrime, enhance privacy, discuss new technologies, better understand the evolving regulatory environment, and advance capabilities in these areas; • Conduct mandatory information security training for all employees and regularly test our employees several times a year for information security awareness and adherence to our information security recommendations; and • Disclose our computer usage policy on our intranet and distribute to new employees.
In connection with this phase, we do the following: • Perform global risk assessments which include information technology risk areas including cyber and, in conjunction with this assessment, we engage leading security and technology vendors to periodically perform specific technical information technology risk assessments; • Maintain a matrix that delineates roles and responsibilities for information security supporting significant financial applications, database and networks; • Participate in various consortiums, associations and groups to share threat intelligence and collaborate with organizations across different industries to share best practices, fight cybercrime, enhance privacy, discuss new technologies, better understand the evolving regulatory environment, and advance capabilities in these areas; • Conduct mandatory information security training for all employees and regularly evaluate their information security awareness and adherence to our information security recommendations; and • Disclose our computer usage policy on our intranet and require employees to acknowledge the policy annually.
Next, we perform certain controls and processes in order to Protect against the identified risks.
Next, we perform certain controls and processes in order to p rotect against the identified risks.
The Audit Committee Chairperson is also involved in our annual overall risk assessment process. In addition to the foregoing, from time to time, the Board of Directors is updated concerning the Company’s internal control systems with respect to information technology security. 22
In addition to the foregoing, from time to time, the Board of Directors is updated concerning the Company’s internal control systems with respect to information technology security. 21
In order to Recover systems or assets affected by a cybersecurity incident, full backups of our business systems data are created, tested and kept at multiple locations in online and offline formats.
In order to r ecover systems or assets affected by a cybersecurity incident, we maintain and regularly test full backups of our business systems data. These backups are stored in multiple locations, both online and offline.
They meet on a regular basis and report to the Audit Committee at least annually on key cybersecurity risks as well as current and future cybersecurity strategy. As delegated by our Board of Directors, our Audit Committee is responsible for reviewing, with management, our internal control systems with respect to information technology security.
The Audit Committee, as delegated by our Board of Directors, is responsible for reviewing, with management, our internal control systems with respect to information technology security. The Audit Committee Chairperson also participates in our annual overall risk assessment process.
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We continually monitor our information system in order to Detect anomalous activity and verify the effectiveness of our protective measures.
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Collectively, this team has decades of expertise in information technology, and the Information Technology Security Manager holds a master's degree in Network Security. They meet regularly to discuss key cybersecurity risks and strategies, reporting to the Audit Committee annually or as necessary, in accordance with our cybersecurity incident protocols.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table shows scheduled lease expirations for our in-service properties as of December 31, 2023: Year of Expiration (A) Number of Leases Expiring GLA Expiring (B) Percentage of GLA Expiring (B) Annualized Base Rent Under Expiring Leases (In thousands) (C) Percentage of Total Annualized Base Rent Expiring (C) 2024 101 3,096,841 5.1% $22,452 5.1% 2025 163 6,695,360 10.9% 45,863 10.4% 2026 187 8,914,480 14.5% 58,779 13.3% 2027 180 9,245,056 15.1% 64,744 14.6% 2028 149 9,524,122 15.5% 83,046 18.7% 2029 92 6,523,519 10.6% 48,527 11.0% 2030 42 3,202,975 5.2% 23,632 5.3% 2031 19 2,894,891 4.7% 23,256 5.2% 2032 23 4,256,732 7.0% 27,475 6.2% 2033 18 2,145,182 3.5% 19,214 4.3% Thereafter 13 4,831,821 7.9% 25,974 5.9% Total 987 61,330,979 100% $442,962 100% _______________ (A) Includes leases that expire on or after January 1, 2024 and assumes tenants do not exercise existing renewal, termination or purchase options.
Biggest changeThe following table shows scheduled lease expirations for our in-service properties as of December 31, 2024: Year of Expiration (A) Number of Leases Expiring GLA Expiring (B) Percentage of GLA Expiring (B) Annualized Base Rent Under Expiring Leases (In thousands) (C) Percentage of Total Annualized Base Rent Expiring (C) 2025 87 2,897,747 4.6% $21,613 4.3% 2026 167 8,396,541 13.2% 58,341 11.6% 2027 175 9,472,076 14.8% 67,577 13.4% 2028 140 9,763,621 15.3% 90,008 17.8% 2029 137 7,818,241 12.2% 73,033 14.5% 2030 76 5,402,436 8.5% 41,831 8.3% 2031 26 3,628,941 5.7% 33,733 6.7% 2032 34 6,424,457 10.1% 42,797 8.5% 2033 17 2,453,117 3.8% 22,953 4.5% 2034 15 3,600,846 5.6% 23,465 4.6% Thereafter 11 3,989,351 6.2% 29,043 5.8% Total 885 63,847,374 100% $504,394 100% _______________ (A) Includes leases that expire on or after January 1, 2025 and assumes tenants do not exercise existing renewal, termination or purchase options.
Our in-service portfolio includes all properties that have reached stabilized occupancy (defined as properties that are 90% leased), (re)developed properties upon the earlier of reaching 90% occupancy or one year from the date construction is completed and acquired properties that are at least 75% occupied at acquisition, unless we anticipate tenant move-outs within two years of ownership would drop occupancy below 75%.
Our in-service portfolio includes all properties that have reached stabilized occupancy (defined as properties that are 90% leased), (re)developed properties upon the earlier of reaching 90% occupancy or one year from the date construction is completed and acquired properties that are at least 75% occupied at acquisition or one year from the acquisition date, unless we anticipate tenant move-outs within two years of ownership would drop occupancy below 75%.
Leasing Activity The following table provides a summary of our leasing activity for the year ended December 31, 2023. The table does not include month-to-month leases or leases with terms less than twelve months.
Leasing Activity The following table provides a summary of our leasing activity for the year ended December 31, 2024. The table does not include month-to-month leases or leases with terms less than twelve months.
(C) Annualized base rent is calculated as monthly contractual base rent per the terms of the lease, as of December 31, 2023, multiplied by 12. If free rent is granted, then the first positive rent value is used.
(C) Annualized base rent is calculated as monthly contractual base rent per the terms of the lease, as of December 31, 2024, multiplied by 12. If free rent is granted, then the first positive rent value is used.
The following table provides a summary of our leases that commenced during the year ended December 31, 2023, which included rent concessions during the lease term.
The following table provides a summary of our leases that commenced during the year ended December 31, 2024, which included rent concessions during the lease term.
Included in the estimated total cost is $10.6 million of leasing commissions. The capitalization rate for these development projects, calculated using the estimated stabilized net operating income (excluding straight-line rent adjustments) divided by the total investment in the developed property is 6.6%.
Included in the estimated total cost is $17.0 million of leasing commissions. The capitalization rate for these development projects, calculated using the estimated stabilized net operating income (excluding straight-line rent adjustments) divided by the total investment in the developed property is 7.0%.
At December 31, 2023, our leases have a weighted average lease length of 7.6 years and the majority provide for periodic rent increases that are either fixed or based on changes in the Consumer Price Index.
At December 31, 2024, our leases have a weighted average lease length of 7.8 years from inception and the majority provide for periodic rent increases that are either fixed or based on changes in the Consumer Price Index.
As of December 31, 2023, approximately 95.5% of the GLA of our in-service properties was leased, and no single tenant or group of related tenants accounted for more than 5.6% of our rent revenues, nor did any single tenant or group of related tenants occupy more than 5.4% of the total GLA of our in-service properties.
As of December 31, 2024, approximately 96.2% of the GLA of our in-service properties was leased, and no single tenant or group of related tenants accounted for more than 6.5% of our rent revenues, nor did any single tenant or group of related tenants occupy more than 6.8% of the total GLA of our in-service properties.
Item 2. Properties General At December 31, 2023, we owned 428 industrial properties of which 422 were classified as in-service. Of the 428 properties owned on a consolidated basis, none of them are directly owned by the Company.
Item 2. Properties General At December 31, 2024, we owned 416 industrial properties of which 412 were classified as in-service. Of the 416 properties owned on a consolidated basis, none of them are directly owned by the Company.
The 422 in-service industrial properties contained an aggregate of approximately 64.9 million square feet of GLA in 18 states, with a diverse base of approximately 1,000 tenants engaged in a wide variety of businesses, including e-commerce, third-party logistics and transportation, consumer and other manufactured products, retail and consumer services, food and beverage, lumber and building materials, wholesale goods, health services, governmental and other.
The 412 in-service industrial properties contained an aggregate of approximately 66.7 million square feet of GLA in 19 states, with a diverse base of approximately 900 tenants engaged in a wide variety of businesses, including e-commerce, third-party logistics and transportation, consumer and other manufactured products, retail and consumer services, food and beverage, lumber and building materials, wholesale goods, health services, governmental and other.
Based on our recent experience, low levels of vacancy generally throughout our markets and the 2024 forecast of a leading national research company, we expect our average net rental rates for renewal leases on a cash basis to be higher than the expiring rates.
Looking ahead, based on our recent experience, low levels of vacancy generally across our markets, and the 2025 forecast of a leading national research company, we expect higher average net rental rates for renewal leases on a cash basis compared to expiring rates.
See Note 4 to the Consolidated Financial Statements and the accompanying Schedule III for additional information. 23 Development Activity During the year ended December 31, 2023, we moved 13 development properties totaling approximately 2.8 million square feet of GLA to our in-service portfolio at a total estimated cost of approximately $354.9 million.
