First Industrial Realty Trust, Inc. (NYSE:FR) Q3 2023 Earnings Call Transcript

Craig Mailman: I’m not trying to make the call a lot longer than it needs to. But just — there’s a lot of focus on market rent growth these days. And it just feels like a lot of the stats being put together by brokers and talked about are kind of asking rents which are — some markets being driven by just new product that’s coming on the market. Versus maybe where taking rates are. And I’m just kind of curious, as you guys go through your market exposure, is there a rosier picture on the taking rate side of things versus the trend in asking rate that you could talk about or?

Peter Baccile: Yes. It’s a complicated subject because market rent growth, that’s tracked differently by a lot of different brokers. Taking rents right now, they report are more like 15%. We don’t quote that. We think the asking rent number is more accurate. Our expectation for rent growth for 2023 was mid- to high-single-digits. That was with asking rents in mind. So far, year-over-year, CBRE reports for the third quarter, that number is 7.5%. So it’s right in the middle of what we expected. So yes, we’re looking more at a 7.5% rental rate increase across the markets that we’re active in. We don’t look at the taking rents are higher because of all taking rents by definition have to include some amount of mark-to-market as opposed to just what’s happened in that quarter or that year. So we don’t pay attention to that.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Peter Baccile for any closing remarks.

Peter Baccile: 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. We hope to connect with many of you in person in the coming months. Be well.

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