First Industrial Realty Trust
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$7.91 B
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First Industrial Realty Trust - 10-K annual report


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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-K
 
   
þ
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 2006
or
o
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the transition period from          to          
 
Commission File Number 1-13102
 
FIRST INDUSTRIAL REALTY TRUST, INC.
(Exact name of Registrant as specified in its Charter)
 
   
Maryland 36-3935116
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
   
   
311 S. Wacker Drive,
Suite 4000, Chicago, Illinois
(Address of principal executive offices)
 60606
(Zip Code)
 
(312) 344-4300
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Common Stock
(Title of class)
 
New York Stock Exchange
(Name of exchange on which registered)
 
Depositary Shares Each Representing 1/100 of a Share of 8.625% Series C Cumulative Preferred Stock
Depositary Shares Each Representing 1/10,000 of a Share of 7.25% Series J Cumulative Preferred Stock
Depositary Shares Each Representing 1/10,000 of a Share of 7.25% Series K Cumulative Preferred Stock
(Title of class)
 
New York Stock Exchange
(Name of exchange on which registered)
 
Securities registered pursuant to Section 12(g) of the Act:
None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o
 
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes o     No þ
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-Kis not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-Kor any amendment to thisForm 10-K.  þ
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” inRule 12b-2of the Exchange Act. (Check one):
Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o
 
Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2of the Exchange Act).  Yes o     No þ
 
The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant was approximately $1,648.6 million based on the closing price on the New York Stock Exchange for such stock on June 30, 2006.
 
At February 22, 2007, 44,919,636 shares of the Registrant’s Common Stock, $0.01 par value, were outstanding.
 
DOCUMENTS INCORPORATED BY REFERENCE
 
Part III incorporates certain information by reference to the Registrant’s definitive proxy statement expected to be filed with the Securities and Exchange Commission no later than 120 days after the end of the Registrant’s fiscal year.
 


 

 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
TABLE OF CONTENTS
 
       
    Page
 
 Business 3
 Risk Factors 8
 Unresolved SEC Comments 14
 Properties 15
 Legal Proceedings 21
 Submission of Matters to a Vote of Security Holders 21
 
 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22
 Selected Financial Data 25
 Management’s Discussion and Analysis of Financial Condition and Results of Operations 26
 Quantitative and Qualitative Disclosures About Market Risk 43
 Financial Statements and Supplementary Data 43
 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 43
 Controls and Procedures 43
 Other Information 44
 
 Directors, Executive Officers and Corporate Governance 44
Item 11.
 Executive Compensation 44
Item 12.
 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 44
Item 13.
 Certain Relationships and Related Transactions and Director Independence 44
Item 14.
 Principal Accountant Fees and Services 44
 
 Exhibits and Financial Statement Schedules 44
 S-1
 Computation of Ratios of Earnings to Fixed Charges
 Subsidiaries of the Registrant
 Consent of PricewaterhouseCoopers LLP
 Certification of Principal Executive Officer
 Certification of Principal Financial Officer
 Section 906 Certifications
 
This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. First Industrial Realty Trust, Inc. (the “Company”) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Company on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rate levels, competition, supply and demand for industrial properties in the Company’s current and proposed market areas, potential environmental liabilities, slippage in development orlease-upschedules, tenant credit risks,higher-than-expectedcosts and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included herein in Item 1A, “Risk Factors” and in the Company’s other filings with the Securities and Exchange Commission.


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PART I
 
THE COMPANY
 
Item 1.  Business
 
General
 
First Industrial Realty Trust, Inc. is a Maryland corporation organized on August 10, 1993, and is a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). First Industrial Realty Trust, Inc., (together with its consolidated subsidiaries, the “Company”) is a self-administered and fully integrated real estate company which owns, manages, acquires, sells, develops, and redevelops industrial real estate. The Company completed its initial public offering in June 1994 (the “Initial Offering”). Upon consummation of the Initial Offering, the Company owned 226 industrial properties which contained an aggregate of 17.4 million square feet of gross leasable area (“GLA”). As of December 31, 2006, the Company’s in-service portfolio consisted of 416 light industrial properties, 147 R&D/flex properties, 173 bulk warehouse properties, 98 regional warehouse properties and 24 manufacturing properties containing approximately 68.6 million square feet of GLA located in 28 states in the United States and one province in Canada. The Company’s in-service portfolio includes all properties other than developed, redeveloped and acquired properties that have not yet reached stabilized occupancy (generally defined as properties that are 90% leased).
 
The Company’s interests in its properties and land parcels are held through (i) partnerships controlled by the Company, including First Industrial, L.P. (the “Operating Partnership”), of which the Company is the sole general partner, as well as, among others, First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P., First Industrial Mortgage Partnership, L.P., First Industrial Pennsylvania, L.P., First Industrial Harrisburg, L.P., First Industrial Indianapolis, L.P., FI Development Services, L.P. and TK-SV, LTD., as to each of which the sole general partner is a wholly-owned subsidiary of the Company (except in the case of the Financing Partnership in which case the Operating Partnership is also the general partner) and the sole limited partner is the Operating Partnership; (ii) limited liability companies, of which the Operating Partnership is the sole member; and (iii) First Industrial Investment, Inc., of which the Operating Partnership is the sole stockholder, and wholly owned limited liability companies of First Industrial Investment, Inc., all of whose operating data is consolidated with that of the Company as presented herein. The Company, through separate wholly-owned limited liability companies of which the Operating Partnership or First Industrial Investment, Inc. is the sole member, also owns minority equity interests in, and provides various services to, six joint ventures which invest in industrial properties (the “September 1998 Joint Venture,” the “May 2003 Joint Venture,” the “March 2005 Joint Venture,” the “September 2005 Joint Venture,” the “March 2006 Co-Investment Program” and the “July 2006 Joint Venture”). The Company, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in and provided property management services to a seventh joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture, the September 2005 Joint Venture, the March 2006 Co-Investment Program and the July 2006 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. On January 31, 2007, the Company purchased the 90% equity interest from the institutional investor in the September 1998 Joint Venture. The operating data of the Joint Ventures is not consolidated with that of the Company as presented herein.
 
The Company utilizes an operating approach which combines the effectiveness of decentralized, locally-based property management, acquisition, sales and development functions with the cost efficiencies of centralized acquisition, sales and development support, capital markets expertise, asset management and fiscal control systems. At February 22, 2007, the Company had approximately 500 employees.
 
The Company has grown and will seek to continue to grow through the development and acquisition of additional industrial properties, through additional joint venture investments, and through its corporate services program.


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The Company maintains a website at www.firstindustrial.com. Copies of the Company’s annual report onForm 10-K,quarterly reports onForm 10-Q,current reports onForm 8-Kand amendments to such reports are available without charge on the Company’s website as soon as reasonably practicable after such reports are filed with or furnished to the Securities and Exchange Commission (the “SEC”). In addition, the Company’s Corporate Governance Guidelines, Code of Business Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter, Nominating/Corporate Governance Committee Charter, along with supplemental financial and operating information prepared by the Company, are all available without charge on the Company’s website or upon request to the Company. Amendments to, or waivers from, the Company’s Code of Business Conduct and Ethics that apply to the Company’s executive officers or directors will be posted to the Company’s website at www.firstindustrial.com. Please direct requests as follows:
 
First Industrial Realty Trust, Inc.
311 S. Wacker, Suite 4000
Chicago, IL 60606
 
Business Objectives and Growth Plans
 
The Company’s fundamental business objective is to maximize the total return to its stockholders through increases in per share distributions and increases in the value of the Company’s properties and operations. The Company’s growth plans include the following elements:
 
  • Internal Growth.  The Company seeks to grow internally by (i) increasing revenues by renewing or re-leasing spaces subject to expiring leases at higher rental levels; (ii) increasing occupancy levels at properties where vacancy exists and maintaining occupancy elsewhere; (iii) controlling and minimizing property operating and general and administrative expenses; (iv) renovating existing properties; and (v) increasing ancillary revenues from non-real estate sources.
 
  • External Growth.  The Company seeks to grow externally through (i) the development of industrial properties; (ii) the acquisition of portfolios of industrial properties, industrial property businesses or individual properties which meet the Company’s investment parameters and target markets; (iii) additional joint venture investments; and (iv) the expansion of its properties.
 
  • Corporate Services.  Through its corporate services program, the Company builds for, purchases from, and leases and sells industrial properties to companies that need industrial facilities. The Company seeks to grow this business by targeting both large and middle-market public and private companies.
 
Business Strategies
 
The Company utilizes the following six strategies in connection with the operation of its business:
 
  • Organization Strategy.  The Company implements its decentralized property operations strategy through the deployment of experienced regional management teams and local property managers. Each operating region is headed by a managing director who is a senior executive officer of, and has an equity interest in, the Company. The Company provides acquisition, development and financing assistance, asset management oversight and financial reporting functions from its headquarters in Chicago, Illinois to support its regional operations. The Company believes the size of its portfolio enables it to realize operating efficiencies by spreading overhead among many properties and by negotiating purchasing discounts.
 
  • Market Strategy.  The Company’s market strategy is to concentrate on the top industrial real estate markets in the United States. These top markets have one or more of the following characteristics: (i) strong industrial real estate fundamentals, including increased industrial demand expectations; (ii) a history of and outlook for continued economic growth and industry diversity; and (iii) a minimum market size of 75 million square feet of industrial space. The Company is currently evaluating industrial real estate investments outside the United States, including in Canada.


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  • Leasing and Marketing Strategy.  The Company has an operational management strategy designed to enhance tenant satisfaction and portfolio performance. The Company pursues an active leasing strategy, which includes broadly marketing available space, seeking to renew existing leases at higher rents per square foot and seeking leases which provide for the pass-through of property-related expenses to the tenant. The Company also has local and national marketing programs which focus on the business and real estate brokerage communities and national tenants.
 
  • Acquisition/Development Strategy.  The Company’s acquisition/development strategy is to invest in properties and other assets with higher yield potential in the top industrial real estate markets in the United States. Of the 858 industrial properties in the Company’s in-service portfolio at December 31, 2006, 128 properties have been developed by the Company or its former management. The Company will continue to leverage the development capabilities of its management, many of whom are leading industrial property developers in their respective markets.
 
  • Disposition Strategy.  The Company continuously evaluates local market conditions and property-related factors in all of its markets for purposes of identifying assets suitable for disposition.
 
  • Financing Strategy.  The Company plans on utilizing a portion of net sales proceeds from property sales, borrowings under its unsecured line of credit and proceeds from the issuance, when and as warranted, of additional debt and equity securities to finance future acquisitions and developments. The Company also continually evaluates joint venture arrangements as another source of capital. As of February 22, 2007, the Company had approximately $210.6 million available in additional borrowings under its unsecured line of credit.
 
Recent Developments
 
In 2006, the Company acquired or placed in-service developments totaling 107 industrial properties and acquired several parcels of land for a total investment of approximately $805.5 million. The Company also sold 125 industrial properties and several parcels of land for a gross sales price of approximately $946.8 million. At December 31, 2006, the Company owned 858 in-service industrial properties containing approximately 68.6 million square feet of GLA.
 
During 2006, in conjunction with the acquisition of several industrial properties, the Company assumed mortgages in the aggregate of $34.0 million. During 2006, the Company paid off and retired $10.3 million of mortgage loans payable.
 
On January 10, 2006, the Company, through the Operating Partnership, issued $200.0 million of senior unsecured debt which matures on January 15, 2016 and bears interest at a rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. In December 2005, the Company also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Company settled the interest rate protection agreements on January 9, 2006 for a payment of approximately $1.7 million, which is included in other comprehensive income.
 
In December 2005, the Company, through the Operating Partnership, entered into a non-revolving unsecured line of credit (the “Unsecured Line of Credit II”). The Unsecured Line of Credit II had a borrowing capacity of $125.0 million and matured on March 15, 2006. The Unsecured Line of Credit II provided for interest only payments at LIBOR plus .625% or at Prime, at the Company’s election. On January 10, 2006, the Company, through the Operating Partnership, paid off and retired the Unsecured Line of Credit II.
 
On September 25, 2006, the Company, through the Operating Partnership, issued $175.0 million of senior unsecured debt which bears interest at a rate of 4.625% (the “2011 Exchangeable Notes”). Under certain circumstances, the holders of the 2011 Exchangeable Notes may exchange their notes for cash up to their principal amount and shares of the Company’s common stock for the remainder of the exchange value in excess of the principal amount. The Company also granted the initial purchasers of the 2011 Exchangeable Notes an option exercisable until October 4, 2006 to purchase up to an additional $25.0 million principal amount of the 2011 Exchangeable Notes to cover over-allotments, if any (the “Over-Allotment Option”). On October 3, 2006, the initial purchasers of the 2011 Exchangeable Notes exercised their Over-Allotment Option


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with respect to $25.0 million in principal amount of the 2011 Exchangeable Notes. With the exercise of the Over-Allotment Option, the aggregate principal amount of 2011 Exchangeable Notes issued and outstanding is $200.0 million. In connection with the offering of the Exchangeable Notes, the Operating Partnership entered into capped call transactions in order to increase the effective exchange price. The aggregate cost of the capped call transactions was approximately $6.8 million.
 
On December 1, 2006, the Company paid off and retired its 7.0% 2006 Unsecured Notes in the amount of $150.0 million.
 
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Shares, respectively, of $0.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187.5 million. The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $0.4 million. In accordance with EITF D-42, due to the redemption of the Series I Preferred Stock, the difference between the redemption cost and the carrying value of the Series I Preferred Stock of approximately $0.7 million is reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2006.
 
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $0.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share.
 
On August 21, 2006, the Company issued 2,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $0.01 par value, Series K Flexible Cumulative Redeemable Preferred Stock (the “Series K Preferred Stock”), at an initial offering price of $25.00 per Depositary Share.
 
On March 21, 2006, the Company, through separate wholly-owned limited liability companies of which the Operating Partnership is the sole member, entered into a co-investment arrangement with an institutional investor to invest in industrial properties (the “March 2006 Co-Investment Program”). The Company, through separate wholly-owned limited liability companies of which the Operating Partnership or First Industrial Investment, Inc. is the sole member, owns a 15% equity interest in and provides property management, leasing, disposition and portfolio management services to the March 2006 Co-Investment Program.
 
On July 21, 2006, the Company, through a wholly-owned limited liability company of First Industrial Investment, Inc. entered into a joint venture arrangement with an institutional investor to invest in land and vertical development (the “July 2006 Joint Venture”). The Company, through wholly-owned limited liability companies in which First Industrial Investment, Inc. is the sole member, owns a 10% equity interest in and provides property management, leasing, development, disposition and portfolio management services to the July 2006 Joint Venture.
 
From January 1, 2007 to February 22, 2007, the Company acquired 55 industrial properties (including 41 properties in connection with the purchase of the 90% equity interest from the institutional investor in the September 1998 Joint Venture on January 31, 2007) and several land parcels for a total estimated investment of approximately $135.9 million. The Company also sold 14 industrial properties for approximately $74.4 million of gross proceeds during this period.
 
On February 28, 2007, the Company declared a first quarter 2007 distribution of $.710 per common share/unit on its common stock/units which is payable on April 16, 2007. The Company also declared a first quarter 2007 dividend of $53.91 per share ($0.5391 per Depositary Share), on its Series C Preferred Stock, totaling, in the aggregate, approximately $1.1 million, which is payable on April 2, 2007; a semi-annual dividend of $3,118.00 per share ($31.1800 per Depositary Share) on its Series F Preferred Stock, totaling, in the aggregate, approximately $1.6 million, which is payable on April 2, 2007; a semi-annual dividend of $3,618.00 per share ($36.1800 per Depositary Share) on its Series G Preferred Stock, totaling, in the aggregate, approximately $0.9 million, which is payable on April 2, 2007; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate approximately $2.7 million, which is payable on April 2, 2007 and a dividend of $4,531.30 per share ($0.4531 per Depositary


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Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $0.9 million, which is payable on April 2, 2007.
 
Future Property Acquisitions, Developments and Property Sales
 
The Company has an active acquisition and development program through which it is continually engaged in identifying, negotiating and consummating portfolio and individual industrial property acquisitions and developments. As a result, the Company is currently engaged in negotiations relating to the possible acquisition and development of certain industrial properties.
 
The Company also sells properties based on market conditions and property related factors. As a result, the Company is currently engaged in negotiations relating to the possible sale of certain industrial properties in the Company’s portfolio.
 
When evaluating potential industrial property acquisitions and developments, as well as potential industrial property sales, the Company will consider such factors as: (i) the geographic area and type of property; (ii) the location, construction quality, condition and design of the property; (iii) the potential for capital appreciation of the property; (iv) the ability of the Company to improve the property’s performance through renovation; (v) the terms of tenant leases, including the potential for rent increases; (vi) the potential for economic growth and the tax and regulatory environment of the area in which the property is located; (vii) the potential for expansion of the physical layout of the propertyand/or the number of sites; (viii) the occupancy and demand by tenants for properties of a similar type in the vicinity; and (ix) competition from existing properties and the potential for the construction of new properties in the area.
 
INDUSTRY
 
Industrial properties are typically used for the design, assembly, packaging, storage and distribution of goodsand/or the provision of services. As a result, the demand for industrial space in the United States is related to the level of economic output. Historically, occupancy rates for industrial property in the United States have been higher than those for other types of commercial property. The Company believes that the higher occupancy rate in the industrial property sector is a result of theconstruction-on-demandnature of, and the comparatively short development time required for, industrial property. For the five years ended December 31, 2006, the occupancy rates for industrial properties in the United States have ranged from 88.1%* to 90.6%*, with an occupancy rate of 90.6%* at December 31, 2006.
 
 
* Source: Torto Wheaton Research


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Item 1A.  Risk Factors
 
Risk Factors
 
The Company’s operations involve various risks that could adversely affect its financial condition, results of operations, cash flow, ability to pay distributions on its common stock and the market price of its common stock. These risks, among others contained in the Company’s other filings with the SEC, include:
 
Real estate investments’ value fluctuates depending on conditions in the general economy and the real estate business. These conditions may limit the Company’s revenues and available cash.
 
The factors that affect the value of the Company’s real estate and the revenues the Company derives from its properties include, among other things:
 
  • general economic conditions;
 
  • local conditions such as oversupply or a reduction in demand in an area;
 
  • the attractiveness of the properties to tenants;
 
  • tenant defaults;
 
  • zoning or other regulatory restrictions;
 
  • competition from other available real estate;
 
  • our ability to provide adequate maintenance and insurance; and
 
  • increased operating costs, including insurance premiums and real estate taxes.
 
Many real estate costs are fixed, even if income from properties decreases.
 
The Company’s financial results depend on leasing space to tenants on terms favorable to the Company. The Company’s income and funds available for distribution to its stockholders will decrease if a significant number of the Company’s tenants cannot pay their rent or the Company is unable to lease properties on favorable terms. In addition, if a tenant does not pay its rent, the Company may not be able to enforce its rights as landlord without delays and the Company may incur substantial legal costs. Costs associated with real estate investment, such as real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the investment. For the year ended December 31, 2006, approximately 69.4% of the Company’s gross revenues from continuing operations came from rentals of real property.
 
The Company may be unable to sell properties when appropriate because real estate investments are not as liquid as certain other types of assets.
 
Real estate investments generally cannot be sold quickly and, therefore, will tend to limit the Company’s ability to adjust its property portfolio promptly in response to changes in economic or other conditions. The inability to respond promptly to changes in the performance of the Company’s property portfolio could adversely affect the Company’s financial condition and ability to service debt and make distributions to its stockholders. In addition, like other companies qualifying as REITs under the Internal Revenue Code, the Company must comply with the safe harbor rules relating to the number of properties disposed of in a year, their tax basis and the cost of improvements made to the properties, or meet other tests which enable a REIT to avoid punitive taxation on the sale of assets. Thus, the Company’s ability at any time to sell assets may be restricted.
 
The Company may be unable to sell properties on advantageous terms.
 
The Company has sold to third parties a significant number of properties in recent years and, as part of its business, the Company intends to continue to sell properties to third parties. The Company’s ability to sell properties on advantageous terms depends on factors beyond the Company’s control, including competition from other sellers and the availability of attractive financing for potential buyers of the Company’s properties. If the Company is unable to sell properties on favorable terms or redeploy the proceeds of property sales in


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accordance with the Company’s business strategy, then the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock could be adversely affected.
 
The Company has also sold to its joint ventures a significant number of properties in recent years and, as part of its business, the Company intends to continue to sell properties to its joint ventures as opportunities arise. If the Company does not have sufficient properties available that meet the investment criteria of current or future joint ventures, or if the joint ventures have reduced or do not have access to capital on favorable terms, then such sales could be delayed or prevented, adversely affecting the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock.
 
The Company may be unable to acquire properties on advantageous terms or acquisitions may not perform as the Company expects.
 
The Company acquires and intends to continue to acquire primarily industrial properties. The acquisition of properties entails various risks, including the risks that the Company’s investments may not perform as expected and that the Company’s cost estimates for bringing an acquired property up to market standards may prove inaccurate. Further, the Company faces significant competition for attractive investment opportunities from other well-capitalized real estate investors, including both publicly-traded REITs and private investors. This competition increases as investments in real estate become attractive relative to other forms of investment. As a result of competition, the Company may be unable to acquire additional properties as it desires or the purchase price may be elevated. In addition, the Company expects to finance future acquisitions through a combination of borrowings under its revolving line of credit (“Unsecured Line of Credit I”), proceeds from equity or debt offerings by the Company and proceeds from property sales, which may not be available and which could adversely affect the Company’s cash flow. Any of the above risks could adversely affect the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market value of, the Company’s common stock.
 
The Company may be unable to complete development and re-development projects on advantageous terms.
 
As part of its business, the Company develops new and re-develops existing properties. In addition, the Company has sold to third parties or sold to the Company’s joint ventures a significant number of development and re-development properties in recent years, and the Company intends to continue to sell such properties to third parties or to sell such properties to the Company’s joint ventures as opportunities arise. The real estate development and re-development business involves significant risks that could adversely affect the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of the Company’s common stock, which include:
 
  • the Company may not be able to obtain financing for development projects on favorable terms and complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties and generating cash flow;
 
  • the Company may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations;
 
  • the properties may perform below anticipated levels, producing cash flow below budgeted amounts and limiting the Company’s ability to sell such properties to third parties or to sell such properties to the Company’s joint ventures.
 
The Company may be unable to renew leases or find other lessees.
 
The Company is subject to the risks that, upon expiration, leases may not be renewed, the space subject to such leases may not be relet or the terms of renewal or reletting, including the cost of required renovations, may be less favorable than expiring lease terms. If the Company were unable to promptly renew a significant


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number of expiring leases or to promptly relet the space covered by such leases, or if the rental rates upon renewal or reletting were significantly lower than the current rates, the Company’s cash, funds from operations, and ability to make expected distributions to stockholders might be adversely affected. As of December 31, 2006, leases with respect to approximately 12.6 million, 12.3 million and 10.0 million square feet of GLA, representing 20%, 19% and 16% of GLA, expire in the remainder of 2007, 2008 and 2009, respectively.
 
The Company might fail to qualify or remain qualified as a REIT.
 
The Company intends to operate so as to qualify as a REIT under the Code. Although the Company believes that it is organized and will operate in a manner so as to qualify as a REIT, qualification as a REIT involves the satisfaction of numerous requirements, some of which must be met on a recurring basis. These requirements are established under highly technical and complex Code provisions of which there are only limited judicial or administrative interpretations and involve the determination of various factual matters and circumstances not entirely within the Company’s control.
 
The Company (through one of its subsidiary partnerships) entered into certain development agreements in 2000 through 2003, the performance of which has been completed. Under these agreements, the Company provided services to unrelated third parties and certain payments were made by the unrelated third parties for services provided by certain contractors hired by the Company. The Company believes that these payments were properly characterized by it as reimbursements for costs incurred by it on behalf of the third parties and do not constitute gross income and did not prevent the Company from satisfying the gross income requirements of the REIT provisions (the “gross income tests”). The Company has brought this matter to the attention of the Internal Revenue Service (the “IRS”). The IRS has not challenged or expressed any interest in challenging the Company’s view on this matter.
 
Employees of the Operating Partnership, a subsidiary partnership of the Company (the “Service Employees”), have been providing certain acquisition and disposition services since 2004 and certain leasing and property management services since 1997 to one of the Company’s taxable REIT subsidiaries (the “TRS”), and have also been providing certain of these services (or similar services) to joint ventures in which First Industrial, L.P. owns a minority interest or to unrelated parties. In determining whether it satisfied the gross income tests for certain years, the Company has taken and intends to take the position that the costs of the Service Employees should be shared between First Industrial, L.P. and the TRS and that no fee income should be imputed to the Company as a result of such arrangement. However, because certain of these services (or similar services) have also been performed for the joint ventures or unrelated parties described above, there can be no assurance that the IRS will not successfully challenge this position. First Industrial, L.P. has taken and intends to continue to take appropriate steps to address this issue going forward, but there can be no assurance that any such steps will adequately resolve this issue.
 
If the IRS were to challenge either of the positions described in the two preceding paragraphs and were successful, the Company could be found not to have satisfied the gross income tests in one or more of its taxable years. If the Company were found not to have satisfied the gross income tests, it could be subject to a penalty tax. However, such noncompliance should not adversely affect the Company’s status as a REIT as long as such noncompliance was due to reasonable cause and not to willful neglect and certain other requirements were met. The Company believes that, in both situations, any such noncompliance was due to reasonable cause and not willful neglect and that such other requirements were met.
 
If the Company were to fail to qualify as a REIT in any taxable year, it would be subject to federal income tax, including any applicable alternative minimum tax, on its taxable income at corporate rates. This could result in a discontinuation or substantial reduction in dividends to stockholders and in cash to pay interest and principal on debt securities that the Company issues. Unless entitled to relief under certain statutory provisions, the Company would be disqualified from electing treatment as a REIT for the four taxable years following the year during which it failed to qualify as a REIT.


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Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on the gain attributable to the transaction.
 
As part of its business, the Company (through the Operating Partnership) sells properties to third parties or sells properties to the Company’s joint ventures as opportunities arise. Under the Code, a 100% penalty tax could be assessed on the gain resulting from sales of properties that are deemed to be prohibited transactions. The question of what constitutes a prohibited transaction is based on the facts and circumstances surrounding each transaction. The IRS could contend that certain sales of properties by the Company are prohibited transactions. While the Company’s management does not believe that the IRS would prevail in such a dispute, if the matter were successfully argued by the IRS, the 100% penalty tax could be assessed against the profits from these transactions. In addition, any income from a prohibited transaction may adversely affect the Company’s ability to satisfy the income tests for qualification as a REIT.
 
The REIT distribution requirements may require the Company to turn to external financing sources.
 
The Company could, in certain instances, have taxable income without sufficient cash to enable it to meet the distribution requirements of the REIT provisions of the Code. In that situation, the Company could be required to borrow funds or sell properties on adverse terms in order to meet those distribution requirements. In addition, because the Company must distribute to its stockholders at least 90% of the Company’s REIT taxable income each year, the Company’s ability to accumulate capital may be limited. Thus, in connection with future acquisitions, the Company may be more dependent on outside sources of financing, such as debt financing or issuances of additional capital stock, which may or may not be available on favorable terms. Additional debt financings may substantially increase the Company’s leverage and additional equity offerings may result in substantial dilution of stockholders’ interests.
 