See Note 4 to the Consolidated Financial Statements and the accompanying Schedule III for additional information. 22 Development Activity During the year ended December 31, 2024, we transferred seven development properties totaling approximately 2.8 million square feet of GLA to our in-service portfolio at a total estimated cost of approximately $392.0 million.
Reflects the impact of renewals signed prior to January 1, 2024 which are now reflected in the new year of expiration. (B) Does not include existing vacancies of 2,937,033 aggregate square feet and December 31, 2023 move outs of 606,094 aggregate square feet.
Reflects the impact of renewals signed prior to January 1, 2025 which are now reflected in the new year of expiration. (B) Does not include existing vacancies of 2,505,108 aggregate square feet and December 31, 2024 move outs of 355,696 aggregate square feet.
The estimated total investment for the six development projects under construction is $284.8 million, of which $171.0 million has been funded as of December 31, 2023. There can be no assurance that the actual completion cost for these developments will not exceed the estimated completion cost.
The estimated total investment for these development projects under construction is $280.4 million, of which $102.9 million has been funded as of December 31, 2024. There can be no assurance that the actual completion cost for these developments will not exceed the estimated completion cost.
The estimated total investment for the six developments is approximately $286.9 million, of which $248.1 million has been funded as of December 31, 2023. There can be no assurance that the actual completion cost for these developments will not exceed the estimated completion cost.
The estimated total investment for these developments is approximately $138.0 million, of which $123.2 million has been funded as of December 31, 2024. There can be no assurance that the actual completion cost for these developments will not exceed the estimated completion cost.
The capitalization rate for these industrial property acquisitions was calculated using the estimated stabilized net operating income (excluding straight-line rent adjustments and above and below market lease amortization) and dividing it by the sum of the purchase price plus closing costs and estimated costs to stabilize the properties.
The industrial properties were acquired at an expected stabilized capitalization rate of approximately 6.1%. This capitalization rate for these property acquisitions was calculated using the estimated stabilized net operating income (excluding straight-line rent adjustments and above and below market lease amortization), divided by the sum of the purchase price, closing costs and estimated stabilization costs.
In-Service Property Summary Totals Metropolitan Area GLA Number of Properties Occupancy at 12/31/23 Atlanta, GA 5,249,774 23 99.0% Baltimore, MD 3,416,464 14 89.8% Central Florida 1,060,469 11 100.0% Central/Eastern Pennsylvania (A) 7,761,506 25 100.0% Chicago, IL 6,262,880 27 96.1% Cincinnati, OH 745,320 8 98.9% Dallas/Ft.
In-Service Property Summary Totals Metropolitan Area GLA Number of Properties Occupancy at 12/31/24 Atlanta, GA 5,249,774 23 100.0% Baltimore, MD 3,416,464 14 85.9% Central Florida 1,168,453 12 89.2% Central/Eastern Pennsylvania (A) 8,656,434 24 100.0% Chicago, IL 6,169,821 25 96.9% Cincinnati, OH 467,320 3 100.0% Dallas/Ft.
Indebtedness As of December 31, 2023, three of our 422 in-service industrial properties, with a net carrying value of $31.1 million, are pledged as collateral under a mortgage financing, totaling $10.0 million.
Indebtedness As of December 31, 2024, three of our 412 in-service industrial properties, with a net carrying value of $30.2 million, are pledged as collateral under a mortgage financing, totaling $9.6 million.
The development projects under construction have the following characteristics: Metropolitan Area Number of Properties GLA Anticipated Quarter of Building Completion Southern California 3 637,668 Q1 2024 South Florida 1 135,707 Q2 2024 Northern California 1 1,015,791 Q3 2024 Central Florida 1 112,000 Q2 2025 Total (A) 6 1,901,166 (A) The six properties were 6% pre-leased at December 31, 2023. 24 Property Acquisitions During the year ended December 31, 2023, we acquired four industrial properties and 239 acres of land located in our Central/Eastern Pennsylvania, Central Florida, Houston, Nashville, South Florida and Southern California markets for an aggregate purchase price of approximately $124.5 million.
The development projects under construction have the following characteristics: Metropolitan Area Number of Properties GLA Anticipated Quarter of Building Completion South Florida 2 258,024 Q2 2025 Houston, TX 1 424,560 Q3 2025 Nashville, TN 2 858,617 Q3 2025 Central Florida 1 112,000 Q3 2025 Central/Eastern Pennsylvania 2 361,800 Q1 2026 Total (A) 8 2,015,001 (A) The eight properties were 43% pre-leased at December 31, 2024. 23 Property Acquisitions During the year ended December 31, 2024, we acquired five industrial properties in our Houston and Southern California markets, as well as approximately 81 acres of land in our South Florida and Southern California markets, for an aggregate purchase price of approximately $70.7 million.
For 2024, net rental rates for new leases on a cash basis on average are also expected to be higher than the comparative prior leases, primarily due to market rent growth since when the comparative leases were signed.
Similarly, for 2025, net rental rates for new leases on a cash basis on average are expected to exceed prior lease rates, driven primarily by market rent growth since the original leases were signed.
Number of Leases Commenced Square Feet Commenced (in 000's) Net Rent Per Square Foot (A) Straight Line Basis Rent Growth (B) Weighted Average Lease Term (C) Lease Costs Per Square Foot (D) Weighted Average Tenant Retention (E) New Leases 73 2,865 $11.20 98.6% 6.8 $6.85 N/A Renewal Leases 127 5,379 $9.96 76.6% 5.1 $2.28 63.5% Development / Acquisition Leases 15 1,590 $11.95 N/A 8.8 N/A N/A Total / Weighted Average 215 9,834 $10.65 84.2% 6.2 $3.87 63.5% (A) Net rent is the average base rent calculated in accordance with GAAP, over the term of the lease.
Number of Leases Commenced Square Feet Commenced (in 000's) Net Rent Per Square Foot (A) Straight Line Basis Rent Growth (B) Weighted Average Lease Term (C) Lease Costs Per Square Foot (D) Weighted Average Tenant Retention (E) New Leases 64 2,069 $ 10.51 56.9 % 4.8 $ 6.65 N/A Renewal Leases 120 6,270 10.38 75.1 % 6.5 2.50 76.7 % Development / Acquisition Leases 12 3,136 10.50 N/A 9.9 N/A N/A Total / Weighted Average 196 11,475 $ 10.44 70.1 % 7.1 $ 3.53 76.7 % (A) Net rent is the average base rent calculated in accordance with GAAP, over the term of the lease.
The acquired industrial properties have the following characteristics: Metropolitan Area Number of Properties GLA Occupancy at 12/31/23 Houston, TX 1 54,080 100% Southern California 3 101,701 100% Total 4 155,781 Property Sales During the year ended December 31, 2023, we sold 11 industrial properties comprising approximately 1.0 million square feet of GLA, at a weighted average capitalization rate of 6.5%, and two land parcels for total gross sales proceeds of approximately $125.3 million.
The acquired industrial properties have the following characteristics: Metropolitan Area Number of Properties GLA Occupancy at 12/31/24 Houston, TX 4 210,937 100% Southern California 1 52,929 100% Total 5 263,866 Property Sales During the year ended December 31, 2024, we sold 22 industrial properties totaling approximately 1.2 million square feet of GLA, at a weighted average capitalization rate of 6.7%, for total gross sales proceeds of approximately $162.8 million.
The substantially completed developments have the following characteristics: Metropolitan Area Number of Properties GLA Occupancy at 12/31/23 Central/Eastern Pennsylvania 2 1,057,728 33% Central Florida 1 107,984 0% Southern California 2 543,928 0% Northern California 1 37,056 0% Total 6 1,746,696 As of December 31, 2023, we have six development projects that are under construction totaling approximately 1.9 million square feet of GLA.
The placed in-service development projects have the following characteristics: Metropolitan Area Number of Properties GLA Occupancy at 12/31/24 Central/Eastern Pennsylvania 2 1,057,728 100% Central Florida 1 107,984 0% Northern California 2 1,052,847 100% Southern California 2 543,945 100% Total 7 2,762,504 As of December 31, 2024, we substantially completed four developments totaling approximately 0.8 million square feet of GLA.
Paul, MN 2,136,628 12 100.0% Nashville, TN 2,335,079 7 78.6% New Jersey (A) 2,519,231 24 99.5% Northern California 246,800 7 81.4% Phoenix, AZ 4,152,314 17 97.8% Seattle, WA 552,163 9 88.3% South Florida 2,655,652 23 98.0% Southern California (A) 10,306,157 80 94.8% Total 64,874,106 422 95.5% _______________ (A) Central/Eastern Pennsylvania includes the markets of Central Pennsylvania and Philadelphia.
Paul, MN 2,136,628 12 100.0% Nashville, TN 2,335,079 7 100.0% New Jersey (A) 2,074,153 17 98.5% Northern California 1,300,236 9 100.0% Phoenix, AZ 4,152,314 17 97.5% Seattle, WA 552,163 9 100.0% South Florida 2,655,394 23 100.0% Southern California (A) 10,900,626 83 95.3% Total 66,708,178 412 96.2% _______________ (A) Central/Eastern Pennsylvania includes the markets of Central Pennsylvania and Philadelphia.
Acquired properties that are less than 75% occupied at acquisition or with tenants that we anticipate will move out within the first two years of ownership are placed in service upon the earlier of reaching 90% occupancy or one year after move out.
Acquired properties with tenants that we anticipate will move out within the first two years of ownership are placed in service upon the earlier of reaching 90% occupancy or one year after move out. The average annual base rent per square foot for our in-service portfolio, calculated at December 31, 2024, was $7.89.
