Good morning. My name is Holly and I'll be your conference operator today. At this time, we’d like to welcome everyone to the First Industrial Third Quarter Earnings Conference Call. All lines have been muted to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session [Operator Instructions] I’d now like to turn today’s conference over to Art Harmon, Vice President of Investor Relations. Please go ahead, sir.

Thanks Holly. Hello everybody and welcome to our call. Before we discuss our third quarter 2015 results, let me remind everyone that our call may include forward-looking statements as defined by Federal Securities Laws. These are based on Management's expectations, plans and estimation of our prospects. Today's statements may be time sensitive and accurate only as of today's date, October 29, 2015. 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 Bruce Duncan, our President and CEO; as well as Scott Musil, our CFO, after which we will open it up for your questions. Also on the call today are Jojo Yap, our Chief Investment Officer; Peter Schultz, Executive Vice President, David Harker, Executive Vice President; Chris Schneider, Senior Vice President of Operations; and Bob Walter, Senior Vice President of Capital Markets and Asset Management. Let me turn the call over to Bruce.

Thanks Art and thanks to everyone for joining us on our call today. Our team delivered another very good quarter driving our occupancy higher by another 40 basis points to 95.5%. This puts us 50 basis points ahead of our original year and occupancy targets of 95% that we established back at our November 2013 Investor Day. Our team should be proud of their accomplishments and I thank everyone at First Industrial for their contributions. Our third quarter same-store NOI was up a strong 5.9% driven by higher average occupancy, contractual rent bumps, increased rental rates on leasing and an increase in normal course restoration fees. Based on this strong third quarter performance, we increased our full year same-store guidance 50 basis points at the midpoint. Scott will walk you through our guidance changes later. Cash rental rates were up 2.4% marking the seventh consecutive positive quarter for this metric. On a GAAP basis, rental rates were up 11.9% and we have been positive on that basis for 15 consecutive quarters. Demand continues to exceed new supply making it a good time to be an industrial landlord. That demand continues to be broad based across markets, industry and tenant sizes. We’ve been busy on the portfolio management front as we continue our efforts to enhance our portfolio through new investments and targeted dispositions. Development continues to lead the way as we use our platform to deliver higher risk adjusted returns and the high quality buildings that meet tenant needs. We had three new starts in the third quarter; the largest was at First Park 94, our new 309 acre site in the Southeast Wisconsin submarket of Chicago that we acquired for $13.4 million. First Park 94 can accommodate up to 4.6 million square feet of industrial space and our development…

Thanks Bruce. Starting with the overall results for the quarter, funds from operations were $0.35 per fully diluted share compared to $0.32 per share in 3Q 2014. EPS for the quarter was $0.13 versus $0.19 one year ago. As Bruce noted we finish the quarter with occupancy at 95.5%, which was up 40 basis points from the second quarter and up 160 basis points year-over-year. Sales had a four basis point impact in our third quarter occupancy while investments held by five basis points. Regarding leasing volume we commenced approximately 2.4 million square feet of long term leases in the third quarter. Of these 900,000 square feet were new, 1.1 million were renewals and 400,000 were developmental leases. Tenant retention by square footage was 77.7%. Same store NOI growth on a cash basis excluding termination fees and a large one time restoration fee that we recognized in 3Q '14 was 5.9%. Same store growth was primarily the result of higher average occupancy, contractual rent bumps and increase rental rates on leasing as well as an increase in routine restoration fees versus a year ago period. Lease termination fees totaled $76,000 in the quarter in same-store NOI growth including termination fees, but excluding the one-time restoration fee in the year ago quarter was 4.4%. Cash rental rates in the quarter were up 2.4% overall. Breaking it down, renewals increased 8.4% and new leases were down 3.5%. On a GAAP basis, the overall rental rate change was a positive 11.9% with renewals coming in at 19.4% and new leasing at a positive 4.7%. On the capital side, as previously announced we closed a $260 million, seven-year term loan, which we effectively fixed to a current interest rate of 3.39%. We initially have used the proceeds to pay down our line of credit…

Thanks Scott. Before I open it up for questions, let me say that overall business is good, with strong tenant demand, which has continued to exceed new supply. With occupancy at 95.5% and with our other metrics consistent with our peers, we have shown the power of our portfolio, platform and our people. Our balance sheet metrics are also in excellent shape. At our Investor Day in New York on November 12, we look forward to highlighting for you what we've accomplished and more importantly, since there is no future in the past the opportunities we see ahead. We look forward to seeing many of you then. And if you haven't registered or need additional details please reach out to Art Harmon. We'll now open it for your questions. As a courtesy to other callers we ask that you limit your questions to one plus a follow-up in order to give the other participants a chance to get their questions answered. You are of course welcome to get back in the queue. So Holly may be we please open up for questions.