Debt financing, the degree of leverage and rising interest rates could reduce the Company’s cash flow.
 
Where possible, the Company intends to continue to use leverage to increase the rate of return on the Company’s investments and to allow the Company to make more investments than it otherwise could. The Company’s use of leverage presents an additional element of risk in the event that the cash flow from the Company’s properties is insufficient to meet both debt payment obligations and the distribution requirements of the REIT provisions of the Code. In addition, rising interest rates would reduce the Company’s cash flow by increasing the amount of interest due on its floating rate debt and on its fixed rate debt as it matures and is refinanced.
 
Cross-collateralization of mortgage loans could result in foreclosure on substantially all of the Company’s properties if the Company is unable to service its indebtedness.
 
If the Operating Partnership decides to obtain additional debt financing in the future, it may do so through mortgages on some or all of its properties. These mortgages may be issued on a recourse, non-recourse or cross-collateralized basis. Cross-collateralization makes all of the subject properties available to the lender in order to satisfy the Company’s debt. Holders of indebtedness that is so secured will have a claim against these properties. To the extent indebtedness is cross-collateralized, lenders may seek to foreclose upon properties that are not the primary collateral for their loan, which may, in turn, result in acceleration of other indebtedness secured by properties. Foreclosure of properties would result in a loss of income and asset value to the Company, making it difficult for it to meet both debt payment obligations and the distribution requirements of the REIT provisions of the Code. As of December 31, 2006, none of the Company’s current indebtedness was cross-collateralized.


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The Company may have to make lump-sum payments on its existing indebtedness.
 
The Company is required to make the following lump-sum or “balloon” payments under the terms of some of its indebtedness, including the Operating Partnership’s:
 
  • $50 million aggregate principal amount of 7.75% Notes due 2032 (the “2032 Notes”)
 
  • $200 million aggregate principal amount of 7.60% Notes due 2028 (the “2028 Notes”)
 
  • approximately $15 million aggregate principal amount of 7.15% Notes due 2027 (the “2027 Notes”)
 
  • $100 million aggregate principal amount of 7.50% Notes due 2017 (the “2017 Notes”)
 
  • $200 million aggregate principal amount of 5.75% Notes due 2016 (the “2016 Notes”)
 
  • $125 million aggregate principal amount of 6.42% Notes due 2014 (the “2014 Notes”)
 
  • $200 million aggregate principal amount of 6.875% Notes due 2012 (the “2012 Notes”)
 
  • $200 million aggregate principal amount of 4.625% Notes due 2011 (the “2011 Exchangeable Notes”)
 
  • $200 million aggregate principal amount of 7.375% Notes due 2011 (the “2011 Notes”)
 
  • $125 million aggregate principal amount of 5.25% Notes due 2009 (the “2009 Notes”)
 
  • $150 million aggregate principal amount of 7.60% Notes due 2007 (the “2007 Notes”)
 
  • a $500 million unsecured revolving credit facility (the “Unsecured Line of Credit I”) under which First Industrial Realty Trust, Inc., through the Operating Partnership, may borrow to finance the acquisition of additional properties and for other corporate purposes, including working capital.
 
The Unsecured Line of Credit I provides for the repayment of principal in a lump-sum or “balloon” payment at maturity in 2008. Under the Unsecured Line of Credit I, the Operating Partnership has the right, subject to certain conditions, to increase the aggregate commitment by up to $100.0 million. As of December 31, 2006, $207.0 million was outstanding under the Unsecured Line of Credit I at a weighted average interest rate of 6.058%.
 
The Company’s ability to make required payments of principal on outstanding indebtedness, whether at maturity or otherwise, may depend on its ability either to refinance the applicable indebtedness or to sell properties. The Company has no commitments to refinance the 2007 Notes, the 2009 Notes, the 2011 Notes, the 2011 Exchangeable Notes, the 2012 Notes, the 2014 Notes, the 2016 Notes, the 2017 Notes, the 2027 Notes, the 2028 Notes, the 2032 Notes or the Unsecured Line of Credit I. Some of the existing debt obligations, other than those discussed above, of the Company, through the Operating Partnership, are secured by the Company’s properties, and therefore such obligations will permit the lender to foreclose on those properties in the event of a default.
 
There is no limitation on debt in the Company’s organizational documents.
 
The organizational documents of the Company do not contain any limitation on the amount or percentage of indebtedness the Company may incur. Accordingly, the Company could become more highly leveraged, resulting in an increase in debt service that could adversely affect the Company’s ability to make expected distributions to stockholders and in an increased risk of default on the Company’s obligations. As of December 31, 2006, the Company’s ratio of debt to its total market capitalization was 40.1%. The Company computes that percentage by calculating its total consolidated debt as a percentage of the aggregate market value of all outstanding shares of the Company’s common stock, assuming the exchange of all limited partnership units of the Operating Partnership for common stock, plus the aggregate stated value of all outstanding shares of preferred stock and total consolidated debt.


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Rising interest rates on the Company’s Unsecured Line of Credit could decrease the Company’s available cash.
 
The Company’s Unsecured Line of Credit I bears interest at a floating rate. As of December 31, 2006, the Company’s Unsecured Line of Credit I had an outstanding balance of $207.0 million at a weighted average interest rate of 6.058%. The Company’s Unsecured Line of Credit I bears interest at the Prime Rate or at the LIBOR plus .625%. Based on an outstanding balance on the Company’s Unsecured Line of Credit I as of December 31, 2006, a 10% increase in interest rates would increase interest expense by $1.3 million on an annual basis. Increases in the interest rate payable on balances outstanding under the Unsecured Line of Credit I would decrease the Company’s cash available for distribution to stockholders.
 
Earnings and cash dividends, asset value and market interest rates affect the price of the Company’s common stock.
 
As a real estate investment trust, the market value of the Company’s common stock, in general, is based primarily upon the market’s perception of the Company’s growth potential and its current and potential future earnings and cash dividends. The market value of the Company’s common stock is based secondarily upon the market value of the Company’s underlying real estate assets. For this reason, shares of the Company’s common stock may trade at prices that are higher or lower than the Company’s net asset value per share. To the extent that the Company retains operating cash flow for investment purposes, working capital reserves, or other purposes, these retained funds, while increasing the value of the Company’s underlying assets, may not correspondingly increase the market price of the Company’s common stock. The Company’s failure to meet the market’s expectations with regard to future earnings and cash dividends likely would adversely affect the market price of the Company’s common stock. Further, the distribution yield on the common stock (as a percentage of the price of the common stock) relative to market interest rates may also influence the price of the Company’s common stock. An increase in market interest rates might lead prospective purchasers of the Company’s common stock to expect a higher distribution yield, which would adversely affect the market price of the Company’s common stock. Additionally, if the market price of the Company’s common stock declines significantly, then the Company might breach certain covenants with respect to its debt obligations, which could adversely affect the Company’s liquidity and ability to make future acquisitions and the Company’s ability to pay dividends to its stockholders.
 
The Company may incur unanticipated costs and liabilities due to environmental problems.
 
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be liable for the costs ofclean-up of certain conditions relating to the presence of hazardous or toxic materials on, in or emanating from a property, and any related damages to natural resources. Environmental laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous or toxic materials. The presence of such materials, or the failure to address those conditions properly, may adversely affect the ability to rent or sell the property or to borrow using a property as collateral. Persons who dispose of or arrange for the disposal or treatment of hazardous or toxic materials may also be liable for the costs ofclean-up of such materials, or for related natural resource damages, at or from an off-site disposal or treatment facility, whether or not the facility is owned or operated by those persons. No assurance can be given that existing environmental assessments with respect to any of the Company’s properties reveal all environmental liabilities, that any prior owner or operator of any of the properties did not create any material environmental condition not known to the Company or that a material environmental condition does not otherwise exist as to any of the Company’s properties.
 
The Company’s insurance coverage does not include all potential losses.
 
The Company currently carries comprehensive insurance coverage including property, boiler & machinery, liability, fire, flood, terrorism, earthquake, extended coverage and rental loss as appropriate for the markets where each of the Company’s properties and their business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties and business activities. The Company believes its properties are adequately insured. However, there are certain losses,


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including losses from earthquakes, hurricanes, floods, pollution, acts of war, acts of terrorism or riots, that are not generally insured against or that are not generally fully insured against because it is not deemed to be economically feasible or prudent to do so. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of the Company’s properties, the Company could experience a significant loss of capital invested and potential revenues from these properties, and could potentially remain obligated under any recourse debt associated with the property.
 
The Company is subject to risks and liabilities in connection with its investments in properties through joint ventures.
 
As of December 31, 2006, the Company’s six joint ventures owned approximately 26.0 million square feet of properties. As of December 31, 2006, the Company’s investment in joint ventures exceeded $55 million in the aggregate, and for the year ended December 31, 2006, the Company’s equity in income of joint ventures exceeded $30 million. The Company’s organizational documents do not limit the amount of available funds that the Company may invest in joint ventures and the Company intends to continue to develop and acquire properties through joint ventures with other persons or entities when warranted by the circumstances. Joint venture investments, in general, involve certain risks, including:
 
  • co-members or joint venturers may share certain approval rights over major decisions;
 
  • co-members or joint venturers might fail to fund their share of any required capital commitments;
 
  • co-members or joint venturers might have economic or other business interests or goals that are inconsistent with the Company’s business interests or goals that would affect its ability to operate the property;
 
  • co-members or joint venturers may have the power to act contrary to the Company’s instructions, requests, policies or objectives, including our current policy with respect to maintaining our qualification as a real estate investment trust;
 
  • the joint venture agreements often restrict the transfer of a member’s or joint venturer’s interest or “buy-sell” or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms;
 
  • disputes between the Company and its co-members or joint venturers may result in litigation or arbitration that would increase the Company’s expenses and prevent its officers and directors from focusing their time and effort on the Company’s business and subject the properties owned by the applicable joint venture to additional risk; and
 
  • the Company may in certain circumstances be liable for the actions of its co-members or joint venturers.
 
The occurrence of one or more of the events described above could adversely affect the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock.
 
In addition, joint venture investments in real estate involve all of the risks related to the ownership, acquisition, development, sale and financing of real estate discussed in the risk factors above. To the extent the Company’s investments in joint ventures are adversely affected by such risks, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock could be adversely affected.
 
Item 1B.  Unresolved SEC Comments
 
None


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Item 2.  Properties
 
General
 
At December 31, 2006, the Company owned 858 in-service industrial properties containing an aggregate of approximately 68.6 million square feet of GLA in 28 states and one province in Canada, with a diverse base of more than 2,500 tenants engaged in a wide variety of businesses, including manufacturing, retail, wholesale trade, distribution and professional services. The properties are generally located in business parks that have convenient access to interstate highwaysand/or rail and air transportation. The weighted average age of the properties as of December 31, 2006 was approximately 19 years. The Company maintains insurance on its properties that the Company believes is adequate.
 
The Company classifies its properties into five industrial categories: light industrial, R&D/flex, bulk warehouse, regional warehouse and manufacturing. While some properties may have characteristics which fall under more than one property type, the Company uses what it believes is the most dominant characteristic to categorize the property.
 
The following describes, generally, the different industrial categories:
 
  • Light industrial properties are of less than 100,000 square feet, have a ceiling height of 16-21 feet, are comprised of 5%-50% of office space, contain less than 50% of manufacturing space and have a land use ratio of 4:1. The land use ratio is the ratio of the total property area to the area occupied by the building.
 
  • R&D/flex buildings are of less than 100,000 square feet, have a ceiling height of less than 16 feet, are comprised of 50% or more of office space, contain less than 25% of manufacturing space and have a land use ratio of 4:1.
 
  • Bulk warehouse buildings are of more than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5%-15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1.
 
  • Regional warehouses are of less than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5%-15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1.
 
  • Manufacturing properties are a diverse category of buildings that have a ceiling height of10-18 feet,are comprised of 5%-15% of office space, contain at least 50% of manufacturing space and have a land use ratio of 4:1.


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Each of the properties is wholly owned by the Company or its consolidated subsidiaries. The following tables summarize certain information as of December 31, 2006, with respect to the Company’s in-service properties.
 
Property Summary
 
                                         
  Light Industrial  R&D/Flex  Bulk Warehouse  Regional Warehouse  Manufacturing 
     Number of
     Number of
     Number of
     Number of
     Number of
 
Metropolitan Area
 GLA  Properties  GLA  Properties  GLA  Properties  GLA  Properties  GLA  Properties 
 
Atlanta, GA(a)
  789,082   13   206,826   5   2,620,959   12   455,935   6   747,950   3 
Baltimore, MD
  918,062   15   169,660   5   910,735   4         171,000   1 
Central PA(b)
  923,242   9         897,000   3   117,599   3       
Chicago, IL
  1,104,890   19   174,198   3   2,898,661   15   198,131   4   421,000   2 
Cincinnati, OH
  436,389   4         1,765,130   8   79,800   1       
Cleveland, OH
  64,000   1         608,740   4             
Columbus, OH(c)
  217,612   2         2,442,967   7   98,800   1       
Dallas, TX
  1,811,665   45   454,963   18   2,637,371   18   677,433   10   128,478   1 
Denver, CO
  1,543,666   29   1,527,480   37   1,499,976   9   521,664   8   126,384   1 
Des Moines, IA
              150,444   1   88,000   1       
Detroit, MI
  2,380,894   86   532,376   16   530,843   5   759,851   18   116,250   1 
Grand Rapids, MI
  61,250   1                         
Houston, TX
  449,325   6         2,233,064   13   437,088   6       
Indianapolis, IN(d,e,f,g)
  889,600   18   108,200   4   3,728,421   15   323,610   8   71,600   2 
Los Angeles, CA
  451,760   6         329,664   3   120,162   2       
Louisville, KY
              443,500   2             
Milwaukee, WI
  263,567   6   93,705   2   838,129   6   129,557   2       
Minneapolis/St. Paul, MN(h,i,j)
  1,626,304   20   524,265   7   1,902,386   9   321,805   4   994,077   9 
Nashville, TN
  273,843   5         1,588,813   7         109,058   1 
N. New Jersey
  1,200,856   21   413,167   7   555,205   4   58,585   1       
Philadelphia, PA
  878,456   18   127,802   5   221,937   2   160,828   3   30,000   1 
Phoenix, AZ
  135,415   6         131,000   1   588,520   8       
Salt Lake City, UT
  601,051   33   146,937   6   834,693   5   82,704   1       
San Diego, CA
  112,773   5         397,967   2   274,042   7       
S. New Jersey(k)
  1,386,577   21   23,050   1         118,496   2   22,738   1 
St. Louis, MO(l)
  545,747   7         1,887,790   8   96,392   1       
Tampa, FL(m)
  493,029   12   759,328   31   209,500   1             
Other(n)
  692,837   8         2,098,214   9   50,000   1   36,000   1 
                                         
Total
  20,251,892   416   5,261,957   147   34,363,109   173   5,759,002   98   2,974,535   24 
                                         
 
 
(a) One property collateralizes a $3.0 million mortgage loan which matures on May 1, 2016.
 
(b) One property collateralizes a $15.2 million mortgage loan which matures on December 1, 2010.
 
(c) One property collateralizes a $5.1 million mortgage loan which matures on December 1, 2019.
 
(d) Twelve properties collateralize a $1.8 million mortgage loan which matures on September 1, 2009.
 
(e) One property collateralizes a $1.6 million mortgage loan which matures on January 1, 2013.
 
(f) One property collateralizes a $2.4 million mortgage loan which matures on January 1, 2012.
 
(g) One property collateralizes a $1.9 million mortgage loan which matures on June 1, 2014.
 
(h) One property collateralizes a $0.8 million mortgage loan which matures on February 1, 2017.
 
(i) One property collateralizes a $5.3 million mortgage loan which matures on December 1, 2019.
 
(j) One property collateralizes a $1.9 million mortgage loan which matures on September 30, 2024.
 
(k) One property collateralizes a $6.7 million mortgage loan which matures on March 1, 2011.


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(l) One property collateralizes a $14.2 million mortgage loan and a $12.0 million mortgage loan which both mature on January 1, 2014.
 
(m) Six properties collateralize a $6.0 million mortgage loan which matures on July 1, 2009.
 
(n) Properties are located in Wichita, KS, McAllen, TX, Austin, TX, Orlando, FL, Horn Lake, MS, Shreveport, LA, Kansas City, MO, San Antonio, TX, Birmingham, AL, Portland, OR, Cambridge, ON, Stratford, ON, Omaha, NE, and Ajax, ON.
 
Property Summary Totals
 
                 
  Totals 
        Average
  GLA as a %
 
     Number of
  Occupancy at
  of Total
 
Metropolitan Area
 GLA  Properties(b)  12/31/06(b)  Portfolio(b) 
 
Atlanta, GA
  4,820,752   39   94%  7.0%
Baltimore, MD
  2,169,457   25   98%  3.2%
Central, PA
  1,937,841   15   98%  2.8%
Chicago, IL
  4,796,880   43   91%  7.0%
Cincinnati, OH
  2,281,319   13   89%  3.3%
Cleveland, OH
  672,740   5   100%  1.0%
Columbus, OH
  2,759,379   10   90%  4.0%
Dallas, TX
  5,709,910   92   93%  8.3%
Denver, CO
  5,219,170   84   90%  7.6%
Des Moines, IA
  238,444   2   87%  0.3%
Detroit, MI
  4,320,214   126   86%  6.3%
Grand Rapids, MI
  61,250   1   100%  0.1%
Houston, TX
  3,119,477   25   94%  4.5%
Indianapolis, IN
  5,121,431   47   98%  7.5%
Los Angeles, CA
  901,586   11   100%  1.3%
Louisville, KY
  443,500   2   100%  0.6%
Milwaukee, WI
  1,324,958   16   95%  1.9%
Minneapolis/St. Paul, MN
  5,368,837   49   95%  7.8%
Nashville, TN
  1,971,714   13   99%  2.9%
N. New Jersey
  2,227,813   33   96%  3.2%
Philadelphia, PA
  1,419,023   29   96%  2.1%
Phoenix, AZ
  854,935   15   93%  1.2%
Salt Lake City, UT
  1,665,385   45   97%  2.4%
San Diego, CA
  784,782   14   83%  1.1%
S. New Jersey
  1,550,861   25   98%  2.3%
St. Louis, MO
  2,529,929   16   98%  3.7%
Tampa, FL
  1,461,857   44   92%  2.1%
Other(a)
  2,877,051   19   100%  4.2%
                 
Total or Average
  68,610,495   858   94%  100.0%
                 
 
 
(a) Properties are located in Wichita, KS, McAllen, TX, Austin, TX, Orlando, FL, Horn Lake, MS, Shreveport, LA, Kansas City, MO, San Antonio, TX, Birmingham, AL, Portland, OR, Cambridge, ON, Stratford, ON, Omaha, NE, and Ajax, ON.
 
(b) Includes only in-service properties.


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Property Acquisition Activity
 
During 2006, the Company acquired 91 industrial properties totaling approximately 10.5 million square feet of GLA at a total purchase price of approximately $573.3 million, or approximately $54.60 per square foot. The Company also purchased several land parcels for an aggregate purchase price of approximately $37.4 million. The 91 industrial properties acquired have the following characteristics:
 
                 
           Average
 
  Number of
        Occupancy at
 
Metropolitan Area
 Properties  GLA  
Property Type
  12/31/2006(b) 
 
Atlanta, GA
  2   192,000   Bulk/Regional Warehouse   71%
Central, PA
  2   81,200   Light Industrial   100%
Chicago, IL(a)
  1   25,313   Bulk Warehouse   N/A 
Chicago, IL
  4   652,944   Bulk Warehouse/Light Industrial   96%
Cincinnati, OH
  1   79,800   Regional Warehouse   100%
Cleveland, OH
  7   1,124,799   Bulk Warehouse/Light Industrial   86%
Cleveland, OH(a)
  4   788,292   Bulk Warehouse   N/A 
Columbus, OH(a)
  1   744,800   Bulk Warehouse   N/A 
Columbus, OH
  2   306,627   Bulk/Regional Warehouse   100%
Dallas, TX
  2   628,243   Light Industrial/Bulk Warehouse   100%
Denver, CO
  4   350,606   Bulk Warehouse   98%
Detroit, MI
  3   168,962   Manufacturing/Regional Warehouse   100%
Indianapolis, IN
  1   209,380   Bulk Warehouse   100%
Los Angeles, CA
  7   698,991   Light Industrial   63%
Milwaukee, WI
  1   90,089   Regional Warehouse   100%
Minneapolis/St. Paul, MN
  3   180,589   Light Industrial/Regional Warehouse   100%
Philadelphia, PA(a)
  1   87,000   Light Industrial   N/A 
Phoenix, AZ
  3   272,197   Bulk /Regional Warehouse   44%
Phoenix, AZ(a)
  2   217,496   Bulk Warehouse/Light Industrial   44%
San Diego, CA
  8   186,787   Light Industrial/Regional Warehouse   45%
S. New Jersey
  2   128,026   Light Industrial   66%
S. New Jersey(a)
  1   37,875   R&D/Flex   N/A 
           Light Industrial /Bulk Warehouse /     
Salt Lake City, UT
  5   715,273   Regional Warehouse   99%
San Francisco, CA
  1   143,750   Bulk Warehouse   100%
St. Louis, MO
  2   1,186,423   Light Industrial/Bulk Warehouse   100%
Tampa, FL
  19   497,535   R&D/Flex   66%
Other(c)
  2   698,794   Bulk Warehouse   100%
                
                 
Total
  91   10,493,791         
                 
 
 
(a) Property was sold in 2006.
 
(b) Includes only in-service properties.
 
(c) Properties are located in Omaha, NE, and Ajax, ON.


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Property Development Activity
 
During 2006, the Company placed in-service 16 developments totaling approximately 5.0 million square feet of GLA at a total cost of approximately $194.8 million, or approximately $38.64 per square foot. The placed in-service developments have the following characteristics:
 
             
        Average
 
        Occupancy
 
Metropolitan Area
 GLA  
Property Type
  at 12/31/06 
 
Chicago, IL
  134,905   Bulk Warehouse   100%
Seattle, WA(a)
  451,151   Bulk Warehouse   N/A 
Atlanta, GA(a)
  399,695   Regional Warehouse   N/A 
Chicago, IL
  167,556   Bulk Warehouse   100%
Indianapolis, IN(a)
  158,928   Bulk Warehouse   N/A 
Dallas, TX
  201,500   Bulk Warehouse   100%
Flint, MI
  80,000   R&D/Flex   100%
Byhalia, MS(a)
  400,000   Bulk Warehouse   N/A 
Atlanta, GA(a)
  1,300,716   Bulk Warehouse   N/A 
Shreveport, TX
  646,000   Bulk Warehouse   100%
Houston, TX(a)
  210,000   Bulk Warehouse   N/A 
Houston, TX(a)
  80,000   Regional Warehouse   N/A 
Nashville, TN
  300,000   Bulk Warehouse   100%
Detroit, MI
  116,250   Manufacturing   100%
Chicago, IL
  120,000   Bulk Warehouse   100%
Nashville, TN
  275,000   Bulk Warehouse   100%
             
Total
  5,041,701         
             
 
 
(a) Property was sold in 2006.
 
At December 31, 2006, the Company had 16 development projects not placed in service, totaling an estimated 2.8 million square feet and with an estimated completion cost of approximately $154.7 million. The Company estimates it will place in service 16 of the 16 projects in fiscal year 2007. There can be no assurance that the Company will place these projects in service in 2007 or that the actual completion cost will not exceed the estimated completion cost stated above.


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Property Sales
 
During 2006, the Company sold 125 industrial properties totaling approximately 17.1 million square feet of GLA and several land parcels. Total gross sales proceeds approximated $946.8 million. The 125 industrial properties sold have the following characteristics:
 
             
  Number of
       
Metropolitan Area
 Properties  GLA  
Property Type
 
 
Atlanta, GA
  5   2,170,372   R&D/Flex/Bulk Warehouse/Manufacturing 
Baltimore, MD
  5   636,073   Light Industrial/Bulk Warehouse 
Central, PA
  2   206,931   Bulk Warehouse 
Chicago, IL
  7   922,983   Bulk/Regional Warehouse/Manufacturing 
Cincinnati, OH
  11   913,041   Regional /Bulk Warehouse/Lt. Ind. 
Cleveland, OH
  5   1,250,292   Bulk Warehouse/Manufacturing 
Columbus, OH
  1   744,800   Bulk Warehouse 
Dallas, TX
  14   1,060,054   Bulk/Lt. Ind./Manufacturing /R&D/Flex/Regional 
Denver, CO
  2   63,287   Light Industrial 
Detroit, MI
  5   178,942   Bulk/Lt. Ind/R&D/Flex/Regional 
Houston, TX
  7   783,080   Bulk/Lt. Ind/R&D/Flex/Regional 
Indianapolis, IN
  9   856,206   Bulk/Lt. Ind/R&D/Flex/Regional 
Los Angeles, CA
  13   818,362   Bulk Warehouse/R&D/Flex/Lt. Ind. 
Milwaukee, WI
  5   1,000,263   Bulk/Regional/Lt. Ind. Warehouse 
Minneapolis/St. Paul, MN
  5   276,881   Manufacturing/R&D/Flex 
N. New Jersey
  1   92,400   Regional Warehouse 
Nashville, TN
  3   467,041   Bulk/Regional Warehouse 
Philadelphia, PA
  4   239,038   Light Industrial 
Phoenix, AZ
  6   1,102,179   Bulk Warehouse/Light Industrial 
Raleigh, NC
  2   397,120   Bulk Warehouse/Manufacturing 
S. New Jersey
  2   58,883   R&D/Flex/Light Industrial 
San Diego, CA
  3   155,984   Bulk/Regional Warehouse 
San Francisco, CA
  1   143,750   Bulk Warehouse 
Seattle, WA
  1   451,151   Bulk Warehouse 
St. Louis, MO
  1   281,105   Bulk Warehouse 
Tampa, FL
  1   14,914   R&D/Flex 
Other(a)
  4   1,827,946   Bulk Warehouse 
            
             
Total
  125   17,113,078     
             
 
 
(a) Properties are located in Malvern, AR, Sparks, NV, Byhalia, MS and Greenville, SC.
 
Property Acquisitions, Developments and Sales Subsequent to Year End
 
From January 1, 2007 to February 22, 2007, the Company acquired 55 industrial properties (including 41 properties in connection with the purchase of the 90% equity interest from the institutional investor in the September 1998 Joint Venture on January 31, 2007) and several land parcels for a total estimated investment of approximately $135.9 million. The Company also sold 14 industrial properties, for approximately $74.4 million of gross proceeds during this period.


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Tenant and Lease Information
 
The Company has a diverse base of more than 2,500 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and six years and provide for periodic rent increases that are either fixed or based on changes in the Consumer Price Index. Industrial tenants typically have net orsemi-netleases and pay as additional rent their percentage of the property’s operating costs, including the costs of common area maintenance, property taxes and insurance. As of December 31, 2006, approximately 94% of the GLA of the in-service industrial properties was leased, and no single tenant or group of related tenants accounted for more than 2.2% of the Company’s rent revenues, nor did any single tenant or group of related tenants occupy more than 1.6% of the Company’s total GLA as of December 31, 2006.
 