The capitalization rate for the 11 industrial property sales is calculated by taking revenues of the property (excluding straight-line rent adjustments, lease inducement amortization and above and below market lease amortization) less operating expenses of the property for a period of the last twelve full months prior to sale and dividing the sum by the sales price of the property.
The capitalization rate for these sales was calculated using the properties' revenues (excluding straight-line rent adjustments, lease inducement amortization and above and below market lease amortization) less operating expenses for the twelve full preceding the sale, divided by the sales price.
Worth, TX 7,390,236 53 99.0% Denver, CO (A) 3,802,262 37 78.9% Detroit, MI 802,193 16 100.0% Houston, TX 3,478,978 29 96.8% Minneapolis/St.
Worth, TX 7,390,236 53 97.4% Denver, CO (A) 3,802,262 37 80.8% Detroit, MI 590,906 11 100.0% Houston, TX 3,689,915 33 96.5% Minneapolis/St.
The average annual base rent per square foot for our in-service portfolio, calculated at December 31, 2023, was $7.21. The properties are generally located in business parks that have convenient access to interstate highways and/or rail and air transportation. We maintain insurance on our properties that we believe is adequate.
The properties are generally located in business parks that have convenient access to interstate highways and/or rail and air transportation. We maintain insurance on our properties that we believe is adequate. The following tables summarize, by market, certain information as of December 31, 2024, with respect to the in-service properties.
Number of Leases With Rent Concessions Square Feet (in 000's) Rent Concessions New Leases 50 2,279 $3,674 Renewal Leases 12 897 $1,238 Development / Acquisition Leases 14 1,573 $5,477 Total 76 4,749 $10,389 26 Lease Expirations Fundamentals for the United States industrial real estate market remained favorable in 2023.
Number of Leases With Rent Concessions Square Feet (in 000's) Rent Concessions New Leases 54 1,863 $ 6,015 Renewal Leases 12 474 2,034 Development / Acquisition Leases 11 3,072 18,812 Total 77 5,409 $ 26,861 25 Lease Expirations Fundamentals for the United States industrial real estate market were balanced in 2024.
Paul, MN 1 48,000 Total 11 999,531 25 Tenant and Lease Information We have a diverse base of approximately 1,000 tenants engaged in a wide variety of businesses including e-commerce, third-party logistics and transportation, consumer and other manufactured products, retail and consumer services, food and beverage, lumber and building materials, wholesale goods, health services, governmental and other.
The sold industrial properties have the following characteristics: Metropolitan Area Number of Properties GLA Central/Eastern Pennsylvania 3 162,800 Chicago, IL 2 93,059 Cincinnati, OH 5 278,000 Detroit, MI 5 211,287 New Jersey 7 445,078 Total 22 1,190,224 24 Tenant and Lease Information We have a diverse base of approximately 900 tenants engaged in a wide variety of businesses including e-commerce, third-party logistics and transportation, consumer and other manufactured products, retail and consumer services, food and beverage, lumber and building materials, wholesale goods, health services, governmental and other.
Overall demand for new industrial space nationally grew, but at lower levels than the post-COVID-19 pandemic inventory rebuilding periods of 2021 and 2022. New industrial space continued to be developed and delivered throughout the year in response to this growth in demand and the levels of existing competing supply. In 2023, new supply exceeded incremental demand.
Demand for new industrial space grew modestly compared to the post-COVID inventory rebuilding periods of 2021 and 2022. New industrial space was delivered throughout the year, while the volume of new construction starts slowed significantly compared to 2023 in response to the moderation of demand.
The placed in-service development projects have the following characteristics: Metropolitan Area Number of Properties GLA Occupancy at 12/31/23 Central/Eastern Pennsylvania 1 105,000 100% Central Florida 3 239,306 100% Chicago, IL 1 451,022 46% Denver, CO 2 787,585 0% Nashville, TN 1 500,240 0% Seattle, WA 1 128,682 50% South Florida 4 605,235 100% Total 13 2,817,070 As of December 31, 2023, we substantially completed six developments totaling approximately 1.7 million square feet of GLA.
The substantially completed developments have the following characteristics: Metropolitan Area Number of Properties GLA Occupancy at 12/31/24 Southern California 3 637,668 0% South Florida 1 135,707 34% Total 4 773,375 As of December 31, 2024, we have eight development projects that are under construction totaling approximately 2.0 million square feet of GLA.
National vacancy levels remained low and overall industry conditions resulted in an environment that was supportive of market-level rental rate growth in virtually all of the markets in which we own and operate, albeit at lower levels than in 2022.
In 2024, new supply outpaced incremental demand, leading to a slight increase in national vacancy levels, though they remained low overall. Market-level rental rate growth was flat to slightly positive in virtually all of the markets in which we own and operate properties. However, Southern California experienced rental rate declines after two years of extraordinary growth.
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The following tables summarize, by market, certain information as of December 31, 2023, with respect to the in-service properties.
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The industrial properties were acquired at an expected stabilized capitalization rate of approximately 6.2%.
Removed
The sold industrial properties have the following characteristics: Metropolitan Area Number of Properties GLA Central/Eastern Pennsylvania 1 264,120 Cincinnati, OH 2 346,969 Detroit, MI 6 157,879 Houston, TX 1 182,563 Minneapolis/St.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are involved in legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material impact on our results of operations, financial position or liquidity. Item 4. Mine Safety Disclosures None. 27 PART II
Biggest changeItem 3. Legal Proceedings We are involved in legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material impact on our results of operations, financial position or liquidity. Item 4. Mine Safety Disclosures None. 26 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeQuarter Ended Closing High Closing Low Dividend/Distribution Declared December 31, 2023 $53.97 $40.64 $0.320 September 30, 2023 $54.86 $47.59 $0.320 June 30, 2023 $54.36 $50.09 $0.320 March 31, 2023 $54.94 $47.64 $0.320 December 31, 2022 $50.68 $43.82 $0.295 September 30, 2022 $55.62 $44.14 $0.295 June 30, 2022 $65.32 $46.13 $0.295 March 31, 2022 $65.01 $56.31 $0.295 As of February 14, 2024, the Company had 315 common stockholders of record.
Biggest changeQuarter Ended Closing High Closing Low Dividend/Distribution Declared December 31, 2024 $55.90 $49.60 $0.37 September 30, 2024 $56.97 $47.13 $0.37 June 30, 2024 $53.28 $45.42 $0.37 March 31, 2024 $54.80 $50.59 $0.37 December 31, 2023 $53.97 $40.64 $0.32 September 30, 2023 $54.86 $47.59 $0.32 June 30, 2023 $54.36 $50.09 $0.32 March 31, 2023 $54.94 $47.64 $0.32 As of February 12, 2025, the Company had 249 common stockholders of record.
The number of holders does not include individuals or entities who beneficially own shares but whose shares are held of record by a broker or clearing agency, but does include each such broker or clearing agency as one record holder. The Operating Partnership had 114 holders of record of Units registered with our transfer agent.
The number of holders does not include individuals or entities who beneficially own shares but whose shares are held of record by a broker or clearing agency, but does include each such broker or clearing agency as one record holder. The Operating Partnership had 107 holders of record of Units registered with our transfer agent.
Our dividend/distribution policy is determined by the Company's Board of Directors and is dependent on multiple factors, including cash flow and capital expenditure requirements, as well as ensuring that the Company meets the minimum distribution requirements set forth in the Code. The Company met the minimum distribution requirements with respect to 2023.
Our dividend/distribution policy is determined by the Company's Board of Directors and is dependent on multiple factors, including cash flow and capital expenditure requirements, as well as ensuring that the Company meets the minimum distribution requirements set forth in the Code. The Company met the minimum distribution requirements with respect to 2024.
The NAREIT Index represents the performance of our publicly traded REIT peers. The historical information set forth below is not necessarily indicative of future performance. (A) $100 invested on 12/31/18 in stock or index, including reinvestment of dividends.
The NAREIT Index represents the performance of our publicly traded REIT peers. The historical information set forth below is not necessarily indicative of future performance. (A) $100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
Subject to certain lock-up periods, holders of Limited Partner Units can redeem their Units by providing written notification to the General Partner of the Operating Partnership. Unless the General Partner provides notice of a redemption restriction to the holder, redemption must be made within seven business days after receipt of the holder's notice.
Subject to certain lock-up periods, holders of Limited Partner Units can redeem their Units by providing written notice to the General Partner of the Operating Partnership. Unless the General Partner imposes a redemption restriction, the redemption process must be completed within seven business days after receipt of the holder's notice.
If each Limited Partner Unit of the Operating Partnership were redeemed as of December 31, 2023, the Operating Partnership could satisfy its redemption obligations by making an aggregate cash payment of approximately $177.9 million or by issuing 3,378,165 shares of the Company's common stock. 28 Performance Graph The following graph provides a comparison of the cumulative total stockholder return among the Company, the FTSE NAREIT Equity REIT Total Return Index (the "NAREIT Index") and the Standard & Poor's 500 Index ("S&P 500").
As of December 31, 2024, if all Limited Partner Units were redeemed, the Operating Partnership could satisfy its redemption obligations by making an aggregate cash payment of approximately $182.5 million or by issuing 3,640,860 shares of the Company's common stock. 27 Performance Graph The following graph provides a comparison of the cumulative total stockholder return among the Company, the FTSE NAREIT Equity REIT Total Return Index (the "NAREIT Index") and the Standard & Poor's 500 Index ("S&P 500").
Limited Partner Units During the year ended December 31, 2023, the Operating Partnership issued 405,618 Limited Partner Units in connection with the issuance of equity compensation, inclusive of Limited Partner Units issued related to dividends accrued on the underlying common stock, to certain employees and directors. See Note 11 to the Consolidated Financial Statements for more information.
