First Industrial Realty Trust Inc Q1 FY2026 Earnings Call

Good day, and welcome to the first Industrial Realty Trust, Inc. first quarter 2026 results call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Art Harmon, SVP, Investor Relations and Marketing. Please go ahead.

Thanks very much, Dave. Hello, everybody, and welcome to our call. Before we discuss our first quarter 2026 results and our updated guidance for 2026, please note that our call may include forward-looking statements as defined by federal securities laws. These statements are based on management's expectations, plans, and estimates of our Today's statements may be time-sensitive and accurate only as of today's date, April 23, 2026. We assume no obligation to update our statements or the other information we provide. Actual results may differ materially from our forward-looking statements, and factors which could cause this are described in our 10-K and other SEC filings. You can find a reconciliation of non-GAAP financial measures discussed in today's call in our supplemental report and our earnings release. The supplemental report earnings release and our SEC filings are available at firstindustrial.com under the Investors tab. Our call will begin with remarks by Peter Basile, our President and Chief Executive Officer, and Scott Musil, our Chief Financial Officer, after which we'll open it up for your questions. Also with us today are Jojo Yev, Chief Investment Officer, Peter Schultz, Executive Vice President, Chris Schneider, Executive Vice President of Operations, and Bob Walter, Executive Vice President of Capital Markets and Asset Management. Now let me turn the call over to Peter.

Thank you, Art, and thank you all for joining us today. I'd like to express my congratulations and gratitude to our team for their efforts in getting 2026 off to an excellent start. We delivered some significant development leasing wins and signed a key renewal in Southern California for our largest remaining 2026 expiration. We're also capturing significant value creation via a pending $131 million land sale that I'll detail shortly. Turning to the overall market, industry fundamentals continued to steady. According to CBRE, national vacancy was stable at 6.7% at the end of the first quarter. Net absorption was a solid 43 million square feet, modestly below new deliveries of 55 million square feet. New supply nationally continued to be disciplined, with starts remaining muted at 39 million square feet. The national construction pipeline is 237 million square feet and highly pre-leased at 39%. In our portfolio, overall touring activity has increased for our availabilities with decision-making accelerating for space sizes under 200,000 square feet within our development portfolio. With respect to potential economic and demand consequences from the conflict in the Middle East, thus far we've seen no discernible impact to leasing activity, but this is a risk we'll continue to monitor. From a portfolio standpoint, our in-service occupancy at quarter-end was 94.3%, in line with our expectations. Since our last earnings call, we made further progress on our 2026 rollovers. We've now taken care of 61% by square footage, and our overall cash rental rate increase for new and renewal leasing is 41%. This includes our largest remaining 2026 expiration, the 556,000 square footer in Southern California, for which we achieved a cash rental rate change that significantly exceeded the top end of our annual guidance range of 40%. Moving now to development leasing, we saw some broad-based success across several markets, inking 383,000 square feet in total. These included a full building lease for our 155,000 square foot First Wilson II project in the Inland Empire. We also signed several sub-100,000 square foot leases in the markets of Chicago, South Florida, Central Florida, as well as Central Pennsylvania. There we leased a 54,000 square foot space at the recently completed first phase of Purse Park 33 in the Lehigh Valley. As I noted in my opening comments, we're pleased to share with you that the ground lessee of 100 acres of land in the 303 corridor in the Phoenix market exercised its option to purchase the site for a sales price of $131 million. The proceeds are approximately $30 per land square foot, which is more than three times industrial land values in that market. We expect this transaction to close in June. Before I turn it over to Scott, I would like to remind you of two upcoming property tours we will be hosting. On May 12th, we will tour our Inland Empire portfolio, and on June 4th, we'll be touring our central New Jersey assets. Please reach out to Art Harmon to register or for more information. With that, I'll turn it over to Scott.

