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What changed in FIRST INDUSTRIAL REALTY TRUST INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of FIRST INDUSTRIAL REALTY TRUST INC's 2022 and 2023 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 2023 report.

+198 added−207 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-16)

Top changes in FIRST INDUSTRIAL REALTY TRUST INC's 2023 10-K

198 paragraphs added · 207 removed · 167 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

20 edited+4 added−1 removed27 unchanged
Biggest changeWe provide acquisition, development and financing assistance, asset management oversight and financial reporting functions from our headquarters in Chicago, Illinois to support our regional operations. We believe the size of our portfolio enables us to realize operating efficiencies by spreading overhead among many properties and by negotiating purchasing discounts. • Market Strategy.
Biggest changeWe implement a decentralized property operations strategy through the deployment of experienced regional management teams and local property managers. We provide acquisition, development and financing assistance, asset management oversight and financial reporting functions from our headquarters in Chicago, Illinois to support our regional operations.
The Operating Partnership also conducts operations through the Other Real Estate Partnerships, numerous limited liability companies ("LLCs") and certain taxable REIT subsidiaries ("TRSs"), the operating data of which, together with that of the Operating Partnership, is consolidated with that of the Company as presented herein.
The Operating Partnership also conducts operations through several other limited partnerships (the "Other Real Estate Partnerships"), numerous limited liability companies ("LLCs") and certain taxable REIT subsidiaries ("TRSs"), the operating data of which, together with that of the Operating Partnership, is consolidated with that of the Company as presented herein.
We seek to grow externally through (i) the development of best-in-class industrial properties; (ii) the acquisition of individual or portfolios of industrial properties which meet our investment parameters within our 15 target markets with a primary emphasis in coastal markets; (iii) the expansion of our existing properties; and (iv) 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 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.
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 97.7% ownership interest ("General Partner Units") at December 31, 2022.
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.
As of February 15, 2023, we had approximately $610.1 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 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 December 31, 2022, our in-service portfolio consisted of 416 industrial properties, containing an aggregate of approximately 62.9 million square feet of gross leasable area ("GLA") located in 18 states. We began operations on July 1, 1994.
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.
The average tenure of our workforce is approximately 12 years. 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.
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.
These documents also may be accessed through the SEC's website at www.sec.gov. 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, 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.
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. We target new investments in 15 target markets where land is more scarce and which exhibit desirable long-term growth characteristics.
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.
Our telephone number is (312) 344-4300. 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.
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.
The Joint Venture, like previous joint venture arrangements, is accounted for under the equity method of accounting and the operating data associated with the Joint Venture is not consolidated with that of the Company or the Operating Partnership as presented herein.
We also provide various services to the Joint Venture. The Joint Venture is accounted for under the equity method of accounting. The operating data of the Joint Venture is not consolidated with that of the Company or the Operating Partnership as presented herein.
Noncontrolling interest in the Operating Partnership of approximately 2.3% at December 31, 2022, represents the aggregate partnership interest held by the limited partners thereof ("Limited Partner Units" and together with the General Partner Units, the "Units").
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").
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. Available Information Our principal executive offices are located at One North Wacker, 42nd Floor, Chicago, Illinois 60606.
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.
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. Our investment strategy is primarily focused on developing and acquiring industrial properties in 15 key logistics markets with a coastal orientation in the United States through the deployment of experienced regional management teams.
Our investment strategy is primarily focused on developing and acquiring industrial properties in 15 key logistics markets in the United States, with an emphasis on markets with a coastal orientation, through the deployment of experienced regional management teams.
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 At December 31, 2022, we had 157 employees, 100% of whom are full-time employees.
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.
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.
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.
See "Summary of Significant Transactions in 2022" 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. We implement a decentralized property operations strategy through the deployment of experienced regional management teams and local property managers.
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.
Environmental, Social and Corporate Governance ("ESG") We are focused on building and maintaining a socially responsible and sustainable business that succeeds by delivering long-term value for our stockholders. We continuously look for new and better ways to minimize our environmental impact as well as that of our tenants.
We continuously look for new and better ways to minimize our environmental impact as well as that of our tenants.
We seek to refine our portfolio over the coming years by focusing on bulk and regional warehouses properties and downsizing our light industrial holdings. Our ability to pursue our long-term growth plans is affected by market conditions and our financial condition and operating capabilities.
We 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.
Our market strategy is to concentrate on 15 industrial real estate markets in the United States with a primary emphasis in coastal markets.
We believe the size of our portfolio enables us to realize operating efficiencies by spreading overhead among many properties and by negotiating purchasing discounts. • Market Strategy. Our market strategy is to concentrate on 15 key logistics markets in the United States, with a primary emphasis on coastal markets.
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We also own an equity interest in, and provide various services to a joint venture (the "Joint Venture"), through a wholly-owned TRS of the Operating Partnership.
Added
The Operating Partnership holds at least a 99% limited partnership interest in each of the Other Real Estate Partnerships. The general partners of the Other Real Estate Partnerships are separate corporations, wholly-owned by the Company, each with at least a .01% general partnership interest in the Other Real Estate Partnerships.
Added
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.
Added
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.
Added
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

56 edited+12 added−18 removed110 unchanged
Biggest changeFinancing and Capital Risks: Disruptions in the financial markets could affect our ability to obtain financing and may negatively impact our liquidity, financial condition and operating results. A significant amount of our existing indebtedness was issued through capital markets transactions. We anticipate that the capital markets could be a source of refinancing of our existing indebtedness in the future.
Biggest changeThis could occur due to an uninsured or high deductible loss, a loss in excess of insured limits, or a loss not paid due to insurer insolvency. Financing and Capital Risks: Disruptions in the financial markets could affect our ability to obtain financing and may negatively impact our liquidity, financial condition and operating results.
Hedging may reduce the overall returns on our investments, which could reduce our cash available for distribution to our stockholders and unitholders. Failure to hedge effectively against interest rate changes may materially adversely affect our financial condition, results of operations and cash flow. No strategy can completely insulate us from the risks associated with interest rate fluctuations.
Hedging may reduce the overall returns on our investments, which could reduce our cash available for distribution to our stockholders and unitholders. Failure to hedge effectively against interest rate changes may materially and adversely affect our financial condition, results of operations and cash flow. No strategy can completely insulate us from the risks associated with interest rate fluctuations.
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, • 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 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.
Material environmental conditions, liabilities or compliance concerns may arise after the environmental assessment has been completed. 10 Environmental laws and regulations in the U.S. also require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is disturbed during building renovation or demolition.
Material environmental conditions, liabilities or compliance concerns may arise after the environmental assessment has been completed. 10 Environmental laws and regulations in the U.S. also require that owners or operators of buildings containing asbestos properly manage the asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is disturbed during building renovation or demolition.
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 tax 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. 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.
This 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, 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.
This 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.
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) to our stockholders each year and we may be subject to tax to the extent our taxable income is not fully distributed.
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.
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.
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.
Accordingly, our subjective estimates and evaluations may not be accurate, and such estimates and evaluations are subject to change or revision. We could be subject to risks and liabilities in connection with joint venture arrangements. Our organizational documents do not limit the amount of available funds that we may invest in joint ventures.
Accordingly, our subjective estimates and evaluations may not be accurate, and such estimates and evaluations are subject to change or revision. 11 We could be subject to risks and liabilities in connection with joint venture arrangements. Our organizational documents do not limit the amount of available funds that we may invest in joint ventures.
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. The market price of our common stock may fluctuate significantly.
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.
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 15 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 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.
Because of the investments we have located in California and Pennsylvania, a downturn in California’s or Pennsylvania's economy or changes to factors affecting the real estate market, including changes to state income tax and property tax laws, could adversely affect our business. 8 No other market besides California and Pennsylvania contributed more than 10% of our total consolidated net operating income for the year ended December 31, 2022.