The following table shows scheduled lease expirations for all leases for the Company’s in-service properties as of December 31, 2006.
 
                     
  Number of
     Percentage of
  Annual Base Rent
  Percentage of Total
 
Year of
 Leases
  GLA
  GLA
  Under Expiring
  Annual Base Rent
 
Expiration(1)
 Expiring  Expiring(2)  Expiring  Leases  Expiring(2) 
  (In thousands) 
 
2007
  716   12,577,758   20%  54,949   19%
2008
  566   12,329,575   19%  52,606   18%
2009
  517   10,039,151   16%  46,189   16%
2010
  300   7,060,607   11%  32,543   11%
2011
  254   6,223,967   10%  31,779   11%
2012
  81   2,177,391   3%  10,557   4%
2013
  51   3,501,366   5%  14,029   5%
2014
  23   1,142,517   2%  5,448   2%
2015
  30   2,176,249   3%  6,996   2%
2016
  27   2,250,640   3%  8,036   3%
Thereafter
  28   5,120,820   8%  22,928   9%
                     
Total
  2,593   64,600,041   100.0% $286,060   100.0%
                     
 
 
(1) Lease expirations as of December 31, 2006 assume tenants do not exercise existing renewal, termination or purchase options.
 
(2) Does not include existing vacancies of 4,010,454 aggregate square feet.
 
Item 3.  Legal Proceedings
 
The Company is involved in legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material impact on the results of operations, financial position or liquidity of the Company.
 
Item 4.  Submission of Matters to a Vote of Security Holders
 
None.


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PART II
 
Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 
Market Information
 
The following table sets forth for the periods indicated the high and low closing prices per share and distributions declared per share for the Company’s common stock, which trades on the New York Stock Exchange under the trading symbol “FR”.
 
             
        Distribution
 
Quarter Ended
 High  Low  Declared 
 
December 31, 2006
 $50.52  $43.70  $0.7100 
September 30, 2006
 $44.25  $37.25  $0.7000 
June 30, 2006
 $41.79  $36.50  $0.7000 
March 31, 2006
 $43.24  $37.73  $0.7000 
December 31, 2005
 $41.82  $37.79  $0.7000 
September 30, 2005
 $41.80  $37.20  $0.6950 
June 30, 2005
 $42.16  $37.35  $0.6950 
March 31, 2005
 $42.65  $37.83  $0.6950 
 
The Company had 617 common stockholders of record registered with its transfer agent as of February 22, 2007.
 
The Company has determined that, for federal income tax purposes, approximately 9.30% of the total $126.0 million in distributions declared in 2006 represents ordinary dividend income to its stockholders, 8.57% qualify as 25 percent rate capital gain, 20.63% qualify as 15 percent rate qualified dividend income, 11.97% qualify as a 15 percent rate capital gain and the remaining 49.53% represents a return of capital.
 
Additionally, for tax purposes, 18.42% of the Company’s 2006 preferred stock dividends qualify as ordinary income, 16.98% qualify as 25 percent rate capital gain, 40.88% qualify as 15 percent rate qualified dividend income and 23.72% qualify as 15 percent rate capital gain.
 
In order to maintain its status as a REIT, the Company is required to meet certain tests, including distributing at least 90% of its REIT taxable income, or approximately $1.24 per common share for 2006. The Company’s dividend policy is to meet the minimum distribution required to maintain the Company’s REIT qualification under the Internal Revenue Code.
 
On January 20 and March 31, 2006, the Operating Partnership issued 21,650 and 9,823 Units, respectively, having an aggregate market value of approximately $1.3 million in exchange for property.
 
All of the above Units were issued in private placements in reliance on Section 4(2) of the Securities Act of 1933, as amended, including Regulation D promulgated thereunder, to individuals or entities holding real property or interests therein. No underwriters were used in connection with such issuances.
 
Subject tolock-upperiods and certain adjustments, Units are convertible into common stock, par value $0.01 per share, of the Company on aone-for-onebasis or cash at the option of the Company.


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Equity Compensation Plans
 
The following table sets forth information regarding the Company’s equity compensation plans.
 
             
  Number of Securities
     Number of Securities
 
  to be Issued
  Weighted-Average
  Remaining Available
 
  Upon Exercise of
  Exercise Price of
  for Further Issuance
 
  Outstanding Options,
  Outstanding Options,
  Under Equity
 
Plan Category
 Warrants and Rights  Warrants and Rights  Compensation Plans 
 
Equity Compensation Plans Approved by Security Holders
        2,178,868 
Equity Compensation Plans Not Approved by Security Holders(1)
  381,976  $31.65   93,340 
             
Total
  381,976  $31.65   2,272,208 
             
 
 
(1) See Notes 3 and 13 of the Notes to Consolidated Financial Statements contained herein for a description of the plan.


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Performance Graph*
 
The following graph provides a comparison of the cumulative total stockholder return among the Company, the NAREIT Equity REIT Total Return Index (the “NAREIT Index”), an industry index which, as of December 31, 2006, was comprised of 130 tax-qualified equity REITs (including the Company), and the Standard & Poor’s 500 Index (“S&P 500”). The comparison is for the period from December 31, 2001 to December 31, 2006 and assumes the reinvestment of any dividends. The closing price for the Company’s Common Stock quoted on the NYSE at the close of business on December 31, 2001 was $31.10 per share. The NAREIT Index includes REITs with 75% or more of their gross invested book value of assets invested directly or indirectly in the equity ownership of real estate. Upon written request, the Company will provide stockholders with a list of the REITs included in the NAREIT Index. The historical information set forth below is not necessarily indicative of future performance. The following graph was prepared at the Company’s request by Research Data Group, Inc., San Francisco, California.
 
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
 
(PERFORMANCE GRAPH)
 
                         
  12/01  12/02  12/03  12/04  12/05  12/06 
 
FIRST INDUSTRIAL REALTY TRUST, INC.
 $100  $98  $129  $167  $169  $220 
S&P 500
  100   78   100   111   117   135 
NAREIT
  100   104   142   187   210   284 
 
 
* The information provided in this performance graph shall not be deemed to be “soliciting material,” to be “filed” or to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act of 1934 unless specifically treated as such.


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Item 6.  Selected Financial Data
 
The following sets forth selected financial and operating data for the Company on a historical consolidated basis. The following data should be read in conjunction with the financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in thisForm 10-K.The historical statements of operations for the years ended December 31, 2006, 2005, 2004, 2003, and 2002 include the results of operations of the Company as derived from the Company’s audited financial statements. The results of operations of properties sold are presented in discontinued operations if they met both of the following criteria: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Company as a result of the disposition and (b) the Company will not have any significant involvement in the operations of the property after the disposal transaction. The historical balance sheet data and other data as of December 31, 2006, 2005, 2004, 2003, and 2002 include the balances of the Company as derived from the Company’s audited financial statements.
 
                     
  Year Ended
  Year Ended
  Year Ended
  Year Ended
  Year Ended
 
  12/31/06  12/31/05  12/31/04  12/31/03  12/31/02 
  (In thousands, except per unit and property data) 
 
Statement of Operations Data:
                    
Total Revenues
 $396,036  $325,530  $268,008  $247,129  $231,893 
Interest Income
  1,614   1,486   3,632   2,416   2,378 
Mark-to-Market/(Loss)Gain on Settlement of Interest Rate Protection Agreements
  (3,112)  811   1,583       
Property Expenses
  (130,230)  (108,464)  (90,309)  (83,848)  (75,694)
General and Administrative Expense
  (77,497)  (55,812)  (39,569)  (26,953)  (19,610)
Interest Expense
  (121,141)  (108,339)  (98,636)  (94,895)  (90,017)
Amortization of Deferred Financing Costs
  (2,666)  (2,125)  (1,931)  (1,764)  (1,925)
Depreciation and Other Amortization
  (145,906)  (105,720)  (79,939)  (63,006)  (52,521)
Expenses from Build to Suit Development for Sale
  (10,263)  (15,574)         
Gain (Loss) from Early Retirement from Debt(a)
     82   (515)  (1,466)  (888)
Equity in Income of Joint Ventures
  30,673   3,699   37,301   539   463 
Income Tax Benefit
  8,920   14,022   7,937   5,495   2,125 
Minority Interest Allocable to Continuing Operations
  9,795   7,980   2,034   5,239   4,660 
                     
(Loss) Income from Continuing Operations
  (43,777)  (42,424)  9,596   (11,114)  864 
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $213,442, $132,139, $88,245, $79,485 and $58,323 for the Years Ended December 31, 2006, 2005, 2004, 2003 and 2002, respectively)
  225,357   154,061   116,693   136,764   129,686 
Provision for Income Taxes Allocable to Discontinued Operations (Including $47,511, $20,529, $8,659, $2,154, and $1,538 allocable to Gain on Sale of Real Estate for the Years ended December 31, 2006, 2005, 2004, 2003 and 2002, respectively)
  (50,140)  (23,583)  (11,005)  (3,689)  (2,680)
Minority Interest Allocable to Discontinued Operations
  (22,796)  (17,171)  (14,500)  (19,602)  (19,025)
Gain on Sale of Real Estate
  6,071   29,550   16,755   15,794   16,476 
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
  (2,119)  (10,871)  (5,371)  (2,408)  (3,111)
Minority Interest Allocable to Gain on Sale of Real Estate
  (514)  (2,458)  (1,562)  (1,972)  (2,002)
                     
Net Income
  112,082   87,104   110,606   113,773   120,208 
Redemption of Preferred Stock
  (672)     (7,959)     (3,707)
Preferred Dividends
  (21,424)  (10,688)  (14,488)  (20,176)  (23,432)
                     
Net Income Available to Common Stockholders
 $89,986  $76,416  $88,159  $93,597  $93,069 
                     
Loss from Continuing Operations Available to Common Stockholders Per Weighted Average Common Share Outstanding:
                    
Basic
 $(1.42) $(0.87) $(0.07) $(0.52) $(0.38)
                     
Diluted
 $(1.42) $(0.87) $(0.07) $(0.52) $(0.38)
                     
Net Income Available to Common Stockholders Per Weighted Average Common Share Outstanding:
                    
Basic
 $2.04  $1.80  $2.17  $2.43  $2.39 
                     
Diluted
 $2.04  $1.80  $2.17  $2.43  $2.39 
                     
Distributions Per Share
 $2.8100  $2.7850  $2.7500  $2.7400  $2.7250 
                     
Weighted Average Number of Common Shares Outstanding:
                    
Basic
  44,012   42,431   40,557   38,542   38,927 
                     
Diluted
  44,012   42,431   40,557   38,542   38,927 
                     
Net Income
 $112,082  $87,104  $110,606  $113,773  $120,208 
Other Comprehensive Income (Loss):
                    
Settlement of Interest Rate Protection Agreements
  (1,729)     6,816      1,772 
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
     (159)         
Mark-to-Marketof Interest Rate Protection Agreements and Interest Rate Swap Agreements
  (2,800)  (1,414)  106   251   (126)
Amortization of Interest Rate Protection Agreements
  (912)  (1,085)  (512)  198   176 
Other Comprehensive Loss Allocable to Minority Interest
  698   837          
                     
Comprehensive Income
 $107,339  $85,283  $117,016  $114,222  $122,030 
                     


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  Year Ended
  Year Ended
  Year Ended
  Year Ended
  Year Ended
 
  12/31/06  12/31/05  12/31/04  12/31/03  12/31/02 
  (In thousands, except per unit and property data) 
 
Balance Sheet Data (End of Period):
                    
Real Estate, Before Accumulated Depreciation
 $3,219,728  $3,260,761  $2,856,474  $2,738,034  $2,697,269 
Real Estate, After Accumulated Depreciation
  2,754,310   2,850,195   2,478,091   2,388,782   2,388,781 
Real Estate Held for Sale, Net
  115,961   16,840   52,790      7,040 
Total Assets
  3,224,399   3,226,243   2,721,890   2,648,023   2,629,973 
Mortgage Loans Payable, Net, Unsecured Lines of Credit and Senior Unsecured Debt, Net
  1,834,658   1,813,702   1,574,929   1,453,798   1,442,149 
Total Liabilities
  2,048,873   2,020,361   1,719,463   1,591,732   1,575,586 
Stockholders’ Equity
  1,022,979   1,043,562   845,494   889,173   882,326 
Other Data:
                    
Cash Flow From Operating Activities
 $59,551  $49,350  $77,657  $103,156  $132,838 
Cash Flow From Investing Activities
  129,147   (371,654)  9,992   29,037   33,350 
Cash Flow From Financing Activities
  (180,800)  325,617   (83,546)  (131,372)  (166,188)
Total In-Service Properties
  858   884   827   834   908 
Total In-Service GLA, in Square Feet
  68,610,505   70,193,161   61,670,735   57,925,466   59,979,894 
In-Service Occupancy Percentage
  94%  92%  90%  88%  90%
 
 
(a) In 2005, the Company wrote off $0.05 million of financing fees related to the Company’s previous line of credit agreement, which was amended and restated on August 23, 2005. In addition, the Company paid $0.3 million of finance fees and wrote off a loan premium of $0.4 million on a mortgage loan payable which was assumed by the buyers of the related properties on July 13, 2005. In 2004, the Company paid off and retired a mortgage loan. The Company recorded a loss from the early retirement of debt in 2004 of approximately $0.5 million, which is comprised of the write-off of unamortized deferred financing costs and prepayment penalties. In 2003, the Company paid off and retired a mortgage loan. The Company recorded a loss from the early retirement of debt in 2003 of approximately $1.5 million, which is comprised of the write-off of unamortized deferred financing costs. In 2002, the Company paid off and retired senior unsecured debt. The Company recorded a loss from the early retirement of debt of approximately $0.9 million which is comprised of the amount paid above the carrying amount of the senior unsecured debt and the write-off of pro rata unamortized deferred financing costs and legal costs.
 
Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion should be read in conjunction with “Selected Financial Data” and the Consolidated Financial Statements and Notes thereto appearing elsewhere in thisForm 10-K.
 
In addition, the following discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Company on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rate levels, competition, supply and demand for industrial properties in the Company’s current and proposed market areas, potential environmental liabilities, slippage in development orlease-upschedules, tenant credit risks,higher-than-expectedcosts and changes in general accounting principles and policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included herein in Item 1A. “Risk Factors,” and in the Company’s other filings with the SEC.

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The Company was organized in the state of Maryland on August 10, 1993. The Company is a REIT, as defined in the Code. The Company began operations on July 1, 1994. The Company’s interests in its properties and land parcels are held through (i) partnerships controlled by the Company, including First Industrial, L.P. (the “Operating Partnership”), of which the Company is the sole general partner, as well as, among others, First Industrial Financing Partnership, L.P., First Industrial Securities, L.P., First Industrial Mortgage Partnership, L.P., First Industrial Pennsylvania, L.P. (the “Financing Partnership”), First Industrial Harrisburg, L.P., First Industrial Indianapolis, L.P., FI Development Services, L.P. and TK-SV, LTD., as to each of which the sole general partner is a wholly-owned subsidiary of the Company (except in the case of the Financing Partnership in which case the Operating Partnership is also the general partner) and the sole limited partner is the Operating Partnership; (ii) limited liability companies, of which the Operating Partnership is the sole member; and (iii) First Industrial Investment, Inc., of which the Operating Partnership is the sole stockholder, all of whose operating data is consolidated with that of the Company as presented herein. The Company, through separate, wholly-owned limited liability companies of which the Operating Partnership or First Industrial Investment, Inc. is the sole member, also owns minority equity interests in, and provides services to, six joint ventures which invest in industrial properties (the “September 1998 Joint Venture,” the “May 2003 Joint Venture,” the “March 2005 Joint Venture,” the “September 2005 Joint Venture,” the “March 2006 Co-Investment Program” and the “July 2006 Joint Venture”). The Company, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in and provided property management services to a seventh joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture, the September 2005 Joint Venture, the March 2006 Co-Investment Program and the July 2006 Joint Venture ; the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. On January 31, 2007, the Company purchased the 90% equity interest from the institutional investor in the September 1998 Joint Venture. The operating data of the Joint Ventures is not consolidated with that of the Company as presented herein.
 
Management believes the Company’s financial condition and results of operations are, primarily, a function of the Company’s and its joint ventures’ performance in four key areas: leasing of industrial properties, acquisition and development of additional industrial properties, redeployment of internal capital and access to external capital.
 
The Company generates revenue primarily from rental income and tenant recoveries from long-term (generally three to six years) operating leases of its and its joint ventures’ industrial properties. Such revenue is offset by certain property specific operating expenses, such as real estate taxes, repairs and maintenance, property management, utilities and insurance expenses, along with certain other costs and expenses, such as depreciation and amortization costs and general and administrative and interest expenses. The Company’s revenue growth is dependent, in part, on its ability to (i) increase rental income, through increasing either or both occupancy rates and rental rates at the Company’s and its joint ventures’ properties, (ii) maximize tenant recoveries and (iii) minimize operating and certain other expenses. Revenues generated from rental income and tenant recoveries are a significant source of funds, in addition to income generated from gains/losses on the sale of the Company’s and its joint ventures’ properties (as discussed below), for the Company’s distributions. The leasing of property, in general, and occupancy rates, rental rates, operating expenses and certain non-operating expenses, in particular, are impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Company. The leasing of property also entails various risks, including the risk of tenant default. If the Company were unable to maintain or increase occupancy rates and rental rates at the Company’s and its joint ventures’ properties or to maintain tenant recoveries and operating and certain other expenses consistent with historical levels and proportions, the Company’s revenue growth would be limited. Further, if a significant number of the Company’s and its joint ventures’ tenants were unable to pay rent (including tenant recoveries) or if the Company or its joint ventures were unable to rent their properties on favorable terms, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.


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The Company’s revenue growth is also dependent, in part, on its and its joint ventures’ ability to acquire existing, and acquire and develop new, additional industrial properties on favorable terms. The Company itself and through its various joint ventures, continually seeks to acquire existing industrial properties on favorable terms, and, when conditions permit, also seeks to acquire and develop new industrial properties on favorable terms. Existing properties, as they are acquired, and acquired and developed properties, as theylease-up,generate revenue from rental income, tenant recoveries and fees, income from which, as discussed above, is a source of funds for the Company’s distributions. The acquisition and development of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Company. The acquisition and development of properties also entails various risks, including the risk that the Company’s and its joint ventures’ investments may not perform as expected. For example, acquired existing and acquired and developed new properties may not sustainand/orachieve anticipated occupancy and rental rate levels. With respect to acquired and developed new properties, the Company may not be able to complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties. Also, the Company and its joint ventures face significant competition for attractive acquisition and development opportunities from other well-capitalized real estate investors, including both publicly-traded REITs and private investors. Further, as discussed below, the Company and its joint ventures may not be able to finance the acquisition and development opportunities they identify. If the Company and its joint ventures were unable to acquire and develop sufficient additional properties on favorable terms, or if such investments did not perform as expected, the Company’s revenue growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
 
The Company also generates income from the sale of its and its joint ventures’ properties (including existing buildings, buildings which the Company or its joint ventures have developed or re-developed on a merchant basis, and land). The Company itself and through its various joint ventures is continually engaged in, and its income growth is dependent in part on, systematically redeploying capital from properties and other assets with lower yield potential into properties and other assets with higher yield potential. As part of that process, the Company and its joint ventures sell, on an ongoing basis, select stabilized properties or land or properties offering lower potential returns relative to their market value. The gain/loss on and fees from, the sale of such properties are included in the Company’s income and are a significant source of funds, in addition to revenues generated from rental income and tenant recoveries, for the Company’s distributions. Also, a significant portion of the Company’s proceeds from such sales is used to fund the acquisition of existing, and the acquisition and development of new, industrial properties. The sale of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Company. The sale of properties also entails various risks, including competition from other sellers and the availability of attractive financing for potential buyers of the Company’s and its joint ventures’ properties. Further, the Company’s ability to sell properties is limited by safe harbor rules applying to REITs under the Code which relate to the number of properties that may be disposed of in a year, their tax bases and the cost of improvements made to the properties, along with other tests which enable a REIT to avoid punitive taxation on the sale of assets. If the Company and its joint ventures were unable to sell properties on favorable terms, the Company’s income growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
 
Currently, the Company utilizes a portion of the net sales proceeds from property sales, borrowings under its unsecured line of credit and proceeds from the issuance, when and as warranted, of additional equity securities to finance future acquisitions and developments and to fund its equity commitments to its joint ventures. Access to external capital on favorable terms plays a key role in the Company’s financial condition and results of operations, as it impacts the Company’s cost of capital and its ability and cost to refinance existing indebtedness as it matures and to fund acquisitions, developments and contributions to its joint ventures or through the issuance, when and as warranted, of additional equity securities. The Company’s ability to access external capital on favorable terms is dependent on various factors, including general market conditions, interest rates, credit ratings on the Company’s capital stock and debt, the market’s perception of


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the Company’s growth potential, the Company’s current and potential future earnings and cash distributions and the market price of the Company’s capital stock. If the Company were unable to access external capital on favorable terms, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
 
CRITICAL ACCOUNTING POLICIES
 
The Company’s significant accounting policies are described in more detail in Note 3 to the consolidated financial statements. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
 
  • The Company maintains an allowance for doubtful accounts which is based on estimates of potential losses which could result from the inability of the Company’s tenants to satisfy outstanding billings with the Company. The allowance for doubtful accounts is an estimate based on the Company’s assessment of the creditworthiness of its tenants.
 
  • Properties are classified as held for sale when management of the Company have approved the sales of such properties. When properties are classified as held for sale, the Company ceases depreciating the properties and estimates the values of such properties and measures them at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify such property as held and used. The Company estimates the value of such property and measures it at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. Fair value is determined by deducting from the estimated sales price of the property the estimated costs to close the sale.
 
  • The Company reviews its properties on a quarterly basis for possible impairment and provides a provision if impairments are determined. The Company utilizes the guidelines established under Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards (“FAS”) No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”) to determine if impairment conditions exist. The Company reviews the expected undiscounted cash flows of each property to determine if there are any indications of impairment. If the expected undiscounted cash flows of a particular property are less than the net book basis of the property, the Company will recognize an impairment charge equal to the amount of carrying value of the property that exceeds the fair value of the property. Fair value is determined by discounting the future expected cash flows of the property. The calculation of the fair value involves subjective assumptions such as estimated occupancy, rental rates, ultimate residual value and the discount rate used to present value the cash flows.
 
  • The Company is engaged in the acquisition of individual properties as well as multi-property portfolios. In accordance with FAS No. 141, “Business Combinations” (“FAS 141”), the Company is required to allocate purchase price between land, building, tenant improvements, leasing commissions, intangible assets and above and below market leases. Above-market and below-market lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rents for each corresponding in-place lease. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental income. The Company also must allocate purchase price on multi-property portfolios to individual properties. The allocation of purchase price is based on the Company’s assessment of various characteristics of the markets where the property is located and the expected cash flows of the property.
 
  • The Company capitalizes (direct and certain indirect) costs incurred in developing, renovating, acquiring and rehabilitating real estate assets as part of the investment basis. Costs incurred in making certain other improvements are also capitalized. During the land development and construction periods, we capitalize interest costs, real estate taxes and certain general and administrative costs of the personnel


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 performing development, renovations or rehabilitation up to the time the property is substantially complete. The determination and calculation of certain indirect costs requires estimates by the Company. Amounts included in capitalized costs are included in the investment basis of real estate assets.
 
  • The company analyzes its investments in joint ventures to determine whether the joint venture should be accounted for under the equity method of accounting or consolidated into the Company’s financial statements based on standards set forth under Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R), Consolidation of Variable Interest Entities,EITF 96-16,Investor’s Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights and Statement of Position78-9,Accounting for Investments in Real Estate Ventures. Based on the guidance set forth in these pronouncements, the Company does not consolidate any of its joint venture investments because either the joint venture has been determined not to be a variable interest entity or it has been determined the Company is not the primary beneficiary. The Company’s assessment of whether they are the primary beneficiary of a variable interest involves the consideration of various factors including the form of our ownership interest, the Company’s representation on the entity’s governing body, the size of the Company’s investment and future cash flows of the entity.
 
RESULTS OF OPERATIONS
 
Comparison of Year Ended December 31, 2006 to Year Ended December 31, 2005
 
The Company’s net income available to common stockholders was $90.0 million and $76.4 million for the years ended December 31, 2006 and 2005, respectively. Basic and diluted net income available to common stockholders were $2.04 and $2.04 per share, respectively, for the year ended December 31, 2006, and $1.80 and $1.80 per share, respectively, for the year ended December 31, 2005.
 
The tables below summarize the Company’s revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2006 and December 31, 2005. Same store properties are in-service properties owned prior to January 1, 2005. Acquired properties are properties that were acquired subsequent to December 31, 2004. Sold properties are properties that were sold subsequent to December 31, 2004. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after December 31, 2004 or acquisitions made prior to January 1, 2005 that were not placed in service as of December 31, 2004. These properties are placed in service as they reach stabilized occupancy (generally defined as properties that are 90% leased). Other revenues are derived from the operations of the Company’s maintenance company, fees earned from the Company’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Company’s maintenance company and other miscellaneous regional expenses.
 
The Company’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The Company’s future revenues and expenses may vary materially from historical rates.
 
At December 31, 2006 and 2005, the occupancy rates of the Company’s same store properties were 92.6% and 91.7%, respectively.
 


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  2006  2005  $ Change  % Change 
  ($ in 000’s) 
 
REVENUES
                
Same Store Properties
 $257,525  $255,963  $1,562   0.6%
Acquired Properties
  95,957   18,565   77,392   416.9%
Sold Properties
  27,738   79,826   (52,088)  (65.3)%
Properties Not In-service
  22,217   18,789   3,428   18.2%
Other
  30,048   19,118   10,930   57.2%
                 
   433,485   392,261   41,224   10.5%
Discontinued Operations
  (37,449)  (66,731)  29,282   (43.9)%
                 
Total Revenues
 $396,036  $325,530  $70,506   21.7%
                 
 
Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $77.4 million due to the 252 industrial properties totaling approximately 30.6 million square feet of GLA acquired subsequent to December 31, 2004. Revenues from sold properties decreased $52.1 million due to the 221 industrial properties totaling approximately 29.9 million square feet of GLA sold subsequent to December 31, 2004. Revenues from properties not in service increased by approximately $3.4 million due primarily to an increase in properties placed in service during 2006 and 2005. Other revenues increased by approximately $10.9 million due primarily to an increase in joint venture fees, partially offset by a decrease in assignment fees.
 