Thank you, Peter. First quarter of 2026, NAIRED funds from operations were $0.68 per fully diluted share compared to $0.68 per share in the first quarter of 2025. The first quarter, 2026 FFO per share was negatively impacted by $0.04 per share of advisory costs related to the contested proxy campaign that was initiated by Landed Buildings. Excluding these costs, our FFO per share was $0.72. As we noted on our fourth quarter earnings call, FFO in the first quarter was impacted by higher G&A costs due to accelerated expense related to an accounting rule that required us to fully expense the value of granted equity-based compensation for certain tenured employees. Our cash savings to run a wide growth for the quarter, excluding termination fees, was 8.7%. The results in the quarter were primarily driven by increases in rental rates on new and renewal leasing, lower free rent, and contractual rent bumps, partially offset by lower average occupancy. Summarizing our leasing activity during the quarter, approximately 2.4 million square feet of leases commenced. Of these, $300,000 were new, $2 million were renewals, and $100,000 were for developments and acquisitions with lease-up. Before I discuss guidance, let me update you on the 3PL tenant under credit watch list. If you recall, we were collecting rent directly from a subtenant while working through the collection process. We are pleased to announce that we signed an agreement with the 3PL that required a lump sum payment of approximately 60% of the balance owed us at December 31st, 2025, which we received in March. In addition, the agreement calls for scheduled payments to pay off the remaining past due rent by the end of 2026. Now moving on to our guidance. Guidance range for 2000 eREED FFO is now $3.05 to $3.15 per share, reflecting $0.04 per share of incremental advisory costs relating to the land and buildings content. Our 2026 FFO guidance range absent these advisory costs is $3.09 to $3.19 per share, which is on change compared to our last call. Our other major operating metric guidance assumptions are as follows. Average quarter and in-service occupancy of 94 to 95%. This range now reflects approximately 1.3 million square feet of incremental development leasing and the 708,000 square footer in central Pennsylvania, all to occur in the second half of the year. Cash same store NOI growth before termination fees of 5 to 6%. Guidance includes the anticipated 2026 costs related to our completed and under construction developments at March 31st. For the full year of 2026, we expect to capitalize about eight cents per share of interest. Our GINA expense guidance range is $42 to $43 million, which excludes the $5.6 million of incremental advisory costs related to the contested proxy campaign. And our guidance assumes that the aforementioned forecasted land sale in Phoenix will close in June. Let me turn

back over to Peter. We are optimistic about the activity levels we are seeing across our availabilities. As always, our team is focused on taking care of our customers, gaining new ones, and sourcing and executing on profitable investments to drive long-term cash flow and value for shareholders. Operator, with that, we're ready to open it up for questions.

We will now begin the question and answer session. To ask a question, you may press star, than one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Also, please limit yourself to one question and one follow-up, re-queue to ask additional questions. The first question comes from Craig Mailman with Citi. Please go ahead.

Hey, good morning, guys. Peter, you know, you mentioned that touring activity has improved, velocity under 200,000 square feet has improved. Could you talk about, you know, other of your peers have talked about the data center adjacent demand. Could you talk about how much of this improvement is that segment of demand versus just either e-commerce or other broader industrial demand?

I mean, from what we're seeing, most of it is just broader industrial demand. 3PLs continue to be very active. Manufacturing is picked up, you know, and that includes data center, tech, aerospace, et cetera. So that's picked up. But it looks more like broader demand for industrial than completely data center driven.

And then, Scott, I know you had mentioned the Central PA is now second half. Could you just talk about kind of the activity you're seeing at Denver and Central PA and kind of the prospects today versus maybe on the fourth quarter call?

Hey, Craig, it's Scott. I think you mentioned that we pushed it to the second half, the 708,000 square footer. That's always been in the second half of the year per our 4Q guidance call. So I wanted to clarify that. And then I'll turn it over to Peter for an update on that vacancy in the Denver development.

Good morning, Craig. It's Peter. So in Denver, we continue to have interested prospects for our large vacancy there. Activity or decision-making, I would say, for larger users has been slow. limited competitive supply. There were just two buildings that came back that will compete with us, one from a business failure from another landlord and another from a lease expiration. But we continue to have prospects. They're just very slow in their decision-making. Smaller, mid-sized tenants in Denver continue to be pretty active. Moving to Pennsylvania, to the second part of your question, Pennsylvania probably is our most active or certainly one of our most active markets across the country in terms of prospect activity, across a range of sizes in the industries, including Peter's comments about 3PLs being very active. We have several prospects for our 708,000 square foot building in central Pennsylvania, all but one of which are full building users, and all of those continue to be engaged in discussions with us.