[Operator Instructions] Your first question comes from the line of Craig Mailman with KeyBanc Capital Markets.

Hey, good morning guys. I guess I just want to hit on occupancy here, you guys are 50 basis points ahead of plan and just looking across your markets, you really only have six that are below 95%. Here I am just curious I guess, what do you think peak occupancy for this portfolio can be how much of markets that are below average here have structural issues, just thoughts on that.

Well let me start and I'll throw it over to Peter to talk about a couple of markets in particular, but I’d say that we're very encouraged by what we're seeing. We're really across almost all of our markets we're seeing good demand and our 95.5% occupancy today is very good. Again the mission for us is focus on getting that average occupancy up and that’s what can deliver dollars. But we're encouraged by what we're seeing. We're seeing good demand as I said in the script in terms of all types of tenants and sizes and we're encouraged, but we do have a couple of places where we have to pick it up in terms of and Peter why don’t you talk about what was going in Minneapolis.

Sure Bruce thanks. Craig this is Peter, in Indianapolis we made some incremental progress this quarter up about a 170 Bps on our in-service portfolio. We have one large vacancy that’s a 311,000 square foot space that’s part of a larger multitenant building that we could demise for one or two tenants and that was resulting from our first quarter move out as we touched on last call. And while we've seen some interest there no signed leases to report, but I would say it's not a structural issue and our team there is all over on getting that space leased. So we fully expect occupancy to improve there and that’s a big one because that’s about 10 percentage points of our occupancy in Indi. In Minneapolis, we picked up about 230 Bps quarter-over-quarter and our in-service portfolio and most of our activity has been in the 20,000 to 40,000 square foot range, which includes a deal that we did in our building at Interstate North that's not yet in service. But the large vacancy in Minneapolis as we talked about on our last call is a 221,000 square foot building that have been leased long term that can accommodate one or two tenants and we’re seeing some activity there but more supply in Northwest Minneapolis so still some work to do, but again not a structural issue and we fully expect the occupancy to return to the mid 90s as it has been.

Great, thanks for the color on that and then Bruce maybe just on the Inland Empire acquisition, can you just provide some color may be how far below market those rents are kind of what that 48 stabilizes to? I’m just trying to reconcile a cap rate that will versus you guys cost the capital.

Sure, hi Jojo, why don't you take that.

Yes Craig this Jojo, so the in-flakes might get rents approximately 10% below market and that's just even comparing it to bulk warehouse rent. This building is fully air-conditioned. So right now it's in places of low 30s market for bulk is mid 30 and that’s not accounting any premium for air-conditioning space. So if you assume bulk warehouse rents, we expect to stabilize it in the low 5% yield. If you assume any premium which we expect to do so in air-conditioning we would approach greater than the mid 5%, 5.5% yields or more.

I don’t - Craig if you look at this on a replace cost basis, we think about it's about 15% below replacement cost in air-conditioning too.

And your next question will come from the line of Ki Bin Kim with SunTrust.

Thanks and good morning. Could you talk a little bit about your renewal lease spreads above 19% this quarter. I know the stack can be volatile quarter-to-quarter, but it seems like a pretty positive trend and obviously from an absolute standpoint a big number, is this a mix issue or is there something that’s little bit more longer term in nature?

Well Ki Bin again this number was very strong for the quarter. If you look at on GAAP rent increases, especially when you're coming up and you're renewing a tenant for the first time. The first time you'll have a lot of free rent. The second time you will have less free rent. So that’s driving some of that increase, but again overall very strong number for the quarter.

And we continue to feel pretty good about.

Yes, Ki Bin this is Peter I would simply add that on the strength of that tenants have fewer options right, we’re certainly getting more traction and in many sectors very limited or no surprise. So we continue to feel good about our progress there.

