Operator We will follow up with the question from Nicholas Yulico from Scotiabank. Nicholas, please go ahead. Greg McGinniss This is Greg McGinniss on with Nick. So, good morning, everyone. Just looking at the FFO per share guidance, which was raised $0.04 at the midpoint with the $0.02 from Camelback, $0.01 from capitalized interest, potentially from $0.01 from a more bad debt expense assumption embedded in the same-store growth guidance. So given that combined $0.04 impact and what appears to be very healthy leasing. Was year-to-date leasing in line with the original expectations for the year? Or should we really looking more towards the top end of the guidance range now for the year?Scott Musil Yes. So let me just correct you on things about the $0.04 increase.
$0.02 per share was primarily due to early development leasing First Park Miami 10 on firstly high as examples, $0.02 per share was the increase in FFO from the joint ventures, primarily due to the leases. You’re absolutely correct that our capitalized interest was increased to $0.01 that was offset by an increase in interest rates we’re assuming for the remaining three quarters in our line of credit, so that got netted against it. But what I would say is, if you look at our guidance now compared to what it was in the fourth quarter, the only change we made was an increase sides FFO guidance was the increase in the same-store by 25 basis points, and that has to do with the better increases on cash runner rates due to new and renewal leasing.
One other point we want to make also, if you remember on the fourth quarter call this relates to our midpoint to $2.38. Our fourth quarter call, we mentioned we were being negatively impacted by real estate taxes in regions in Denver, it’s about $0.02 per share. The values in that market up. We’re going to collect there was increases in the following fiscal year. So if you were to take out that negative impact, our FFO midpoint would be $2.40 per share.Greg McGinniss Right. Okay. I appreciate the color there. And I guess just following up on the millions of bad debts. Is that no longer assumed within same-store growth? I guess what changed there? And if you should touch on following some movement in the top tenant disclosure this quarter, how are you viewing the credit quality of tenants today?
And what is your tenant watch list look like?Scott Musil Sure. So bad debt expense for the quarter was $100,000 compared to $250,000 what we assumed in original guidance for the quarter. Quarters 2, 3 and 4Q are $250,000 per quarter, which is unchanged compared to our fourth quarter guidance. I would say, so bad debt expense was very low in the quarter. I would say as far as tenant watch list, nothing material on our watch list, but I will bring up ADESA, which we talked about in the fourth quarter call owned by Carvana. They’ve been having some financial problems, but what we’re seeing on the tenant front from ADESA and the rent timely.Greg McGinniss Okay. Thank you.Operator And our next question is coming from Caitlin Burrows from Goldman Sachs.
Caitlin, please go ahead. Caitlin Burrows So yes, just another follow-up on the guidance shift I know last quarter you guys had talked about the potential $0.08 of upside from early kind of development lease up and you just mentioned in the last quarter, how — it seems like you’ve recognized $0.02 of that. So I’m just wondering for how development on lease-up of new developments, could go forward. Does that mean there’s still another $0.06 of potential? Or is it from a timing perspective since we’re already where we are in the year, is it not quite that amount. Just wondering kind of keep on gating the 12-month lease out, how much potential there still is?Scott Musil Very good question. Caitlin, you’re right. We did pick up $0.02 of that due to our early development leasing that I talked about.
We have another $0.03 per share of opportunity related to early lease-up if we’re able to lease up our developments within the six months. That leaves us with about $0.03 short of what we talked about in the fourth quarter call. So some of the developments that we talked about in the fourth quarter are already inside of that 6-month period. So we’re not including them in our number. Is that — does that answer your question? Okay?Caitlin Burrows Yes, I think it does. Thanks. And then separately, you talked about how demand today seems characteristic of the 2018 and ‘19-time frame, which I agree was a really good time for the industry. So I was just wondering, what do you think is driving that change versus, say, 2021? Is it that company’s warehouse needs have been built out?
Is pricing too high macro uncertainty, delaying more build-out? Just wondering if you have a view on kind of what’s driving the current demand situation.Peter Schultz Caitlin, it’s Peter Schultz. I would go back to what I said a few minutes ago. So the cadence of decision-making smaller and mid-sized tenants continues to be better than larger tenants. Larger tenants had been certainly a large percentage of the net absorption in the last couple of years. So given that the decision-making time frames are taking longer, I think that’s really where we’re seeing a little bit more normalization of demand, as Peter was saying earlier. But the smaller midsized tenants continue to be very active and make decisions quicker.Peter Baccile So the other thing, Caitlin, remember in 2020 leasing was pretty anemic given COVID and the shutdowns and everything.
And one very, very large e-commerce player went at least about 70 million square feet, probably in an effort to outrun and outpace and put down their competition who was weaker that year. In fact, Amazon needs more space than the next 30 most active tenants combined in 2020. So you get to ’21, in the beginning of ’22 and everybody play a catch-up and you had this very, very high strong sense of urgency that it was built out your network and your platform now or maybe you get outcompeted and go out of business. So you had a high sense of urgency and a huge pop in leasing to try to catch up. And I think now as we look forward, we’re getting back to what we more call a normal course of business and normalized demand. And that’s why we refer more to 2018 and ’19.Caitlin Burrows That makes sense.
And then maybe one last one. Just in terms of — you talked about how the market starts the development activities come down some, but given what you have placed in service and started you’ve maintained close to $600 million of in-process construction. So just wondering for First Industrial, I know you had talked about how much opportunity you have and that you could move pretty quickly if you expect to maintain that level or if you think it could come down before coming up again?Peter Baccile That really depends on the continued strong fundamentals of our submarkets in particular. We certainly expect that to continue. Some of our buildings are larger, larger format. And as you’ve heard a couple of times already this morning, the larger tenants who have a very large financial commitment when they take down a building or making those decisions a little bit more slowly, so that will impact the timing of any new starts that we have.