Great. Thank you. And the next question comes from Nick Thillman with Baird. Please go ahead.

Hey, good morning. Maybe touching a little bit, Peter, just thought process on starting some new projects here. Given the land bank, it's a little bit more heavy, concentrated, and say the IE, you did sign a lease there. But just how you're viewing the landscape and just thought process on overall activity and if that would warrant some starts here in the back half of the year.

Sure. We continue to evaluate opportunities for new starts. We're not going to guide on volume, of course. And the markets that we're focused on continue to be markets like Dallas, Delaware, which is really the South Philly sub-market. With Lehigh Valley PA, we have opportunity, South Florida, and, of course, we're continuing to try to acquire additional opportunity in the way of land and some of the other markets that we've been in and most active recently. So those are the markets we're focused on. Yes, we do have very good sites in Southern California, but those markets still have a number of availabilities, so they aren't markets where we're going to be starting projects anytime soon.

And then, Scott, maybe just on the 3PL tenant, what was the lift in theme store from that within first quarter? And then can you just provide an update on what the bad debt expectations are for the full year? And I know Boohoo from the standpoint of just the credit agreement that you're covered for the full year, but just any updates on that tenant as well.

Okay. So the 3PL tenant, no impact, the same store. We never reserved that tenant back in 2025 when we discussed it being on our watch list. We just made you guys aware of it. We always thought it was collectible. We updated you on this call with the big payment we received and the agreement we reached with the tenant. So again, there's no impact FFO or same store related to that. On Boohoo, they continue to be current on their rent. They pay right at the end of the month, every month. And Peter, I'll turn it over to you to update them on the sublease potential in the space. Thanks, Scott. Boohoo continues to market

the building for sublet there are a declining number of available million square foot plus buildings in Pennsylvania activity as I mentioned a few minutes ago continues to be very good at that level as well Amazon is about to ink two more million square foot plus buildings in Pennsylvania as of today so that's in process and there are relatively few options there There likely will be some more starts in that size range, given the strength of demand. But Boohoo continues to market the building for sublet.

And, Nick, you had one other part of the question. Our bad debt expense was $100,000 in the first quarter compared to our guidance of $250,000. And we kept our guidance the same in 2Q, 3Q, and 4Q at $250,000 per quarter. Great. Appreciate it. Thank you all.

And the next question comes from Nicholas Yulico with Scotiabank. Please go ahead.

Hello, this is Victor Fediwan with Nick. So you posted really strong Q1, and it seems like your today activity is also solid. So just trying to understand what's driving your decision to maintain your full year FFO and same-story NOI guidance instead of raising it.

Okay, so Nick, this is Scott. we did lease up 400,000 square feet of development leasing. It did have slightly positive impact on our FFO compared to guidance. That's being offset by a couple of things. One is we have in our guidance the land sale that's expected to close in June. That's a leased piece of land, so there's slight dilution from that sale because we're assuming the funds are used to pay down the line of credit. And the other piece of it is like what we do every quarter when we update guidance. We We look at all of our leasing assumptions and guidance, and we update them accordingly, and we make adjustments as we see fit. So that's the reconciliation.

Got it. And then a quick follow-up on this disposition of land. So how does this transaction kind of inform the timeline and strategy for unlocking, like, similar higher and better use value for the rest of your land bank? How many similar opportunities you might have within your portfolio?

yeah as you as you know we have uh taken a a pretty close look at every asset that we own land and income producing uh real estate uh properties and we've narrowed it down now to about a handful of opportunities where we think we might be able to push forward and create significant value we're in the process now of trying to secure power that's a very lengthy process. And so we'll see where that goes. If we're successful with that, that would add significant value above and beyond the value of the industrial value for those particular assets.

Got it. Thank you. And the next question comes from Todd Thomas with KeyBank. Please go ahead.

Hi, thanks. First, I just wanted to follow up on the central PA vacancy. I was just curious where things stand with the tenants that you're engaged with, you know, whether, you know, regarding a lease or a sale. Is a sale still a potential outcome that's being contemplated?

Todd, it's Peter. All the prospects we're engaged with are for lease only today.