Because of the investments we have located in California and Pennsylvania, a downturn in California’s or Pennsylvania's economy or changes to factors affecting the real estate market, including changes to state income tax and property tax laws, could adversely affect our business. 8 No other market besides California and Pennsylvania contributed more than 10% of our total consolidated net operating income for the year ended December 31, 2023.
We have significant investment in properties in coastal markets such as Southern California, Northern California and South Florida and have also targeted those markets for future growth. Our properties, especially the coastal market properties, may be exposed to rare catastrophic weather events, such as severe storms, drought, earthquakes, floods, wildfires or other extreme weather events.
We have significant investment in properties in coastal markets such as Southern California, Northern California, Houston and South Florida and have also targeted those markets for future growth. Our properties, especially the coastal market properties, may be exposed to catastrophic weather events, such as severe storms, drought, earthquakes, floods, wildfires or other extreme weather events.
We are exposed to the economic conditions and other events and occurrences in the local, regional and national geographies in which we own properties. Our operating performance is further impacted by the economic conditions of the specific markets in which we have concentrations of properties.
We are exposed to the economic conditions and other events and occurrences in the local, regional and national geographies in which we own properties. We are also impacted by global events and occurrences. Our operating performance is further impacted by the economic conditions of the specific markets in which we have concentrations of properties.
Joint venture investments, in general, involve certain risks not present where we act alone, including: • joint venture partners may share certain approval rights over major decisions, which might (i) 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 (ii) 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; • joint venture partners might experience financial distress, become bankrupt or otherwise fail to fund their share of any required capital contributions; • 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; • joint venture partners may have the power to act contrary to our instructions, requests, policies or objectives, including our current policy with respect to maintaining the Company's qualification as a REIT; • 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; • 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 • we may in certain circumstances be liable for the actions of our joint venture partners.
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.
A future 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: • reduced economic activity may severely impact our tenants' businesses, financial condition and liquidity 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; • 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; • 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, may affect our access to capital necessary to fund business operations or address maturing debt obligations on a timely basis; • our ability to meet the financial covenants of our Unsecured Credit Facility and other debt agreements and result in a default and potentially 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; • any impairment in value of our tangible or intangible assets which could be recorded as a result of weaker economic conditions; • a general decline in business activity and demand for real estate transactions could adversely affect our ability to sell or purchase properties, at attractive pricing or at all; • an inability to initiate or pursue litigation due to various court closures, increased case volume and/or moratoriums on certain types of activities; • the potential negative impact on the health of our employees, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during this disruption, or a future disruption, and may negatively impact our disclosure controls and procedures over financial reporting; and • an extended period of remote work arrangements for our employees 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.
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.
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, making investments or pursuing different business or growth strategies.
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.
The factors that affect the value of our real estate and the revenues we derive from our properties include, among other things: • general economic conditions; • local, regional, national and international economic conditions and other events and occurrences that affect the markets in which we own properties; • local conditions such as oversupply or a reduction in demand in an area; • increasing labor and material costs; • the ability to collect on a timely basis all rents from tenants; • changes in tenant operations, real estate needs and credit; • changes in interest rates and in the availability, cost and terms of mortgage funding; • zoning or other regulatory restrictions; • competition from other available real estate; • operating costs, including maintenance, insurance premiums and real estate taxes; and • other factors that are beyond our control.
The factors that affect the value of our real estate and the revenues we derive from our properties include, among other things: • general economic conditions; • local, regional, national and international economic conditions and other events and occurrences that affect the markets in which we own properties; • local conditions such as oversupply or a reduction in demand; • increasing labor and material costs; • the ability to collect on a timely basis all rents from tenants; • changes in tenant operations, real estate needs and credit; • changes in interest rates and in the availability, cost and terms of financing; • zoning or other legislative and regulatory restrictions; • competition from other available real estate; • operating costs, including maintenance, insurance premiums and real estate taxes; and • other factors that are beyond our control.
General Risk Factors: A future outbreak of highly infectious or contagious diseases similar to COVID-19 may adversely affect our business. The COVID-19 pandemic caused, and another pandemic in the future could cause, disruptions to regional and global economies and significant volatility and negative pressure in the financial markets.
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.
Any such changes could have an adverse effect on an investment in shares or on the market value or the resale potential of our properties.
Any such changes could have an adverse effect on an investment in shares of our common stock or on the market value or the resale potential of our properties.
The occurrence of one or more of the events described above 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.
Certain of these ground leases have payments subject to annual escalations and/or periodic fair market value adjustments which could adversely affect our financial condition or results of operations. 12 We are exposed to the potential impacts of future climate change. We are exposed to potential physical risks from possible future changes in climate.
Certain of these ground leases have payments subject to annual escalations and/or periodic fair market value adjustments which could adversely affect our financial condition or results of operations. We are exposed to the impacts of climate change. We are exposed to physical risks from changes in climate.
A successful cybersecurity attack or other disruption of our computer systems could, among other things,: • compromise the confidential information of our employees, tenants and vendors; • disrupt the proper functioning of our networks and systems, and therefore our operations and/or those of certain of our tenants; • 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; • result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines; • result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; • require significant management attention and resources to remedy any damages that result; • subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; • subject us to legal liability; or • damage our reputation among our tenants, investors and associates.
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.
The Company could, in certain instances, have taxable income without sufficient cash to enable it to meet this requirement. In that situation, we could be required to borrow funds or sell properties on adverse terms in order to do so.
The Company could, in certain instances, have taxable income without sufficient cash to enable it to meet this requirement. In that situation, we could be required to borrow funds or sell properties on adverse terms in order to satisfy the distribution requirement.
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 given climate change risk.
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.
However, we do not insure against all types of casualty, and we may not fully insure against certain perils including, without limitation, earthquake, windstorm 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, 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, qualification as a REIT involves the satisfaction of numerous requirements, some of which must be met on a recurring basis. These requirements are established under highly technical and complex Code provisions. There are only limited judicial and administrative interpretations of these provisions, and they involve the determination of various factual matters and circumstances not entirely within our control.
However, qualification as a REIT involves the satisfaction of numerous requirements, some of which must be met on a recurring basis. These requirements are established under highly technical and complex Code provisions and they involve the determination of various factual matters and circumstances not entirely within our control.
These could include attempts to gain unauthorized access to our data and computer 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 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.
The IRS could contend that certain sales of properties by us are prohibited transactions. While we have implemented 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. We may pay some taxes.
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.
In addition, losses resulting from these types of events may be uninsurable. 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.
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, 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.
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.
We have a portfolio environmental insurance policy that provides coverage for potential unknown environmental liabilities, subject to the policy's coverage conditions and limitations, for most of our properties. Such policy may not be able to be renewed or may be subject to additional restrictions or limitations.
We have a portfolio environmental insurance policy that provides coverage for certain potential unknown environmental liabilities, subject to the policy's coverage conditions and limitations. Such policy may not be able to be renewed or may be subject to additional restrictions, limitations or be insufficient to fully respond to a loss.
There can be no assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future acquisitions or renovations, or that additional regulation will not be adopted that increase such delays or result in additional costs. Our growth strategy may be affected by our ability to obtain permits, licenses and zoning relief.
There can be no assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future acquisitions or renovations, or that additional laws or regulation will not be adopted that increase such delays or result in additional costs.
If we incur substantial costs to comply with the ADA or other legislation, our financial condition, results of operations, cash flow, our ability to satisfy debt service obligations and 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. 11 Adverse market and economic conditions could cause us to recognize impairment charges.
If we incur substantial costs to comply with applicable laws or regulations, our financial condition, results of operations, cash flow, our ability to satisfy debt service obligations and 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.
At December 31, 2022, operating properties located in California (Northern California and Southern California markets) and Pennsylvania represented 23.6% and 10.7%, respectively, of our consolidated net operating income for the year ended December 31, 2022.
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.