                 
  2006  2005  $ Change  % Change 
  ($ in 000’s) 
 
PROPERTY EXPENSES
                
Same Store Properties
 $87,047  $85,220  $1,827   2.1%
Acquired Properties
  31,380   5,688   25,692   451.7%
Sold Properties
  8,270   34,959   (26,689)  (76.3)%
Properties Not In-service
  9,512   9,005   507   5.6%
Other
  15,429   11,321   4,108   36.3%
                 
   151,638   146,193   5,445   3.7%
Discontinued Operations
  (11,145)  (22,155)  11,010   (49.7)%
                 
Total Property Expenses
 $140,493  $124,038  $16,455   13.3%
                 
 
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses and expenses from build to suit development for sale. Property expenses from same store properties increased $1.8 million or 2.1% primarily due to an increase of $1.1 million in utility expense attributable to increases in gas and electric costs and an increase of $0.8 million in real estate tax expense. Property expenses from acquired properties increased by $25.7 million primarily due to properties acquired subsequent to December 31, 2004 and due to an increase inbuild-to-suit-for-saleexpenses of $10.3 million. Property expenses from sold properties decreased $26.7 million due to properties sold subsequent to December 31, 2004, and also due to a decrease inbuild-to-suit-for-saleexpenses of $15.6 million. Property expenses from properties not in service increased by approximately $0.5 million due primarily to an increase in properties placed in service during 2006 and 2005. Other expenses increased $4.1 million due primarily to increases in employee compensation.
 
General and administrative expense increased by approximately $21.7 million, or 38.9%, due primarily to increases in employee compensation related to compensation for new employees as well as an increase in incentive compensation.
 

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  2006  2005  $ Change  % Change 
  ($ in 000’s) 
 
DEPRECIATION AND OTHER AMORTIZATION
                
Same Store Properties
 $82,896  $84,009  $(1,113)  (1.3)%
Acquired Properties
  51,652   11,808   39,844   337.4%
Sold Properties
  9,584   20,644   (11,060)  (53.6)%
Properties Not In-service and Other
  14,250   10,169   4,081   40.1%
Corporate Furniture, Fixtures and Equipment
  1,913   1,371   542   39.5%
                 
   160,295   128,001   32,294   25.2%
Discontinued Operations
  (14,389)  (22,281)  7,892   (35.4)%
                 
Total Depreciation and Other Amortization
 $145,906  $105,720  $40,186   38.0%
                 
 
Depreciation and other amortization for same store properties remained relatively unchanged. Depreciation and other amortization from acquired properties increased by $39.8 million due to properties acquired subsequent to December 31, 2004. Depreciation and other amortization from sold properties decreased by $11.1 million due to properties sold subsequent to December 31, 2004. Depreciation and other amortization for properties not in service and other increased $4.1 million due primarily to accelerated depreciation on one property in Columbus, OH which was razed during the year ended December 31, 2006. Amortization of corporate furniture, fixtures and equipment increased $0.5 million primarily due to expansion and improvement to corporate offices.
 
Interest income remained relatively unchanged.
 
In April 2006, the Company, through the Operating Partnership, entered into interest rate protection agreements which it designated as cash flow hedges. Each of the interest rate protection agreements had a notional value of $74.8 million, were effective from May 10, 2007 through May 10, 2012, and fixed the LIBOR rate at 5.42%. In September 2006, the interest rate protection agreements failed to qualify for hedge accounting since the actual debt issuance date was not within the range of dates the Company disclosed in its hedge designation. The Company, through the Operating Partnership, settled the interest rate protection agreements and paid the counterparties $2.9 million. In October 2005, the Company, through an entity wholly-owned by the Operating Partnership, entered into an interest rate protection agreement which hedged the change in value of a build-to-suit development project the Company was constructing. This interest rate protection agreement did not qualify for hedge accounting. The Company recognized a loss of $0.2 million related to this interest rate protection agreement for the year ended December 31, 2006. Both transactions are recognized in themark-to-market/(loss)gain on settlement of interest rate protection agreements caption on the consolidated statement of operations.
 
The Company recognized a $0.6 million gain related to thesettlement/mark-to-marketof two interest rate protection agreements the Company entered into during 2005 in order to hedge the change in value of a build-to-suit development project as well as $0.2 million in deferred gain that was reclassified out of other comprehensive income relating to a settled interest rate protection agreement that no longer qualified for hedge accounting.
 
Interest expense increased by approximately $12.8 million due primarily to an increase in the weighted average debt balance outstanding for the year ended December 31, 2006 ($1,880.3 million) as compared to the year ended December 31, 2005 ($1,690.2 million), an increase in the weighted average interest rate for the year ended December 31, 2006 (6.72%) as compared to the year ended December 31, 2005 (6.63%), partially offset by an increase in capitalized interest for the year ended December 31, 2006 due to an increase in development activities.
 
Amortization of deferred financing costs increased by approximately $0.5 million, or 25.5%, due primarily to financing fees incurred associated with the amendment and restatement of the Company’s

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Unsecured Line of Credit I in August 2005, the issuance of the 2016 Notes in January 2006 and the issuance of the 2011 Exchangeable Notes in September 2006.
 
The Company recognized approximately $0.08 million of gain on the early retirement of debt for the year ended December 31, 2005, comprised of $0.05 million write-off of financing fees associated with the Company’s previous line of credit agreement which was amended and restated on August 23, 2005. The gain on early retirement of debt also includes a payment of $0.3 million of fees and a write-off of loan premium of $0.4 million on a $13.7 million mortgage loan which was assumed by the buyers of the related properties on July 13, 2005.
 
Equity in income of joint ventures increased by approximately $27.0 million due primarily to the Company’s economic share of gains and earn outs on property sales from the March 2005 Joint Venture and the September 2005 Joint Venture during the year ended December 31, 2006.
 
The income tax provision (included in continuing operations, discontinued operations and gain on sale) increased by $22.9 million, in the aggregate, due primarily to an increase in the gain on sale of real estate, joint venture fees, equity in net income of joint ventures, partially offset by an increase in interest expense and an increase in general and administrative expense within the Company’s taxable REIT subsidiary.
 
The $6.1 million gain on sale of real estate for the year ended December 31, 2006 resulted from the sale of several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $29.6 million gain on sale of real estate for the year ended December 31, 2005 resulted from the sale of 10 industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.
 
The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Company for the years ended December 31, 2006 and December 31, 2005.
 
         
  Year Ended
 
  December 31, 
  2006  2005 
  ($ in 000’s) 
 
Total Revenues
 $37,449  $66,731 
Property Expenses
  (11,145)  (22,155)
Interest Expense
     (373)
Depreciation and Amortization
  (14,389)  (22,281)
Provision for Income Taxes Allocable to Operations
  (2,629)  (3,054)
Gain on Sale of Real Estate
  213,442   132,139 
Provision for Income Taxes Allocable to Gain on Sale
  (47,511)  (20,529)
         
Income from Discontinued Operations
 $175,217  $130,478 
         
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2006 reflects the results of operations and gain on sale of real estate of $213.4 million relating to 125 industrial properties that were sold during the year ended December 31, 2006 and the results of operations of 25 properties that were identified as held for sale at December 31, 2006.
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2005 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2006, 25 properties that were identified as held for sale at December 31, 2006, the results of operations and gain on sale of real estate of $132.1 million from the 86 industrial properties which were sold during the year ended December 31, 2005.


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Comparison of Year Ended December 31, 2005 to Year Ended December 31, 2004
 
The Company’s net income available to common stockholders was $76.4 million and $88.2 million for the years ended December 31, 2005 and 2004, respectively. Basic and diluted net income available to common stockholders were $1.80 and $1.80 per share, respectively, for the year ended December 31, 2005, and $2.17 and $2.17 per share, respectively, for the year ended December 31, 2004.
 
The tables below summarize the Company’s revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2005 and December 31, 2004. Same store properties are in-service properties owned prior to January 1, 2004. Acquired properties are properties that were acquired subsequent to December 31, 2003. Sold properties are properties that were sold subsequent to December 31, 2003. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after December 31, 2003 or acquisitions made prior to January 1, 2004 that were not placed in service as of December 31, 2003. These properties are placed in service as they reach stabilized occupancy (generally defined as properties that are 90% leased). Other revenues are derived from the operations of the Company’s maintenance company, fees earned from the Company’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Company’s maintenance company and other miscellaneous regional expenses.
 
The Company’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The Company’s future revenues and expenses may vary materially from historical rates.
 
At December 31, 2005 and 2004, the occupancy rates of the Company’s same store properties were 90.1% and 89.5%, respectively.
 
                 
  2005  2004  $ Change  % Change 
  ($ in 000’s) 
 
REVENUES
                
Same Store Properties
 $251,046  $249,309  $1,737   0.7%
Acquired Properties
  55,098   11,912   43,186   362.5%
Sold Properties
  24,482   49,395   (24,913)  (50.4)%
Properties Not In-service
  42,199   23,617   18,582   78.7%
Other
  19,436   8,880   10,556   118.9%
                 
   392,261   343,113   49,148   14.3%
Discontinued Operations
  (66,731)  (75,105)  8,374   11.1%
                 
Total Revenues
 $325,530  $268,008  $57,522   21.5%
                 
 
Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $43.2 million due to the 240 industrial properties totaling approximately 29.3 million square feet of GLA acquired subsequent to December 31, 2003. Revenues from sold properties decreased $24.9 million due to the 193 industrial properties totaling approximately 20.2 million square feet of GLA sold subsequent to December 31, 2003. Revenues from properties not in service increased by approximately $18.6 million due primarily tobuild-to-suit-for-salerevenues of $16.2 million. Other revenues increased by approximately $10.6 million due primarily to an increase in joint venture fees due to new joint ventures and assignment fees.
 


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  2005  2004  $ Change  % Change 
  ($ in 000’s) 
 
PROPERTY EXPENSES
                
Same Store Properties
 $83,636  $80,051  $3,585   4.5%
Acquired Properties
  15,702   3,756   11,946   318.1%
Sold Properties
  8,823   16,661   (7,838)  (47.0)%
Properties Not In-service
  26,161   8,739   17,422   199.4%
Other
  11,871   6,543   5,328   81.4%
                 
   146,193   115,750   30,443   26.3%
Discontinued Operations
  (22,155)  (25,441)  3,286   (12.9)%
                 
Total Property Expenses
 $124,038  $90,309  $33,729   37.3%
                 
 
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses and expenses from build to suit development for sale. Property expenses from same store properties increased $3.6 million or 4.5% primarily due to an increase of $0.9 million in utility expense attributable to increases in gas and electric costs, an increase of $1.3 million in repair and maintenance attributable to increases in snow removal expense and an increase of $0.9 million in real estate tax expense. Property expenses from acquired properties increased by $11.9 million due to properties acquired subsequent to December 31, 2003. Property expenses from sold properties decreased by $7.8 million due to properties sold subsequent to December 31, 2003. Property expenses from properties not in service increased by approximately $17.4 million due primarily tobuild-to-suit-for-salecosts of $15.6 million. Other expenses increased $5.3 million due primarily to increases in employee compensation.
 
General and administrative expense increased by approximately $16.2 million, or 41.0%, due primarily to increases in employee compensation related to compensation for new employees as well as an increase in incentive compensation.
 
                 
  2005  2004  $ Change  % Change 
  ($ in 000’s) 
 
DEPRECIATION AND OTHER AMORTIZATION
                
Same Store Properties
 $77,329  $72,016  $5,313   7.4%
Acquired Properties
  29,278   3,797   25,481   671.1%
Sold Properties
  7,795   13,713   (5,918)  (43.2)%
Properties Not In-service and Other
  12,228   9,740   2,488   25.5%
Corporate Furniture, Fixtures and Equipment
  1,371   1,280   91   7.1%
                 
   128,001   100,546   27,455   27.3%
Discontinued Operations
  (22,281)  (20,607)  (1,674)  8.1%
                 
Total Depreciation and Other Amortization
 $105,720  $79,939  $25,781   32.3%
                 
 
The increase in depreciation and other amortization for same store properties is due to an acceleration of depreciation and amortization on tenant improvements and leasing commissions for tenants who terminated leases early, an acceleration of amortization on in-place lease values related to leases for which the tenants did not renew and a net increase in leasing commissions and tenant improvements paid in 2005 and 2004. Depreciation and other amortization from acquired properties increased by $25.5 million due to properties acquired subsequent to December 31, 2003. Depreciation and other amortization from sold properties decreased by $5.9 million due to properties sold subsequent to December 31, 2003. Depreciation and other amortization for properties not in service and other increased $2.5 million due to developments substantially completed in 2004 and 2005. Amortization of corporate furniture, fixtures and equipment remained relatively unchanged.

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Interest income decreased by approximately $2.1 million due primarily to a decrease in the average mortgage loans receivable outstanding during the year ended December 31, 2005, as compared to the year ended December 31, 2004.
 
The Company recognized a $0.6 million gain related to thesettlement/mark-to-marketof two interest rate protection agreements that the Company entered into during 2005 in order to hedge the change in value of a build to suit development project as well as $0.2 million in deferred gain that was reclassified out of other comprehensive income relating to a settled interest rate protection agreement that no longer qualified for hedge accounting.
 
In March 2004, the Company, through the Operating Partnership, entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73.5 million. In May 2004, the Company reduced the projected amount of the future debt offering and settled $24.5 million of this interest rate protection agreement for proceeds in the amount of $1.5 million which is recognized in net income for the year ended December 31, 2004. In November 2004, the Company settled an interest rate protection agreement for $0.3 million that had been designated as a cash flow hedge of $50.0 million of a forecasted debt issuance. Hedge ineffectiveness in the amount of $0.1 million, due to a mismatch in the forecasted debt issuance dates, was recognized in net income. The remaining $0.2 million was included in other comprehensive income and was reclassified into net income for the year ended December 31, 2005 as the hedge no longer qualified for hedge accounting.
 
Interest expense increased by approximately $9.7 million due primarily to an increase in the weighted average debt balance outstanding for the year ended December 31, 2005 ($1,690.2 million) as compared to the year ended December 31, 2004 ($1,522.9 million), an increase in the weighted average interest rate for the year ended December 31, 2005 (6.63%) as compared to the year ended December 31, 2004 (6.60%), partially offset by an increase in capitalized interest for the year ended December 31, 2005 due to an increase in development activities.
 
Amortization of deferred financing costs remained relatively unchanged.
 
The Company recognized a $0.08 million gain on the early retirement of debt for the year ended December 31, 2005. This includes $0.05 million write-off of financing fees associated with the Company’s previous line of credit agreement which was amended and restated on August 23, 2005. The gain on early retirement of debt also includes a payment of $0.3 million of fees and a write-off of loan premium of $0.4 million on a $13.7 million mortgage loan which was assumed by the buyers of the related properties on July 13, 2005. The loss on early retirement of debt of approximately $0.5 million for the year ended December 31, 2004 is comprised of the write-off of unamortized deferred financing costs, a loan premium and a prepayment penalty related to the early pay off and retirement of a $4.8 million mortgage loan.
 
Equity in income of joint ventures decreased by approximately $33.6 million due primarily to the Company’s allocation of gain and earn out from the sale of all the properties in the December 2001 Joint Venture and the Company’s recognition of the deferred gain on its initial sale of certain properties to the December 2001 Joint Venture recognized in the year ended December 31, 2004.
 
The income tax provision (included in continuing operations, discontinued operations and gain on sale) increased by $12.0 million, in the aggregate, due primarily to an increase in the gain on sale of real estate and joint venture fees partially offset by an increase in general and administrative expense and interest expense in the Company’s taxable REIT subsidiary.
 
The $29.6 million gain on sale of real estate for the year ended December 31, 2005 resulted from the sale of ten industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $16.8 million gain on sale of real estate for the year ended December 31, 2004 resulted from the sale of five industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.


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The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Company for the years ended December 31, 2005 and December 31, 2004.
 
         
  Year Ended
 
  December 31, 
  2005  2004 
  ($ in 000’s) 
 
Total Revenues
 $66,731  $75,105 
Property Expenses
  (22,155)  (25,441)
Interest Expense
  (373)  (609)
Depreciation and Amortization
  (22,281)  (20,607)
Provision for Income Taxes Allocable to Operations
  (3,054)  (2,346)
Gain on Sale of Real Estate
  132,139   88,245 
Provision for Income Taxes Allocable to Gain on Sale
  (20,529)  (8,659)
         
Income from Discontinued Operations
 $130,478  $105,688 
         
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2005 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2006, the results of operations and gain on sale of real estate of $132.1 million relating to 86 industrial properties that were sold during the year ended December 31, 2005 and the results of operations of 25 properties that were identified as held for sale at December 31, 2006.
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2004 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2006 and 2005, 25 properties that were identified as held for sale at December 31, 2006, the results of operations of industrial properties that were sold during the year ended December 31, 2004, as well as the gain on sale of real estate of $88.2 million from the 92 industrial properties which were sold during the year ended December 31, 2004.
 
LIQUIDITY AND CAPITAL RESOURCES
 
At December 31, 2006, the Company’s cash and cash equivalents was approximately $16.1 million and restricted cash was approximately $16.0 million. Restricted cash is primarily comprised of gross proceeds from the sales of certain industrial properties. These sales proceeds will be disbursed as the Company exchanges industrial properties under Section 1031 of the Internal Revenue Code.
 
The Company has considered its short-term (one year or less) liquidity needs and the adequacy of its estimated cash flow from operations and other expected liquidity sources to meet these needs. The Company’s 7.6% Notes due 2007, with an aggregate principal amount of $150.0 million, are due on May 15, 2007. The Company expects to satisfy the maturity of the 2007 Notes with the issuance of additional debt. With the exception of the 2007 Notes, the Company believes that its principal short-term liquidity needs are to fund normal recurring expenses, debt service requirements and the minimum distribution required to maintain the Company’s REIT qualification under the Code. The Company anticipates that these needs will be met with cash flows provided by operating activities.
 
The Company expects to meet long-term (greater than one year) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through the disposition of select assets, the issuance of long-term unsecured indebtedness and the issuance of additional equity securities. As of December 31, 2006 and February 22, 2007, $215.4 million of common stock, preferred stock and depositary shares and approximately $300.0 million of debt securities were registered and unissued under the Securities Act of 1933, as amended. The Company also may finance the development or acquisition of additional properties through borrowings under the Unsecured Line of Credit I. At December 31, 2006, borrowings under the Unsecured Line of Credit I bore interest at a weighted average interest rate of 6.058%. The Unsecured Line of Credit bear interest at a floating rate of LIBOR plus .625% or the Prime Rate, at the Company’s election. As of February 22, 2007, the Company had


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approximately $210.6 million available in additional borrowings under the Unsecured Line of Credit I. The Unsecured Line of Credit I contains certain financial covenants relating to debt service coverage, market value net worth, dividend payout ratio and total funded indebtedness. The Company’s access to borrowings may be limited if it fails to meet any of these covenants. Also, the Company’s borrowing rate on its Unsecured Line of Credit I may increase in the event of a downgrade on the Company’s unsecured notes by the rating agencies.
 
The Company currently has credit ratings from Standard & Poor’s, Moody’s and Fitch Ratings of BBB/Baa2/BBB, respectively. The Company’s goal is to maintain its existing credit ratings. In the event of a downgrade, management believes the Company would continue to have access to sufficient capital; however, the Company’s cost of borrowing would increase and its ability to access certain financial markets may be limited.
 
Year Ended December 31, 2006
 
Net cash provided by operating activities of approximately $59.6 million for the year ended December 31, 2006 was comprised primarily of net income before minority interest of approximately $125.6 million and net distributions from joint ventures of $1.0 million, offset by the net change in operating assets and liabilities of approximately $4.6 million and adjustments for non-cash items of approximately $62.4 million. The adjustments for the non-cash items of approximately $62.4 million are primarily comprised of the gain on sale of real estate of approximately $219.5 million and the effect of the straight-lining of rental income of approximately $10.2 million, offset by depreciation and amortization of approximately $165.0 million and the provision for bad debt of $2.3 million.
 
Net cash provided by investing activities of approximately $129.1 million for the year ended December 31, 2006 was comprised primarily of the net proceeds from the sale of real estate, the repayment of mortgage loans receivable, decrease in restricted cash that is held by an intermediary for Section 1031 exchange purposes, and distributions from the Company’s industrial real estate joint ventures, partially offset by the acquisition of real estate, development of real estate, capital expenditures related to the expansion and improvement of existing real estate, contributions to, and investments in, the Company’s industrial real estate joint ventures.
 
During the year ended December 31, 2006, the Company acquired 91 industrial properties comprising approximately 10.5 million square feet of GLA and several land parcels. The purchase price of these acquisitions totaled approximately $610.7 million, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. The Company also substantially completed the development of 15 industrial properties comprising approximately 5.0 million square feet of GLA at an estimated cost of approximately $188.6 million.
 
The Company, through wholly-owned limited liability companies in which the Operating Partnership is the sole member, contributed approximately $32.8 million to, and received distributions of approximately $51.4 million from, the Company’s industrial real estate joint ventures. As of December 31, 2006, the Company’s industrial real estate joint ventures owned 255 industrial properties comprising approximately 26.0 million square feet of GLA.
 
During the year ended December 31, 2006, the Company sold 125 industrial properties comprising approximately 17.1 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 125 industrial properties and several land parcels were approximately $946.8 million.
 
Net cash used in financing activities of approximately $180.8 million for the year ended December 31, 2006 was derived primarily by the redemption of preferred stock, common and preferred stock dividends and unit distributions, net repayments under the Company’s Unsecured Lines of Credit, the repayments of senior unsecured debt, the repurchase of restricted stock from employees of the Company to pay for withholding taxes on the vesting of restricted stock and repayments on mortgage loans payable, partially offset by the net


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proceeds from the issuance of senior unsecured debt and preferred stock and the net proceeds from the exercise of stock options.
 
For the year ended December 31, 2006, certain directors and employees of the Company exercised 125,780 non-qualified employee stock options. Net proceeds to the Company were approximately $3.7 million.
 
During the year ended December 31, 2006, the Company awarded 303,142 shares of restricted common stock to certain employees and 16,232 shares of restricted common stock to certain directors. These shares of restricted common stock had a fair value of approximately $12.2 million on the date of grant. The restricted common stock vests over a period of three years for awards granted to employees and generally over a period of five years for awards granted to directors. Compensation expense will be charged to earnings over the respective vesting periods.
 
On January 10, 2006, the Company, through the Operating Partnership, paid off and retired the 2005 Unsecured Line of Credit II, which had a borrowing capacity of $125.0 million and matured on March 15, 2006.
 
On January 10, 2006, the Company, through the Operating Partnership, issued the 2016 Notes. Net of offering costs, the Company received net proceeds of $197.5 million from the issuance of 2016 Notes. In December 2005, the Company also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Company settled the interest rate protection agreements on January 9, 2006 for a payment of approximately $1.7 million which is included in other comprehensive income.
 
On January 13, 2006, the Company redeemed the Series I Preferred Stock for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $0.4 million. The Operating Partnership also redeemed the Series I Preferred Units.
 
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $0.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share.
 
On August 21, 2006, the Company issued 2,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series K Flexible Cumulative Redeemable Preferred Stock (the “Series K Preferred Stock”), at an initial offering price of $25.00 per Depositary Share.
 
On September 25, 2006, the Company, through the Operating Partnership issued $175.0 million of senior unsecured debt which bears interest at 4.625% (the “Exchangeable Notes”). Under certain circumstances, the holders of the Exchangeable Notes may exchange their notes for cash up to their principal amount and shares of the Company’s common stock for the remainder of the exchange value in excess of the principal amount. The Company also granted the initial purchasers of the 2011 Exchangeable Notes an option exercisable until October 4, 2006 to purchase up to an additional $25,000 principal amount of the 2011 Exchangeable Notes to cover over-allotments, if any (the “Over-allotment Option”). On October 3, 2006, the initial purchasers of the 2011 Exchangeable Notes exercised their Over-Allotment Option with respect to $25,000 in principal amount of the 2011 Exchangeable Notes. With the exercise of the Over-Allotment Option, the aggregate principal amount of 2011 Exchangeable Notes issued and outstanding is $200,000. In connection with the offering of the Exchangeable Notes, the Operating Partnership entered into capped call transactions in order to increase the effective exchange price. The aggregate cost of the capped call transactions was approximately $6.8 million.


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Contractual Obligations and Commitments
 
The following table lists our contractual obligations and commitments as of December 31, 2006 (In thousands):
 
                     
     Payments Due by Period 
     Less Than
          
  Total  1 Year  1-3 Years  3-5 Years  Over 5 Years 
 
Operating and Ground Leases*
 $41,649  $2,561  $4,417  $3,504  $31,167 
Real Estate Development*
  101,050   101,050          
Long-term Debt
  1,847,077   152,884   343,112   422,905   928,176 
Interest Expense on Long-Term Debt*
  921,160   100,967   189,078   162,359   468,756 
                     
Total
 $2,910,936  $357,462  $536,607  $588,768  $1,428,099 
                     
 
 
* Not on balance sheet.
 
Off-Balance Sheet Arrangements
 
Letters of credit are issued in most cases as pledges to governmental entities for development purposes or to support purchase obligations. At December 31, 2006, the Company has $9.0 million in outstanding letters of credit, none of which are reflected as liabilities on the Company’s balance sheet. The Company has no other off-balance sheet arrangements other than those disclosed on the Contractual Obligations and Commitments table above.
 
Environmental
 
The Company incurred environmental costs of approximately $0.6 million and $0.4 million in 2006 and 2005, respectively. The Company estimates 2007 costs of approximately $0.7 million. The Company estimates that the aggregate cost which needs to be expended in 2007 and beyond with regard to currently identified environmental issues will not exceed approximately $2.0 million, a substantial amount of which will be the primary responsibility of the tenant, the seller to the Company or another responsible party.
 
Inflation
 
For the last several years, inflation has not had a significant impact on the Company because of the relatively low inflation rates in the Company’s markets of operation. Most of the Company’s leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing the Company’s exposure to increases in costs and operating expenses resulting from inflation. In addition, many of the outstanding leases expire within six years which may enable the Company to replace existing leases with new leases at higher base rentals if rents of existing leases are below the then-existing market rate.
 
Market Risk
 
The following discussion about the Company’s risk-management activities includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements.
 
This analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments which are held by the Company at December 31, 2006 that are sensitive to changes in the interest rates. While this analysis may have some use as a benchmark, it should not be viewed as a forecast.


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In the normal course of business, the Company also faces risks that are either non-financial or non-quantifiable. Such risks principally include credit risk and legal risk and are not represented in the following analysis.
 
At December 31, 2006, $1,627.7 million (approximately 88.7% of total debt at December 31, 2006) of the Company’s debt was fixed rate debt and $207.0 million (approximately 11.3% of total debt at December 31, 2006) was variable rate debt. Currently, the Company does not enter into financial instruments for trading or other speculative purposes.
 
For fixed rate debt, changes in interest rates generally affect the fair value of the debt, but not earnings or cash flows of the Company. Conversely, for variable rate debt, changes in the interest rate generally do not impact the fair value of the debt, but would affect the Company’s future earnings and cash flows. The interest rate risk and changes in fair market value of fixed rate debt generally do not have a significant impact on the Company until the Company is required to refinance such debt. See Note 5 to the consolidated financial statements for a discussion of the maturity dates of the Company’s various fixed rate debt.
 
Based upon the amount of variable rate debt outstanding at December 31, 2006, a 10% increase or decrease in the interest rate on the Company’s variable rate debt would decrease or increase, respectively, future net income and cash flows by approximately $1.3 million per year. A 10% increase in interest rates would decrease the fair value of the fixed rate debt at December 31, 2006 by approximately $55.2 million to $1,659.9 million. A 10% decrease in interest rates would increase the fair value of the fixed rate debt at December 31, 2006 by approximately $59.1 million to $1,774.2 million.
 