Limited Partner Units During the year ended December 31, 2024, the Operating Partnership issued 396,400 Limited Partner Units as part of its equity compensation program, including Limited Partner Units issued in connection with dividends accrued on the underlying common stock for certain employees and directors. See Note 11 to the Consolidated Financial Statements for more information.
Fiscal year ending December 31. 12/18 12/19 12/20 12/21 12/22 12/23 FIRST INDUSTRIAL REALTY TRUST, INC. $ 100.00 $ 147.35 $ 153.51 $ 246.11 $ 183.69 $ 205.54 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 FTSE NAREIT Equity REITs $ 100.00 $ 126.00 $ 115.92 $ 166.04 $ 125.58 $ 142.83 _______________ (A) The information provided in this performance graph shall not be deemed to be "soliciting material," to be "filed" or to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 unless specifically treated as such. 29 Item 6. [Reserved] None.
Fiscal year ending December 31. 12/19 12/20 12/21 12/22 12/23 12/24 FIRST INDUSTRIAL REALTY TRUST, INC. $ 100.00 $ 104.18 $ 167.02 $ 124.66 $ 139.49 $ 136.64 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 FTSE NAREIT Equity REITs $ 100.00 $ 92.00 $ 131.78 $ 99.67 $ 113.35 $ 123.25 _______________ (A) The information provided in this performance graph shall not be deemed to be "soliciting material," to be "filed" or to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 unless specifically treated as such.
Prior requests for redemption have generally been fulfilled with shares of common stock of the Company, and the Operating Partnership intends to continue this practice.
Historically, redemptions have been fulfilled with the issuance of the Company's common stock, and the Operating Partnership expects to continue this practice.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeInvesting Activities: Cash used in investing activities decreased $250.8 million, primarily due to the following: • decrease of $334.7 million related to the acquisition, development and investment in real estate attributable to fewer acquisitions and a reduction in expenditures related to developments under construction during the year ended December 31, 2023 as compared to the year ended December 31, 2022; and • decrease of $4.3 million in escrow deposits; offset by: ◦ decrease of $55.0 million in net proceeds received from the disposition of real estate in 2023 as compared to 2022; and ◦ decrease of $36.1 million in net distributions from our Joint Venture in 2023 as compared to 2022. 35 Financing Activities: Cash used in financing activities was $27.8 million for the year ended December 31, 2023 as compared to $304.5 million provided by financing activities for the year ended December 31, 2022, resulting in a decrease of cash provided by financing activities of $332.3 million, primarily due to the following: • decrease of $465.0 million in proceeds from refinancing the expiring $260.0 million unsecured term loan with a $425.0 million unsecured term loan in 2022 and $300.0 million related to the new unsecured term loan we entered into in 2022; • increase in dividend and unit distributions of $14.0 million due to the Company increasing the dividend rate in 2023 as well as an increase in common shares and Units outstanding; • decrease of $12.8 million related to net proceeds from the issuance of 218,230 shares of the Company's common stock under our ATM in 2022; and • increase in distributions to noncontrolling interests of $7.1 million in 2023 as compared to 2022; offset by: ◦ increase in net borrowings under our Unsecured Credit Facility of $92.0 million in 2023 as compared to 2022; ◦ decrease in repayments of mortgage loans payable of $69.1 million in 2023 compared to 2022; and ◦ decrease in debt issuance costs of $5.1 million related to the $425.0 million unsecured term loan refinancing and $300.0 million unsecured term loan issuance.
Biggest changeInvesting Activities: Cash used in investing activities decreased $246.7 million, primarily due to the following: • decrease of $203.6 million related to the acquisition, development and investment in real estate attributed to fewer acquisitions and reduced expenditures for developments under construction during the year ended December 31, 2024 as compared to the year ended December 31, 2023; • increase of $38.5 million in net proceeds received from the disposition of real estate in 2024 as compared to 2023; and • decrease of $6.6 million in contributions to the Joint Venture in 2024 as compared to 2023.
We anticipate that these needs will be met with cash flows provided by operating activities as well as the disposition of select assets. These needs may also be met by the issuance of other debt or equity securities, subject to market conditions or borrowings under our Unsecured Credit Facility.
We anticipate that these needs will be met with cash flows provided by operating activities as well as the disposition of select assets. These needs may also be met by the issuance of other debt or equity securities or borrowings under our Unsecured Credit Facility, subject to market conditions.
In addition, the remaining estimated equity that the Company will need to contribute to complete the development projects in our Joint Venture is approximately $7.9 million. The majority of the construction costs and our proportionate share of equity contributions to the Joint Venture need to be funded in one year or less.
In addition, the remaining estimated equity that the Company will need to contribute to complete the development projects in our Joint Venture is approximately $9.7 million. The majority of the construction costs and our proportionate share of equity contributions to the Joint Venture need to be funded in one year or less.
Management believes that, by excluding gains or losses related to sales of real estate assets, real estate asset depreciation and amortization and impairment of real estate, investors and analysts are able to identify the operating results of the long-term assets that form the core of a REIT's activity and use these operating results for assistance in comparing these operating results between periods or to those of different companies.
Management believes that, by excluding gains or losses related to sales of real estate assets, impairment of real estate assets and real estate asset depreciation and amortization, investors and analysts are able to identify the operating results of the long-term assets that form the core of a REIT's activity and use these operating results for assistance in comparing these operating results between periods or to those of different companies.
Acquired above and below market lease intangibles are valued based on the present value of the difference between prevailing market rental rates and the in-place rental rates measured over a period equal to the remaining term of the lease for above market leases or the remaining term of the lease plus the term of any below market fixed rate renewal options for below market leases.
Above and below market lease intangibles are valued based on the present value of the difference between prevailing market rental rates and the in-place rental rates measured over a period equal to the remaining term of the lease for above market leases or the remaining term of the lease plus the term of any below market fixed rate renewal options for below market leases.
FFO is calculated by us in accordance with the definition adopted by the Board of Governors of NAREIT and therefore may not be comparable to other similarly titled measures of other companies.
FFO is calculated by us in accordance with the definition adopted by the Board of Governors of NAREIT and may not be comparable to other similarly titled measures of other companies.
At December 31, 2023 and 2022, the fixed rate debt amounts include variable rate debt that has been effectively swapped to a fixed rate through the use of derivative instruments with an aggregate notional amount outstanding of $925.0 million that mitigate our exposure to our Unsecured Term Loans' variable interest rates, which are currently based on SOFR.
At December 31, 2024 and 2023, the fixed rate debt amounts include variable rate debt that has been effectively swapped to a fixed rate through the use of derivative instruments with an aggregate notional amount outstanding of $925.0 million that mitigate our exposure to our Unsecured Term Loans' variable interest rates, which are currently based on SOFR.
With respect to our outstanding indebtedness, we periodically evaluate our exposure to interest rate fluctuations, and may continue to enter into derivatives that mitigate, but do not eliminate, the impact of changes in interest rates on our Unsecured Credit Facility. Market Risk The following discussion about our risk-management activities includes "forward-looking statements" that involve risk and uncertainties.
With respect to our outstanding indebtedness, we periodically evaluate our exposure to interest rate fluctuations, and may continue to enter into derivatives that mitigate, but do not eliminate, the impact of interest rate changes on our Unsecured Credit Facility. Market Risk The following discussion about our risk-management activities includes "forward-looking statements" that involve risk and uncertainties.
FFO and SS NOI are factors used by management in measuring our performance, including for purposes of determining the compensation of our executive officers under our 2023 incentive compensation plan. Neither FFO nor SS NOI should be considered as a substitute for net income, or any other measures derived in accordance with GAAP.
FFO and SS NOI are factors used by management in measuring our performance, including for purposes of determining the compensation of our executive officers under our 2024 incentive compensation plan. Neither FFO nor SS NOI should be considered as a substitute for net income, or any other measures derived in accordance with GAAP.
The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2023 and 2022. Same store properties are properties owned prior to January 1, 2022 and held as an in-service property through December 31, 2023 and developments and redevelopments that were placed in service prior to January 1, 2022.
The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2024 and 2023. Same store properties are properties owned prior to January 1, 2023 and held as an in-service property through December 31, 2024 and developments and redevelopments that were placed in service prior to January 1, 2023.
For the year ended December 31, 2023, we recognized $95.7 million of gain on sale of real estate related to the sale of eleven industrial properties comprising approximately 1.0 million square feet of GLA and two land parcels.
For the year ended December 31, 2023, we recognized $95.7 million of gain on sale of real estate related to the sale of 11 industrial properties comprising approximately 1.0 million square feet of GLA and two land parcels.
The following table shows a reconciliation of the same store revenues and property expenses disclosed in the results of operations (and reconciled to revenues and expenses reflected on the statements of operations) to SS NOI for the years ended December 31, 2023 and 2022.
The following table shows a reconciliation of the same store revenues and property expenses disclosed in the results of operations (and reconciled to revenues and expenses reflected on the statements of operations) to SS NOI for the years ended December 31, 2024 and 2023.
We expect to meet long-term (after December 31, 2024) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through long-term unsecured and secured indebtedness, the disposition of select assets and the issuance of additional equity or debt securities, subject to market conditions. 36 We believe that we were in compliance with our financial covenants as of December 31, 2023, and we anticipate that we will be able to operate in compliance with our financial covenants in 2024.
We expect to meet long-term (after December 31, 2025) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through long-term unsecured and secured indebtedness, the disposition of select assets and the issuance of additional equity or debt securities, subject to market conditions. 35 We believe that we were in compliance with our financial covenants as of December 31, 2024, and we anticipate that we will be able to operate in compliance with our financial covenants in 2025.