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. 14 The REIT distribution requirements may limit our ability to retain capital and require us to turn to external financing sources.
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.
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. 20 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.
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.
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. Our organizational documents do not contain any limitation on the amount or percentage of indebtedness we may incur.
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.
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. We cannot give any assurance that other such conditions do not exist or may not arise in the future.
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.
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 . 13 Debt financing, the degree of leverage and rising interest rates could reduce our cash flow.
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 .
Acts of violence, including terrorist attacks, could occur in the localities in which we conduct business. 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.
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.
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.
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.
Although we employ a number of measures to prevent, detect and mitigate these threats, which include password protection, frequent password change events, firewall detection systems, frequent backups, a redundant data system for core applications, a managed detection monitoring and response solution, periodic cyber dwelling reviews and annual penetration testing, 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 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.
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. 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.
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.
We may incur significant costs complying with various federal, state and local laws, regulations and covenants that are applicable to our properties and, in particular, costs associated with complying with regulations such as the Americans with Disabilities Act of 1990 (the "ADA") may result in unanticipated expenses.
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 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. Among other coverage, we carry property, boiler and machinery, general liability, cyber liability, fire, flood, terrorism, earthquake, owner's protective professional indemnity and rental loss insurance.
Some of our properties are located in areas where casualty risk is higher due to earthquake, wind, wildfire and/or flood risk. 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.
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 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.
If the frequency of extreme weather events increases, our exposure to these events could increase and could impact our tenants' operations and their ability to pay rent.
If the frequency or severity of extreme weather events increases, our exposure to these events could increase and could impact our tenants' operations and their ability to pay rent. The impacts of climate change on our real estate properties could adversely affect our ability to lease, develop or sell such properties or to borrow using such properties as collateral.
Our coverage includes policy specifications and limits customarily carried for similar properties and business activities. We evaluate our level of insurance coverage and deductibles using analysis and modeling, as is customary in our industry.
We evaluate our insurance limits and deductibles using analysis and modeling, as is customary in our industry.
This source of refinancing may not be available if volatility in or disruption of the capital markets occurs.
A significant amount of our existing indebtedness was issued through capital markets transactions. We anticipate that the capital markets could be a source of refinancing of our existing indebtedness in the future. This source of refinancing may not be available if volatility in or disruption of the capital markets occurs.
We may be unable to retain and attract key management personnel. We may be unable to retain and attract talented personnel. In the event of the loss of key management personnel or upon unexpected death, disability or retirement, we may not be able to find replacements with comparable skill, ability and industry expertise.
In the event of the loss of key management personnel or upon unexpected death, disability or retirement, we may not be able to find replacements with comparable skill, ability and industry expertise. Until suitable replacements are identified and retained, if at all, our operating results and financial condition could be materially and adversely affected. Item 1B. Unresolved SEC Comments None.
Phase I assessments generally include a historical review, a public records review, an investigation of the surveyed site and surrounding properties, and preparation and issuance of a written report, but do not include soil sampling or subsurface investigation, sampling and remediation and typically do not include an asbestos survey.
Phase I assessments do not include soil sampling or subsurface investigation, sampling and remediation and typically do not include an asbestos survey.
As a result, we could experience a significant loss of capital or revenues, and be exposed to obligations under recourse debt associated with a property. This could occur due to an uninsured or high deductible loss, a loss in excess of insured limits, or a loss not paid due to insurer insolvency.
Furthermore, we cannot be sure that insurance companies will continue to offer products with sufficient coverage at commercially reasonable rates. As a result, we could experience a significant loss of capital or revenues, and be exposed to obligations under recourse debt associated with a property.
Compliance with new laws or regulations relating to climate change, including compliance with “green” building codes, may require us to make improvements to our existing properties or result in increased operating costs that we may not be able to effectively pass on to our tenants.
We may be required to make substantial improvements or capital expenditures, or implement operational changes, to comply with applicable laws and regulations, and we may not be able to effectively pass on these additional costs to our tenants.
We plan to modify the affected debt agreements and the related interest rate swaps prior to June 2023. Failure to comply with covenants in our debt agreements could adversely affect our financial condition.
Our organizational documents do not contain any limitation on the amount or percentage of indebtedness we may incur. 13 Failure to comply with covenants in our debt agreements could adversely affect our financial condition.
Real property is subject to casualty risk including damage, destruction, or loss resulting from events that are unusual, sudden and unexpected. Some of our properties are located in areas where casualty risk is higher due to earthquake, wind, wildfire and/or flood risk.
Given climate change risk, we cannot be sure that insurance companies will continue to offer products with sufficient coverage at commercially reasonable rates 12 Our insurance coverage does not include all potential losses. Real property is subject to casualty risk including damage, destruction, or loss resulting from events that are unusual, sudden and unexpected.
Removed
We may obtain only limited warranties when we purchase a property and would have only limited recourse in the event our due diligence did not identify any issues that lower the value of our property.
Added
Noncompliance with these laws and regulations, including but not limited to, the ADA, could result in the imposition of fines or the award of damages or attorneys’ fees to private litigants.
Removed
We invest in properties historically used for industrial, manufacturing and commercial purposes. Some of these properties contain, or may have contained, underground storage tanks for the storage of petroleum products and other hazardous or toxic substances. All of these operations create a potential for the release of petroleum products or other hazardous or toxic substances.
Added
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.
Removed
Some of our properties are adjacent to or near other properties that may have contained or currently contain underground storage tanks used to store petroleum products, or other hazardous or toxic substances.
Added
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.
Removed
In addition, previous or current occupants of our properties, including but not limited to, our tenants, and adjacent properties may have engaged, or may in the future engage, in activities that may release petroleum products or other hazardous or toxic substances.
Added
Our liquidity may be adversely affected if events such as limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, with respect to financial institutions or the financial services industry generally, or based on concerns or rumors related to these or similar risks.
Removed
We may incur significant costs complying with various federal, state and local laws, regulations and covenants that are applicable to our properties and, in particular, costs associated with complying with regulations such as the Americans with Disabilities Act of 1990 (the "ADA") may result in unanticipated expenses.
Added
For example, the Federal Deposit Insurance Corporation took control of, and was appointed receiver of, Silicon Valley Bank, New York Signature Bank and First Republic Bank on March 10, 2023, March 12, 2023 and May 1, 2023, respectively.
Removed
The properties in our portfolio are subject to various covenants and U.S. federal, state and local laws and regulatory requirements, including permitting and licensing requirements.
Added
Although we did not have any funds held by these banks or other institutions that have been closed, we cannot guarantee that the banks or other financial institutions that hold our funds will not experience similar issues.
Removed
Local regulations, including municipal or local ordinances, zoning restrictions and restrictive covenants imposed by community developers may restrict our use of our properties and may require us to obtain approval from local officials or restrict our use of our properties and may require us to obtain approval from local officials of community standards organizations at any time with respect to our properties, including prior to acquiring a property or when undertaking renovations of any of our existing properties.
Added
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.
Removed
Among other things, these restrictions may relate to fire and safety, seismic or hazardous material abatement requirements.
Added
The REIT distribution requirements may limit our ability to retain capital and require us to turn to external financing sources.
Removed
Our failure to obtain such permits, licenses and zoning relief or to comply with applicable laws could have an adverse effect on our financial condition, results of operations and cash flow. In addition, under the ADA, all places of public accommodation are required to meet certain U.S. federal requirements related to access and use by disabled persons.
Added
Even if we maintain our qualification as a REIT for federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to stockholders.
Removed
Noncompliance with the ADA could result in an order to correct any non-complying feature, which could result in substantial capital expenditures. We do not conduct audits or investigations of all of these properties to determine their compliance and we cannot predict the ultimate cost of compliance with the ADA, or other legislation.
Added
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.
Removed
If one or more of our properties in which we invest is not in compliance with the ADA, or other legislation, then we would be required to incur additional costs to bring the property into compliance.