Okay. And then, you know, you talked about the increase in demand from tenants looking for space, you know, 200,000 square feet or less, that, you know, generally aligns with some of the more recent development starts. And I'm just wondering what the holdback is from increasing starts here a little bit more meaningfully. You know, what are you sort of looking for in order to increase, you know, development starts a bit further?

Yeah, that's a market-by-market question. For example, as you know, we've got a number of availabilities in South Florida. We also have a number of opportunities for new starts there. We want to make sure that we're not too concentrated with development in any one market at one time. And we just completed the project in the first phase of the project in Central Pennsylvania, and we've signed a small lease, a 54,000 square foot lease there. We'd like to see a little bit more leasing there before we begin phase two. So it's really more of a concentration

question. All right. Thank you. And the next question comes from Michael Carroll with RBC

Capital Markets. Please go ahead. Yeah, thanks. Scott, I wanted to circle back on your comments regarding the land sale. I mean, how much rent is the JV paying on that land today? I mean, just given the sale is three times the industrial land value, I think that the corresponding cap rate would be pretty low and not dilutive to earnings. Well, it's not in the JV. This is on

balance sheet. And the supplemental, Mike, if you look, we disclosed the cap rate. It's about a 5.3% cap rate. We got a great rent from the tenant when we leased the land to them back a

couple of years ago. And then I just wanted to confirm, too, that you didn't change the expected timing of the 1.3 million square feet remaining development leasing in the PA space, those are still the same timing as it was in the prior guidance that you provided in 4Q? I believe it

was, but I just wanted to confirm that. That's correct. The only difference is the development leasing in the fourth quarter was 1.7 million. Now it's 1.3 million, and the decline has to do with the 400,000 square foot of development leases that we signed. Great. Appreciate it.

And the next question comes from Rich Anderson with Cantor Fitzgerald. Please go ahead.

Thanks. Good morning. So on the IE release, 556K, can you go through the economics of that transaction? I don't know if that's been provided someplace. If I missed it, I apologize.

Joe, do you want to cover that?

So we can't really go through the lease rate or the economics, but I can tell you it's long-term. We're very happy about the long-term renewal. The space is very critical to the tenant, and it significantly exceeds the high end of our rent change guidance of 40%.

Okay. So, okay. Up more than 40%. Is that right? Okay. Okay. Thanks for that. Second, yeah, I asked this question on each group. I kind of butchered the question. Let's see if I could do it better here. On the data center demand that you're seeing, I'm wondering how siloed that is in the confines of your broader business. I mean, to what degree is the data center demand sort of informing your core tenants, your kind of consumption-oriented tenants, and telling them, I better act now because space is getting taken by this other way of using industrial space. And from your point of view, how does it change your strategy from a development point of view? Does First Industrial have to go about things differently depending on the end customer, whether it's a supplier or it's a consumption-oriented or e-commerce or whatever? I'm curious how this is disruptive in any way, or if it's just pure new demand, and it's as simple as that. Thanks.

You know, we've talked in the past about what would be a catalyst for tenants to begin to make decisions faster. The decision-making now for a couple of years has been fairly slow, especially on the kind of larger spaces. And that, the topic that you're discussing, does create a cost to waiting, so it does help on the margin. The other topic, of course, is power, and while data centers need a lot of power, warehouses need their fair share as well, so that's also a topic. So these are both helpful on the margin to get tenants to make decisions sooner, but it hasn't really created a wave of new lease signings.

Peter and Joe, do you want to add anything to that? The only other thing I'd add to that, Rich, is there is a little bit of incremental demand, as we commented earlier, from tenants that are supporting the construction of data centers and infrastructure. So we are seeing a little bit of that, but I wouldn't call it material to the overall demand profile.

Yeah, just to add just a little bit more detail there, if you look at the data center development, there's a lot of infrastructure related switchgear, semiconductor, pipes, you know, electrical supply, a lot of that. and that has to be manufactured and distributed, and, you know, data center involved businesses need space to either distribute that equipment, store that equipment, and fulfill that equipment in a lot of places in the U.S. So, at the end of the day, they need warehouses where they can store these goods or do some light assembly. So, that is the incremental demand that both Peters have mentioned. But if you look at the Q126, they are not the biggest users. In fact, I think they're growing, but they didn't even make the top 10. The biggest ones are the 3PLs, consumer goods, like Peter mentioned, broad base, construction, and food and beverage.