Interest Rate Risk The following analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments which are held by us at December 31, 2023 that are sensitive to changes in interest rates.
Interest Rate Risk The following analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments that are held by us at December 31, 2024 that are sensitive to changes in interest rates.
We have no other off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results of operation or liquidity and capital resources. Environmental We paid approximately $0.7 million and $0.6 million during the years ended December 31, 2023 and 2022, respectively, related to environmental expenditures.
We have no other off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results of operation or liquidity and capital resources. Environmental We paid approximately $0.8 million and $0.7 million during the years ended December 31, 2024 and 2023, respectively, related to environmental expenditures.
(B) The interest rate is based on SOFR, plus a 0.10% SOFR adjustment, plus a credit spread of 0.85%. We have interest rate swaps, with an aggregate notional value of $200.0 million, that effectively fix the SOFR rate that results in an all-in interest rate of 1.81% at December 31, 2023. These interest rate swaps mature in February 2026.
(B) The interest rate is based on SOFR, plus a 0.10% SOFR adjustment, plus a credit spread of 0.85%. We have interest rate swaps, with an aggregate notional value of $200.0 million, that effectively fix the SOFR rate that results in an all-in interest rate of 1.83% at December 31, 2024. These interest rate swaps mature in February 2026.
Properties are moved from the same store classification to the redevelopment classification when capital expenditures for a project are estimated to exceed 25% of the undepreciated gross book value of the property. Acquired properties are properties that were acquired subsequent to December 31, 2021 and held as an operating property through December 31, 2023.
Properties are moved from the same store classification to the redevelopment classification when capital expenditures for a project are estimated to exceed 25% of the undepreciated gross book value of the property. Acquired properties are properties that were acquired subsequent to December 31, 2022 and held as an operating property through December 31, 2024.
Other revenues are derived from the operations of properties not placed in service under one of the categories discussed above, the operations of our maintenance company, interest income and other miscellaneous revenues.
Other revenues are derived from the operations of properties not placed in service under one of the categories discussed above, the operations of our maintenance company, interest income, joint venture fees and other miscellaneous revenues.
Total debt, exclusive of unamortized debt issuance costs and unamortized discounts, at December 31, 2023 and 2022 is detailed below.
Total debt, exclusive of unamortized debt issuance costs and unamortized discounts, at December 31, 2024 and 2023 is detailed below.
The purchase price is further allocated to in-place lease values based on an estimate of the lease revenue received during a reasonable lease-up period as if the property was vacant on the date of acquisition. • Impairment of Real Estate Assets: We review the carrying value of our long-lived real estate assets for possible impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable.
The purchase price is further allocated to in-place lease values based on an estimate of the lease revenue expected during a reasonable lease-up period, assuming the property was vacant on the date of acquisition. • Impairment of Real Estate Assets: We review the carrying value of our long-lived real estate assets for possible impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
Currently, we do not enter into financial instruments for trading or other speculative purposes. See Material Cash Requirements for further details on the derivative instruments. As of December 31, 2023 and 2022, the estimated fair value of our debt was approximately $2,135.7 million and $1,945.4 million, respectively, based on our estimate of the then-current market interest rates.
Currently, we do not enter into financial instruments for trading or other speculative purposes. See Material Cash Requirements for further details on the derivative instruments. As of December 31, 2024 and 2023, the estimated fair value of our debt was approximately $2,125.3 million and $2,135.7 million, respectively, based on our estimate of the then-current market interest rates.
(C) The interest rate is based on SOFR, plus a 0.10% SOFR adjustment, plus a credit spread of 0.85%. We have interest rate swaps, with an aggregate notional value of $425.0 million, that effectively fix the SOFR rate that results in an all-in interest rate of 3.64% at December 31, 2023. These interest rate swaps mature in September 2027.
(C) The interest rate is based on SOFR, plus a 0.10% SOFR adjustment, plus a credit spread of 0.84%. We have interest rate swaps, with an aggregate notional value of $425.0 million, that effectively fix the SOFR rate that results in an all-in interest rate of 3.63% at December 31, 2024. These interest rate swaps mature in September 2027.
Additionally, if weighted average interest rates on our fixed rate debt were to have increased by 10% due to refinancing, interest expense would have increased by approximately $7.5 million and $5.5 million during the years ended December 31, 2023 and 2022. 39 Supplemental Earnings Measure Investors in and industry analysts following the real estate industry utilize funds from operations ("FFO") and net operating income ("NOI") as supplemental operating performance measures of an equity REIT.
Additionally, if weighted average interest rates on our weighted average fixed rate debt were to have increased by 10% due to refinancing, interest expense would have increased by approximately $7.5 million and $7.5 million during the years ended December 31, 2024 and 2023, respectively. 38 Supplemental Earnings Measure Investors and analysts in the real estate industry commonly use funds from operations ("FFO") and net operating income ("NOI") as supplemental performance measures of an equity REIT.
(D) The interest rate is based on SOFR, plus a 0.10% SOFR adjustment, plus a credit spread of 0.85%. We have interest rate swaps, with an aggregate notional value of $300.0 million, that effectively fix the SOFR rate that results in an all-in interest rate of 4.88% at December 31, 2023.
(D) The interest rate is based on SOFR, plus a 0.10% SOFR adjustment, plus a credit spread of 0.84%. We have interest rate swaps, with an aggregate notional value of $300.0 million, that effectively fix the SOFR rate that results in an all-in interest rate of 4.87% at December 31, 2024.
The purchase price is allocated to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. The determination of fair value includes the use of significant assumptions such as land comparables, discount rates, terminal capitalization rates and market rent assumptions.
The purchase price is allocated to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. This valuation incorporates significant assumptions such as land comparables, discount rates, terminal capitalization rates and market rent assumptions.
The judgments regarding the existence of indicators of impairment are based on the operating performance, market conditions, as well as our ability to hold and our intent with regard to each property.
The judgments regarding the existence of indicators of impairment are based on the operating performance, market conditions, and our intent and ability to hold each property.
Sold properties are properties that were sold subsequent to December 31, 2021. (Re)Developments include developments and redevelopments that were not: (a) substantially complete 12 months prior to January 1, 2022; or (b) stabilized prior to January 1, 2022.
Sold properties are properties that were sold subsequent to December 31, 2022. Developments and redevelopments (collectively referred to as "(Re)Developments") include (re)developments that were not: a) substantially complete 12 months prior to January 1, 2023; or b) stabilized prior to January 1, 2023.
We estimate 2024 expenditures of approximately $2.1 million which has been accrued at December 31, 2023. We estimate that the aggregate expenditures which need to be expended in 2024 and beyond with regard to currently identified environmental issues will not exceed approximately $5.5 million which has been accrued at December 31, 2023.
We estimate 2025 expenditures of approximately $1.9 million which has been accrued at December 31, 2024. We estimate that the aggregate expenditures which need to be expended in 2025 and beyond with regard to currently identified environmental issues will not exceed approximately $4.6 million which has been accrued at December 31, 2024.
Off-Balance Sheet Arrangements At December 31, 2023, we had letters of credit and performance bonds outstanding amounting to $20.7 million in the aggregate. The letters of credit and performance bonds are not reflected as liabilities on our balance sheet.
Off-Balance Sheet Arrangements At December 31, 2024, we had letters of credit and performance bonds outstanding amounting to $32.2 million in the aggregate. The letters of credit and performance bonds are not reflected as liabilities on our balance sheet.
If the SOFR and LIBOR rates relevant to our variable rate debt were to have increased 10%, we estimate that our interest expense during the years ended December 31, 2023 and 2022 would have increased by approximately $1.3 million and $0.8 million, respectively, based on our average outstanding floating-rate debt during the years ended December 31, 2023 and 2022.
If the SOFR rate component relevant to our variable rate debt were to have increased 10%, we estimate that our interest expense during the years ended December 31, 2024 and 2023 would have increased by approximately $1.5 million and $1.3 million, respectively, based on our average outstanding floating-rate debt during the years ended December 31, 2024 and 2023.
Weighted Average Interest Rate at December 31, 2023 Outstanding Balance at Weighted Average Maturity in Years at December 31, 2023 December 31, 2023 December 31, 2022 (In thousands) Mortgage Loan Payable (A) 4.17% $ 9,978 $ 10,299 4.7 Senior Unsecured Notes, Gross Senior Unsecured Bonds (A) 7.58% 48,571 48,571 5.3 Private Placement Notes (A) 3.66% 950,000 950,000 6.0 Subtotal 998,571 998,571 Unsecured Term Loans, Gross 2021 Unsecured Term Loan (B) 1.81% 200,000 200,000 2.5 2022 Unsecured Term Loan (C) 3.64% 425,000 425,000 3.8 2022 Unsecured Term Loan II (D) 4.88% 300,000 300,000 3.6 Subtotal 925,000 925,000 Unsecured Credit Facility (E) 6.19% 299,000 143,000 2.5 Total Debt $ 2,232,549 $ 2,076,870 (A) These loans have a fixed interest rate.