Added
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.
Removed
We may be adversely impacted as a real estate owner, manager and developer in the future by potential impacts to the supply chain or stricter energy efficiency standards or greenhouse gas regulations for the commercial building sectors.
Added
Our success depends to a significant degree upon the continued contributions of certain key personnel including, but not limited to, our executive officers, whose continued service is not guaranteed, and each of whom would be difficult to replace.

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Item 2. Properties

Properties — owned and leased real estate

29 edited+5 added−8 removed7 unchanged
Biggest changePaul, MN 2,040 11 145 2 — — 2,185 13 100.0 % Nashville, TN 1,671 4 — — 164 2 1,835 6 100.0 % New Jersey (A) 1,567 7 — — 952 17 2,519 24 99.5 % Northern California — — 138 4 109 3 247 7 90.9 % Phoenix, AZ 3,669 9 445 7 38 1 4,152 17 100.0 % Seattle, WA 101 1 322 7 — — 423 8 100.0 % South Florida 1,439 9 612 10 — — 2,051 19 98.7 % Southern California (A) 7,975 28 1,730 31 498 18 10,203 77 100.0 % Total 50,350 186 7,923 125 4,626 105 62,899 416 98.8 % Occupancy by Industrial Property Type 98.7 % 99.2 % 99.2 % _______________ (A) Central/Eastern Pennsylvania includes the markets of Central Pennsylvania and Philadelphia.
Biggest changePaul, 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.
The capitalization rate for the nine 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 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.
Based on our recent experience, low levels of vacancy generally throughout our markets and the 2023 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.
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.
Leasing Activity The following table provides a summary of our leasing activity for the year ended December 31, 2022. 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, 2023. The table does not include month-to-month leases or leases with terms less than twelve months.
Assumes no exercise of lease renewal options, if any. (D) Lease costs are comprised of the costs incurred or capitalized for improvements of vacant and renewal spaces, as well as the commissions paid and costs capitalized for leasing transactions.
Assumes no exercise of lease renewal options, if any. (D) Lease costs are comprised of the costs incurred or capitalized for improvements of vacant and renewal spaces, as well as the commissions funded and costs capitalized for leasing transactions.
The 416 in-service industrial properties contained an aggregate of approximately 62.9 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 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.
Included in the total cost is $22.3 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 $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%.
The following table provides a summary of our leases that commenced during the year ended December 31, 2022, 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, 2023, which included rent concessions during the lease term.
At December 31, 2022, our leases have a weighted average lease length of 7.4 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, 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.
The average annual base rent per square foot for our in-service portfolio, calculated at December 31, 2022, was $6.50. 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 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.
As of December 31, 2022, approximately 98.8% of the GLA of our in-service properties was leased, and no single tenant or group of related tenants accounted for more than 6.1% of our rent revenues, nor did any single tenant or group of related tenants occupy more than 5.6% of the total GLA of our in-service properties.
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.
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, 2022, we moved ten development properties totaling approximately 4.1 million square feet of GLA to our in-service portfolio at a total cost of approximately $447.8 million.
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.
The industrial properties were acquired at an expected stabilized capitalization rate of approximately 3.9%.
The industrial properties were acquired at an expected stabilized capitalization rate of approximately 6.2%.
(B) Property is located in Greenville, KY. 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.
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 estimated total investment for the 14 development projects under construction is $556.2 million, of which $293.1 million has been paid as of December 31, 2022. 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 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.
For 2023, 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 continued improvement in market conditions as compared to the conditions prevailing when the comparative leases were signed.
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.
The estimated total investment for the seven developments is approximately $223.5 million, of which $178.0 million has been paid as of December 31, 2022. 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.
Indebtedness As of December 31, 2022, three of our 416 in-service industrial properties, with a net carrying value of $31.8 million, are pledged as collateral under a mortgage financing, totaling $10.3 million, excluding unamortized debt issuance costs.
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.
The development projects under construction have the following characteristics: Metropolitan Area Number of Properties GLA Property Type Anticipated Quarter of Building Completion Central Florida 4 347,157 Bulk Warehouse, Regional Warehouse Q1 2023 South Florida 2 417,148 Bulk Warehouse Q1 2023 Central/Eastern Pennsylvania 1 698,880 Bulk Warehouse Q2 2023 Northern California 1 37,056 Regional Warehouse Q2 2023 South Florida 1 56,399 Regional Warehouse Q3 2023 Southern California 4 1,022,887 Bulk Warehouse, Regional Warehouse Q3 2023 Northern California 1 1,015,791 Bulk Warehouse Q1 2024 Total (A) 14 3,595,318 (A) The 14 properties were 11% pre-leased at December 31, 2022. 24 Property Acquisitions During the year ended December 31, 2022, we acquired 11 industrial properties and 134 acres of land located in our Central/Eastern Pennsylvania, Houston, Northern California, Seattle, South Florida and Southern California markets for an aggregate purchase price of approximately $299.1 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 substantially completed developments have the following characteristics: Metropolitan Area Number of Properties GLA Property Type Occupancy at 12/31/22 Central/Eastern Pennsylvania 1 105,000 Bulk Warehouse 0% Chicago, IL 1 451,022 Bulk Warehouse 0% Denver, CO 2 787,585 Bulk Warehouse 0% Nashville, TN 1 500,240 Bulk Warehouse 0% Seattle, WA 1 128,426 Bulk Warehouse 0% South Florida 1 131,683 Bulk Warehouse 0% Total 7 2,103,956 As of December 31, 2022, we have 14 development projects that are under construction totaling approximately 3.6 million square feet of GLA.
The placed in-service development projects have the following characteristics: Metropolitan Area Number of Properties GLA Occupancy at 12/31/23 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.
(B) Does not include existing vacancies of 755,461 aggregate square feet and December 31, 2022 move outs of 513,854 aggregate square feet. (C) Annualized base rent is calculated as monthly contractual base rent per the terms of the lease, as of December 31, 2022, 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, 2023, multiplied by 12. If free rent is granted, then the first positive rent value is used.
National vacancy levels remained low and overall industry conditions resulted in an environment supportive of rental rate growth in virtually all of our markets.
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.
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 97 2,921 $8.51 48.9% 6.1 $6.06 N/A Renewal Leases 120 5,914 $7.45 40.3% 5.0 $1.84 71.2% Development / Acquisition Leases 24 4,451 $8.37 N/A 9.8 N/A N/A Total / Weighted Average 241 13,286 $7.99 43.3% 6.8 $3.24 71.2% (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 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.
The acquired industrial properties have the following characteristics: Metropolitan Area Number of Properties GLA Property Type Occupancy at 12/31/22 Northern California 1 14,935 Regional Warehouse 100% Seattle, WA 1 12,768 Regional Warehouse 100% South Florida 2 179,430 Regional Warehouse 100% Southern California 7 279,560 Bulk Warehouse, Regional Warehouse 100% Total 11 486,693 Property Sales During the year ended December 31, 2022, we sold nine industrial properties comprising approximately 2.2 million square feet of GLA, at a weighted average capitalization rate of 5.7%, and one land parcel for total gross sales proceeds of approximately $178.3 million.
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.
Inventory rebuilding following the peak of the COVID-19 pandemic, drove additional demand for logistics space from a range of industries. New industrial space continued to be developed throughout the year in response to this growth in demand. In 2022, incremental demand exceeded new supply.
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.
Item 2. Properties General At December 31, 2022, we owned 426 industrial properties of which 416 were classified as in-service.
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.