I guess just to finish the question, from your point of view, when do you need, if you're spec building something spec, when do you need to know that you're going to have an alternative user in the building and how does that inform your development process or do you not need to know necessarily any specific time frame?

That's not going to change our process or our philosophy around the quality, location, features and functionality that we build.

Okay. Okay, that's all I got. Thank you.

And the next question comes from Caitlin Burroughs with Goldman Sachs. Please go ahead.

Hi, everyone. Maybe it lines up with the market if you mentioned you'd be most interested in building, but can you go through which markets maybe three are strongest versus weakest today on demand and rents and what's driving that difference?

Peter, do you want to talk about PA? Sure. Caitlin, it's Peter. I would say, as I mentioned a couple of minutes ago, Pennsylvania is probably our most active market from a tenant perspective across really all size ranges, reflective of the deal we signed in our just completed project in Lehigh Valley. The activity we have on the 708, the activity from market participants for large buildings over a million square feet, very, very active. We're seeing good activity in South Florida. And we're seeing a little less activity in Nashville than we've seen the last couple of years, but pretty tight from a supply standpoint. And as I mentioned, in Denver, slower decision making from larger tenants. But overall, markets are performing well. Along the East Coast, rents are stable and still trending up a little bit. So pretty good shape there. JoJ, you want to talk about the West?

Yes. Thank you, Peter. If you look at gross leasing, Dallas, Houston, and Phoenix have exhibited significant gross leasing, and that's been really continuing since the second act of 25 through Q1 to 26. What's most interesting is that gross leasing actually in the IE has been positive from Q to Q. And if you look at just activity from the large spaces over there, that's been pretty good in IE. But at the same time in IE, you have space ranges from 200 to 400,000 square feet that is abundant in the market today that basically the market has to digest. And tenants in that size range, 200 to 400, has, you know, quite a bit of choices.

Got it. Okay. And then maybe to talk about SoCal a little bit more. So you mentioned that other lease you guys did with the rent spreads meaningfully above 40%. I guess, can you go through what you're seeing more broadly from a leasing spread perspective in SoCal? I imagine some are up, some are down. Is it mostly a function of at least vintage, certain building space types act one way versus another? Just what's the range you're seeing there?

Sure, sure. In terms of rent spreads, we will continue to see rent change, positive rent change in SoCal, because when you look at it, you know, it has come down from the high of Q1 2023, but the growth from pre-COVID to COVID significantly still exceeds that. So over the next couple of years, we will still see positive rent change. In terms of actual Q2Q, quarter to quarter, in terms of rent growth, it's been flat. There are some deals that actually have shown some growth, but overall it's been flattish.

Got it. Okay, thank you.

And the next question comes from Jason Belcher with Wells Fargo. Please go ahead.

Hi, good morning. I'm wondering if you could talk a little bit about your investment or capital allocation preferences in the current environment and how you're thinking about deploying capital for, say, acquisitions versus development versus share repurchase.

Sure. Look, the primary driver of our growth will continue to be speculative development. We're also always in the market making offers for opportunities to acquire cash-flowing buildings in the past that you've seen the majority of our capital go into development, so maybe 20%, 25% into cash-flowing buildings. And with respect to the share purchase opportunity, the share authorization, look, you know, again, the primary use of our capital is going to be to support the growth of development and acquisitions, but there have been several market disruptions in the recent past where our stock price has been pretty negatively impacted to levels that belie fundamentals and our long-term prospects. And we have a very strong belief in the long-term value of our shares. So in those periods of dislocation, we've concluded that it would be value enhancing to shareholders to opportunistically acquire shares. You can figure out, I suppose, on your own what that means in terms of allocation to that versus the other

two categories. Great. Thank you. And then, just as a follow-up, can you give us an update on how your embedded rent increases are trending and what you're incorporating into newly signed leases? And if you can touch on any shifts you've seen there in recent quarters. Yeah. If you look at where we're at on the completed 2026 deals that we've signed, the overall bumps are about 3.6%. And if you look at the entire portfolio, as far as in-place bumps in 2026, we're at about 3.4%.