Weighted Average Interest Rate at December 31, 2024 Outstanding Balance at Weighted Average Maturity in Years at December 31, 2024 December 31, 2024 December 31, 2023 (In thousands) Mortgage Loan Payable (A) 4.17% $ 9,643 $ 9,978 3.6 Senior Unsecured Notes, Gross Senior Unsecured Bonds (A) 7.58% 48,571 48,571 4.3 Private Placement Notes (A) 3.66% 950,000 950,000 5.0 Subtotal 998,571 998,571 Unsecured Term Loans, Gross 2021 Unsecured Term Loan (B) 1.83% 200,000 200,000 1.5 2022 Unsecured Term Loan (C) 3.63% 425,000 425,000 2.8 2022 Unsecured Term Loan II (D) 4.87% 300,000 300,000 2.6 Subtotal 925,000 925,000 Unsecured Credit Facility (E) 5.19% 282,000 299,000 1.5 Total Debt $ 2,215,214 $ 2,232,549 (A) These loans have a fixed interest rate.
We believe that our principal short-term liquidity needs are to fund normal recurring expenses, property acquisitions, developments, renovations, expansions and other nonrecurring capital improvements, debt service requirements, the minimum distributions required to maintain the Company's REIT qualification under the Code and distributions approved by the Company's Board of Directors.
Apart from these payment obligations, we believe that our principal short-term liquidity needs include funding normal recurring expenses, property acquisitions, developments, renovations, expansions, other nonrecurring capital improvements, debt service requirements, the minimum distributions required to maintain the Company's REIT qualification under the Code and distributions approved by the Company's Board of Directors.
The following table shows a reconciliation of net income available to common stockholders and participating securities to the calculation of FFO available to common stockholders and participating securities as follows: Year Ended December 31, 2023 2022 2021 2020 2019 (In thousands) Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities $ 274,816 $ 359,134 $ 270,997 $ 195,989 $ 238,775 Adjustments: Depreciation and Other Amortization of Real Estate 162,098 146,448 130,062 128,814 120,516 Gain on Sale of Real Estate (95,650) (128,268) (150,310) (86,751) (124,942) Gain on Sale of Real Estate from Joint Ventures (28,034) (115,024) — (4,443) (16,714) Income Tax Provision - Allocable to Gain on Sale of Real Estate, Including Joint Ventures 7,311 23,658 4,853 2,198 3,095 Noncontrolling Interest Share of Adjustments 2,126 15,222 357 (843) 406 Funds from Operations Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities $ 322,667 $ 301,170 $ 255,959 $ 234,964 $ 221,136 40 Same Store Net Operating Income SS NOI is a non-GAAP financial measure that provides a measure of rental operations and, as calculated by us, that does not factor in joint venture fees, depreciation and amortization, general and administrative expense, joint venture development services expense, interest expense, equity in income and loss from joint ventures, income tax benefit and provision and gains and losses on the sale of real estate.
The following table shows a reconciliation of net income available to common stockholders and participating securities to the calculation of FFO available to common stockholders and participating securities as follows: Year Ended December 31, 2024 2023 2022 2021 2020 (In thousands) Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities $ 287,554 $ 274,816 $ 359,134 $ 270,997 $ 195,989 Adjustments: Depreciation and Other Amortization of Real Estate 171,207 162,098 146,448 130,062 128,814 Depreciation and Other Amortization of Real Estate in the Joint Venture 2,758 — — — — Gain on Sale of Real Estate (111,970) (95,650) (128,268) (150,310) (86,751) Gain on Sale of Real Estate (Including Incentive Fees) from Joint Venture (1,756) (28,034) (115,024) — (4,443) Income Tax Provision - Excluded from FFO 4,542 7,311 23,658 4,853 2,198 Noncontrolling Interest Share of Adjustments (1,850) 2,126 15,222 357 (843) Funds from Operations Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities $ 350,485 $ 322,667 $ 301,170 $ 255,959 $ 234,964 39 Same Store Net Operating Income SS NOI is a non-GAAP financial measure that provides a measure of rental operations and, as calculated by us, that does not factor in joint venture fees, depreciation and amortization, general and administrative expense, joint venture development services expense, interest expense, equity in income and loss from joint ventures, income tax benefit and provision and gains and losses on the sale of real estate.
As of February 14, 2024, we had approximately $409.9 million available for additional borrowings under our Unsecured Credit Facility. As of December 31, 2023, our senior unsecured notes have been assigned credit ratings from Standard & Poor's, Moody's and Fitch Ratings of BBB/Stable, Baa2/Stable and BBB/Stable, respectively.
As of February 13, 2025, we had approximately $480.5 million available for additional borrowings under our Unsecured Credit Facility. As of December 31, 2024, our senior unsecured notes have been assigned credit ratings from Standard & Poor's, Moody's and Fitch Ratings of BBB/Stable, Baa2/Stable and BBB/Positive, respectively.
We completed the following financing activities during the year ended December 31, 2023: • We declared an annual cash dividend of $1.28 per common share or Unit, an increase of 8.5% from 2022. • At December 31, 2023, we had $449.8 million available for additional borrowings under our Unsecured Credit Facility and cash and cash equivalents was $42.9 million, after excluding our Joint Venture minority partner's share of cash and cash equivalents that we consolidate and report in our financial statements. 30 Results of Operations Comparison of Year Ended December 31, 2023 to Year Ended December 31, 2022 Our net income was $285.8 million and $381.6 million for the years ended December 31, 2023 and 2022, respectively.
We completed the following financing activities during the year ended December 31, 2024: • We declared an annual cash dividend of $1.48 per common share or Unit, an increase of 15.6% from 2023. • At December 31, 2024, we had $467.5 million available for additional borrowings under our Unsecured Credit Facility and cash and cash equivalents and restricted cash was $51.2 million, after excluding our Joint Venture partner's 6% share that we consolidate and report in our financial statements. 29 Results of Operations Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023 Our net income was $296.0 million and $285.8 million for the years ended December 31, 2024 and 2023, respectively.
Revenues from acquired properties increased $5.4 million due to the 15 industrial properties acquired subsequent to December 31, 2021 totaling approximately 0.6 million square feet of GLA. Revenues from sold properties decreased $12.0 million due to the 20 industrial properties sold subsequent to December 31, 2021 totaling approximately 3.2 million square feet of GLA.
Revenues from acquired properties increased $4.3 million due to the nine industrial properties acquired subsequent to December 31, 2022 totaling approximately 0.4 million square feet of GLA. Revenues from sold properties decreased $12.2 million due to the 33 industrial properties sold subsequent to December 31, 2022 totaling approximately 2.2 million square feet of GLA.
In the event of a downgrade, we believe we would continue to have access to sufficient capital; however, our cost of borrowing would increase and our ability to access certain financial markets may be limited. 37 Our other material cash requirements from known contractual and other obligations as of December 31, 2023 include an estimate of remaining payments on the completion of development projects under construction for the Company of $113.8 million which includes all costs necessary to place the properties into service.
However, our cost of borrowing would increase and our ability to access certain financial markets may be limited. 36 Our other material cash requirements from known contractual and other obligations as of December 31, 2024 include an estimate of remaining payments on the completion of development projects under construction for the Company of $177.5 million which includes all costs necessary to place the properties into service.
Depreciation and other amortization from acquired properties increased $1.8 million due to properties acquired subsequent to December 31, 2021. Depreciation and other amortization from sold properties decreased $3.1 million due to properties sold subsequent to December 31, 2021. Depreciation and other amortization from (re)developments increased $14.3 million primarily due to an increase in depreciation and amortization related to completed developments.
Depreciation and other amortization from acquired properties increased $1.7 million due to properties acquired subsequent to December 31, 2022. Depreciation and other amortization from sold properties decreased $2.5 million due to properties sold subsequent to December 31, 2022. Depreciation and other amortization from (re)developments increased $10.5 million primarily due to an increase in depreciation and amortization related to completed developments.
Property expenses from same store properties increased $8.0 million primarily due to increases in real estate tax expense and insurance expense. Property expenses from acquired properties increased $1.2 million due to properties acquired subsequent to December 31, 2021. Property expenses from sold properties decreased $2.8 million due to properties sold subsequent to December 31, 2021.
Property expenses from same store properties increased $8.7 million primarily due to increases in real estate tax expense and snow removal costs. Property expenses from acquired properties increased $1.0 million due to properties acquired subsequent to December 31, 2022. Property expenses from sold properties decreased $3.4 million due to properties sold subsequent to December 31, 2022.
The impairment assessment and fair value measurement requires the use of estimates and assumptions related to the timing and amounts of cash flow projections, discount rates and terminal capitalization rates. 34 Liquidity and Capital Resources Cash Flow Activity The following table summarizes our cash flow activity for the Company for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 (In thousands) Net cash provided by operating activities $ 304,815 $ 410,943 Net cash used in investing activities (378,306) (629,108) Net cash (used in) provided by financing activities (27,783) 304,503 The following table summarizes our cash flow activity for the Operating Partnership for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 (In thousands) Net cash provided by operating activities $ 304,813 $ 410,897 Net cash used in investing activities (378,306) (629,108) Net cash (used in) provided by financing activities (27,781) 304,549 Changes in cash flow for the year ended December 31, 2023, compared to the prior year are described as follows: Operating Activities: Cash provided by operating activities decreased $106.1 million, primarily due to the following: • decrease in distributions from our Joint Venture of $110.6 million in 2023 as compared to 2022 due to funds received from a sale of real estate from our Joint Venture; • increase of $25.3 million in interest expense; and • decrease in accounts payable, accrued expenses, other liabilities, rents received in advance and security deposits due to timing of cash payments; offset by: ◦ increase in net operating income from same store properties, acquired properties and recently developed properties of $54.3 million, offset by a decrease in net operating income due to the disposition of real estate of $9.2 million; and ◦ decrease of $14.7 million in income tax provision.