In-Service Property Summary Totals Bulk Warehouse Regional Warehouse Light Industrial Total Metropolitan Area GLA (in 000's) Number of Properties GLA (in 000's) Number of Properties GLA (in 000's) Number of Properties GLA (in 000's) Number of Properties Occupancy at 12/31/22 Atlanta, GA 4,563 14 340 4 347 5 5,250 23 100.0 % Baltimore, MD 3,096 9 — — 320 5 3,416 14 81.2 % Central Florida 427 3 315 4 79 1 821 8 100.0 % Central/Eastern PA (A) 7,241 15 481 6 199 4 7,921 25 99.8 % Chicago, IL 5,265 16 342 6 205 4 5,812 26 100.0 % Cincinnati, OH 683 3 131 2 278 5 1,092 10 100.0 % Dallas/Ft.
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.
Number of Leases With Rent Concessions Square Feet (in 000's) Rent Concessions New Leases 68 2,443 $4,582 Renewal Leases 4 185 $89 Development / Acquisition Leases 18 4,113 $12,204 Total 90 6,741 $16,875 26 Lease Expirations Fundamentals for the United States industrial real estate market remained favorable in 2022, despite continuing, albeit diminishing, supply chain disruptions and a slowdown in the overall U.S. economy.
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.
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) 2023 127 4,546,740 7.4% 29,455 7.5% 2024 179 7,356,534 11.9% 44,676 11.4% 2025 168 6,756,718 11.0% 44,666 11.4% 2026 162 8,530,320 13.8% 51,590 13.2% 2027 157 9,058,218 14.7% 58,645 15.0% 2028 79 6,464,743 10.5% 41,924 10.7% 2029 45 4,951,050 8.0% 33,733 8.6% 2030 29 2,687,634 4.4% 18,130 4.6% 2031 18 3,119,801 5.1% 23,690 6.0% 2032 21 4,082,700 6.6% 24,864 6.3% Thereafter 14 4,075,605 6.6% 20,740 5.3% Total 999 61,630,063 100% $392,113 100% _______________ (A) Includes leases that expire on or after January 1, 2023 and assumes tenants do not exercise existing renewal, termination or purchase options.
The 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.
Removed
We classify our properties into three industrial categories: bulk warehouse, regional warehouse and light industrial. While some properties may have characteristics which fall under more than one property type, we use what we believe is the most dominant characteristic to categorize the property.
Added
The following tables summarize, by market, certain information as of December 31, 2023, with respect to the in-service properties.
Removed
Individual properties may be reclassified over time due to changes in building characteristics such as tenant use and office space build-out.
Added
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.
Removed
The following describes, generally, the different industrial categories: • Bulk warehouse buildings are of 100,000 square feet or more, have a ceiling height of at least 22 feet and are comprised of less than 15% of office space; • Regional warehouses are of less than 100,000 square feet, have a ceiling height of at least 22 feet and are comprised of less than 30% of office space; and • Light industrial properties are of less than 100,000 square feet, have a ceiling height of less than 22 feet and are comprised of 30% or more of office space. 22 The following tables summarize, by market, certain information as of December 31, 2022, with respect to the in-service properties.
Added
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.
Removed
Worth, TX 5,996 31 1,327 20 67 2 7,390 53 100.0 % Denver, CO (A) 1,417 6 750 8 848 21 3,015 35 100.0 % Detroit, MI 242 2 281 6 437 14 960 22 100.0 % Houston, TX 2,958 18 564 8 85 3 3,607 29 99.1 % Minneapolis/St.
Added
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.
Removed
The placed in-service development projects have the following characteristics: Metropolitan Area Number of Properties GLA Property Type Occupancy at 12/31/22 Central/Eastern Pennsylvania 1 1,085,280 Bulk Warehouse 100% Dallas/Ft.
Added
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.
Removed
Worth, TX 2 374,306 Bulk Warehouse 100% Nashville, TN 1 691,418 Bulk Warehouse 100% New Jersey 1 208,000 Bulk Warehouse 100% Phoenix, AZ 1 802,439 Bulk Warehouse 100% South Florida 3 591,940 Bulk Warehouse 100% Southern California 1 303,204 Bulk Warehouse 100% Total 10 4,056,587 As of December 31, 2022, we substantially completed seven developments totaling approximately 2.1 million square feet of GLA.
Removed
The sold industrial properties have the following characteristics: Metropolitan Area Number of Properties GLA Property Type Cleveland, OH (A) 6 1,228,629 Bulk Warehouse Detroit, MI 1 60,491 Regional Warehouse Minneapolis/St. Paul, MN 1 580,733 Bulk Warehouse Other (B) 1 332,465 Bulk Warehouse Total 9 2,202,318 (A) With the sale of these properties, we exited the Cleveland, OH market.
Removed
The following table shows scheduled lease expirations for all signed leases in our in-service properties as of December 31, 2022.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−0 removed5 unchanged
Biggest changeQuarter Ended Closing High Closing Low Dividend/Distribution Declared 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 December 31, 2021 $66.48 $53.08 $0.270 September 30, 2021 $56.69 $52.08 $0.270 June 30, 2021 $53.91 $46.92 $0.270 March 31, 2021 $47.39 $40.64 $0.270 As of February 15, 2023, the Company had 327 common stockholders of record.
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.
In order to comply with the REIT requirements of the Code, the Company is generally required to make common share distributions and preferred share distributions (other than capital gain distributions) to its shareholders in amounts that together at least equal i) the sum of a) 90% of the Company's "REIT taxable income" computed without regard to the dividends paid deduction and net capital gains and b) 90% of net income (after tax), if any, from foreclosure property, minus ii) certain excess non-cash income.
Dividends In order to comply with the REIT requirements of the Code, the Company is generally required to make common share distributions and preferred share distributions (other than capital gain distributions) to its shareholders in amounts that together at least equal (i) the sum of (a) 90% of the Company's "REIT taxable income" computed without regard to the dividends paid deduction and net capital gains and (b) 90% of net income (after tax), if any, from foreclosure property, minus (ii) certain excess non-cash income.
Market for Registrant's Common Equity / Partners' Capital, Related Stockholder / Unitholder Matters and Issuer Purchases of Equity Securities Market Information The following table sets forth, for the periods indicated, the high and low closing prices per share of the Company's common stock, which trades on the New York Stock Exchange under the trading symbol "FR" and the dividends declared per share for the Company's common stock and the distributions declared per Unit for the Operating Partnership's Units.
Market for Registrant's Common Equity / Partners' Capital, Related Stockholder / Unitholder Matters and Issuer Purchases of Equity Securities Market Information and Holders The following table sets forth, for the periods indicated, the high and low closing prices per share of the Company's common stock, which trades on the New York Stock Exchange under the trading symbol "FR" and the dividends declared per share for the Company's common stock and the distributions declared per Unit for the Operating Partnership's Units.
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 128 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 114 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 2022.
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.
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 12/31/17 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 12/31/18 in stock or index, including reinvestment of dividends.
During the year ended December 31, 2022, the Operating Partnership issued 280,081 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, 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.
If each Limited Partner Unit of the Operating Partnership were redeemed as of December 31, 2022, the Operating Partnership could satisfy its redemption obligations by making an aggregate cash payment of approximately $147.5 million or by issuing 3,055,766 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").
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").
Fiscal year ending December 31. 12/17 12/18 12/19 12/20 12/21 12/22 FIRST INDUSTRIAL REALTY TRUST, INC. $ 100.00 $ 94.37 $ 139.05 $ 144.86 $ 232.24 $ 173.34 S&P 500 $ 100.00 $ 95.62 $ 125.72 $ 148.85 $ 191.58 $ 156.89 FTSE NAREIT Equity REITs $ 100.00 $ 95.38 $ 120.17 $ 110.56 $ 158.36 $ 119.78 _______________ (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.
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.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+1 added−0 removed0 unchanged
Biggest changeItem 6. [Reserved] 30 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 43 Item 8. Financial Statements and Supplementary Data 43 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 43 Item 9A. Controls and Procedures 44
Biggest changeItem 6. [Reserved] 30 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 41 Item 8. Financial Statements and Supplementary Data 41 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 41 Item 9A. Controls and Procedures 42 Item 9B.