The use of derivative financial instruments allows the Company to manage risks of increases in interest rates with respect to the effect these fluctuations would have on our earnings and cash flows. As of December 31, 2006, we had two outstanding interest rate swaps with aggregate notional amount of $145.8 million which fix the interest rate on a forecasted offering of debt.
 
Subsequent Events
 
On January 2, 2007, the Company paid fourth quarter 2006 dividends of $53.91 per share ($0.5391 per Depositary Share) on its Series C Preferred Stock, totaling, in the aggregate, approximately $1.1 million; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate, approximately $2.7 million; and a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $0.9 million.
 
On January 22, 2007, the Company and the Operating Partnership paid a fourth quarter 2006 distribution of $.7100 per share, totaling approximately $36.6 million.
 
On February 28, 2007, the Company declared a first quarter 2007 distribution of $.7100 per common share/unit on its common stock/units which is payable on April 16, 2007. The Company also declared first quarter 2007 dividends of $53.91 per share ($0.5391 per Depositary Share), on its Series C Preferred Stock, totaling, in the aggregate, approximately $1.1 million, which is payable on April 2, 2007; semi-annual dividends of $3,118.00 per share ($31.1800 per Depositary Share) on its Series F Preferred Stock, totaling, in the aggregate, approximately $1.6 million, which is payable on April 2, 2007; semi-annual dividends of $3,618.00 per share ($36.1800 per Depositary Share) on its Series G Preferred Stock, totaling, in the aggregate, approximately $0.9 million, which is payable on April 2, 2007; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate, approximately $2.7, which is payable on April 2, 2007; and a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $0.9 million, which is payable on April 2, 2007.
 
From January 1, 2007 to February 22, 2007, the Company awarded 1,598 shares of restricted common stock to certain Directors. These shares of restricted common stock had a fair value of approximately $0.1 million on the date of grant. The restricted common stock vests over a period of five years. Compensation expense will be charged to earnings over the respective vesting period.


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From January 1, 2007 to February 22, 2007, the Company acquired 55 industrial properties (including 41 properties in connection with the purchase of the 90% equity interest from the institutional investor in the September 1998 Joint Venture on January 31, 2007) and several land parcels for a total estimated investment of approximately $135.9 million. The Company also sold 14 industrial properties for approximately $74.4 million of gross proceeds during this period.
 
Related Party Transactions
 
The Company periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of Michael W. Brennan, the President and Chief Executive Officer and a director of the Company, is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2006, 2005 and 2004 this relative received approximately $0.3, $0.3, and $0.03 million in brokerage commissions.
 
Other
 
In February 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 155,“Accounting for Certain Hybrid Financial Instruments” which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets.” This statement:
 
a. Permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation;
 
b. Clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133;
 
c. Establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation;
 
d. Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and
 
e. Amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.
 
This Statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In March 2006, the FASB issued SFAS No. 156,“Accounting for Servicing of Financial Assets”which amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, (“FAS 140”) with respect to the accounting for separately recognized servicing assets and servicing liabilities. This statement was issued to simplify the accounting for servicing rights and reduce the volatility that results from the use of different measurements attributes for servicing rights and the related financial instruments used to economically hedge risks associated with those servicing rights. The statement clarifies when to separately account for servicing rights, requires separately recognized servicing rights to be initially measured at fair value, and provides the option to subsequently account for those servicing rights at either fair value or under the amortization method previously required under FAS 140. An entity should adopt this statement as of the beginning of its first fiscal year that begins after September 15, 2006. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.


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In June 2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes”(“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with SFAS No. 109, “Accounting for Income Taxes.” The evaluation of a tax position in accordance with FIN 48 is a two-step process. First, the Company determines whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. Second, a tax position that meets the more-likely-than-not threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent reporting period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent reporting period in which the threshold is no longer met. The Company is required to apply the guidance of FIN 48 beginning January 1, 2007. The Company is currently evaluating what impact the application of FIN 48 will have on the consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157,“Fair Value Measurements” which establishes a common definition of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In December 2006, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regarding EITF00-19-2,“Accounting for Registration Payment Arrangements.”The guidance specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with SFAS No. 5, “Accounting for Contingencies”. The guidance is effective for periods beginning after December 15, 2006. EITF00-19-2 is not expected to impact the Company’s results of operations, financial position, or liquidity.
 
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
 
Response to this item is included in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” above.
 
Item 8.  Financial Statements and Supplementary Data
 
See Index to Financial Statements and Financial Statement Schedule on page 55 included in Item 15.
 
Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
None.
 
Item 9A.  Controls and Procedures
 
Evaluation of Disclosure Controls and Procedures
 
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s periodic reports pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosure.
 
The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange ActRule 13a-15(b)as of the end of the period covered by this report. Based upon this evaluation,


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the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.
 
Management’s Report on Internal Control Over Financial Reporting
 
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
 
Management of the Company has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006. In making its assessment of internal control over financial reporting, management used the criteria described in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
 
Management of the Company has concluded that, as of December 31, 2006, the Company’s internal control over financial reporting was effective.
 
Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein within Item 15. See Report of Independent Registered Public Accounting Firm on page 56-57.
 
Changes in Internal Control Over Financial Reporting
 
There has been no change in the Company’s internal control over financial reporting that occurred during the fourth quarter of 2006 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
Item 9B.  Other Information
 
None.
 
PART III
 
Item 10, 11, 12, 13 and 14.  Directors, Executive Officers and Corporate Governance, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships and Related Transactions and Director Independence and Principal Accountant Fees and Services
 
The information required by Item 10, Item 11, Item 12, Item 13 and Item 14 is hereby incorporated or furnished, solely to the extent required by such item, from the Company’s definitive proxy statement, which is expected to be filed with the SEC no later than 120 days after the end of the Company’s fiscal year. Information from the Company’s definitive proxy statement shall not be deemed to be “filed” or “soliciting material,” or subject to liability for purposes of Section 18 of the Securities Exchange Act of 1934 to the maximum extent permitted under the Exchange Act.
 
PART IV
 
Item 15.  Exhibits and Financial Statement Schedules
 
(a) Financial Statements, Financial Statement Schedule and Exhibits
 
(1 & 2) See Index to Financial Statements and Financial Statement Schedule on page 55.


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(3) Exhibits:
 
     
Exhibits
 
Description
 
 3.1 Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
 3.2 Amended and Restated Bylaws of the Company, dated September 4, 1997 (incorporated by reference to Exhibit 1 of the Company’sForm 8-K,dated September 4, 1997, as filed on September 29, 1997, File No. 1-13102)
 3.3 Articles of Amendment to the Company’s Articles of Incorporation, dated June 20, 1994 (incorporated by reference to Exhibit 3.2 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
 3.4 Articles of Amendment to the Company’s Articles of Incorporation, dated May 31, 1996 (incorporated by reference to Exhibit 3.3 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
 3.5 Articles Supplementary relating to the Company’s 85/8% Series C Cumulative Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.1 of theForm 8-Kof the Company dated June 6, 1997, File No. 1-13102)
 3.6 Articles Supplementary relating to the Company’s 6.236% Series F Flexible Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 3.1 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 3.7 Articles Supplementary relating to the Company’s 7.236% Series G Flexible Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 3.2 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 3.8 Articles Supplementary relating to the Company’s Junior Participating Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.10 ofForm S-3of the Company and First Industrial, L.P. dated September 24, 1997, RegistrationNo. 333-29879)
 3.9 Articles Supplementary relating to the Company’s 7.25% Series J Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.1 of theForm 8-Kof the Company filed January 17, 2006, File No. 1-13102)
 3.10 Articles Supplementary relating to the Company’s 7.25% Series K Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 1.6 of theForm 8-Aof the Company, as filed on August 18, 2006, File No. 1-13102)
 4.1 Deposit Agreement, dated June 6, 1997, by and among the Company, First Chicago Trust Company of New York and holders from time to time of Series C Depositary Receipts (incorporated by reference to Exhibit 4.2 of theForm 8-Kof the Company, dated June 6, 1997, File No. 1-13102)
 4.2 Deposit Agreement, dated May 27, 2004, by and among the Company, EquiServe Inc. and EquiServe Trust Company, N.A. and holders from time to time of Series F Depositary Receipts (incorporated by reference to Exhibit 4.1 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 4.3 Deposit Agreement, dated May 27, 2004, by and among the Company, EquiServe Inc. and EquiServe Trust Company, N.A. and holders from time to time of Series G Depositary Receipts (incorporated by reference to Exhibit 4.2 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 4.4 Remarketing Agreement, dated May 27, 2004, relating to 50,000 depositary shares, each representing 1/100 of a share of the Series F Flexible Cumulative Redeemable Preferred Stock, by and among Lehman Brothers Inc., the Company and First Industrial, L.P. (incorporated by reference to Exhibit 1.2 of theForm 8-Kof the Company, dated May 27, 2004, File No. 1-13102)
 4.5 Remarketing Agreement, dated May 27, 2004, relating to 25,000 depositary shares, each representing 1/100 of a share of the Series G Flexible Cumulative Redeemable Preferred Stock, by and among Lehman Brothers Inc., the Company and First Industrial, L.P. (incorporated by reference to Exhibit 1.3 of theForm 8-Kof the Company, dated May 27, 2004, File No. 1-13102)


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Exhibits
 
Description
 
 4.6 Deposit Agreement, dated January 13, 2006, by and among the Company, Computershare Shareholder Services, Inc. and Computershare Trust Company, N.A., as depositary, and holders from time to time of Series J Depositary Receipts (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company, filed January 17, 2006, File No. 1-13102)
 4.7 Deposit Agreement, dated August 21, 2006, by and among the Company, Computershare Shareholder Services, Inc. and Computershare Trust Company, N.A., as depositary, and holders from time to time of Series K Depositary Receipts (incorporated by reference to Exhibit 1.7 of theForm 8-Aof the Company, as filed on August 18, 2006, File No. 1-13102)
 4.8 Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of theForm 10-Qof the Company for the fiscal quarter ended March 31, 1997, as amended byForm 10-Q/ANo. 1 of the Company filed May 30, 1997, File No. 1-13102)
 4.9 Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of theForm 10-Qof the Company for the fiscal quarter ended March 31, 1997, as amended byForm 10-Q/ANo. 1 of the Company filed May 30, 1997, File No. 1-13102)
 4.10 Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011(incorporated by reference to Exhibit 4.4 of theForm 10-Qof First Industrial, L.P. for the fiscal quarter ended March 31, 1997, FileNo. 333-21873)
 4.11 Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 ofForm 8-Kof First Industrial, L.P., dated November 3, 1997, as filed November 3, 1997, FileNo. 333-21873)
 4.12 7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1997, File No. 1-13102)
 4.13 7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1997, File No. 1-13102)
 4.14 Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of theForm 10-Qof First Industrial, L.P. for the fiscal quarter ended March 31, 1997, FileNo. 333-21873)
 4.15 Rights Agreement, dated as of September 16, 1997, between the Company and First Chicago Trust Company of New York, as Rights Agent (incorporated by reference to Exhibit 99.1 ofForm 8-A12Bas filed on September 24, 1997, File No. 1-13102)
 4.16 7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of theForm 8-Kof First Industrial, L.P. dated July 15, 1998, FileNo. 333-21873)
 4.17 Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2008 (incorporated by reference to Exhibit 4.1 of theForm 8-Kof First Industrial, L.P. dated July 15, 1998, FileNo. 333-21873)
 4.18 7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of First Industrial, L.P.’s Annual Report onForm 10-Kfor the year ended December 31, 2000, FileNo. 333-21873)
 4.19 Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011 (incorporated by reference to Exhibit 4.16 of First Industrial, L.P.’s Annual Report onForm 10-Kfor the year ended December 31, 2000, FileNo. 333-21873)

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Exhibits
 
Description
 
 4.20 Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of First Industrial, L.P.’s Annual Report onForm 10-Kfor the year ended December 31, 2000, File No.333-21873)
 4.21 Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of theForm 8-Kof First Industrial, L.P. dated April 4, 2002, FileNo. 333-21873)
 4.22 Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of theForm 8-Kof First Industrial, L.P., dated April 4, 2002, FileNo. 333-21873)
 4.23 Form of 7.75% Notes due 2032 in the principal amount of $50.0 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of theForm 8-Kof First Industrial, L.P., dated April 4, 2002, FileNo. 333-21873)
 4.24 Supplemental Indenture No. 8, dated as of May 17, 2004, relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-Kof First Industrial, L.P., dated May 27, 2004, FileNo. 333-21873)
 4.25 Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-Kof First Industrial, L.P., dated June 17, 2004, FileNo. 333-21873)
 4.26 Amendment No. 1, dated as of February 25, 2004, to Rights Agreement, dated as of September 16, 1997, between the Company and Equiserve Trust Company, N.A. (f/k/a First Chicago Trust Company of New York), as Rights Agent (incorporated by reference to Exhibit 4.23 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 2003, File No. 1-13102)
 4.27 Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-Kof the Company, filed January 11, 2006, File No. 1-13102)
 4.28 Indenture dated as of September 25, 2006 among First Industrial, L.P., as issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the current report onForm 8-Kof First Industrial, L.P. dated September 25, 2006, FileNo. 333-21873)
 4.29 Form of 4.625% Exchangeable Senior Note due 2011 (incorporated by reference to Exhibit 4.2 of the current report onForm 8-Kof First Industrial, L.P. dated September 25, 2006, File No.333-21873)
 4.30 Registration Rights Agreement dated September 25, 2006 among the Company, First Industrial, L.P. and the Initial Purchasers named therein (incorporated by reference to Exhibit 10.1 of the current report onForm 8-Kof First Industrial, L.P. dated September 25, 2006, File No.333-21873)
 10.1 Eleventh Amended and Restated Partnership Agreement of First Industrial, L.P. dated August 21, 2006 (the “LP Agreement”) (incorporated by reference to Exhibit 10.2 of theForm 8-Kof the Company, filed August 22, 2006, File No. 1-13102)
 10.2 Sales Agreement by and among the Company, First Industrial, L.P. and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of theForm 8-Kof the Company, dated September 16, 2004, File No. 1-13102)
 10.3 Registration Rights Agreement, dated April 29, 1998, relating to the Company’s Common Stock, par value $0.01 per share, between the Company, the Operating Partnership and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 4.1 of theForm 8-Kof the Company dated May 1, 1998, File No. 1-13102)

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Exhibits
 
Description
 
 10.4 Non-Competition Agreement between Jay H. Shidler and First Industrial Realty Trust, Inc. (incorporated by reference to Exhibit 10.16 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1994, File No. 1-13102)
 10.5 Form of Non-Competition Agreement between each of Michael T. Tomasz, Paul T. Lambert, Michael J. Havala, Michael W. Brennan, Michael G. Damone, Duane H. Lund, and Johannson L. Yap and First Industrial Realty Trust, Inc. (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement onForm S-11,FileNo. 33-77804)
 10.6† 1994 Stock Incentive Plan (incorporated by reference to Exhibit 10.37 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1994, File No. 1-13102)
 10.7† First Industrial Realty Trust, Inc. Deferred Income Plan (incorporated by reference to Exhibit 10 of theForm 10-Qof the Company for the fiscal quarter ended March 31, 1996, File No. 1-13102)
 10.8 Contribution Agreement, dated March 19, 1996, among FR Acquisitions, Inc. and the parties listed on the signature pages thereto (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company, dated April 3, 1996, File No. 1-13102)
 10.9 Contribution Agreement, dated January 31, 1997, among FR Acquisitions, Inc. and the parties listed on the signature pages thereto (incorporated by reference to Exhibit 10.58 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1996, File No. 1-13102)
 10.10† Employment Agreement, dated June 21, 2005, between the Company and Michael W. Brennan (incorporated by reference to Exhibit 10.1 of the Company’sForm 8-Kfiled June 24, 2005 File No. 1-13102)
 10.11† 1997 Stock Incentive Plan (incorporated by reference to Exhibit 10.62 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1996, File No. 1-13102)
 10.12† 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.34 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 2001, File No. 1-13102)
 10.13† Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Michael J. Havala (incorporated by reference to Exhibit 10.1 of theForm 10-Qof First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
 10.14† Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Johannson L. Yap (incorporated by reference to Exhibit 10.2 of theForm 10-Qof First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
 10.15† Employment Agreement, dated March 25, 2002, between First Industrial Realty Trust, Inc. and David P. Draft (incorporated by reference to Exhibit 10.3 of theForm 10-Qof First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
 10.16† Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.3 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 10.17† Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.4 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 10.18† Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.5 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 10.19† Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.6 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 10.20 Fourth Amended and Restated Unsecured Revolving Credit Agreement, dated as of August 23, 2005, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase Bank, NA and certain other banks (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company filed August 25, 2005, File No. 1-13102)
 10.21† Form of Restricted Stock Agreement (Director’s Annual Retainer) (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company filed May 19, 2006, File No. 1-13102)
 10.22† Amendment No. 1 to the Company’s 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2006, File No. 1-13102)

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Exhibits
 
Description
 
 10.23† Summary of Managing Director 2006 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company filed August 7, 2006, File No. 1-13102)
 10.24† Separation Agreement between Robert Cutlip and First Industrial Realty Trust, Inc. dated March 13, 2006 (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company filed March 16, 2006, File No. 1-13102)
 12.1* Computation of ratios of earnings to fixed charges and preferred stock dividends of the Company
 21.1* Subsidiaries of the Registrant
 23* Consent of PricewaterhouseCoopers LLP
 31.1* Certification of Principal Executive Officer pursuant toRule 13a-14(a)under the Securities Exchange Act of 1934, as amended
 31.2* Certification of Principal Financial Officer pursuant toRule 13a-14(a)under the Securities Exchange Act of 1934, as amended
 32** Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes — Oxley Act of 2002
 
 
Filed herewith.
 
** Furnished herewith.
 
Indicates a compensatory plan or arrangement contemplated by Item 15 a (3) ofForm 10-K.

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EXHIBIT INDEX
 
     
Exhibits
 
Description
 
 3.1 Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
 3.2 Amended and Restated Bylaws of the Company, dated September 4, 1997 (incorporated by reference to Exhibit 1 of the Company’sForm 8-K,dated September 4, 1997, as filed on September 29, 1997, File No. 1-13102)
 3.3 Articles of Amendment to the Company’s Articles of Incorporation, dated June 20, 1994 (incorporated by reference to Exhibit 3.2 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
 3.4 Articles of Amendment to the Company’s Articles of Incorporation, dated May 31, 1996 (incorporated by reference to Exhibit 3.3 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 1996, File No. 1-13102)
 3.5 Articles Supplementary relating to the Company’s 85/8% Series C Cumulative Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.1 of theForm 8-Kof the Company dated June 6, 1997, File No. 1-13102)
 3.6 Articles Supplementary relating to the Company’s 6.236% Series F Flexible Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 3.1 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 3.7 Articles Supplementary relating to the Company’s 7.236% Series G Flexible Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 3.2 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 3.8 Articles Supplementary relating to the Company’s Junior Participating Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.10 ofForm S-3of the Company and First Industrial, L.P. dated September 24, 1997, RegistrationNo. 333-29879)
 3.9 Articles Supplementary relating to the Company’s 7.25% Series J Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 4.1 of theForm 8-Kof the Company filed January 17, 2006, File No. 1-13102)
 3.10 Articles Supplementary relating to the Company’s 7.25% Series K Cumulative Redeemable Preferred Stock, $0.01 par value (incorporated by reference to Exhibit 1.6 of theForm 8-Aof the Company, as filed on August 18, 2006, File No. 1-13102)
 4.1 Deposit Agreement, dated June 6, 1997, by and among the Company, First Chicago Trust Company of New York and holders from time to time of Series C Depositary Receipts (incorporated by reference to Exhibit 4.2 of theForm 8-Kof the Company, dated June 6, 1997, File No. 1-13102)
 4.2 Deposit Agreement, dated May 27, 2004, by and among the Company, EquiServe Inc. and EquiServe Trust Company, N.A. and holders from time to time of Series F Depositary Receipts (incorporated by reference to Exhibit 4.1 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 4.3 Deposit Agreement, dated May 27, 2004, by and among the Company, EquiServe Inc. and EquiServe Trust Company, N.A. and holders from time to time of Series G Depositary Receipts (incorporated by reference to Exhibit 4.2 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 4.4 Remarketing Agreement, dated May 27, 2004, relating to 50,000 depositary shares, each representing 1/100 of a share of the Series F Flexible Cumulative Redeemable Preferred Stock, by and among Lehman Brothers Inc., the Company and First Industrial, L.P. (incorporated by reference to Exhibit 1.2 of theForm 8-Kof the Company, dated May 27, 2004, File No. 1-13102)
 4.5 Remarketing Agreement, dated May 27, 2004, relating to 25,000 depositary shares, each representing 1/100 of a share of the Series G Flexible Cumulative Redeemable Preferred Stock, by and among Lehman Brothers Inc., the Company and First Industrial, L.P. (incorporated by reference to Exhibit 1.3 of theForm 8-Kof the Company, dated May 27, 2004, File No. 1-13102)


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Exhibits
 
Description
 
 4.6 Deposit Agreement, dated January 13, 2006, by and among the Company, Computershare Shareholder Services, Inc. and Computershare Trust Company, N.A., as depositary, and holders from time to time of Series J Depositary Receipts (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company, filed January 17, 2006, File No. 1-13102)
 4.7 Deposit Agreement, dated August 21, 2006, by and among the Company, Computershare Shareholder Services, Inc. and Computershare Trust Company, N.A., as depositary, and holders from time to time of Series K Depositary Receipts (incorporated by reference to Exhibit 1.7 of theForm 8-Aof the Company, as filed on August 18, 2006, File No. 1-13102)
 4.8 Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of theForm 10-Qof the Company for the fiscal quarter ended March 31, 1997, as amended byForm 10-Q/ANo. 1 of the Company filed May 30, 1997, File No. 1-13102)
 4.9 Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of theForm 10-Qof the Company for the fiscal quarter ended March 31, 1997, as amended byForm 10-Q/ANo. 1 of the Company filed May 30, 1997, File No. 1-13102)
 4.10 Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011(incorporated by reference to Exhibit 4.4 of theForm 10-Qof First Industrial, L.P. for the fiscal quarter ended March 31, 1997, FileNo. 333-21873)
 4.11 Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 ofForm 8-Kof First Industrial, L.P., dated November 3, 1997, as filed November 3, 1997, FileNo. 333-21873)
 4.12 7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1997, File No. 1-13102)
 4.13 7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1997, File No. 1-13102)
 4.14 Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of theForm 10-Qof First Industrial, L.P. for the fiscal quarter ended March 31, 1997, FileNo. 333-21873)
 4.15 Rights Agreement, dated as of September 16, 1997, between the Company and First Chicago Trust Company of New York, as Rights Agent (incorporated by reference to Exhibit 99.1 ofForm 8-A12Bas filed on September 24, 1997, File No. 1-13102)
 4.16 7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of theForm 8-Kof First Industrial, L.P. dated July 15, 1998, FileNo. 333-21873)
 4.17 Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2008 (incorporated by reference to Exhibit 4.1 of theForm 8-Kof First Industrial, L.P. dated July 15, 1998, FileNo. 333-21873)
 4.18 7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of First Industrial, L.P.’s Annual Report onForm 10-Kfor the year ended December 31, 2000, FileNo. 333-21873)
 4.19 Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011 (incorporated by reference to Exhibit 4.16 of First Industrial, L.P.’s Annual Report onForm 10-Kfor the year ended December 31, 2000, FileNo. 333-21873)


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Exhibits
 
Description
 
 4.20 Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of First Industrial, L.P.’s Annual Report onForm 10-Kfor the year ended December 31, 2000, File No.333-21873)
 4.21 Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and the U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of theForm 8-Kof First Industrial, L.P. dated April 4, 2002, FileNo. 333-21873)
 4.22 Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of theForm 8-Kof First Industrial, L.P., dated April 4, 2002, FileNo. 333-21873)
 4.23 Form of 7.75% Notes due 2032 in the principal amount of $50.0 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of theForm 8-Kof First Industrial, L.P., dated April 4, 2002, FileNo. 333-21873)
 4.24 Supplemental Indenture No. 8, dated as of May 17, 2004, relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-Kof First Industrial, L.P., dated May 27, 2004, FileNo. 333-21873)
 4.25 Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-Kof First Industrial, L.P., dated June 17, 2004, FileNo. 333-21873)
 4.26 Amendment No. 1, dated as of February 25, 2004, to Rights Agreement, dated as of September 16, 1997, between the Company and Equiserve Trust Company, N.A. (f/k/a First Chicago Trust Company of New York), as Rights Agent (incorporated by reference to Exhibit 4.23 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 2003, File No. 1-13102)
 4.27 Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of theForm 8-Kof the Company, filed January 11, 2006, File No. 1-13102)
 4.28 Indenture dated as of September 25, 2006 among First Industrial, L.P., as issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the current report onForm 8-Kof First Industrial, L.P. dated September 25, 2006, FileNo. 333-21873)
 4.29 Form of 4.625% Exchangeable Senior Note due 2011 (incorporated by reference to Exhibit 4.2 of the current report onForm 8-Kof First Industrial, L.P. dated September 25, 2006, File No.333-21873)
 4.30 Registration Rights Agreement dated September 25, 2006 among the Company, First Industrial, L.P. and the Initial Purchasers named therein (incorporated by reference to Exhibit 10.1 of the current report onForm 8-Kof First Industrial, L.P. dated September 25, 2006, File No.333-21873)
 10.1 Eleventh Amended and Restated Partnership Agreement of First Industrial, L.P. dated August 21, 2006 (the “LP Agreement”) (incorporated by reference to Exhibit 10.2 of theForm 8-Kof the Company, filed August 22, 2006, File No. 1-13102).
 10.2 Sales Agreement by and among the Company, First Industrial, L.P. and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of theForm 8-Kof the Company, dated September 16, 2004, File No. 1-13102)
 10.3 Registration Rights Agreement, dated April 29, 1998, relating to the Company’s Common Stock, par value $0.01 per share, between the Company, the Operating Partnership and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 4.1 of theForm 8-Kof the Company dated May 1, 1998, File No. 1-13102)


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Exhibits
 
Description
 
 10.4 Non-Competition Agreement between Jay H. Shidler and First Industrial Realty Trust, Inc. (incorporated by reference to Exhibit 10.16 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1994, File No. 1-13102)
 10.5 Form of Non-Competition Agreement between each of Michael T. Tomasz, Paul T. Lambert, Michael J. Havala, Michael W. Brennan, Michael G. Damone, Duane H. Lund, and Johannson L. Yap and First Industrial Realty Trust, Inc. (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement onForm S-11,FileNo. 33-77804)
 10.6† 1994 Stock Incentive Plan (incorporated by reference to Exhibit 10.37 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1994, File No. 1-13102)
 10.7† First Industrial Realty Trust, Inc. Deferred Income Plan (incorporated by reference to Exhibit 10 of theForm 10-Qof the Company for the fiscal quarter ended March 31, 1996, File No. 1-13102)
 10.8 Contribution Agreement, dated March 19, 1996, among FR Acquisitions, Inc. and the parties listed on the signature pages thereto (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company, dated April 3, 1996, File No. 1-13102)
 10.9 Contribution Agreement, dated January 31, 1997, among FR Acquisitions, Inc. and the parties listed on the signature pages thereto (incorporated by reference to Exhibit 10.58 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1996, File No. 1-13102)
 10.10† Employment Agreement, dated June 21, 2005, between the Company and Michael W. Brennan (incorporated by reference to Exhibit 10.1 of the Company’sForm 8-Kfiled June 24, 2005 File No. 1-13102)
 10.11† 1997 Stock Incentive Plan (incorporated by reference to Exhibit 10.62 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 1996, File No. 1-13102)
 10.12† 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.34 of the Company’s Annual Report onForm 10-Kfor the year ended December 31, 2001, File No. 1-13102)
 10.13† Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Michael J. Havala (incorporated by reference to Exhibit 10.1 of theForm 10-Qof First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
 10.14† Employment Agreement, dated March 31, 2002, between First Industrial Realty Trust, Inc. and Johannson L. Yap (incorporated by reference to Exhibit 10.2 of theForm 10-Qof First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
 10.15† Employment Agreement, dated March 25, 2002, between First Industrial Realty Trust, Inc. and David P. Draft (incorporated by reference to Exhibit 10.3 of theForm 10-Qof First Industrial Realty Trust, Inc. for the fiscal quarter ended March 31, 2002, File No. 1-13102)
 10.16† Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.3 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 10.17† Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.4 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 10.18† Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.5 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 10.19† Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.6 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2004, File No. 1-13102)
 10.20 Fourth Amended and Restated Unsecured Revolving Credit Agreement, dated as of August 23, 2005, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase Bank, NA and certain other banks (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company filed August 25, 2005, File No. 1-13102)
 10.21† Form of Restricted Stock Agreement (Director’s Annual Retainer) (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company filed May 19, 2006, File No. 1-13102)
 10.22† Amendment No. 1 to the Company’s 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of theForm 10-Qof the Company for the fiscal quarter ended June 30, 2006, File No. 1-13102)


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Exhibits
 
Description
 
 10.23† Summary of Managing Director 2006 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company filed August 7, 2006, File No. 1-13102)
 10.24† Separation Agreement between Robert Cutlip and First Industrial Realty Trust, Inc. dated March 13, 2006 (incorporated by reference to Exhibit 10.1 of theForm 8-Kof the Company filed March 16, 2006, File No. 1-13102)
 12.1* Computation of ratios of earnings to fixed charges and preferred stock dividends of the Company
 21.1* Subsidiaries of the Registrant
 23*  Consent of PricewaterhouseCoopers LLP
 31.1* Certification of Principal Executive Officer pursuant toRule 13a-14(a)under the Securities Exchange Act of 1934, as amended
 31.2* Certification of Principal Financial Officer pursuant toRule 13a-14(a)under the Securities Exchange Act of 1934, as amended
 32**  Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes — Oxley Act of 2002
 
 
Filed herewith.
 