The impairment assessment and fair value measurement requires the use of estimates and assumptions, including the timing and amounts of cash flow projections, discount rates and terminal capitalization rates. 33 Liquidity and Capital Resources Cash Flow Activity The following table summarizes our cash flow activity for the Company for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (In thousands) Net cash provided by operating activities $ 352,488 $ 304,815 Net cash used in investing activities (131,620) (378,306) Net cash used in financing activities (213,030) (27,783) The following table summarizes our cash flow activity for the Operating Partnership for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (In thousands) Net cash provided by operating activities $ 352,542 $ 304,813 Net cash used in investing activities (131,620) (378,306) Net cash used in financing activities (213,084) (27,781) Changes in cash flow for the year ended December 31, 2024, compared to the prior year are described as follows: Operating Activities: Cash provided by operating activities increased $47.7 million, primarily due to the following: • increase in net operating income from same store properties, acquired properties and recently developed properties of $48.7 million, offset by a decrease in net operating income due to the disposition of real estate of $8.8 million; and • increase in accounts payable, accrued expenses, other liabilities, rents received in advance and security deposits due to timing of cash payments; offset by: ◦ decrease in distributions from our Joint Venture of $4.5 million in 2024 as compared to 2023; and ◦ increase of $8.6 million in interest expense.
Such risks principally include credit risk and legal risk and are not represented in the following analysis. 38 At December 31, 2023, $1,933.5 million or 86.6% of our total debt, excluding unamortized debt issuance costs, was fixed rate debt.
Such risks principally include credit risk and legal risk and are not represented in the following analysis. 37 At December 31, 2024, $1,933.2 million, or 87.3%, of our total debt, excluding unamortized debt issuance costs, was fixed rate debt, while $282.0 million, or 12.7%, was variable rate debt.
These properties were 100% leased at December 31, 2023. • We acquired approximately 239.2 acres of land for development located in our Central Florida, Nashville, Philadelphia, South Florida and Southern California markets for an aggregate purchase price of $80.6 million, excluding transaction costs. • We placed in-service 13 industrial properties comprising approximately 2.8 million square feet of GLA located in our Central Florida, Chicago, Denver, Nashville, Philadelphia, Seattle and South Florida markets at an estimated total cost of $354.9 million.
These properties were 100% leased at December 31, 2024. • We acquired approximately 81.4 acres of land for development located in our South Florida and Southern California markets for an aggregate purchase price of $25.9 million, excluding transaction costs. • We placed in-service seven industrial properties totaling approximately 2.8 million square feet of GLA located in our Central/Eastern Pennsylvania, Central Florida, Northern California and Southern California markets at an estimated total cost of $392.0 million.
As of the same date, $299.0 million or 13.4% of our total debt, excluding unamortized debt issuance costs, was variable rate debt. At December 31, 2022, $1,933.8 million or 93.1% of our total debt, excluding unamortized debt issuance costs, was fixed rate debt.
At December 31, 2023, $1,933.5 million, or 86.6%, of our total debt, excluding unamortized debt issuance costs, was fixed rate debt, while $299.0 million, or 13.4%, was variable rate debt.
Property expenses from (re)developments increased $13.4 million primarily due to the substantial completion of developments. Property expenses from other increased $2.2 million primarily due to an increase in real estate tax expense related to land parcels purchased in 2022 and 2023 and an increase in certain miscellaneous expenses.
Property expenses from (re)developments increased $9.1 million primarily due to the substantial completion of developments. Property expenses from other increased $1.9 million primarily due to an increase in real estate tax expense related to land parcels, demolition costs incurred to prepare certain land sites for construction and miscellaneous expenses.
A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization.
A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization. In the event of a downgrade, we believe we would continue to have access to sufficient capital.
We have considered our short-term (through December 31, 2024) liquidity needs and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs.
We also had $467.5 million available for additional borrowings under our Unsecured Credit Facility as of December 31, 2024. We have considered our short-term liquidity needs through December 31, 2025, as well as the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet those needs.
Income tax expense decreased $14.7 million, or 62.8%, primarily due to decreases in our share of taxable gains and incentive fees from the Joint Venture, partially offset by an increase in our share of equity in income from the Joint Venture related to increases in rental and interest income recognized by the Joint Venture. 33 Comparison of Year Ended December 31, 2022 to Year Ended December 31, 2021 A discussion of changes in our results of operations between 2022 and 2021 can be found in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Year Ended December 31, 2022 to Year Ended December 31, 2021" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
This decrease was partially offset by an increase in income tax expense associated with gains from the sale of real estate. 32 Comparison of Year Ended December 31, 2023 to Year Ended December 31, 2022 A discussion of changes in our results of operations between 2023 and 2022 can be found in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Year Ended December 31, 2023 to Year Ended December 31, 2022" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Inflation Prior to 2021, inflation had been low and had a minimal impact on the operating performance of our industrial properties in our markets of operation; however, inflation significantly increased in 2021 and 2022 and, while it moderated in 2023, it could increase in the future.
Inflation Inflation had a minimal impact on the operating performance of our industrial properties across our markets prior to 2021, due to relatively low inflation rates. However, inflation increased significantly in 2021 and 2022, remain elevated relative to pre-2021 levels and the future direction of inflation rates is uncertain.
For the year ended December 31, 2022, we recognized $128.3 million of gain on sale of real estate related to the sale of nine industrial properties comprising approximately 2.2 million square feet of GLA and one land parcel.
Depreciation from corporate furniture, fixtures and equipment and other remained relatively unchanged. For the year ended December 31, 2024, we recognized $112.0 million of gain on sale of real estate related to the sale of 22 industrial properties comprising approximately 1.2 million square feet of GLA.
Many of our leases contain provisions designed to mitigate the adverse impact of inflation, including contractual rent escalations and requirements for tenants to pay their proportionate share of property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties, thereby reducing our exposure to increases in property operating expenses resulting from inflation.
If inflation rates increase, this could impact our operations and financial performance. Many of our leases contain provisions designed to mitigate the adverse impact of inflation, including contractual rent escalations and requirements for tenants to pay their proportionate share of property operating expenses.
Interest expense increased $25.3 million, or 51.7%, primarily due to an increase in the weighted average interest rate for the year ended December 31, 2023 (4.05%) as compared to the year ended December 31, 2022 (3.41%), an increase in the weighted average debt balance outstanding for the year ended December 31, 2023 ($2,175.0 million) as compared to the year ended December 31, 2022 ($1,917.4 million) and a decrease in capitalized interest of $2.5 million caused by a decrease in development projects eligible for capitalization during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Additionally, the increase in interest expense was influenced by a higher weighted average debt balance of $2,220.7 million for the year ended December 31, 2024, up from $2,175.0 million for the year ended December 31, 2023, as well as an increase in the weighted average interest rate to 4.11% for the year ended December 31, 2024, compared to 4.05% for the year ended December 31, 2023.
Acquisitions that are less than 75% occupied at the date of acquisition, developments and redevelopments are placed in service as they reach the earlier of (a) stabilized occupancy (defined as 90% occupied), or (b) one year subsequent to acquisition or development/redevelopment construction completion.
Properties that are at least 75% occupied at acquisition are placed in service, unless we anticipate the tenant move-outs within two years of ownership would drop occupancy below 75%. Properties that are less than 75% occupied at the date of acquisition are placed in service as they reach the earlier of 90% occupancy or one year subsequent to acquisition.
For the years ended December 31, 2023 and 2022, the average occupancy rates of our same store properties were 97.4% and 98.0%, respectively. 31 2023 2022 $ Change % Change (In thousands) REVENUES Same Store Properties $ 519,477 $ 483,976 $ 35,501 7.3 % Acquired Properties 10,434 5,029 5,405 107.5 % Sold Properties 5,691 17,699 (12,008) (67.8) % (Re) Developments 56,204 20,241 35,963 177.7 % Other 22,221 12,984 9,237 71.1 % Total Revenues $ 614,027 $ 539,929 $ 74,098 13.7 % Revenues from same store properties increased $35.5 million primarily due to increases in rental rates and tenant recoveries, offset by a slight decrease in occupancy.
For the years ended December 31, 2024 and 2023, the average daily occupancy rate of our same store properties was 96.8% and 97.6%, respectively. 30 Year Ended December 31, 2024 2023 $ Change % Change (In thousands) REVENUES Same Store Properties $ 594,527 $ 563,949 $ 30,578 5.4 % Acquired Properties 5,522 1,245 4,277 343.5 % Sold Properties 8,266 20,470 (12,204) (59.6) % (Re) Developments 43,669 11,176 32,493 290.7 % Other 17,657 17,187 470 2.7 % Total Revenues $ 669,641 $ 614,027 $ 55,614 9.1 % Revenues from same store properties increased $30.6 million primarily due to increases in rental rates and tenant recoveries, offset by a slight decrease in occupancy.
These properties were 45% leased at December 31, 2023. • We commenced speculative development of four industrial buildings comprised of 0.8 million square feet of GLA in our Central Florida, Philadelphia, South Florida and Southern California markets. • We sold 11 industrial properties comprising approximately 1.0 million square feet of GLA and two land parcels for gross proceeds of $125.3 million. • Our Joint Venture sold approximately 31 acres of land located in Phoenix for gross proceeds of $50 million.
These properties were 96% leased at December 31, 2024. • We commenced speculative development of seven industrial buildings totaling approximately 1.9 million square feet of GLA in our Central/Eastern Pennsylvania, Houston, Nashville and South Florida markets.
Equity in income of joint venture decreased $82.7 million, or 72.0%, due to a decrease in our pro-rata share of gain from the sale of real estate by the Joint Venture and incentive fees related to the Joint Venture, partially offset by an increase in rental and interest income we earned from the Joint Venture.