Added
Other Information 43 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 43 PART III. 44

Item 7. Management's Discussion & Analysis

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

52 edited+9 added−13 removed40 unchanged
Biggest changeInvesting Activities: Cash used in investing activities increased $212.3 million, primarily due to the following: • increase of $160.7 million related to the acquisition and development of real estate as well as payments for improvements and leasing commissions in 2022 as compared to 2021; and • decrease of $59.3 million in net proceeds received from the disposition of real estate in 2022 as compared to 2021; offset by: ◦ increase in net proceeds of $3.9 million resulting from distributions from and contributions to our Joint Ventures in 2022 as compared to 2021; ◦ increase of $1.5 million related to the collection of insurance settlement proceeds; and ◦ decrease of $4.0 million in escrow deposits. 36 Financing Activities: Cash provided by financing activities increased $295.5 million for the Company (increased $295.6 million for the Operating Partnership), primarily due to the following: • increase of $465.0 million in proceeds from refinancing the $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; offset by: ◦ decrease of $132.9 million related to net proceeds from the issuance of 218,230 shares of the Company's common stock under our ATM in 2022 as compared to the net proceeds from the issuance of 2,513,758 shares of the Company's common stock under our ATM in 2021; ◦ increase in dividend and unit distributions of $15.6 million due to the Company increasing the dividend rate in 2022 as well as an increase in common shares and units outstanding; ◦ decrease in net borrowings under our Unsecured Credit Facility of $15.0 million in 2022 as compared to 2021; ◦ increase in repayments of mortgage loans payable of $5.0 million in 2022 compared to 2021; and ◦ increase in net distributions to noncontrolling interests of $4.4 million in 2022 as compared to 2021.
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.
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 2022 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 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.
The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2022 and 2021. Same store properties are properties owned prior to January 1, 2021 and held as an in-service property through December 31, 2022 and developments and redevelopments that were placed in service prior to January 1, 2021.
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.
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, 2022 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 which are held by us at December 31, 2023 that are sensitive to changes in interest rates.
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, 2022 and 2021.
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.
We expect to meet long-term (after December 31, 2023) 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. 37 We believe that we were in compliance with our financial covenants as of December 31, 2022, and we anticipate that we will be able to operate in compliance with our financial covenants in 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.
Sold properties are properties that were sold subsequent to December 31, 2020. (Re)Developments include developments and redevelopments that were not: a) substantially complete 12 months prior to January 1, 2021; or b) stabilized prior to January 1, 2021.
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.
We have considered our short-term (through December 31, 2023) liquidity needs and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs.
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.
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 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 and other miscellaneous revenues.
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 $0.6 million and $1.0 million during the years ended December 31, 2022 and 2021, 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 $0.7 million and $0.6 million during the years ended December 31, 2023 and 2022, respectively, related to environmental expenditures.
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 $5.5 million and $5.6 million during the years ended December 31, 2022 and 2021. 40 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 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.
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, 2020 and held as an operating property through December 31, 2022.
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.
(D) The interest rate is based on daily SOFR plus a spread of 0.85% plus a SOFR adjustment of 0.10%.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, 2022.
(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.
(C) The interest rate is based on one-month SOFR plus a spread of 0.85% plus a SOFR adjustment of 0.10%. 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, 2022. 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 0.85%. 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.
Total debt, exclusive of unamortized debt issuance costs and unamortized discounts, at December 31, 2022 and 2021 is detailed below.
Total debt, exclusive of unamortized debt issuance costs and unamortized discounts, at December 31, 2023 and 2022 is detailed below.
If the LIBOR and SOFR rates relevant to our variable rate debt were to have increased 10%, we estimate that our interest expense during the years ended December 31, 2022 and 2021 would have increased by approximately $0.8 million and $0.01 million, respectively, based on our average outstanding floating-rate debt during the years ended December 31, 2022 and 2021.
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.
At December 31, 2022 and 2021, 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 and $460.0 million, respectively, that mitigate our exposure to our Unsecured Term Loans' variable interest rates, which are based on LIBOR and SOFR.
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.
We estimate 2023 expenditures of approximately $2.0 million which has been accrued at December 31, 2022. We estimate that the aggregate expenditures which need to be expended in 2023 and beyond with regard to currently identified environmental issues will not exceed approximately $5.9 million which has been accrued at December 31, 2022.
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.
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, 2022 and 2021, the estimated fair value of our debt was approximately $1,945.4 million and $1,691.3 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, 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.
Depreciation from corporate furniture, fixtures and equipment and other increased $1.9 million due to depreciation and amortization related to properties acquired that were not yet stabilized at December 31, 2020 and therefore are not yet included in the same store pool.
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.
As of the same date, $79.0 million or 4.9% of our total debt, excluding unamortized debt issuance costs, was variable rate debt.
As of the same date, $143.0 million or 6.9% of our total debt, excluding unamortized debt issuance costs, was variable rate debt.
Property expenses from same store properties increased $5.0 million primarily due to increases in real estate tax expense, repairs and maintenance, insurance and property management expense. Property expenses from acquired properties increased $1.4 million due to properties acquired subsequent to December 31, 2020. Property expenses from sold properties decreased $2.8 million due to properties sold subsequent to December 31, 2020.
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.
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. 38 Our other material cash requirements from known contractual and other obligations as of December 31, 2022 include an estimate of remaining payments on the completion of development projects under construction for the Company and our proportionate share of the Joint Venture of $263.1 million and $25.0 million, respectively, which includes all costs necessary to place the properties into service.
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.
Weighted Average Interest Rate at December 31, 2022 Outstanding Balance at Weighted Average Maturity in Years at December 31, 2022 December 31, 2022 December 31, 2021 (In thousands) Mortgage Loans Payable, Gross (A) 4.17% $ 10,299 $ 79,764 5.7 Senior Unsecured Notes, Gross Senior Unsecured Bonds (A) 7.58% 48,571 48,571 6.3 Private Placement Notes (A) 3.66% 950,000 950,000 7.0 Subtotal 998,571 998,571 Unsecured Term Loans, Gross 2015 Unsecured Term Loan N/A — 260,000 N/A 2021 Unsecured Term Loan (B) 1.84% 200,000 200,000 3.5 2022 Unsecured Term Loan (C) 3.64% 425,000 — 4.8 2022 Unsecured Term Loan II (D) 4.88% 300,000 — 4.6 Subtotal 925,000 460,000 Unsecured Credit Facility (E) 5.16% 143,000 79,000 3.5 Total Debt $ 2,076,870 $ 1,617,335 (A) These loans have a fixed interest rate.
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.
Revenues from (re)developments increased $23.9 million due to an increase in occupancy and tenant recoveries.
Revenues from (re)developments increased $36.0 million due to an increase in occupancy and tenant recoveries.
Property expenses from (re)developments increased $4.6 million primarily due to the substantial completion of developments. Property expenses from other increased $4.2 million primarily due to an increase in real estate tax expense related to land parcels purchased in 2021 and 2022 and an increase in certain miscellaneous expenses. General and administrative expense remained relatively unchanged.
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.
(B) The interest rate is based on one-month LIBOR plus a spread of 0.85%. We have interest rate swaps, with an aggregate notional value of $200.0 million, that effectively fix the LIBOR rate that results in an all-in interest rate of 1.84% at December 31, 2022. 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 1.81% at December 31, 2023. These interest rate swaps mature in February 2026.
Interest expense increased $4.9 million, or 11.1%, primarily due to an increase in the weighted average debt balance outstanding for the year ended December 31, 2022 ($1,917.4 million) as compared to the year ended December 31, 2021 ($1,631.9 million), offset by an increase in capitalized interest of $4.2 million caused by an increase in development projects eligible for capitalization during the year ended December 31, 2022 as compared to the year ended December 31, 2021, and a decrease in the weighted average interest rate for the year ended December 31, 2022 (3.41%) as compared to the year ended December 31, 2021 (3.45%).