Okay. And in terms of a couple of development projects why Dallas because I know on from very high level, but we do see more potential supplier risk in that market. So why add to that or is just very sub market specific and secondly, what is the timeline for that project to maybe get in line or online.

Craig we got David Harker with us who has overall responsibility for a lot of the market concluding Dallas. So why don't maybe you talk about the sites down there.

Yeah, the amount of the Creek site in Dallas would attract us to a number of things. One it's got great access to I20, it's on the right on the boarder of the GSW and the South Dallas market and if you look at where most of the over building in South Dallas it's on the Eastern side of the South Dallas market, the I45 corridor is the area that’s more over built. So we feel that it’s a very attractive site our base is in it. We pay less than a buck for it. We're very optimistic that it's going to be a good site, but because of the building in South Dallas we’re not recommending we go spec on it. We’re going to hold it for build a suite and we think we've got a very valuable site.

And Jojo, why don't you talk about First…

Yes Bruce. So we're encouraged about the absorption that with significant leasing on the million square foot and up in Inland Empire and robust leasing there, but we're not prepared to announce anything yet and we'll let you know once we announce anything on the site. Again that site can accommodate 1,450,000 square feet crossed out state of the art functionality with trailers and all that and we really like that site and we've got a lot of success there, but we'll let you know once we announce something there.

And that's another site where we've got good base too.

Okay, thank you.

And you next question will comes from the Dave Rogers with Robert W. Baird.

Good morning guys, first a question for you just along the lines of what you just answered but I guess on the development trade or the development that you're working on 74 for what's been placed in service I think that's $6 million for what was placed in service kind of 12 months/ But as you look at what's kind of completed but not in service and under construction, can you kind of give us a range for those and then I guess the other question would be the big difference maybe between projects you just started like First Park 94 and the stuff that you had started a year or two go on embedded land the difference on those returns, I didn’t hear if you mentioned that.

We mentioned it, but let me -- I would I say that if you look at what we have under construction, we probably have between under construction and the stuff that’s just completed. The average yield -- gap yield would be -- first year would be like 7%. So, again we feel those yields are pretty good. We think again our focus continues to be development because we think we get higher risk adjusted returns and that we continue to enhance that portfolio with these developments.

And on First Park 94 like we have said in the prepared remarks we're forecasting a yield of 8% of GAAP yield. Did I answer your question Dave.

It did yeah, that’s was helpful. Thank you. And then I guess maybe just a follow-up on the guidance from Scott and I heard Chris about occupancy earlier and you said kind of returning to higher historical levels for a couple of the markets like Indiana and MSP but I guess with regards to the occupancy guidance for the end of the year, kind of down from where you're now, is that just reiterating guidance is there something in there big I didn’t really hear if you addressed kind of why that number would slip into the end of the year.

Sure Dave this is Scott. We basically tightened our year end occupancy guidance to 94.75% to 95.25%. When we do guidance, we do ranges of 25 basis points. So if you were do the midpoint of the fourth quarter based on that range would be about 95.1% and our goal again is to be 95% or higher in the fourth quarter and that's what we'll continue to push to do.

And I guess just to follow-up on that you typically don't you see some pretty decent seasonal leases in the fourth quarter and we see that kind of move up I guess that's why I am asking the question.

Yes, I would say typically we do have -- the fourth quarter is a good quarter for us, but we have work to do and we'll let you know at the end of the year how we end up, but the fourth typically has been a decent quarter for us.

Okay. Sounds conservative. All right, thanks guys.

And your next question will come from the line of John Guinee with Stifel.

Great. Hey thank you, lot of questions on development excreta. If I look at your land inventory, towards the end of your supplemental how much of that land is in locations where you could start development in the next couple of years and what’s the general below-market above-market valuation on that land?