** Furnished herewith.
 
Indicates a compensatory plan or arrangement contemplated by Item 15 a (3) ofForm 10-K.


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Report of Independent Registered Public Accounting Firm
 
To the Board of Directors and Stockholders of
First Industrial Realty Trust, Inc.:
 
We have completed integrated audits of First Industrial Realty Trust, Inc.’s consolidated financial statements and of its internal control over financial reporting as of December 31, 2006, in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.
 
Consolidated financial statements and financial statement schedule
 
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of First Industrial Realty Trust, Inc. and its subsidiaries (“the Company”) at December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for stock-based compensation in fiscal 2006.
 
Internal control over financial reporting
 
Also, in our opinion, management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, that the Company maintained effective internal control over financial reporting as of December 31, 2006 based on criteria established inInternal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006 based on criteria established in Internal Control — Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.
 
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external


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purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
PricewaterhouseCoopers LLP
 
Chicago, Illinois
March 1, 2007


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
 
         
  December 31,
  December 31,
 
  2006  2005 
  (Dollars in thousands, except share and per share data) 
 
ASSETS
Assets:
        
Investment in Real Estate:
        
Land
 $558,425  $541,406 
Buildings and Improvements
  2,626,284   2,653,281 
Construction in Progress
  35,019   66,074 
Less: Accumulated Depreciation
  (465,418)  (410,566)
         
Net Investment in Real Estate
  2,754,310   2,850,195 
         
Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $9,688 and $1,622 at December 31, 2006 and December 31, 2005
  115,961   16,840 
Cash and Cash Equivalents
  16,135   8,237 
Restricted Cash
  15,970   29,581 
Tenant Accounts Receivable, Net
  8,014   8,897 
Investments in Joint Ventures
  55,527   44,241 
Deferred Rent Receivable, Net
  28,839   24,910 
Deferred Financing Costs, Net
  15,210   10,909 
Deferred Leasing Intangibles, Net
  86,265   78,537 
Prepaid Expenses and Other Assets, Net
  128,168   153,896 
         
Total Assets
 $3,224,399  $3,226,243 
         
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
        
Mortgage Loans Payable, Net
 $77,926  $57,309 
Senior Unsecured Debt, Net
  1,549,732   1,298,893 
Unsecured Lines of Credit
  207,000   457,500 
Accounts Payable and Accrued Expenses
  119,027   110,560 
Deferred Leasing Intangibles, Net
  19,486   24,307 
Rents Received in Advance and Security Deposits
  30,844   32,283 
Leasing Intangibles Held for Sale Net of Accumulated Amortization of $183 at December 31, 2006
  2,310    
Dividends Payable
  42,548   39,509 
         
Total Liabilities
  2,048,873   2,020,361 
         
Commitments and Contingencies
      
Minority Interest
  152,547   162,320 
Stockholders’ Equity:
        
Preferred Stock ($0.01 par value, 10,000,000 shares authorized, 20,000, 500, 250, 600, and 200 shares of Series C, F, G, J, and K Cumulative Preferred Stock, respectively, issued and outstanding at December 31, 2006, having a liquidation preference of $2,500 per share ($50,000), $100,000 per share ($50,000), $100,000 per share ($25,000), $250,000 per share ($150,000), and $250,000 per share ($50,000), respectively. At December 31, 2005, 10,000,000 shares authorized, 20,000, 500, 250 and 750 shares of Series C, F, G and I Cumulative Preferred Stock, respectively, were issued and outstanding, having a liquidation preference of $2,500 per share ($50,000), $100,000 per share ($50,000), $100,000 per share ($25,000) and $250,000 per share ($187,500), respectively
      
Common Stock ($0.01 par value, 100,000,000 shares authorized, 47,537,030 and 46,971,110 shares issued and 45,010,630 and 44,444,710 shares outstanding at December 31, 2006 and December 31, 2005, respectively)
  475   470 
AdditionalPaid-in-Capital
  1,388,311   1,384,712 
Distributions in Excess of Accumulated Earnings
  (284,955)  (248,686)
Unearned Value of Restricted Stock Grants
     (16,825)
Accumulated Other Comprehensive Loss
  (10,264)  (5,521)
Treasury Shares at Cost (2,526,400 shares at December 31, 2006 and December 31, 2005)
  (70,588)  (70,588)
         
Total Stockholders’ Equity
  1,022,979   1,043,562 
         
Total Liabilities and Stockholders’ Equity
 $3,224,399  $3,226,243 
         
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
 
             
  Year Ended
  Year Ended
  Year Ended
 
  December 31,
  December 31,
  December 31,
 
  2006  2005  2004 
  (In thousands except per unit data) 
 
Revenues:
            
Rental Income
 $274,907  $223,572  $200,600 
Tenant Recoveries and Other Income
  110,589   85,717   67,408 
Revenues from Build to Suit Development for Sale
  10,540   16,241    
             
Total Revenues
  396,036   325,530   268,008 
             
Expenses:
            
Property Expenses
  130,230   108,464   90,309 
General and Administrative
  77,497   55,812   39,569 
Depreciation and Other Amortization
  145,906   105,720   79,939 
Expenses from Build to Suit Development for Sale
  10,263   15,574    
             
Total Expenses
  363,896   285,570   209,817 
             
Other Income/Expense:
            
Interest Income
  1,614   1,486   3,632 
Mark-to-Market/(Loss)Gain on Settlement of Interest Rate Protection Agreements
  (3,112)  811   1,583 
Interest Expense
  (121,141)  (108,339)  (98,636)
Amortization of Deferred Financing Costs
  (2,666)  (2,125)  (1,931)
Gain (Loss) From Early Retirement of Debt
     82   (515)
             
Total Other Income/Expense
  (125,305)  (108,085)  (95,867)
Loss from Continuing Operations Before Equity in Income of Joint Ventures, Income Tax Benefit and Income Allocated To Minority Interest
  (93,165)  (68,125)  (37,676)
Equity in Income of Joint Ventures
  30,673   3,699   37,301 
Income Tax Benefit
  8,920   14,022   7,937 
Minority Interest Allocable to Continuing Operations
  9,795   7,980   2,034 
             
(Loss) Income from Continuing Operations
  (43,777)  (42,424)  9,596 
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $213,442, $132,139, and $88,245 for the Years Ended December 31, 2006, 2005 and 2004, respectively)
  225,357   154,061   116,693 
Provision for Income Taxes Allocable to Discontinued Operations (including $47,511, $20,529, and $8,659 allocable to Gain on Sale of Real Estate for the Years Ended December 31, 2006, 2005 and 2004, respectively)
  (50,140)  (23,583)  (11,005)
Minority Interest Allocable to Discontinued Operations
  (22,796)  (17,171)  (14,500)
             
Income Before Gain on Sale of Real Estate
  108,644   70,883   100,784 
Gain on Sale of Real Estate
  6,071   29,550   16,755 
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
  (2,119)  (10,871)  (5,371)
Minority Interest Allocable to Gain on Sale of Real Estate
  (514)  (2,458)  (1,562)
             
Net Income
  112,082   87,104   110,606 
Less: Preferred Dividends
  (21,424)  (10,688)  (14,488)
Less: Redemption of Preferred Stock
  (672)     (7,959)
             
Net Income Available to Common Stockholders
 $89,986  $76,416  $88,159 
             
Basic Earnings Per Share:
            
Loss from Continuing Operations Available to Common Stockholders
 $(1.42) $(0.87) $(0.07)
             
Income from Discontinued Operations
 $3.46  $2.67  $2.25 
             
Net Income Available to Common Stockholders
 $2.04  $1.80  $2.17 
             
Weighted Average Shares Outstanding
  44,012   42,431   40,557 
             
Diluted Earnings Per Share:
            
Loss from Continuing Operations Available to Common Stockholders
 $(1.42) $(0.87) $(0.07)
             
Income from Discontinued Operations
 $3.46  $2.67  $2.25 
             
Net Income Available to Common Stockholders
 $2.04  $1.80  $2.17 
             
Weighted Average Shares Outstanding
  44,012   42,431   40,557 
             
Dividends/Distributions declared per Common Share Outstanding
 $2.8100  $2.7850  $2.7500 
             
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
 
             
  Year Ended
  Year Ended
  Year Ended
 
  December 31,
  December 31,
  December 31,
 
  2006  2005  2004 
  (Dollars in thousands) 
 
Net Income
  112,082  $87,104  $110,606 
Other Comprehensive (Loss) Income:
            
Settlement of Interest Rate Protection Agreements
  (1,729)     6,816 
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
     (159)   
Mark-to-Marketof Interest Rate Protection Agreements
  (2,800)  (1,414)  106 
Amortization of Interest Rate Protection Agreements
  (912)  (1,085)  (512)
Other Comprehensive Loss Allocable to Minority Interest
  698   837    
             
Comprehensive Income
 $107,339  $85,283  $117,016 
             
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
 
             
  Year Ended
  Year Ended
  Year Ended
 
  December 31,
  December 31,
  December 31,
 
  2006  2005  2004 
  (Dollars in thousands) 
 
Preferred Stock — Beginning of Year
 $  $  $1 
Issuance of Preferred Stock
         
Redemption of Preferred Stock
        (1)
             
Preferred Stock — End of Year
 $  $  $ 
             
Common Stock — Beginning of Year
 $470  $454  $424 
Net Proceeds from the Issuance of Common Stock
  1   15   30 
Issuance of Restricted Stock
  3   2   2 
Repurchase and Retirement of Common Stock
  (1)  (1)  (1)
Restricted Stock Forfeitures
     (1)  (4)
Conversion of Units to Common Stock
  2   1   3 
             
Common Stock — End of Year
 $475  $470  $454 
             
Additional Paid-In-Capital — Beginning of Year
 $1,384,712  $1,142,356  $1,161,373 
Net Proceeds from the Issuance of Common Stock
  3,819   56,109   99,250 
Issuance of Restricted Stock
  (3)  8,379   8,377 
Repurchase and Retirement of Restricted Stock/Common Stock
  (2,463)  (2,741)  (3,094)
Restricted Stock Forfeitures
     (2,825)  (10,629)
Call Spread
  (6,835)      
Net Proceeds from the Issuance of Preferred Stock
  192,624   181,484   194,424 
Redemption of Preferred Stock
  (181,484)     (313,537)
Conversion of Units to Common Stock
  5,142   1,950   6,192 
Reclassification to initially adopt SFAS No. 123R
  (16,825)      
Amortization of Restricted Stock Grants
  9,624       
             
Additional Paid-In-Capital — End of Year
 $1,388,311  $1,384,712  $1,142,356 
             
Dist. In Excess of Accum. Earnings — Beginning of Year
 $(248,686) $(203,417) $(172,892)
Preferred Stock Dividends
  (21,424)  (10,688)  (14,488)
Distributions ($2.8100, $2.7850 and $2.7500 per Share/Unit at December 31, 2006, 2005 and 2004, respectively)
  (144,720)  (139,168)  (132,585)
Redemption of Preferred Stock
  (672)     (7,959)
Repurchase and Retirement of Restricted Stock/Common Stock
  (269)  (543)  (652)
Restricted Stock Forfeitures
     (147)  (3,464)
Net Income Before Minority Interest
  125,597   98,753   124,634 
Minority Interest:
            
Allocation of Income
  (13,515)  (11,649)  (14,028)
Distributions ($2.8100, $2.7850 and $2.7500 per Unit at December 31, 2006, 2005 and 2004, respectively)
  18,734   18,173   18,017 
             
Dist. In Excess of Accum. Earnings — End of Year
 $(284,955) $(248,686) $(203,417)
             
Unearned Value of Rest. Stock Grants — Beginning of Year
 $(16,825) $(19,611) $(19,035)
Issuance of Restricted Stock
     (8,381)  (8,379)
Amortization of Restricted Stock Grants
     8,845   6,866 
Restricted Stock Forfeitures
     2,322   937 
Reclassification to initially adopt SFAS No. 123R
  16,825       
             
Unearned Value of Rest. Stock Grants — End of Year
 $  $(16,825) $(19,611)
             
Treasury Shares, at cost — Beginning of Year
 $(70,588) $(70,588) $(70,588)
Purchase of Treasury Shares
         
             
Treasury Shares, at cost — End of Year
 $(70,588) $(70,588) $(70,588)
             
Accum. Other Comprehensive Loss — Beginning of Year
 $(5,521) $(3,700) $(10,110)
Settlement of Interest Rate Protection Agreements
  (1,729)     6,816 
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
     (159)   
Mark-to-Marketof Interest Rate Protection Agreements
  (2,800)  (1,414)  106 
Amortization of Interest Rate Protection Agreements
  (912)  (1,085)  (512)
Other Comprehensive Loss Allocable to Minority Interest
  698   837    
             
Accum. Other Comprehensive Loss — End of Year
 $(10,264) $(5,521) $(3,700)
             
Total Stockholders’ Equity at End of Year
 $1,022,979  $1,043,562  $845,494 
             
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
             
  Year Ended
  Year Ended
  Year Ended
 
  December 31,
  December 31,
  December 31,
 
  2006  2005  2004 
 
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net Income
 $112,082  $87,104  $110,606 
Income Allocated to Minority Interest
  13,515   11,649   14,028 
             
Net Income Before Minority Interest
  125,597   98,753   124,634 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
            
Depreciation
  121,347   99,338   82,757 
Amortization of Deferred Financing Costs
  2,666   2,125   1,931 
Other Amortization
  40,965   33,728   22,547 
Provision for Bad Debt
  2,289   1,817   (1,474)
Mark-to-Market/Losson Settlement of Interest Rate Protection Agreements
  (16)  (143)   
(Gain) Loss From Early Retirement of Debt
     (82)  515 
Equity in Income of Joint Ventures
  (30,673)  (3,699)  (36,451)
Distributions from Joint Ventures
  31,664   3,866   36,451 
Decrease (Increase) in Build to Suit Development for Sale Costs Receivable
  5,883   (16,241)   
Gain on Sale of Real Estate
  (219,513)  (161,689)  (91,242)
Increase in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net
  (16,524)  (23,371)  (46,030)
Increase in Deferred Rent Receivable
  (10,154)  (9,459)  (6,771)
Increase (Decrease) in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits
  6,020   24,407   (9,210)
             
Net Cash Provided by Operating Activities
  59,551   49,350   77,657 
             
CASH FLOWS FROM INVESTING ACTIVITIES:
            
Purchases of and Additions to Investment in Real Estate
  (813,840)  (920,707)  (485,393)
Net Proceeds from Sales of Investments in Real Estate
  907,428   537,252   293,703 
Contributions to and Investments in Joint Ventures
  (32,773)  (45,175)  (5,422)
Distributions from Joint Ventures
  19,734   2,971   14,074 
Repayment and Sale of Mortgage Loans Receivable
  34,987   83,561   111,049 
Decrease (Increase) in Restricted Cash
  13,611   (29,556)  81,981 
             
Net Cash Provided by (Used in) Investing Activities
  129,147   (371,654)  9,992 
             
CASH FLOWS FROM FINANCING ACTIVITIES:
            
Net Proceeds from the Issuance of Common Stock
  3,462   55,754   86,121 
Proceeds from the Issuance of Preferred Stock
  200,000   187,500   200,000 
Preferred Stock Offering Costs
  (7,103)  (5,906)  (5,576)
Redemption of Preferred Stock
  (182,156)     (321,438)
Repurchase of Restricted Stock
  (2,660)  (3,285)  (3,747)
Proceeds from Senior Unsecured Debt
  399,306      134,496 
Other (Costs) Proceeds from Senior Unsecured Debt
  (1,729)     6,816 
Repayment of Senior Unsecured Debt
  (150,000)  (50,000)   
Dividends/Distributions
  (143,858)  (137,672)  (130,220)
Preferred Stock Dividends
  (19,248)  (8,162)  (13,256)
Proceeds from Mortgage Loans Payable
     1,167   1,400 
Repayments of Mortgage Loans Payable
  (12,618)  (1,987)  (5,965)
Proceeds from Unsecured Lines of Credit
  779,300   647,500   581,000 
Repayments on Unsecured Lines of Credit
  (1,029,800)  (357,500)  (609,400)
Call Spread
  (6,835)      
Cost of Debt Issuance and Prepayment Fees
  (6,861)  (1,792)  (3,777)
             
Net Cash (Used in) Provided by Financing Activities
  (180,800)  325,617   (83,546)
             
Net Increase in Cash and Cash Equivalents
  7,898   3,313   4,103 
Cash and Cash Equivalents, Beginning of Period
  8,237   4,924   821 
             
Cash and Cash Equivalents, End of Period
 $16,135  $8,237  $4,924 
             
 
The accompanying notes are an integral part of the financial statements.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
(Dollars in thousands)
 
1.  Organization and Formation of Company
 
First Industrial Realty Trust, Inc. was organized in the state of Maryland on August 10, 1993. First Industrial Realty Trust, Inc. is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code of 1986, as amended (the “Code”).
 
First Industrial Realty Trust, Inc. and its subsidiaries (the “Company”) began operations on July 1, 1994. The Company’s operations are conducted primarily through First Industrial, L.P. (the “Operating Partnership”) of which the Company is the sole general partner. The Company is the sole stockholder of First Industrial Finance Corporation, First Industrial Pennsylvania Corporation, First Industrial Harrisburg Corporation, First Industrial Securities Corporation, First Industrial Mortgage Corporation, First Industrial Indianapolis Corporation, FI Development Services Corporation and First Industrial Florida Finance Corporation, which are the sole general partners of First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, L.P. (the “Mortgage Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), FI Development Services, L.P. and TK-SV, LTD., respectively (except in the case of the Financing Partnership in which case the Operating Partnership is also the general partner), and the Operating Partnership is the sole limited partner. The Operating Partnership is also the sole member of limited liability companies and the sole stockholder of First Industrial Investment, Inc. The operating data of the foregoing subsidiaries of the Company is consolidated with that of the Company as presented herein. The Company, through separate, wholly-owned limited liability companies of which the Operating Partnership or First Industrial Investment, Inc. is the sole member, also owns minority equity interests in, and provides various services to, six joint ventures which invest in industrial properties (the “September 1998 Joint Venture,” the “May 2003 Joint Venture,” the “March 2005 Joint Venture,” the “September 2005 Joint Venture,” the “March 2006 Co-Investment Program” and the “July 2006 Joint Venture”). The Company, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in and provided property management services to a seventh joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture, the September 2005 Joint Venture, the March 2006 Co-Investment Program and the July 2006 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. On January 31, 2007, the Company purchased the 90% equity interest from the institutional investor in the September 1998 Joint Venture. The operating data of the Joint Ventures is not consolidated with that of the Company as presented herein.
 
As of December 31, 2006, the Company owned 931 industrial properties (inclusive of developments in progress) located in 28 states in the United States and one province in Canada, containing an aggregate of approximately 76.9 million square feet (unaudited) of gross leasable area (“GLA”).
 
2.  Basis of Presentation
 
First Industrial Realty Trust, Inc. is the sole general partner of the Operating Partnership, with an approximate 87.3% and 86.8% ownership interest at December 31, 2006 and 2005, respectively. Minority interest at December 31, 2006 and 2005, represents the approximate 12.7% and 13.2%, respectively, aggregate partnership interest in the Operating Partnership held by the limited partners thereof.
 
The consolidated financial statements of the Company at December 31, 2006 and 2005 and for each of the years ended December 31, 2006, 2005 and 2004 include the accounts and operating results of the Company and its subsidiaries. Such financial statements present the Company’s minority equity interests in the


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Joint Ventures under the equity method of accounting. All intercompany transactions have been eliminated in consolidation.
 
3.  Summary of Significant Accounting Policies
 
In order to conform with generally accepted accounting principles, management, in preparation of the Company’s financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2006 and 2005, and the reported amounts of revenues and expenses for each of the years ended December 31, 2006, 2005 and 2004. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short term maturity of these investments.
 
Restricted Cash
 
At December 31, 2006 and 2005, restricted cash includes gross proceeds from the sales of certain properties. These sales proceeds will be disbursed as the Company exchanges into properties under Section 1031 of the Internal Revenue Code. The carrying amount approximates fair value due to the short term maturity of these investments.
 
Investment in Real Estate and Depreciation
 
Investment in Real Estate is carried at cost. The Company reviews its properties on a quarterly basis for impairment and provides a provision if impairments are found. To determine if an impairment may exist, the Company reviews its properties and identifies those that have had either an event of change or event of circumstances warranting further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, the Company estimates the future net cash flows expected to result from the use of the property and its eventual disposition, on an individual property basis. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property on an individual property basis, the Company will recognize an impairment loss based upon the estimated fair value of such property. For properties management considers held for sale, the Company ceases depreciating the properties and values the properties at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, the Company decides not to sell a property previously classified as held for sale, the Company will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. To calculate the fair value of properties held for sale, the Company deducts from the estimated sales price of the property the estimated costs to close the sale. The Company classifies properties as held for sale when management of the Company has approved the properties for sale.
 
Interest costs, real estate taxes, compensation costs of development personnel and other directly related costs incurred during construction periods are capitalized and depreciated commencing with the date the property is substantially completed. Upon substantial completion, the Company reclassifies construction in progress to building, tenant improvements and leasing commissions. Such costs begin to be capitalized to the development projects from the point the Company is undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

available for occupancy. Depreciation expense is computed using the straight-line method based on the following useful lives:
 
     
  Years 
 
Buildings and Improvements
  20 to 50 
Land Improvements
  15 
Furniture, Fixtures and Equipment
  5 to 10 
 
Construction expenditures for tenant improvements, leasehold improvements and leasing commissions (inclusive of compensation costs of personnel attributable to leasing) are capitalized and amortized over the terms of each specific lease. Capitalized compensation costs of personnel attributable to leasing relate to time directly attributable to originating leases with independent third parties that result directly from and are essential to originating those leases and would not have been incurred had these leasing transactions not occurred. Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized.
 
The Company accounts for all acquisitions entered into subsequent to June 30, 2001 in accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standard No. 141, “Business Combinations” (“FAS 141”). Upon acquisition of a property, the Company allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, buildings, tenant improvements, leasing commissions and intangible assets including in-place leases, above market and below market leases and tenant relationships. The Company allocates the purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. Acquired above and below market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates over the remaining lease term.
 
The purchase price is further allocated to in-place lease values and tenant relationships based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the respective tenant. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental revenue on the Company’s consolidated statements of operations. The value of in-place lease intangibles and tenant relationships, which are included as components of Deferred Leasing Intangibles, Net (see below) are amortized over the remaining lease term and expected renewal periods of the respective lease as adjustments to depreciation and other amortization expense. If a tenant terminates its lease early, the unamortized portion of the tenant improvements, leasing commissions, above and below market leases, the in-place lease value and tenant relationships is immediately written off.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Deferred Leasing Intangibles, exclusive of deferred leasing intangibles held for sale, included in the Company’s total assets consist of the following:
 
         
  December 31,
  December 31,
 
  2006  2005 
 
In-Place Leases
 $81,422  $78,674 
Less: Accumulated Amortization
  (15,361)  (6,236)
         
  $66,061  $72,438 
         
Above Market Leases
 $6,933  $7,958 
Less: Accumulated Amortization
  (2,177)  (1,859)
         
  $4,756  $6,099 
         
Tenant Relationships
 $16,657  $ 
Less: Accumulated Amortization
  (1,209)   
         
  $15,448  $ 
         
 
Deferred Leasing Intangibles, exclusive of deferred leasing intangibles held for sale, included in the Company’s total liabilities consist of the following:
 
         
  December 31,
  December 31,
 
  2006  2005 
 
Below Market Leases
 $25,735  $27,710 
Less: Accumulated Amortization
  (6,249)  (3,403)
         
  $19,486  $24,307 
         
 
Amortization expense related to deferred leasing intangibles was $13,747, $6,733, and $1,643 for the years ended December 31, 2006, 2005, and 2004 respectively. The Company will recognize net amortization expense related to deferred leasing intangibles over the next five years as follows:
 
     
2007
 $19,673 
2008
  17,012 
2009
  14,695 
2010
  12,324 
2011
  10,409 
 
Build to Suit for Sale Revenues and Expenses
 
During 2006 and 2005, the Company entered into contracts with third parties to construct industrial properties. Thebuild-to-suitfor sale contracts require the purchase price to be paid at closing. The Company uses thepercentage-of-completioncontract method of accounting in accordance withSOP 81-1“Accounting for Performance of Construction-Type and Certain Production-Type Contracts”. During the period of performance, costs are accumulated on the balance sheet in Prepaid Expenses and Other Assets ($10,263 at December 31, 2006 and $15,574 at December 31, 2005) and revenues and expenses are recognized in continuing operations.
 