So they're still holding pretty strong. And if you're asking about the rental increase side of it, we're still consistent with our cash rental rate change guidance of 30% to 40% for 2026. And as Peter mentioned in the script, I think we're at about 41% for the leases that we've signed already in 2026. The reason that's a little bit higher is that 556,000-square-foot renewal that JoJo spoke about, that was significantly higher than the top end of our 40% range.

Great. Thanks again.

Again, if you have a question, please press star and then one. Our next question comes from Vince Taboni with Green Street Advisors. Please go ahead.

Hi. Good morning. Some of the development leasing this quarter was for smaller suites within larger buildings. I'm curious if that reflects any change in strategy and kind of willing to carve up some of these boxes that have taken a little longer to lease into multi-tenant spaces or suites, or was that always the business plan for those properties?

Good morning, Vince. it's Peter yes that was always the plan for those buildings so they're all designed for multi-tenant use certainly over the last several years we've been fortunate to see some full building users but we always design flexibility into our buildings as I mentioned on the question about our building in central Pennsylvania for 708 just to contrast that size range really good activity there that we're seeing today and there's a lot of activity for larger buildings from tenants in Pennsylvania and some of the other big markets so I wouldn't take that tenant demand is limited to under 200,000 but we built those buildings because we felt those pockets were underserved and we're seeing the results of that you know the Lehigh Valley building that Peter mentioned we just completed and we've seen good activity there and already

have our first deal signed. Oh, it's really helpful color. Appreciate that. And then maybe staying on development a bit, it seems that, you know, the million square foot plus box is where you're seeing the most favorable kind of changes in supply demand dynamics right now in most markets. I'm curious, you know, are you willing to kind of go spec at that, you know, ultra large size range? I know you've done some of that in the past, but generally have been, you know, a little smaller building size, like, if demand stays strong for this, you know, ultra-large box, could you, you know, pivot or, you know, go a bit more larger, ultra-large box when we're doing

more some of these new spec deals? Sure. I mean, we're always looking to maximize the value of our land. We continue to seek out new land investment opportunities, and some of which would involve large format properties, large format buildings. It's part of the game plan. As you know, we do own some sites in SoCal that could accommodate very, very large format buildings. And we continue to evaluate those in light of the economic realities and leasing realities of that market.

Great. Thank you. And the next question comes from Vikram Malhotra with Mizuho. Please go ahead.

Good morning. Thanks for the question. I guess this first one to clarify, you're ahead on your development lease up. You've got good rent growth, rent spreads like you cited, and good visibility. So I'm wondering two things that you can maybe be more specific. One, why not move up the occupancy guide specifically? What's the offset to not moving that up given the leasing? And then Can you be more granular on, like, why the guide didn't go up? Because even what you described, it would still suggest you should be trending at least one or two cents higher.

Hey, Vikram, this is Scott. And so the answer is, yes, we did pick up a little bit of FFO due to the 400,000 square feet of development leasing we announced. That was offset by two items. One had to do with the projected land sale that we have in our guidance. That's a leased parcel, so when we sell that land parcel, we lose the NOI, and we're paying down the line of credit, so there's a little bit of dilution there. And then the other item has to do with just our normal process of going through our lease availabilities and our leasing assumptions on a quarterly basis when we update guidance. We made assumptions to some of those. We did not make changes, though, to the 1.3 million square feet of development and the 708,000 square feet that we have in our guidance. So it was more some changes and some core lease. So those are the pieces.

But just to clarify, the occupancy piece, I don't think that land sale would impact that, right? Like what offset the occupancy? Is it just you've assumed lower renewal?

We made some slight adjustments to some core lease-up assumptions as well, and also keep in mind that, you know, occupancy, we provide a range to it, and we're comfortable with that occupancy range.

Got it. Okay. And then, just maybe stepping back, you know, you announced the buyback, you're doing these property tours, you know, there's a change in sort of the board as well. So, you know, I'm just trying to understand, like, can you walk through kind of each of these actions? Like, what are you sort of aiming for? There's obviously in the background, you know, the quasi, I guess, activist that's pushing, you know, and I'm just trying to understand, like, all these different actions, like, are they related? Are they independent? What are driving those three things?