Jojo

Yes, John if you look at on Page 23 of the supplemental, I think that’s what you're referring to, I would say that the key land sites would be 680 acres and I'll just quickly touch on the locations allowing us to develop about 11.5 million square feet. So just starting off very briefly, first part favorable, that's a very good site in Atlanta can accommodate 1.2 million square feet followed by the land which is essential PA, that’s going to accommodate a build a suite of about 500,000 square feet. Moving down we briefly spoke about their prepared remarks First Park 94, South East Wisconsin, sub market of Chicago that's totaling about 4 million square feet of developable and moving further down, you have First Arlington, First Mountain Creek distribution center that's going to accommodate 1.2 million square feet with David Harker just discussed. You also heard us talk about our positioning in Katie West Side in Houston that could accommodate about 676,000 square feet. We already touched on First Nandina that’s about 1,450,000 square feet and I am just going to finish off with two other land sites that we didn’t talk about on this call or our prepared remarks, which is a land in Nashville that’s a very active build a suite that could accommodate about 1.2 million square feet and Stockton that's going to accommodate 1.2 million square feet. So John if you add all of that, that’s about 11.5 million square feet of building that would fit under your description of could be developable in the immediate future over the next couple of years as really helping us grow our portfolio.

Right and again in the land up in the North of Chicago that for me in square feet, you're not going to do that all ones but over time you'll do that so that will take some years and the other thing is the stock will take a few years with that I wouldn't anticipate that in the next one or two years.

And then is it safe to say that rest is on the market if the price is right?

A number of the sites are key expansion sites for a potential expansion of site, some of them are we're keeping to provide additional functionality and flexibility to our buildings and you're correct it is correct to assume that some of those are in the market for sale.

Great. Thank you.

[Operator Instructions] And your next question will come from the line of Eric Frankel with Green Street Advisors.

Thank you. I have a leverage question so some of the acquisitions -- the acquisitions you closed on the third quarter and which you closed on the fourth quarter I’m sure they have a compelling investment case each one of them, but I was curious that I understand you're crossing your leverage goals and why not the acquisition market is pretty heated and share prices certainly haven’t been screaming lately, why not just de-lever a little bit further and go below six times debt to EBITDA.

Well, Eric this is Scott. We closed the quarter actually at 6.1 times debt to EBITDA. So we're at the low end of our range there and again our goal is to use sales proceeds to basically cover the cost of any acquisitions and investments and also the excess working capital that we have after paying our dividend which is about $45 million this year. Now you might have some slight mismatches between quarters everything doesn’t match up perfectly, but I would say in the long run, our goal is to make sure acquisitions and investments are covered by property sales and again our excess cash flow after paying our common dividends.

Okay and just my next question a follow-up question rather I’m not sure you guys ever talked about the Panama Canal in the past but obviously that's set to open next year, but it doesn’t seem like many East Coast ports can actually accommodate the larger ship that come through. Do you think that's going to impact tenant demand in any shape or form over the couple of years?

Eric its Peter. We're seeing modest to limited impact from the potential of Panama Canal. You're correct, there are only a couple of ports that can accommodate the larger ships now and some of those have garaging projects, but we think from a port diversification strategy a lot of the users and our tenants have already made some of those adjustments. So we’re not really anticipating that much but really some modest incremental demand.

And I would like to -- this is Jojo I would like to just briefly add in that what’s good with the Panama Canal is that it will make everything even more competitive because larger ships lowers the cost of goods being transferred to the U.S. and that’s means the America consumer can buy more because if they choose to spend the same dollar because the cost of goods coming to U.S. is less. The more goods come to U.S. the better it is for the industrial real estate space.

Okay, thank you. Operator And your next question will come from the line of Bill Crow with Raymond James.

Good morning, guys. Bruce one quick question the hotels, no I am kidding, the question I do have is one of your peers talked about some hesitancy on the part of tenants to take our new space to commit to new developments and may be with just a temporary phenomenon that occurred in the last summer. Did you see anything like that and because of the economic environment or anything else that was going on that tenants spot a little bit that new commitments.

No we did not see that. I would say that again typically we have sense of involved in this and this quarter we did -- we picked up 40 basis points in occupancy which is we're very pleased with and we're seeing very good demand so we did not see that.

Okay, that’s it from me. See you in New York. Thanks.

Thank you.

At this we have no further questions. We'll turn the conference call back over to Mr. Duncan for closing remarks.

Great. Well we appreciate very much your interest in First Industrial and I remind you that the November 12 Investor Day we hope we'll see you then and if you have any questions about that call Art and put it on your calendar because we look forward to that and we'll see you NAREIT in Las Vegas. Any questions from today’s call or the report, please call Art, Scott or myself. We look forward to it. Thank you, bye.

Once again, we would like to thank you for dialing in for today’s First Industrial third quarter earnings conference call. You may now disconnect.