Deferred Financing Costs
 
Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

financing costs was $13,863 and $12,541 at December 31, 2006 and 2005, respectively. Unamortized deferred financing costs are written-off when debt is retired before the maturity date.
 
Investments in Joint Ventures
 
Investments in Joint Ventures represent the Company’s minority equity interests in the Joint Ventures. The Company accounts for its investments in Joint Ventures under the equity method of accounting, as the Company does not have operational control or a majority voting interest. Under the equity method of accounting, the Company’s share of earnings or losses of the Joint Ventures is reflected in income as earned and contributions or distributions increase or decrease, respectively, the Company’s Investments in Joint Ventures as paid or received, respectively. Differences between the Company’s carrying value of its investments in joint ventures and the Company’s underlying equity of such joint ventures are amortized over the respective lives of the underlying assets.
 
Stock Based Compensation
 
Effective January 1, 2006 the Company adopted Statement of Financial Accounting Standards No. 123R, “Share Based Payment” (“FAS 123R”), using the modified prospective application method, which requires measurement of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. For the years ended December 31, 2003, 2004 and 2005, the Company accounted for its stock incentive plans under the recognition and measurement principles of Statement of Financial Accounting Standards No. 123, “Accounting for Stock Based Compensation” for all new issuances of stock based compensation. At January 1, 2006, the Company did not have any unvested option awards and the Company had accounted for their previously issued restricted stock awards at fair value, accordingly, the adoption of FAS 123R did not require the Company to recognize a cumulative effect of a change in accounting principle. The Company did reclassify $16,825 from the Unearned Value of Restricted Stock Grants caption within Stockholder’s Equity to Additional Paid in Capital during the year ended December 31, 2006 in accordance with the provisions of FAS 123R.
 
Prior to January 1, 2003, the Company accounted for its stock incentive plans under the recognition measurement principles of Accounting Principles Board opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Under APB 25, compensation expense is not recognized for options issued in which the strike price is equal to the fair value of the Company’s stock on the date of grant. The following table illustrates the pro forma effect on net income and earnings per share as if the fair value recognition provisions


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of FAS 123R had been applied to all outstanding and unvested option awards for the years ended December 31, 2005 and 2004:
 
         
  For the Year Ended 
  2005  2004 
 
Net Income Available to Common Stockholders — as reported
 $76,416  $88,159 
Add: Stock-Based Employee Compensation Expense Included in Net Income Available to Common Stockholders, Net of Minority Interest — as reported
      
Less: Total Stock-Based Employee Compensation Expense, Net of Minority Interest — Determined Under the Fair Value Method
  (87)  (362)
         
Net Income Available to Common Stockholders — pro forma
 $76,329  $87,797 
         
Net Income Available to Common Stockholders per Share — as reported — Basic
 $1.80  $2.17 
Net Income Available to Common Stockholders per Share — pro forma — Basic
 $1.80  $2.16 
Net Income Available to Common Stockholders per Share — as reported — Diluted
 $1.80  $2.17 
Net Income Available to Common Stockholders per Share — pro forma — Diluted
 $1.80  $2.16 
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:
        
Expected dividend yield
  N/A   N/A 
Expected stock price volatility
  N/A   N/A 
Risk-free interest rate
  N/A   N/A 
Expected life of options
  N/A   N/A 
 
The Company did not issue any options in 2005 and 2004.
 
Revenue Recognition
 
Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as revenue in the same period the related expenses are incurred by the Company.
 
Revenue is recognized on payments received from tenants for early lease terminations after the Company determines that all the necessary criteria have been met in accordance with FASB Statement of Financial Accounting Standards No. 13, “Accounting for Leases” (“FAS 13”).
 
Interest income on mortgage loans receivable is recognized based on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected.
 
The Company provides an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the consolidated balance sheets are shown net of an allowance for doubtful accounts of $783 and $111 as of December 31, 2006 and 2005, respectively. For accounts receivable the Company deems uncollectible, the Company uses the direct write-off method.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Gain on Sale of Real Estate
 
Gain on sale of real estate is recognized using the full accrual method, when appropriate. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are written off with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Company after completion of each sale are included in the determination of the gain on sales.
 
Income Taxes
 
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Code. As a result, the Company generally is not subject to federal income taxation to the extent of the income which it distributes if it satisfies the requirements set forth in Section 856 of the Code (pertaining to its organization and types of income and assets) necessary to maintain its status as a REIT, it distributes annually at least 90% of its REIT taxable income, as defined in the Code, to its stockholders and it satisfies certain other requirements.
 
A provision has been made for federal income taxes in the accompanying consolidated financial statements for activities conducted in its taxable REIT subsidiary, First Industrial Investment, Inc. which has been accounted for under FASB Statement of Financial Standards No. 109, “Accounting for Income Taxes” (“FAS 109”). In accordance with FAS 109, the total benefit/expense has been separately allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
 
The Company and certain of its subsidiaries are subject to certain state and local income, excise and franchise taxes. The provision for excise and franchise taxes has been reflected in general and administrative expense in the consolidated statements of operations and has not been separately stated due to its insignificance. State and local income taxes are included in the provision/benefit for income taxes which is allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
 
Earnings Per Common Share
 
Net income per weighted average share — basic is based on the weighted average common shares outstanding (excluding restricted stock that has not yet vested). Net income per weighted average share — diluted is based on the weighted average common shares outstanding (excluding restricted stock that has not yet vested) plus the dilutive effect ofin-the-moneyemployee stock options, restricted stock and 2011 Exchangeable Notes (hereinafter defined). See Note 10 for further disclosure about earnings per share.
 
Fair Value of Financial Instruments
 
The Company’s financial instruments include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses, mortgage loans payable, unsecured lines of credit and senior unsecured debt.
 
The fair values of the short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable and other accrued expenses approximates their carrying or contract values. See Note 5 for the fair values of the mortgage loans payable, unsecured lines of credit and senior unsecured debt.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Derivative Financial Instruments
 
Historically, the Company has used interest rate protection agreements (the “Agreements”) to fix the interest rate on anticipated offerings of senior unsecured debt or convert floating rate debt to fixed rate debt. Receipts or payments that result from the settlement of Agreements used to fix the interest rate on anticipated offerings of senior unsecured debt are amortized over the life of the senior unsecured debt and included in interest expense. Receipts or payments resulting from Agreements used to convert floating rate debt to fixed rate debt are recognized as a component of interest expense. Agreements which qualify for hedge accounting aremarked-to-marketand any gain or loss is recognized in other comprehensive income (shareholders’ equity). Any agreements which no longer qualify for hedge accounting aremarked-to-marketand any gain or loss is recognized in net income immediately. The credit risks associated with the Agreements are controlled through the evaluation and monitoring of the creditworthiness of the counterparty. In the event that the counterparty fails to meet the terms of the Agreements, the Company’s exposure is limited to the current value of the interest rate differential, not the notional amount, and the Company’s carrying value of the Agreements on the balance sheet. See Note 5 for more information on the Agreements.
 
Discontinued Operations
 
On January 1, 2002, the Company adopted the FASB Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”). FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property or property held for sale be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Company as a result of the disposal transaction and (b) the Company will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be reclassified and presented in discontinued operations in prior consolidated statements of operations.
 
Segment Reporting
 
Management views the Company as a single segment based on its method of internal reporting.
 
Recent Accounting Pronouncements
 
In February 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 155,“Accounting for Certain Hybrid Financial Instruments” which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“FAS 133”), and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, “Application of SFAS No. 133 to Beneficial Interests in Securitized Financial Assets.” This statement:
 
a. Permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation;
 
b. Clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133;
 
c. Establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation;


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
d. Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and
 
e. Amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.
 
This Statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In March 2006, the FASB issued SFAS No. 156,“Accounting for Servicing of Financial Assets”which amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, (“FAS 140”) with respect to the accounting for separately recognized servicing assets and servicing liabilities. This statement was issued to simplify the accounting for servicing rights and reduce the volatility that results from the use of different measurements attributes for servicing rights and the related financial instruments used to economically hedge risks associated with those servicing rights. The statement clarifies when to separately account for servicing rights, requires separately recognized servicing rights to be initially measured at fair value, and provides the option to subsequently account for those servicing rights at either fair value or under the amortization method previously required under FAS 140. An entity should adopt this statement as of the beginning of its first fiscal year that begins after September 15, 2006. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In June 2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes”(“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with SFAS No. 109, “Accounting for Income Taxes.” The evaluation of a tax position in accordance with FIN 48 is a two-step process. First, the Company determines whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position. Second, a tax position that meets the more-likely-than-not threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent reporting period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent reporting period in which the threshold is no longer met. The Company is required to apply the guidance of FIN 48 beginning January 1, 2007. The Company is currently evaluating what impact the application of FIN 48 will have on the consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157,“Fair Value Measurements” which establishes a common definition of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. The Company does not expect that the implementation of this statement will have a material effect on the Company’s consolidated financial position or results of operations.
 
In December 2006, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regarding EITF00-19-2,“Accounting for Registration Payment Arrangements.” The guidance specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with SFAS No. 5, “Accounting for Contingencies.” The guidance is effective for periods beginning after December 15, 2006. EITF00-19-2 is not expected to impact the Company’s results of operations, financial position, or liquidity.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
4.  Investments in Joint Ventures
 
On September 28, 1998, the Company, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “September 1998 Joint Venture”) with an institutional investor to invest in industrial properties. At December 31, 2006, the Company, through wholly-owned limited liability companies of the Operating Partnership, owns a 10% equity interest in the September 1998 Joint Venture and provides property and asset management services to the September 1998 Joint Venture. On January 31, 2007, the Company purchased the remaining 90% equity interest from the institutional investor in the September 1998 Joint Venture (See Note 16).
 
On December 28, 2001, the Company, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “December 2001 Joint Venture”) with an institutional investor to invest in industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership, owned a 15% equity interest in the December 2001 Joint Venture and provided property management services to the December 2001 Joint Venture. On August 27, 2004, the December 2001 Joint Venture sold all 36 industrial properties, containing approximately 6.2 million square feet (unaudited) of GLA, to a third party for gross proceeds of approximately $349,750. Due to certain provisions in the operating agreement, the Company received distributions in excess of its 15% equity interest in the December 2001 Joint Venture. Due to the sale of all 36 industrial properties, the Company recognized, in aggregate, approximately $34,767 from the Company’s 15% share of gain from the sale of the December 2001 Joint Venture’s properties and distributions received from the December 2001 Joint Venture in excess of the Company’s 15% equity interest. This amount is included in Equity in Income of Joint Ventures.
 
As a result of the sale on August 27, 2004 to a third party, the Company recognized the unamortized portion of the previously deferred gain from the original sales to the December 2001 Joint Venture, of approximately $5,836. These deferred gains are included in Equity in Income of Joint Ventures.
 
On May 16, 2003, the Company, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “May 2003 Joint Venture”) with an institutional investor to invest in industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Investment, Inc., owns a 15% equity interest in the May 2003 Joint Venture and provides property management services to the May 2003 Joint Venture.
 
On March 18, 2005, the Company, through a wholly-owned limited liability company in which First Industrial Investment, Inc. is the sole member, entered into a joint venture arrangement (the “March 2005 Joint Venture”) with an institutional investor to invest in, own, develop, redevelop and operate certain industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Investment, Inc., owns a 10% equity interest in the March 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the March 2005 Joint Venture.
 
On September 7, 2005, the Company, through a wholly-owned limited liability company in which First Industrial Investment, Inc. is the sole member, entered into a joint venture arrangement (the “September 2005 Joint Venture”) with an institutional investor to invest in, own and operate certain industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Investment, Inc., owns a 10% equity interest in the September 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the September 2005 Joint Venture.
 
On March 21, 2006, the Company, through separate wholly-owned limited liability companies in which the Operating Partnership is the sole member, entered into a co-investment arrangement with an institutional investor to invest in industrial properties (the “March 2006 Co-Investment Program”). The Company, through


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

separate wholly-owned limited liability companies of the Operating Partnership or First Industrial Investment, Inc., owns a 15% equity interest in and provides property management, asset management and leasing management services to the March 2006 Co-Investment Program.
 
On July 21, 2006 the Company, through a wholly-owned limited liability company of First Industrial Investment, Inc., entered into a joint venture arrangement with an institutional investor to invest in land and vertical development (the “July 2006 Joint Venture”). The Company, through wholly-owned limited liability companies of First Industrial Investment, Inc., owns a 10% equity interest in and provides property management, asset management, development management and leasing management services to the July 2006 Joint Venture.
 
As of December 31, 2006, the September 1998 Joint Venture owned 41 industrial properties comprising approximately 1.3 million square feet (unaudited) of GLA, the May 2003 Joint Venture owned 12 industrial properties comprising approximately 5.4 million square feet (unaudited) of GLA, the March 2005 Joint Venture owned 42 industrial properties comprising approximately 3.9 million square feet (unaudited) of GLA and several land parcels, the September 2005 Joint Venture owned 148 industrial properties comprising approximately 10.3 million square feet (unaudited) of GLA and several land parcels, the March 2006 Co-Investment Program owned 13 industrial properties comprising approximately 5.9 million square feet (unaudited) of GLA (of which the Consolidated Operating Partnership has an equity interest in 12 industrial properties comprising approximately 5.0 million square feet (unaudited) of GLA) and the July 2006 Joint Venture owned several land parcels.
 
During the year ended December 31, 2006, the Company sold several land parcels to the March 2005 Joint Venture for a sales price of $12.3 million. During the year ended December 31, 2005, the Company sold eight properties and several land parcels to the March 2005 Joint Venture for a sales price of $92.6 million. The Company deferred 10% of the gain from these sales in 2006 and 2005, which is equal to the Company’s economic interest in the March 2005 Joint Venture. In 2006 and 2005, the March 2005 Joint Venture sold three properties and several parcels of land to third parties. As a result of the sales, the Company recognized the unamortized portion of the previously deferred gains from the original sales to the March 2005 Joint Venture in Equity in Income of Joint Ventures. If the Company repurchases any of the properties or land parcels from the March 2005 Joint Venture, the 10% deferral will be netted against the basis of the property purchased (which reduces the basis of the property).
 
During the year ended December 31, 2006, the Company earned acquisition fees from the May 2003 Joint Venture, the September 2005 Joint Venture and the March 2006 Co-Investment Program. During the year ended December 31, 2005, the Company earned acquisition fees from the May 2003 Joint Venture and the September 2005 Joint Venture. The Company deferred 15% of the acquisition fees earned from the May 2003 Joint Venture and the March 2006 Co-Investment Program activity and 10% of the acquisition fees earned from the September 2005 Joint Venture activity. The deferrals reduced the Company’s investment in the joint ventures and are amortized into income over the life of the properties, generally 25 to 40 years.
 
At December 31, 2006 and 2005, the Company has a receivable from the Joint Ventures of $7,967 and $3,354, respectively, which relates to development, leasing, property management and asset management fees due to the Company from the Joint Ventures, reimbursement for general contractor expenditures made by a wholly owned subsidiary of the Company who is acting in the capacity of the developer for several development projects for the March 2005 Joint Venture and from borrowings made to the September 1998 Joint Venture.
 
During the years ended December 31, 2006, 2005 and 2004, the Company invested the following amounts in its Joint Ventures as well as received distributions and recognized fees (included within Other Income) from


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

acquisition, disposition, property management, leasing, development, general contractor, incentive and asset management services in the following amounts:
 
             
  Year Ended
  Year Ended
  Year Ended
 
  December 31,
  December 31,
  December 31,
 
  2006  2005  2004 
 
Contributions
 $29,194  $43,311  $3,676 
Distributions
 $51,398  $6,837  $50,525 
Fees
 $22,507  $8,301  $2,689 
 
The combined summarized financial information of the investments in joint ventures is as follows:
 
         
  December 31,
  December 31,
 
  2006  2005 
 
Condensed Combined Balance Sheets
        
Gross Real Estate Investment
 $1,685,969  $1,410,389 
Less: Accumulated Depreciation
  (72,398)  (30,497)
         
Net Real Estate
  1,613,571   1,379,892 
Other Assets
  224,048   256,233 
         
Total Assets
 $1,837,619  $1,636,125 
         
Debt
 $1,276,001  $1,174,296 
Other Liabilities
  108,430   46,962 
Equity
  453,188   414,867 
         
Total Liabilities and Equity
 $1,837,619  $1,636,125 
         
Company’s share of Equity
 $53,151  $44,772 
Basis Differentials(1)
  2,376   (531)
         
Carrying Value of the Company’s investments in joint ventures
 $55,527  $44,241 
         
 
 
(1) This amount represents the aggregate difference between the Company’s historical cost basis and the basis reflected at the joint venture level. Basis differentials are primarily comprised of gain deferrals related to properties the Company sold to the Joint Ventures, certain acquisition costs which are not reflected at the joint venture level and incentive payments the Company has earned but has not received.
 
             
  Year Ended December 31, 
  2006  2005  2004 
 
Condensed Combined Statements of Operations
            
Total Revenues
 $163,443  $59,411  $32,353 
Expenses
            
Operating and Other
  55,070   16,128   11,593 
Interest
  61,524   20,995   7,712 
Depreciation and Amortization
  90,842   32,150   12,540 
             
Total Expenses
  207,436   69,273   31,845 
             
Gain on Sale of Real Estate
  94,352   10,761   81,431 
             
Net Income
  50,359   899   81,939 
             
Company’s share of Net Income
 $30,673  $3,699  $37,301 
             


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

5.  Mortgage Loans Payable, Net, Senior Unsecured Debt, Net and Unsecured Lines of Credit
 
The following table discloses certain information regarding the Company’s mortgage loans, senior unsecured debt and unsecured lines of credit:
 
                   
           Effective
   
  Outstanding
  Interest
  Interest
   
  Balance at  Rate at
  Rate at
   
  December 31,
  December 31,
  December 31,
  December 31,
  Maturity
  2006  2005  2006  2006  Date
 
Mortgage Loans Payable, Net
 $77,926  $57,309   5.50% - 9.25%   4.58% - 9.25%  July 2009 -
September 2024
Unamortized Premiums
  (2,919)  (3,549)          
                   
Mortgage Loans Payable, Gross
 $75,007  $53,760           
                   
Senior Unsecured Debt, Net
                  
2006 Notes
 $  $150,000   7.000%   7.22%  12/01/06
2007 Notes
  149,998   149,992   7.600%   7.61%  05/15/07
2016 Notes
  199,372      5.750%   5.91%  01/15/16
2017 Notes
  99,895   99,886   7.500%   7.52%  12/01/17
2027 Notes
  15,055   15,054   7.150%   7.11%  05/15/27
2028 Notes
  199,831   199,823   7.600%   8.13%  07/15/28
2011 Notes
  199,746   199,685   7.375%   7.39%  03/15/11
2012 Notes
  199,270   199,132   6.875%   6.85%  04/15/12
2032 Notes
  49,435   49,413   7.750%   7.87%  04/15/32
2009 Notes
  124,893   124,849   5.250%   4.10%  06/15/09
2014 Notes
  112,237   111,059   6.420%   6.54%  06/01/14
2011 Exchangeable Notes
  200,000      4.625%   4.63%  09/15/11
                   
Subtotal
 $1,549,732  $1,298,893           
                   
Unamortized Discounts
  15,338   16,177           
                   
Senior Unsecured Notes, Gross
 $1,565,070  $1,315,070           
                   
Unsecured Lines of Credit
                  
Unsecured Line of Credit I
 $207,000  $332,500   6.058%   6.058%  09/28/08
Unsecured Line of Credit II
     125,000   N/A   N/A  N/A
                   
Unsecured Lines of Credit Total
 $207,000  $457,500           
                   
 
Mortgage Loans Payable, Net
 
During 2006, in conjunction with the acquisition of several industrial properties, the Company assumed mortgages in the aggregate of $33,866. In conjunction with the assumption of the loans, the Company recorded a premium in the amount of $116. Also during 2006, the Company paid off and retired $10,331 of mortgage loans payable. As of December 31, 2006, mortgage loans payable of $77,926 is collateralized by industrial properties with a carrying value of $124,470.
 
Senior Unsecured Debt, Net
 
On January 10, 2006, the Company, through the Operating Partnership, issued $200,000 of senior unsecured debt which matures on January 15, 2016 and bears interest at a rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. Interest is paid semi-annually in arrears on January 15 and July 15. In December 2005, the Company also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Company settled the interest rate protection agreements on January 9, 2006 for a payment of approximately $1,729, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements will be amortized over the life of the 2016 Notes as an adjustment to interest expense. Including


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the impact of the offering discount and the settlement amount of the interest rate protection agreements, the Company’s effective interest rate on the 2016 Notes is 5.91%.
 
On September 25, 2006, the Company, through the Operating Partnership, issued $175,000 of senior unsecured debt which bears interest at a rate of 4.625% (the “2011 Exchangeable Notes”). The Company also granted the initial purchasers of the 2011 Exchangeable Notes an option exercisable until October 4, 2006 to purchase up to an additional $25,000 principal amount of the 2011 Exchangeable Notes to cover over-allotments, if any (the “Over-allotment Option”). Holders of the 2011 Exchangeable Notes may exchange their notes for the Company’s common stock prior to the close of business on the second business day immediately preceding the stated maturity date at any time beginning on July 15, 2011 and also under the following circumstances: 1) during any calendar quarter beginning after December 31, 2006 (and only during such calendar quarter), if, and only if, the closing sale price per share of the Company’s common stock for at least 20 trading days ending on the last trading day of the preceding calendar quarter is more than 130% of the exchange price per share of the Company’s common stock in effect on the applicable trading day; 2) during the five consecutivetrading-dayperiod following any five consecutivetrading-dayperiod in which the trading price of the notes was less than 98% of the product of the closing sale price per share of the Company’s common stock multiplied by the applicable exchange rate; 3) if those notes have been called for redemption, at any time prior to the close of business on the second business day prior to the redemption date; 4) upon the occurrence of distributions of certain rights to purchase the Company’s common stock or certain other assets; or 5) if the Company’s common stock ceases to be listed on a U.S. national or regional securities exchange and is not quoted on theover-the-countermarket as reported by Pink Sheets LLC or any similar organization, in each case, for 30 consecutive trading days. The 2011 Exchangeable Notes have an initial exchange rate of 19.6356 shares of the Company’s common stock per $1,000 principal amount, representing an exchange price of approximately $50.93 per common share and an exchange premium of approximately 20% based on the last reported sale price of $42.44 per share of the Company’s common stock on September 19, 2006. If a change of control transaction described in the indenture relating to the 2011 Exchangeable Notes occurs and a holder elects to exchange notes in connection with any such transaction, holders of the 2011 Exchangeable Notes will be entitled to a make-whole amount in the form of an increase in the exchange rate. The exchange rate may also be adjusted under certain other circumstances, including the payment of cash dividends in excess of the Company’s current regular quarterly dividend on its common stock of $0.70 per share. The 2011 Exchangeable Notes will be exchangeable for cash up to their principal amount and shares of the Company’s common stock for the remainder of the exchange value in excess of the principal amount. The 2011 Exchangeable notes mature on September 15, 2011, unless previously redeemed or repurchased by the Company or exchanged in accordance with their terms prior to such date. Interest is paid semi-annually in arrears on March 15 and September 15 of each year, beginning March 15, 2007. The 2011 Exchangeable Notes are fully and unconditionally guaranteed by the Company. On October 3, 2006, the initial purchasers of the 2011 Exchangeable Notes exercised their Over-Allotment Option with respect to $25,000 in principal amount of the 2011 Exchangeable Notes. With the exercise of the Over-Allotment Option, the aggregate principal amount of 2011 Exchangeable Notes issued and outstanding is $200,000. In connection with the Operating Partnership’s offering of the 2011 Exchangeable Notes, the Operating Partnership entered into capped call transactions (the “capped call transactions”) with affiliates of two of the initial purchasers of the 2011 Exchangeable Notes (the “option counterparties”) in order to increase the effective exchange price of the 2011 Exchangeable Notes to $59.42 per share of the Company’s common stock, which represents an exchange premium of approximately 40% based on the last reported sale price of $42.44 per share of the Company’s common stock on September 19, 2006. The aggregate cost of the capped call transactions was approximately $6,835. The capped call transactions are expected to reduce the potential dilution with respect to the Company’s common stock upon exchange of the 2011 Exchangeable Notes to the extent the then market value per share of the Company’s common stock does not exceed the cap price of the capped call transaction during the observation period relating to an exchange. The cost of the capped call will be accounted for as a hedge and included in


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

shareholders’ equity because the derivative is indexed to the Company’s own stock and meets the scope exception in FAS 133.
 
On December 1, 2006, the Company paid off and retired its 7.0% 2006 Unsecured Notes in the amount of $150,000.
 
All of the Company’s senior unsecured debt (except for the 2011 Exchangeable Notes) contains certain covenants, including limitations on incurrence of debt and debt service coverage.
 
Unsecured Lines of Credit
 
The Company has maintained an unsecured revolving credit facility since 1997 (the “Unsecured Line of Credit”). On August 23, 2005, the Company, through the Operating Partnership, amended and restated the Unsecured Line of Credit (the “Unsecured Line of Credit I”). The Unsecured Line of Credit I matures on September 28, 2008, has a borrowing capacity of $500,000, with the right, subject to certain conditions, to increase the borrowing capacity up to $600,000 and bears interest at a floating rate of LIBOR plus .625%, or the Prime Rate, at the Company’s election. The net unamortized deferred financing fees related to the Unsecured Line of Credit I and any additional deferred financing fees incurred related to the Unsecured Line of Credit I are being amortized over the life of the Unsecured Line of Credit I in accordance with Emerging Issues Task Force Issue98-14,“Debtor’s Accounting for Changes inLine-of-Creditor Revolving-Debt Arrangements”, except for $51, which represents the write off of deferred financing costs and is included in the gain from early retirement of debt. The Unsecured Line of Credit I contains certain financial covenants relating to debt service coverage, market value net worth, dividend payout ratio and total funded indebtedness.
 
In December 2005, the Company, through the Operating Partnership, entered into a non-revolving unsecured line of credit (the “Unsecured Line of Credit II”; together with the Unsecured Line of Credit I, the “Unsecured Lines of Credit”). The Unsecured Line of Credit II had a borrowing capacity of $125,000 and matured on March 15, 2006. The Unsecured Line of Credit II provided for interest only payments at LIBOR plus .625% or at Prime, at the Company’s election. The Company, through the Operating Partnership, paid off and retired the Unsecured Line of Credit II in January 2006.
 