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.
Depreciation and other amortization from acquired properties increased $3.2 million due to properties acquired subsequent to December 31, 2020. Depreciation and other amortization from sold properties decreased $2.4 million due to properties sold subsequent to December 31, 2020. Depreciation and other amortization from (re)developments increased $10.3 million primarily due to an increase in depreciation and amortization related to completed developments.
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.
Material Cash Requirements At December 31, 2022, our combined restricted cash and cash and cash equivalents were $132.2 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 $604.1 million available for additional borrowings under our Unsecured Credit Facility as of December 31, 2022.
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.
Income tax expense increased $18.5 million, or 378.8%, primarily due to an increase in taxable gains and incentive fees one of our TRSs recognized from its share of equity in income from the Joint Ventures in the year ended December 31, 2022 compared to the year ended December 31, 2021. 34 Comparison of Year Ended December 31, 2021 to Year Ended December 31, 2020 A discussion of changes in our results of operations between 2021 and 2020 can be found in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Year Ended December 31, 2021 to Year Ended December 31, 2020" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
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.
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. 35 Liquidity and Capital Resources Cash Flow Activity The following table summarizes our cash flow activity for the Company for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 (In thousands) Net cash provided by operating activities $ 410,943 $ 266,895 Net cash used in investing activities (629,108) (416,823) Net cash provided by financing activities 304,503 9,050 The following table summarizes our cash flow activity for the Operating Partnership for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 (In thousands) Net cash provided by operating activities $ 410,897 $ 267,030 Net cash used in investing activities (629,108) (416,823) Net cash provided by financing activities 304,549 8,915 Changes in cash flow for the year ended December 31, 2022, compared to the prior year are described as follows: Operating Activities: Cash provided by operating activities increased $144.0 million for the Company (increased $143.9 million for the Operating Partnership), primarily due to the following: • increase in distributions from our Joint Ventures of $118.0 million in 2022 as compared to 2021 due to funds received from a sale of real estate from our Joint Venture; • increase in net operating income from same store properties, acquired properties and recently developed properties of $57.3 million, offset by a decrease in net operating income due to the disposition of real estate of $10.8 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: ◦ increase in tenant accounts receivable, prepaid expenses and other assets due to timing of cash receipts.
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.
Revenues from acquired properties increased $6.9 million due to the 15 industrial properties acquired subsequent to December 31, 2020 totaling approximately 0.7 million square feet of GLA. Revenues from sold properties decreased $13.6 million due to the 38 industrial properties sold subsequent to December 31, 2020 totaling approximately 5.1 million square feet of GLA.
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.
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 has significantly increased in 2021 and 2022 and may continue to be elevated or increase further.
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.
As of the same date, $143.0 million or 6.9% of our total debt, excluding unamortized debt issuance costs, was variable rate debt. At December 31, 2021, $1,538.3 million or 95.1% of our total debt, excluding unamortized debt issuance costs, was fixed rate debt.
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.
For the year ended December 31, 2021, we recognized $150.3 million of gain on sale of real estate related to the sale of 29 industrial properties comprising approximately 2.9 million square feet of GLA and one land parcel.
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.
The majority of these construction costs will need to be funded in one year or less. Off-Balance Sheet Arrangements At December 31, 2022, we had letters of credit and performance bonds outstanding amounting to $22.6 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, 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.
In 2022, we completed the following significant real estate activities: • We acquired 11 industrial properties comprised of approximately 0.5 million square feet of GLA located in our Northern California, Seattle, South Florida and Southern California markets for an aggregate purchase price of $137.1 million, excluding transaction costs. These properties were 100% leased at December 31, 2022.
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.
These properties were 100% leased at December 31, 2022. • We commenced speculative development of 11 industrial buildings totaling 3.3 million square feet of GLA in our Central/Eastern Pennsylvania, Chicago, Denver, Lehigh Valley, Northern California, South Florida and Southern California markets. • We sold nine industrial properties comprising approximately 2.2 million square feet of GLA and one land parcel for gross sales proceeds of $178.3 million. • Our Joint Venture sold 391 acres of land located in Phoenix for gross proceeds of $255.3 million.
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 amounts include our partner's 6% interest in the Joint Venture that we consolidate and report within our financial statements. Equity in loss of Joint Ventures for the year ended December 31, 2021 was $0.2 million.
These amounts include our partner's 6% interest in the Joint Venture that we consolidate and report within our financial statements.
Reven ue s from other increased $9.0 million due to revenues related to acquisitions that were not yet stabilized at December 31, 2020 and therefore are not yet included in the same store pool, revenues from income-producing land parcels for which our ultimate intent is to redevelop or develop in the future, joint venture development fees and interest income earned on our cash and cash equivalent balances. 2022 2021 $ Change % Change (In thousands) PROPERTY EXPENSES Same Store Properties $ 117,394 $ 112,431 $ 4,963 4.4 % Acquired Properties 1,817 419 1,398 333.7 % Sold Properties 2,405 5,180 (2,775) (53.6) % (Re) Developments 6,659 2,078 4,581 220.5 % Other 15,388 11,192 4,196 37.5 % Total Property Expenses $ 143,663 $ 131,300 $ 12,363 9.4 % Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses.
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.
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. 41 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, 2022 2021 2020 2019 2018 (In thousands) Net Income Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities $ 359,134 $ 270,997 $ 195,989 $ 238,775 $ 163,239 Adjustments: Depreciation and Other Amortization of Real Estate 146,448 130,062 128,814 120,516 115,659 Impairment of Real Estate (A) — — — — 2,285 Gain on Sale of Real Estate (A) (128,268) (150,310) (86,751) (124,942) (80,909) Gain on Sale of Real Estate from Joint Ventures (A) (115,024) — (4,443) (16,714) — Income Tax Provision - Allocable to Gain on Sale of Real Estate, Including Joint Ventures (A) 23,658 4,853 2,198 3,095 — Noncontrolling Interest Share of Adjustments 15,222 357 (843) 406 (883) Funds from Operations Available to First Industrial Realty Trust, Inc.'s Common Stockholders and Participating Securities $ 301,170 $ 255,959 $ 234,964 $ 221,136 $ 199,391 (A) In December 2018, NAREIT issued a white paper restating the definition of FFO.
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.
Based on our current credit ratings and leverage and the related interest rate hedges with a notional value of $300.0 million that we entered into and commenced in December 2022, our all-in interest rate on this term loan is 4.88% at December 31, 2022. • We issued 218,230 shares of our common stock, through "at-the-market" ("ATM") offerings, resulting in net proceeds of $12.8 million. • We declared an annual cash dividend of $1.18 per common share or Unit, an increase of 9.3% from 2021. • At December 31, 2022, we had $604.1 million available for additional borrowings under our Unsecured Credit Facility and cash and cash equivalents and restricted cash was $132.2 million, after excluding our Joint Venture minority partner's share of cash and cash equivalents that we consolidate and report in our financial statements. 31 Results of Operations Comparison of Year Ended December 31, 2022 to Year Ended December 31, 2021 Our net income was $381.6 million and $277.2 million for the years ended December 31, 2022 and 2021, 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 additionally acquired three income-producing land parcels in our Northern California, Seattle and Southern California markets for an aggregate purchase price of $56.5 million, excluding transaction costs. • We added to our development pipeline 116 acres of land located in our Central/Eastern Pennsylvania, Houston, Northern California, South Florida and Southern California markets for an aggregate purchase price of $105.5 million, excluding transaction costs. • We placed in-service ten industrial properties comprising approximately 4.1 million square feet of GLA located in our Central/Eastern Pennsylvania, Dallas/Ft.Worth, Nashville, New Jersey, Phoenix, South Florida, and Southern California markets at an estimated total cost of $447.8 million.
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.
As of December 31, 2022, 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. 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.