A lot of topics in one question. Okay, so the whole topic around the new director, as you may know, we unexpectedly lost a director last year who passed away. Again, unexpectedly at that point, we determined it would be prudent to go ahead and start a process for a new one. That process was extended on two occasions. First, to consider the candidacy of the L&B nominee, past nominee, and then again to consider the candidacy of the two individuals that the L&B nominee suggested we talk to. So that whole process was well underway long before those conversations began. With respect to the share buyback, look, we took a look at what happened to our stock in certain periods, okay, such as COVID, such as when Amazon announced they were pulling back in April of 22, the tariffs impact on the shares, less so the war in the Middle East. And when you look at those time periods, you see significant fall off in share price when the fundamentals and long-term prospects for our shares did not. And those are times that will continue to happen with the volatility that we have experienced and will continue to experience. And so it just simply makes sense to be in the market supporting the long-term value of our shares during those time periods. That, again, is a conversation that we have had with the board for a long time. I've now forgotten the rest of your questions.

Just the property tours.

Property tours. I would say, look, yeah, we want to do whatever we can to get the word out on not only the transformation that we have completed, but also what's going on right now in some of our markets. We want you guys to be able to get to know our market leaders. It just makes sense to take the opportunity to enhance shareholder engagement.

Great. Thank you. And the next question comes from Brendan Lynch with Barclays. Please go ahead.

Great. Thank you for taking my question. You mentioned waning concessions contributed to the strong cash NOI growth in the quarter. Can you provide some more additional color on the current trends that you're seeing with concessions and what we should expect going forward?

Yeah, Brendan, it's Peter. Generally speaking, we're seeing rent concessions at half of one month to one month of rent per year of term. And I would say that's drifted upward a little bit, which is more of a market-by-market and, in some cases, asset-by-asset. and that's on new leases. TIs have been roughly the same, just depends upon the specific

requirements of the tenant. And renewals have been pretty steady, still very low renewals and TIs

involved in renewals. Okay, great, thanks. And another question, we've seen a lot of discussion recently about how brokers are going to be disintermediated by AI, or at least the broker fees are going to be pressured lower. What is your view on how that cost dynamic will evolve for First Industrial and for the industry in general going forward?

Do you have a view on that, Jojo?

Yes. We don't see material impact right now on AI in terms of brokerage services. Again, when we hire brokers, we feel we hire the best. They bring value to the table in terms of our leasing efforts. We've seen, you know, more, you know, very quick flow, efficient flow of information back and forth in the industry, but the brokers play a key role in the industrial

leasing business. Yeah, AI is going to provide a lot of data. Maybe these transactions happen more quickly for that reason, but intermediaries do bring value, and those negotiations, it always helps to have some distance. And we don't see the value of that community lessening over time

because of AI. Great. Thank you. Again, if you have a question, please press star and then one. Our next question comes from Michael Mueller with JP Morgan. Please go ahead.

Yeah. Hi. I guess first, are the light assembly data center users that you've referenced, are they generally shorter-term leasers, takers of space, or are you seeing long-term leases there? And, you know, I guess at the completion of the data center, are they expected to kind of stick around, or just that's the end of the lease and they go away and space goes to a different type of user?

Sure. Let me give you some color there, Michael. The light assembly, usually they're midterm to longer term leases because the assembly of the equipment, it depends on how much data center development a particular tenant is fulfilling. And if you have a multi-phase, for example, development going on that the tenant, our tenant, is fulfilling, that would take anywhere from a couple years to long term, as much as 10 years. So it really depends on what they're fulfilling. It also depends on how many regions that particular prospect will be serving. As you know, data center development and data center buildings take longer time than industrial buildings. So that's another piece of color there. But yeah, so in terms of data center development, we cannot predict. You know as much as we do, if you look at the industry news and how much the hyperscalers There's one we'll put out in the marketplace, and that's pretty – it seems like pretty long-term, pretty huge dollars.

And just a quick second one. Are there any notable disposition expectations beyond the Phoenix sale that's expected to close this year or just are expected to be nominal?

No, there's really nothing else in the hopper that looks like that.

Okay. This concludes our question and answer session. I would like to turn the conference back over to Peter Basile for any closing remarks.

Thank you, Operator, and thanks to everyone for participating on our call today. If you have any follow-ups from our call, please reach out to Art, Scott, or me, and have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.