New Standards Enhance Comparability Among Industrial REITs

Industrial REITs Collaborate for Improved Metrics

Today, a significant coalition of industrial real estate investment trusts (REITs) has come together to announce updated standards for calculating key non-GAAP property metrics. This initiative involves prominent companies such as First Industrial Realty Trust, Inc. (NYSE: FR), EastGroup Properties, Inc., Prologis, Inc., and STAG Industrial, Inc., collectively referred to as the 'Industrial REIT Group'. The goal is to enhance comparability across the sector.

Focus on Standardized Non-GAAP Metrics

This coalition builds upon a harmonization initiative from 2018. The Industrial REIT Group has reaffirmed its approach to essential property metrics including stabilization, occupancy rates, rent changes, and customer retention metrics. Notably, the annual same-store portfolio will continue to focus on properties that have been stabilized in both the current and prior reporting periods. This helps ensure that projections and strategies are based on solid data.

Criteria for Inclusion and Exclusion

To maintain precision in reporting, properties that are undergoing value-added transformations or redevelopment will be excluded from the same-store portfolio. This allows investors and analysts to make more informed evaluations based on consistent data.

Alignment Among All Participants

Each member of the Industrial REIT Group will adhere to these standardized methodologies when they disclose their non-GAAP financial metrics. These methodologies have already been integrated into First Industrial's 2025 guidance. Importantly, they are not anticipated to cause substantial changes to First Industrial's non-GAAP metrics for any periods prior to 2025.

Enhancing Consistency Across the Sector

While there may still be minor variations in the calculation techniques or terminology used by different REITs, the overarching aim is to foster transparency and consistency throughout the industrial real estate sector. Such efforts are crucial as they help streamline the data available to investors and analysts, leading to better-informed investment decisions.

About First Industrial Realty Trust, Inc.

First Industrial Realty Trust, Inc. (NYSE: FR) stands as a premier U.S.-only owner, operator, developer, and acquirer of logistics properties. With a fully integrated operating and investment platform, First Industrial provides exceptional facilities and superior customer service that are essential for the logistical needs of multinational and regional firms. Their focus is on investing in 15 strategically important metropolitan statistical areas (MSAs) that are known for being supply-constrained and coastal-oriented markets.

As of the end of a recent reporting period, First Industrial boasts a portfolio and ongoing developments encompassing approximately 69.5 million square feet of industrial space, a testament to their commitment to growth and efficiency in the logistics sector.

Frequently Asked Questions

What are the changes in metrics announced by the Industrial REIT Group?

The Industrial REIT Group has updated methodologies for property stabilization, occupancy, rent changes, and retention to enhance comparability in the sector.

Which companies are involved in this initiative?

The coalition includes First Industrial Realty Trust, EastGroup Properties, Prologis, and STAG Industrial.

When will these standardized methodologies begin to impact reporting?

These methodologies are included in First Industrial’s 2025 guidance but are not expected to affect metrics for periods before 2025.

How does this initiative benefit investors?

This standardization allows investors to compare data more effectively across the industrial REIT sector, contributing to better-informed investment choices.

Why are value-added and redevelopment properties excluded from the metrics?

Excluding these properties ensures that metrics reflect stable and comparable performance, allowing for a clearer analysis of operational performance.

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