Income tax expense decreased $2.6 million, or 30.1%, primarily due to a reduction in our pro-rata share of taxable gain and incentive fees from the Joint Venture.
Joint Venture development services expense increased by $2.8 million, or 303.4%, for the year ended December 31, 2023, which primarily relates to expenses paid to a third party to assist with the development of properties in the Joint Venture. 32 2023 2022 $ Change % Change (In thousands) DEPRECIATION AND OTHER AMORTIZATION Same Store Properties $ 129,427 $ 128,083 $ 1,344 1.0 % Acquired Properties 4,475 2,627 1,848 70.3 % Sold Properties 814 3,933 (3,119) (79.3) % (Re) Developments 23,455 9,198 14,257 155.0 % Corporate Furniture, Fixtures and Equipment and Other 4,780 3,579 1,201 33.6 % Total Depreciation and Other Amortization $ 162,951 $ 147,420 $ 15,531 10.5 % Depreciation and other amortization from same store properties remained relatively unchanged.
This decrease is primarily attributable to a reduction in development activities by our Joint Venture during the year ended December 31, 2024, compared to the year ended December 31, 2023. 31 Year Ended December 31, 2024 2023 $ Change % Change (In thousands) DEPRECIATION AND OTHER AMORTIZATION Same Store Properties $ 145,944 $ 146,863 $ (919) (0.6) % Acquired Properties 2,119 404 1,715 424.5 % Sold Properties 1,237 3,782 (2,545) (67.3) % (Re) Developments 19,670 9,172 10,498 114.5 % Corporate Furniture, Fixtures and Equipment and Other 2,969 2,730 239 8.8 % Total Depreciation and Other Amortization $ 171,939 $ 162,951 $ 8,988 5.5 % Depreciation and other amortization from same store properties remained relatively unchanged.
Material Cash Requirements At December 31, 2023, our cash and cash equivalents were $42.9 million, after excluding our Joint Venture partner's share of cash and cash equivalents that we consolidate and report in our financial statements. We also had $449.8 million available for additional borrowings under our Unsecured Credit Facility as of December 31, 2023.
Financing Activities: Cash used in financing activities increased $185.2 million ($185.3 million for the Operating Partnership), primarily due to the following: • decrease in net borrowings under our Unsecured Credit Facility of $173.0 million in 2024 as compared to 2023; and • increase in dividend and unit distributions of $24.1 million due to the Company increasing the dividend rate in 2024 as well as an increase in common shares and units outstanding; offset by: ◦ decrease in distributions to noncontrolling interests of $11.4 million in 2024 as compared to 2023. 34 Material Cash Requirements At December 31, 2024, our cash and cash equivalents and restricted cash was approximately $51.2 million, after excluding our Joint Venture partner's share of cash and cash equivalents that we consolidate and report in our financial statements.
Amortization of debt issuance costs increased $0.4 million, or 13.8%, primarily due to debt issuance costs incurred during the year ended December 31, 2022 related to the issuance of a $300.0 million term loan.
Interest expense increased $8.6 million, or 11.6%, primarily due to a $5.5 million reduction in capitalized interest during the year ended December 31, 2024, compared to the year ended December 31, 2023.
In addition, we believe that some of the existing rental rates under our leases subject to renewal are below current market rates for comparable space and that upon renewal or re-leasing, such rates may be increased to be consistent with, or closer to, current market rates, which may also offset our exposure to inflationary expense pressures related to our leased properties.
In addition, while some of our existing leases are below current market rental rates, we believe that lease renewals or re-leasing opportunities will allow us to adjust rental rates upward, aligning them more closely with market rates. These adjustments could offset inflationary pressures on our operating expenses. Inflation also continues to affect our development portfolio.
Removed
Summary of 2023 Our operating results were solid in 2023. Our year end in-service occupancy was 95.5%, 330 basis points lower than our in-service occupancy at December 31, 2022, reflecting the impact of completed developments in lease-up entering our in-service portfolio.
Added
Summary of 2024 Our operating results were strong in 2024. Our year end in-service occupancy was 96.2%, representing a 70-basis-point increase compared to December 31, 2023. Additionally, during the year ended December 31, 2024, we achieved a 50.8% increase in cash rental rates on new and renewal leases, while same store performance on a cash basis rose by 8.4%.
Removed
Also, during the year ended December 31, 2023, we grew cash rental rates by 58.3% on new and renewal leasing, establishing a new annual company record for this metric. At December 31, 2023, we had six projects comprising 1.9 million square feet of GLA under development with an estimated investment of $284.8 million.
Added
At December 31, 2024, we had eight projects under development, totaling approximately 2.0 million square feet of GLA, with an aggregate estimated investment of approximately $280.4 million.
Removed
Additionally, we continue to position ourselves for future development activity by acquiring land located in our target markets with an emphasis on supply constrained coastal markets.
Added
In 2024, we completed the following significant real estate activities: • We executed 13 leases at development properties with the following characteristics: Metropolitan Area Number of Properties GLA Leased % of Building Leased as of 12/31/24 Central/Eastern Pennsylvania 2 708,486 100% Chicago 1 119,840 73% Denver 1 100,588 50% Houston 1 212,280 50% Nashville 2 1,041,740 100% Northern California 1 1,015,791 100% Seattle 1 64,341 100% South Florida 1 46,257 34% Southern California 2 543,945 100% Total 12 3,853,268 Additionally, within our Joint Venture, we fully leased an industrial building totaling approximately 0.4 million square feet of GLA to two tenants and executed a lease, which is expected to commence in the first quarter of 2025, for 48% of an industrial building totaling approximately 1.0 million square feet of GLA. • We acquired five industrial properties totaling approximately 0.3 million square feet of GLA located in our Houston and Southern California markets for an aggregate purchase price of $44.8 million, excluding transaction costs.
Removed
In 2023, we completed the following significant real estate activities: • We acquired four industrial properties comprised of approximately 0.2 million square feet of GLA located in our Houston and Southern California markets for an aggregate purchase price of $43.9 million, excluding transaction costs.
Added
These properties were 40% pre-leased at December 31, 2024. • We sold 22 industrial properties totaling approximately 1.2 million square feet of GLA for gross proceeds of $162.8 million.
Removed
Our pro-rata share of the gain was $17.3 million and we recognized an incentive fee of $7.1 million. These amounts exclude our partner's 6% share in the Joint Venture that we consolidate and report in our financial statements as Noncontrolling Interest.
Added
Developments, redevelopments and acquired income-producing land parcels for which our ultimate intent is to redevelop or develop on the land parcel are placed in service as they reach the earlier of 90% occupancy or one year subsequent to development/redevelopment construction completion.
Removed
Properties which are at least 75% occupied at acquisition are placed in service, unless we anticipate the tenants to move out within the first two years of ownership.
Added
Revenues from (re)developments increased $32.5 million due to an increase in occupancy and tenant recoveries. Reven ue s from other increased $0.5 million due to revenues from income-producing land parcels for which our ultimate intent is to redevelop, develop or sell the applicable land parcel, offset by a decrease in joint venture fees and legal settlement proceeds.
Removed
Revenues from (re)developments increased $36.0 million due to an increase in occupancy and tenant recoveries.
Added
Year Ended December 31, 2024 2023 $ Change % Change (In thousands) PROPERTY EXPENSES Same Store Properties $ 144,221 $ 135,570 $ 8,651 6.4 % Acquired Properties 1,131 172 959 557.6 % Sold Properties 1,677 5,101 (3,424) (67.1) % (Re) Developments 17,366 8,295 9,071 109.4 % Other 18,426 16,517 1,909 11.6 % Total Property Expenses $ 182,821 $ 165,655 $ 17,166 10.4 % Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses.
Removed
Reven ue s from other increased $9.2 million due to joint venture fees, legal settlement proceeds, interest income earned on cash balances, revenues from income-producing land parcels for which our ultimate intent, for the majority of the land parcels, is to redevelop or develop in the future and revenues related to acquisitions that were not yet stabilized at December 31, 2021 and therefore are not yet included in the same store pool. 2023 2022 $ Change % Change (In thousands) PROPERTY EXPENSES Same Store Properties $ 127,967 $ 119,955 $ 8,012 6.7 % Acquired Properties 2,271 1,061 1,210 114.0 % Sold Properties 1,271 4,048 (2,777) (68.6) % (Re) Developments 16,951 3,592 13,359 371.9 % Other 17,195 15,007 2,188 14.6 % Total Property Expenses $ 165,655 $ 143,663 $ 21,992 15.3 % Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses.
Added
General and administrative expense increased by $3.8 million, or 10.3%, primarily driven by higher equity compensation expense which is primarily due to the accelerated recognition of expense for certain tenured employees who are, or will soon become, retirement eligible prior to the standard vesting schedule.
Removed
General and administrative expense increased by $3.1 million, or 9.3%, due to an increase in compensation and other professional costs.
Added
Additionally, the increase was influenced by a modest increase in overall compensation and a slight decrease in the amount of compensation capitalized to development activities. Joint Venture development services expense, representing payments made to a third party for property development assistance within the Joint Venture, decreased by $2.1 million, or 58.3%.
Removed
Depreciation from corporate furniture, fixtures and equipment and other increased $1.2 million primarily due to depreciation and amortization related to properties acquired that were not yet stabilized at December 31, 2021 and therefore are not yet included in the same store pool.
Added
Amortization of debt issuance costs remained relatively unchanged. Equity in income of joint venture for the year ended December 31, 2024 was $4.3 million representing our pro-rata share of the net income generated by the Joint Venture.
Removed
These amounts include our partner's 6% interest in the Joint Venture that we consolidate and report within our financial statements.

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