(E ) The interest rate is a variable rate based on one-month LIBOR plus 77.5 basis points and a facility fee of 15 basis points. Our balance under our Unsecured Credit Facility changes depending on our cash needs and the interest rate and facility fee are each subject to adjustment based on our leverage and investment grade rating.
Our balance under our Unsecured Credit Facility changes depending on our cash needs and the interest rate and facility fee are each subject to adjustment based on our leverage and investment grade rating. Weighted average maturity reflected in the table above assumes we extended the maturity pursuant to two, six-month extension options, subject to certain conditions.
Year Ended December 31, 2022 2021 (In thousands) Same Store Revenues $ 474,602 $ 437,117 Same Store Property Expenses (117,394) (112,431) Same Store Net Operating Income Before Same Store Adjustments $ 357,208 $ 324,686 Same Store Adjustments: Straight-line Rent (11,468) (11,330) Above (Below) Market Lease Amortization (927) (1,016) Lease Termination Fees (119) (560) Same Store Net Operating Income $ 344,694 $ 311,780 Subsequent Events From January 1, 2023 to February 15, 2023, we acquired one industrial building for a purchase price of approximately $6.0 million, excluding transaction costs.
Year Ended December 31, 2023 2022 (In thousands) Same Store Revenues $ 519,477 $ 483,976 Same Store Property Expenses (127,967) (119,955) Same Store Net Operating Income Before Same Store Adjustments $ 391,510 $ 364,021 Same Store Adjustments: Straight-line Rent (11,486) (12,254) Above (Below) Market Lease Amortization (1,232) (1,034) Lease Termination Fees (309) (118) Same Store Net Operating Income $ 378,483 $ 350,615 Subsequent Events From January 1, 2024 to February 14, 2024, we sold five industrial buildings and one land parcel for a sales price of approximately $33.0 million, excluding transaction costs.
Joint Venture development services expense of $0.9 million for the year ended December 31, 2022, are expenses paid to a third party to assist with the development of properties in the Joint Venture for which we earn Joint Venture Fees. 33 2022 2021 $ Change % Change (In thousands) DEPRECIATION AND OTHER AMORTIZATION Same Store Properties $ 123,688 $ 120,262 $ 3,426 2.8 % Acquired Properties 3,962 720 3,242 450.3 % Sold Properties 2,808 5,182 (2,374) (45.8) % (Re) Developments 12,427 2,139 10,288 481.0 % Corporate Furniture, Fixtures and Equipment and Other 4,535 2,650 1,885 71.1 % Total Depreciation and Other Amortization $ 147,420 $ 130,953 $ 16,467 12.6 % Depreciation and other amortization from same store properties increased $3.4 million primarily due to improvements completed at our properties subsequent to December 31, 2021.
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.
At December 31, 2022, we had 14 projects comprising 3.6 million square feet of GLA under development with an estimated investment of approximately $556 million. Additionally, we continue to position ourselves for future development activity by acquiring land located in our target markets.
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.
Equity in income of Joint Ventures of $114.9 million for the year ended December 31, 2022 includes our pro-rata share of gain on sale of real estate by the Joint Venture of $84.1 million as well as incentive fees of $31.3 million we earned from the Joint Venture.
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.
For the years ended December 31, 2022 and 2021, the average occupancy rates of our same store properties were 98.0% and 96.0%, respectively. 32 2022 2021 $ Change % Change (In thousands) REVENUES Same Store Properties $ 474,602 $ 437,117 $ 37,485 8.6 % Acquired Properties 8,034 1,126 6,908 613.5 % Sold Properties 10,899 24,505 (13,606) (55.5) % (Re) Developments 31,232 7,338 23,894 325.6 % Other 15,162 6,204 8,958 144.4 % Total Revenues $ 539,929 $ 476,290 $ 63,639 13.4 % Revenues from same store properties increased $37.5 million primarily due to an increase in rental rates and recoverable income from property expenses, an increase in occupancy and an insurance settlement gain of $1.4 million.
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.
Our pro-rata share of gain was $74.0 million and we earned an incentive fee of $27.6 million.
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.
Removed
Summary of 2022 Our operating results remained strong in 2022. Our year end in-service occupancy was 98.8%, which is a 70 basis point increase compared to our in-service occupancy at December 31, 2021. Also, during the year ended December 31, 2022, we grew cash rental rates by 26.7% on new and renewal leases.
Added
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.
Removed
These amounts exclude our minority partner's share that we consolidate and report in our financial statements as Noncontrolling Interest. 30 We completed the following financing activities during the year ended December 31, 2022: • We paid off $68.0 million in mortgage loans payable, increasing the percentage of our real estate that was unencumbered to 99.3% at December 31, 2022. • We replaced our $260.0 million term loan that was scheduled to mature in September 2022 with a $425.0 million term loan that matures on October 18, 2027.
Added
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.
Removed
Based on our current credit ratings and leverage and the related interest rate hedges with a notional value of $425.0 million that we entered into and commenced in October 2022, our all-in interest rate on this term loan is 3.64% at December 31, 2022. • In November, we drew down the entire principal on a new $300.0 million term loan that matures in August, 2025 unless we extend the term, at our election, pursuant to two, one-year extension options at our election ("2022 Unsecured Term Loan II").
Added
General and administrative expense increased by $3.1 million, or 9.3%, due to an increase in compensation and other professional costs.
Removed
Amortization of debt issuance costs decreased $0.2 million, or 6.9%, primarily due to mortgages paid off in 2021 and 2022.
Added
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.
Removed
However, during the year ended December 31, 2021, we deferred $10.2 million of equity in income and incentive fees earned from the sale of the remaining 138 acres of developable land from one of the Joint Ventures since the Company was the purchaser of the land. This deferral was netted against the basis of the land acquired.
Added
(E ) The interest rate is a variable rate based on SOFR, plus a 0.10% SOFR adjustment, plus a credit spread of 0.775% and a facility fee of 15 basis points.
Removed
Weighted average maturity reflected in the table above assumes we extended the maturity pursuant to two, six-month extension options, subject to certain conditions. As of February 15, 2023, we had approximately $610.1 million available for additional borrowings under our Unsecured Credit Facility.
Added
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.
Removed
Such risks principally include credit risk and legal risk and are not represented in the following analysis. 39 The Financial Conduct Authority announced it intended to stop compelling banks to submit rates for the calculation of LIBOR after June 30, 2023.
Added
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.
Removed
As a result, in the U.S., the Federal Reserve Board and the Federal Reserve Bank of New York identified the SOFR as its preferred alternative rate for USD LIBOR in debt and derivative financial instruments. As of December 31, 2022, our Unsecured Credit Facility, our 2021 Unsecured Term Loan and related interest rate swaps are indexed to LIBOR.
Added
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.
Removed
Our loan documents contain provisions that contemplate alternative methods to determine the base rate applicable to our LIBOR-indexed debt to the extent LIBOR-indexed rates are not available.
Added
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.
Removed
We plan to modify the affected debt agreements and the related interest rate swaps prior to June 2023 and do not anticipate the modifications will have a material impact on our Consolidated Financial Statements. At December 31, 2022, $1,933.8 million or 93.1% of our total debt, excluding unamortized debt issuance costs, was fixed rate debt.
Removed
The restated definition provides an option to include or exclude gains and losses as well as impairment of non-depreciable real estate if the sales are deemed incidental. Prior to January 1, 2019, we included gains and losses on sales and impairment of our non-depreciable real estate in our calculation of NAREIT FFO.
Removed
On January 1, 2019, we adopted the restated definition of NAREIT FFO on a prospective basis and began excluding gains and losses on sales and impairment of our non-depreciable real estate that we deem incidental.
Removed
We also exclude the same adjustments from our share of net income from unconsolidated joint ventures. 42 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 depreciation and amortization, general and administrative 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.

Other FR 10-K year-over-year comparisons