The following is a schedule of the stated maturities and scheduled principal payments of the mortgage loans, senior unsecured debt and unsecured line of credit, exclusive of premiums and discounts, for the next five years ending December 31, 2007 and thereafter:
 
     
  Amount 
 
2007
 $152,884 
2008
  210,111 
2009
  133,001 
2010
  15,545 
2011
  407,360 
Thereafter
  928,176 
     
Total
 $1,847,077 
     


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Fair Value
 
At December 31, 2006 and 2005, the fair value of the Company’s mortgage loans payable, senior unsecured debt and Unsecured Line of Credit I were as follows:
 
                 
  December 31, 2006  December 31, 2005 
  Carrying
  Fair
  Carrying
  Fair
 
  Amount  Value  Amount  Value 
 
Mortgage Loans Payable
 $77,926  $78,730  $57,309  $58,864 
Senior Unsecured Debt
  1,549,732   1,636,318   1,298,893   1,415,268 
Unsecured Lines of Credit I
  207,000   207,000   457,500   457,500 
                 
Total
 $1,834,658  $1,922,048  $1,813,702  $1,931,632 
                 
 
The fair value of the senior unsecured debt was determined by quoted market prices, if available. The fair values of the Company’s senior unsecured debt not valued by quoted market prices and mortgage loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value of the Unsecured Lines of Credit was equal to their carrying value due to the variable interest rate nature of the loans.
 
Other Comprehensive Income
 
In conjunction with the prior issuances of senior unsecured debt, the Company entered into interest rate protection agreements to fix the interest rate on anticipated offerings of senior unsecured debt (the “Interest Rate Protection Agreements”). In the next 12 months, the Company will amortize approximately $1,182 of the Interest Rate Protection Agreements into net income as a decrease to interest expense.
 
In October 2005, the Company, through an entity wholly-owned by the Operating Partnership, entered into an interest rate protection agreement which hedged the change in value of a build to suit development project the Company was constructing. This interest rate protection agreement had a notional value of $50,000, was based on the three Month LIBOR rate, had a strike rate of 4.8675%, had an effective date of December 30, 2005 and a termination date of December 30, 2010. Per Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” fair value and cash flow hedge accounting for hedges of non-financial assets and liabilities is limited to hedges of the risk of changes in the market price of the entire hedged item because changes in the price of an ingredient or component of a non-financial item generally do not have a predictable, separately measurable effect on the price of the item. Since the interest rate protection agreement is hedging a component of the change in value of the build to suit development, the interest rate protection agreement does not qualify for hedge accounting and the change in value of the interest rate protection agreement will be recognized immediately in net income as opposed to other comprehensive income. On January 5, 2006, the Company, settled the interest rate protection agreement for a payment of $186.
 
In December 2005, the Company, through the Operating Partnership, entered into three interest rate protection agreements which fixed the interest rate on a forecasted offering of unsecured debt which it designated as cash flow hedges. Two of the interest rate protection agreements each had a notional value of $48,700 and were effective from December 30, 2005 through December 30, 2015. The interest rate protection agreements fixed the LIBOR rate at 5.066% and 5.067%. The third interest rate protection agreement had a notional value of $48,700, was effective from January 19, 2006 through January 19, 2016, and fixed the LIBOR rate at 4.992%. The Company settled the three interest rate protection agreements on January 9, 2006 for a payment of $1,729, which is included in other comprehensive income. The settlement amount of the interest rate protection agreements will be amortized over the life of the 2016 Notes as an adjustment to interest expense.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
In April 2006, the Company, through the Operating Partnership, entered into four interest rate protection agreements which fixed the interest rate on forecasted offerings of unsecured debt which it designated as cash flow hedges. Two of the interest rate protection agreements each have a notional value of $72,900 and are effective from November 28, 2006 through November 28, 2016. The interest rate protection agreements fixed the LIBOR rate at 5.537%. The third and fourth interest rate protection agreements each have a notional value of $74,750, are effective from May 10, 2007 through May 10, 2012, and fixed the LIBOR rate at 5.420% (the ”2006 Interest Rate Protection Agreements”). In September 2006, the 2006 Interest Rate Protection Agreements failed to qualify for hedge accounting, since the actual debt issuance date was not within the range of dates the Company disclosed in its hedge designation. The Company settled the 2006 Interest Rate Protection Agreements and paid the counterparties $2,942. This amount is recognized in themark-to-market/gain(loss) on settlement of interest rate protection agreements caption on the consolidated statements of operations.
 
6.  Stockholders’ Equity
 
Preferred Stock
 
On June 6, 1997, the Company issued 2,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 85/8%, $0.01 par value, Series C Cumulative Preferred Stock (the “Series C Preferred Stock”), at an initial offering price of $25 per Depositary Share. Dividends on the Series C Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series C Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series F Preferred Stock (hereinafter defined), Series G Preferred Stock (hereinafter defined), Series J Preferred Stock (hereinafter defined) and Series K Preferred Stock (hereinafter defined). The Series C Preferred Stock is not redeemable prior to June 6, 2007. On or after June 6, 2007, the Series C Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series C Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On February 4, 1998, the Company issued 5,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.95%, $0.01 par value, Series D Cumulative Preferred Stock (the “Series D Preferred Stock”), at an initial offering price of $25 per Depositary Share. On or after February 4, 2003, the Series D Preferred Stock became redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25 per Depositary Share, or $125,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Company redeemed the Series D Preferred Stock on June 7, 2004 at a redemption price of $25.00 per Depositary Share, and paid a prorated second quarter dividend of $0.36990 per Depositary Share, totaling approximately $1,850. In accordance with EITF D-42, due to the redemption of the Series D Preferred Stock, the initial offering costs associated with the issuance of the Series D Preferred Stock of $4,467 were reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2004.
 
On March 18, 1998, the Company issued 3,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.90%, $0.01 par value, Series E Cumulative Preferred Stock (the “Series E Preferred Stock”), at an initial offering price of $25 per Depositary Share. On or after March 18, 2003, the Series E Preferred Stock became redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25 per Depositary Share, or $75,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Company redeemed the Series E Preferred Stock on June 7, 2004 at a redemption price of $25.00 per Depositary Share, and paid a prorated second quarter dividend of $0.36757 per Depositary Share, totaling approximately $1,103. In accordance with EITF D-42, due to the redemption of the Series E Preferred Stock, the initial offering costs associated with the issuance of the Series E Preferred Stock


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of $2,892 were reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2004.
 
On May 27, 2004, the Company issued 50,000 Depositary Shares, each representing 1/100th of a share of the Company’s 6.236%, $0.01 par value, Series F Flexible Cumulative Redeemable Preferred Stock (the “Series F Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share. Dividends on the Series F Preferred Stock are cumulative from the date of initial issuance and are payable semi-annually in arrears for the period from the date of original issuance through March 31, 2009 (the “Series F Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 6.236% per annum of the liquidation preference (the “Series F Initial Distribution Rate”) (equivalent to $62.36 per Depositary Share). On or after March 31, 2009, the Series F Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.375% (the initial credit spread), plus the greater of (i) the3-monthLIBOR Rate, (ii) the10-yearTreasury CMT Rate (as defined in the Articles Supplementary), and (iii) the30-yearTreasury CMT Rate (the adjustable rate)(as defined in the Articles Supplementary), reset quarterly. Dividends on the Series F Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series F Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series F Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series G Preferred Stock (hereinafter defined), Series J Preferred Stock (hereinafter defined) and Series K Preferred Stock (hereinafter defined). On or after March 31, 2009, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series F Initial Fixed Rate Period, the Series F Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series F Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On May 27, 2004, the Company issued 25,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.236%, $0.01 par value, Series G Flexible Cumulative Redeemable Preferred Stock (the “Series G Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share. Dividends on the Series G Preferred Stock are cumulative from the date of initial issuance and are payable semi-annually in arrears for the period from the date of original issuance of the Series G Preferred Stock through March 31, 2014 (the “Series G Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 7.236% per annum of the liquidation preference (the “Series G Initial Distribution Rate”) (equivalent to $72.36 per Depositary Share). On or after March 31, 2014, the Series G Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.500% (the initial credit spread), plus the greater of (i) the3-monthLIBOR Rate, (ii) the10-yearTreasury CMT Rate (as defined in the Articles Supplementary), and (iii) the30-yearTreasury CMT Rate (the adjustable rate) (as defined in the Articles Supplementary), reset quarterly. Dividends on the Series G Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series G Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series G Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock, Series J Preferred Stock (hereinafter defined) and Series K Preferred Stock (hereinafter defined). On or after March 31, 2014, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series G Initial Fixed Rate Period, the Series G Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $25,000 in the aggregate, plus dividends accrued and unpaid to the


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redemption date. The Series G Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On June 2, 2004, the Company issued 500 shares of 2.965%, $0.01 par value, Series H Flexible Cumulative Redeemable Preferred Stock (the “Series H Preferred Stock”), at an initial offering price of $250,000.00 per share. On or after July 2, 2004, the Series H Preferred Stock became redeemable for cash at the option of the Company, in whole but not in part, at a redemption price equivalent, initially, to $242,875.00 per share, plus accrued and unpaid dividends. The Company redeemed the Series H Preferred Stock on July 2, 2004 and paid a prorated second and third quarter dividend of $629.555 per share, totaling approximately $315. In accordance with EITF D-42, due to the redemption of the Series H Preferred Stock, the initial offering costs associated with the issuance of the Series H Preferred Stock of $600 is reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2004.
 
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Shares, respectively, of $.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock, (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187,500. The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $353. In accordance with EITF D-42, due to the redemption of the Series I Preferred Stock, the difference between the redemption cost and the carrying value of the Series I Preferred Stock of approximately $672 is reflected as a deduction from net income to arrive at net income available to common stockholders in determining earnings per share for the year ended December 31, 2006.
 
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. Dividends on the Series J Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. However, during any period that both (i) the depositary shares are not listed on the NYSE or AMEX, or quoted on NASDAQ, and (ii) the Company is not subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, the Company will increase the dividend on the preferred shares to a rate of 8.25% of the liquidation preference per year. However, if at any time both (i) the depositary shares cease to be listed on the NYSE or the AMEX, or quoted on NASDAQ, and (ii) the Company ceases to be subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, then the preferred shares will be redeemable, in whole but not in part at the Company’s option, within 90 days of the date upon which the depositary shares cease to be listed and the Company ceases to be subject to such reporting requirements, at a redemption price equivalent to $25.00 per Depositary Share, plus all accrued and unpaid dividends to the date of redemption. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock, Series G Preferred Stock and Series K Preferred Stock (hereinafter defined). The Series J Preferred Stock is not redeemable prior to January 15, 2011. On or after January 15, 2011, the Series J Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On August 21, 2006, the Company issued 2,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series K Flexible Cumulative Redeemable Preferred Stock (the “Series K Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. Dividends on the Series K Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial


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issuance and are payable quarterly in arrears. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series K Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock, Series G Preferred Stock and Series J Preferred Stock. The Series K Preferred Stock is not redeemable prior to August 15, 2011. On or after August 15, 2011, the Series K Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series K Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
The following table summarizes certain information regarding the Company’s preferred stock:
 
         
  Stated Value at 
  December 31,
  December 31,
 
  2006  2005 
 
Series C Preferred Stock
 $50,000  $50,000 
Series F Preferred Stock
  50,000   50,000 
Series G Preferred Stock
  25,000   25,000 
Series I Preferred Stock
     187,500 
Series J Preferred Stock
  150,000    
Series K Preferred Stock
  50,000    
         
Total
 $325,000  $312,500 
         
 
Shares of Common Stock
 
On September 16, 2004, the Company and the Operating Partnership entered into a sales agreement to sell up to 3,900,000 shares of the Company’s common stock from time to time with Cantor Fitzgerald & Co., as sales agent, in a controlled equity offering program. During the year ended December 31, 2004, the Company issued 1,333,600 shares of common stock under the controlled equity offering program and received net proceeds of $48,820.
 
On December 9, 2005, the Company issued 1,250,000 shares of $0.01 par value common stock (the “December 2005 Equity Offering”). The price per share was $39.45 resulting in gross offering proceeds of $49,313. Proceeds to the Company, net of underwriters’ discount and total expenses, were approximately $48,775.
 
For the years ended December 31, 2006, 2005 and 2004, 213,773, 81,644, and 248,098 respectively, shares of common stock were converted from an equivalent number of limited partnership interests in the Operating Partnership (“Units”).


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The following table is a roll-forward of the Company’s shares of common stock outstanding, including unvested restricted shares of common stock for the three years ended December 31, 2006:
 
     
  Shares of
 
  Common Stock
 
  Outstanding 
 
Balance at December 31, 2003
  39,850,370 
Issuance of Common Stock and Stock Option Exercises
  2,621,082 
Issuance of Restricted Stock Shares
  216,617 
Repurchase and Retirement of Restricted Stock Shares
  (102,076)
Conversion of Operating Partnership Units
  248,098 
     
Balance at December 31, 2004
  42,834,091 
     
Issuance of Common Stock and Stock Option Exercises
  1,480,942 
Issuance of Restricted Stock Shares
  200,042 
Repurchase and Retirement of Restricted Stock Shares
  (152,009)
Conversion of Operating Partnership Units
  81,644 
     
Balance at December 31, 2005
  44,444,710 
     
Stock Option Exercises
  125,780 
Issuance of Restricted Stock Shares
  319,374 
Repurchase and Retirement of Restricted Stock Shares
  (93,007)
Conversion of Operating Partnership Units
  213,773 
     
Balance at December 31, 2006
  45,010,630 
     
 
Non-Qualified Employee Stock Options
 
For the year ended December 31, 2004, certain employees of the Company exercised 1,663,652 non-qualified employee stock options. Net proceeds to the Company were approximately $37,301.
 
For the year ended December 31, 2005, certain employees of the Company exercised 248,881 non-qualified employee stock options. Net proceeds to the Company were approximately $6,698.
 
For the year ended December 31, 2006, certain employees of the Company exercised 125,780 non-qualified employee stock options. Net proceeds to the Company were approximately $3,742.
 
Restricted Stock
 
During the years ended December 31, 2006, 2005, and 2004 the Company awarded 319,374, 200,042, and 216,617 restricted shares of common stock, respectively, to certain employees and certain directors of the Company. See Note 13 for further disclosure on the Company’s stock based compensation.
 
Shareholders’ Rights Plan
 
On September 4, 1997, the Board of Directors of the Company declared a dividend distribution of one Preferred Share Purchase Right (“Right”) for each outstanding share of Common Stock. The dividend distribution was made on October 20, 1997 to stockholders of record as of the close of business on October 19, 1997. In addition, a Right will attach to each share of Common Stock issued in the future. Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Junior Participating Preferred Stock (the “Junior Preferred Stock”), at a price of $125 per one one-hundredth of a share (the “Purchase Price”), subject to adjustment. The Rights become exercisable only if a person or group of affiliated


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or associated persons (an “Acquiring Person”) acquires, or obtains the right to acquire, beneficial ownership of Common Stock or other voting securities (“Voting Stock”) that have 15% or more of the voting power of the outstanding shares of Voting Stock, or if an Acquiring Person commences or makes an announcement of an intention to commence a tender offer or exchange offer to acquire beneficial ownership of Voting Stock that have 15% or more of the voting power of the outstanding shares of Voting Stock. The Rights will expire on October 19, 2007, unless redeemed earlier by the Company at $0.001 per Right, or exchanged by the Company at an exchange ratio of one share of Common Stock per Right.
 
In the event that a person becomes an Acquiring Person, each holder of a Right, other than the Acquiring Person, is entitled to receive, upon exercise, (1) Common Stock having a value equal to two times the Purchase Price of the Right or (2) common stock of the acquiring company having a value equal to two times the Purchase Price of the Right.
 
The Junior Preferred Stock ranks junior to all other series of the Company’s preferred stock with respect to payment of dividends and as to distributions of assets in liquidation. Each share of Junior Preferred Stock has a quarterly dividend rate per share equal to the greater of $1.00 or 100 times the per share amount of any dividend (other than a dividend payable in shares of Common Stock or a subdivision of the Common Stock) declared on the Common Stock, subject to certain adjustments. In the event of liquidation, the holder of the Junior Preferred Stock is entitled to receive a preferred liquidation payment per share of $1.00 (plus accrued and unpaid dividends) or, if greater, an amount equal to 100 times the payment to be made per share of Common Stock, subject to certain adjustments.
 
Dividends/Distributions
 
The following table summarizes dividends/distributions declared for the past three years:
 
                         
  Year Ended 2006  Year Ended 2005  Year Ended 2004 
  Dividend/
     Dividend/
     Dividend/
    
  Distribution
  Total
  Distribution
  Total
  Distribution
  Total
 
  per Share/
  Dividend/
  per Share/
  Dividend/
  per Share/
  Dividend/
 
  Unit  Distribution  Unit  Distribution  Unit  Distribution 
 
Common Stock/Operating Partnership Units
 $2.8100  $144,720  $2.7850  $139,168  $2.7500  $132,585 
Series C Preferred Stock
 $215.6240  $4,313  $215.6240  $4,313  $215.6240  $4,313 
Series D Preferred Stock
 $  $  $  $  $86.6780  $4,334 
Series E Preferred Stock
 $  $  $  $  $86.1320  $2,585 
Series F Preferred Stock
 $6,236.0000  $3,118  $6,236.0000  $3,118  $3,724.2800  $1,861 
Series G Preferred Stock
 $7,236.0000  $1,809  $7,236.0000  $1,809  $4,321.5000  $1,080 
Series H Preferred Stock
 $  $  $  $  $629.5550  $315 
Series I Preferred Stock
 $470.6667  $353  $1,930.2431  $1,448  $  $ 
Series J Preferred Stock
 $17,521.0000  $10,512  $  $  $  $ 
Series K Preferred Stock
 $6,595.6000  $1,319  $  $  $  $ 
 
7.  Acquisition and Development of Real Estate
 
In 2004, the Company acquired 79 industrial properties comprising, in the aggregate, approximately 9.2 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $402,388, excluding costs incurred in conjunction with the acquisition of the properties. The Company also substantially completed development of 11 properties comprising approximately 2.3 million square feet (unaudited) of GLA at a cost of approximately $80,241. The Company reclassed the costs of the substantially


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completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
In 2005, the Company acquired 161 industrial properties comprising, in the aggregate, approximately 20.1 million square feet (unaudited) of GLA and several land parcels. The gross purchase price for 160 industrial properties and several land parcels totaled approximately $752,674, (approximately $14,698 of which was made through the issuance of 366,472 Units relating to five properties) excluding costs incurred in conjunction with the acquisition of the properties. Additionally, one industrial property was acquired through foreclosure due to a default on a mortgage loan receivable. The Company also substantially completed development of five properties comprising approximately 1.8 million square feet (unaudited) of GLA at a cost of approximately $97,466. The Company reclassed the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
In 2006, the Company acquired 91 industrial properties comprising, in the aggregate, approximately 10.5 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $610,745 (approximately $1,288 of which was made through the issuance of 31,473 Units relating to two properties) excluding costs incurred in conjunction with the acquisition of the properties. The Company also substantially completed development of 15 properties comprising approximately 5.0 million square feet (unaudited) of GLA at a cost of approximately $188,592. The Company reclassed the costs of the substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
Intangible Assets Subject To Amortization in the Period of Acquisition
 
The fair value of in-place leases, above market leases, tenant relationships and below market leases recorded as a result of the above acquisitions was $36,270, $3,831, $20,336, and $(13,148), respectively, for the year ended December 31, 2006. The weighted average life in months of in-place leases, above market leases, tenant relationships and below market leases recorded as a result of 2006 acquisitions was 72, 71, 105, and 109 months, respectively.
 
The fair value of in-place leases, above market leases, and below market leases recorded as a result of the above acquisitions was $59,901, $6,137, and $(23,600), respectively for the year ended December 31, 2005. The weighted average life in months of in-place leases, above market leases, and below market leases recorded as a result of 2005 acquisitions was 137, 75 and 115 months, respectively.
 
8.  Sale of Real Estate, Real Estate Held for Sale and Discontinued Operations
 
In 2004, the Company sold 97 industrial properties comprising approximately 7.4 million square feet (unaudited) of GLA and several land parcels. Gross proceeds from the sales of the 97 industrial properties and several land parcels were approximately $424,878. The gain on sale of real estate was approximately $105,000, of which $88,245 is shown in discontinued operations. Ninety-two of the 97 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate, net of income taxes for the 92 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate, net of income taxes for the five industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
In 2005, the Company sold 96 industrial properties comprising approximately 12.8 million square feet (unaudited) of GLA and several land parcels. Of the 96 industrial properties sold, eight industrial property sales were to the March 2005 Joint Venture. Gross proceeds from the sales of the 96 industrial properties and several land parcels were approximately $656,094. The gain on sale of real estate was approximately


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$161,689, of which $132,139 is shown in discontinued operations. Eighty-six of the 96 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 86 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the ten industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
In 2006, the Company sold 125 industrial properties comprising approximately 17.1 million square feet (unaudited) of GLA and several land parcels, totaling gross proceeds of $946,800. The gain on sale of real estate was approximately $219,513, of which $213,442 is shown in discontinued operations. The 125 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate, for the 125 sold industrial properties are included in discontinued operations. The results of operations and gain on sale of real estate, for the several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
At December 31, 2006, the Company had 25 industrial properties comprising approximately 2.0 million square feet (unaudited) of GLA held for sale. In accordance with FAS 144, the results of operations of the 25 industrial properties held for sale at December 31, 2006 are included in discontinued operations. There can be no assurance that such industrial properties held for sale will be sold.
 
The following table discloses certain information regarding the industrial properties included in discontinued operations by the Company for the years ended December 31, 2006, 2005 and 2004.
 
             
  Year Ended December 31, 
  2006  2005  2004 
 
Total Revenues
 $37,449  $66,731  $75,105 
Property Expenses
  (11,145)  (22,155)  (25,441)
Interest Expense
     (373)  (609)
Depreciation and Amortization
  (14,389)  (22,281)  (20,607)
Provision for Income Taxes Allocable to Operations
  (2,629)  (3,054)  (2,346)
Gain on Sale of Real Estate
  213,442   132,139   88,245 
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
  (47,511)  (20,529)  (8,659)
             
Income from Discontinued Operations
 $175,217  $130.478  $105,688 
             
 
In conjunction with certain property sales, the Company provided seller financing. At December 31, 2006 and 2005, the Company had mortgage notes receivable and accrued interest outstanding of approximately $0 and $24,118, respectively, which is included as a component of prepaid expenses and other assets.


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9.  Supplemental Information to Statements of Cash Flows
 
Supplemental disclosure of cash flow information:
 
             
  Year Ended
  Year Ended
  Year Ended
 
  December 31,
  December 31,
  December 31,
 
  2006  2005  2004 
 
Interest paid, net of capitalized interest
 $114,709  $107,573  $98,910 
             
Interest capitalized
 $5,159  $3,271  $1,304 
             
Income Taxes Paid
 $36,374  $36,080  $7,936 
             
Supplemental schedule of noncash investing and financing activities:
            
Distribution payable on common stock/units
 $36,613  $35,752  $34,255 
             
Distribution payable on preferred stock
 $5,935  $3,757  $1,232 
             
Exchange of units for common shares:
            
Minority interest
 $(5,144) $(1,951) $(6,195)
Common stock
  2   1   3 
Additionalpaid-in-capital
  5,142   1,950   6,192 
             
  $  $  $ 
             
In conjunction with property and land acquisitions, the following assets and liabilities were assumed:
            
Accounts payable and accrued expenses
 $(1,928) $(4,735) $(3,231)
             
Issuance of Operating Partnership Units
 $(1,288) $(14,698) $ 
             
Mortgage debt
 $(33,982) $(11,545) $(18,244)
             
Foreclosed property acquisition and write-off of a Mortgage loan receivable
 $  $3,870  $ 
             
Write-off of fully depreciated assets
 $30,596  $67,814  $26,041 
             
In conjunction with certain property sales, the Company provided seller financing or assigned a mortgage loan payable:
            
Notes receivable
 $11,200  $76,744  $92,146 
             
Mortgage Note Payable
 $  $13,242  $ 
             


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10.  Earnings Per Share (“EPS”)
 
The computation of basic and diluted EPS is presented below.
 
             
  Year Ended
  Year Ended
  Year Ended
 
  December 31,
  December 31,
  December 31,
 
  2006  2005  2004 
 
Numerator:
            
(Loss) Income from Continuing Operations
 $(43,777) $(42,424) $9,596 
Gain on Sale of Real Estate, Net of Minority Interest and Income Tax
  3,438   16,221   9,822 
Less: Preferred Stock Dividends
  (21,424)  (10,688)  (14,488)
Less: Redemption of Preferred Stock
  (672)     (7,959)
             
Loss from Continuing Operations Available to Common Stockholders, Net of Minority Interest — For Basic and Diluted EPS
  (62,435)  (36,891)  (3,029)
Discontinued Operations, Net of Minority Interest and Income Tax
  152,421   113,307   91,188 
             
Net Income Available to Common Stockholders — For Basic and Diluted EPS
 $89,986  $76,416  $88,159 
             
Denominator:
            
Weighted Average Shares — Basic
  44,011,503   42,431,109   40,557,053 
Effect of Dilutive Securities:
            
2011 Exchangeable Notes
         
Employee and Director Common Stock Options
         
Employee and Director Shares of Restricted Stock
         
             
Weighted Average Shares — Diluted
  44,011,503   42,431,109   40,557,053 
             
Basic EPS:
            
Loss from Continuing Operations Available to Common Stockholders, Net of Minority Interest
 $(1.42) $(0.87) $(0.07)
             
Discontinued Operations, Net of Minority Interest and Income Tax
 $3.46  $2.67  $2.25 
             
Net Income Available to Common Stockholders
 $2.04  $1.80  $2.17 
             
Diluted EPS:
            
Loss from Continuing Operations Available to Common Stockholders, Net of Minority Interest
 $(1.42) $(0.87) $(0.07)
             
Discontinued Operations, Net of Minority Interest and Income Tax
 $3.46  $2.67  $2.25 
             
Net Income Available to Common Stockholders
 $2.04  $1.80  $2.17 
             
 
Weighted average shares — diluted are the same as weighted average shares — basic for the years ended December 31, 2006, 2005 and 2004 as the dilutive effect of stock options and restricted stock was excluded because its inclusion would have been anti-dilutive to the loss from continuing operations available to common stockholders, net of minority interest. The dilutive stock options and restricted stock excluded from the


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

computation are 116,155 and 93,643, respectively, for the year ended December 31, 2006, 141,625 and 82,888, respectively, for the year ended December 31, 2005 and 227,423 and 103,551, respectively, for the year ended December 31, 2004.
 
Unvested restricted stock of 778,535, 700,023, and 823,836 were outstanding as of December 31, 2006, 2005 and 2004 respectively. Unvested restricted stock aggregating 109,517, 182,651, and 211,924 were antidilutive at December 31, 2006, 2005 and 2004, respectively, and accordingly, were excluded from dilution computations.
 
Additionally, options to purchase common stock of 381,976, 546,723, and 823,421 were outstanding as of December 31, 2006, 2005 and 2004, respectively. None of the options outstanding at December 31, 2006, 2005 and 2004 were antidilutive.
 
The 2011 Exchangeable Notes issued during 2006, which are convertible into common shares of the Company at a price of $50.93, were not included in the computation of diluted EPS for 2006 as the Company’s average stock price did not exceed the strike price of the conversion feature (see Note 5).
 
11.  Income Taxes
 
For income tax purposes, distributions paid to common shareholders are classified as ordinary income, capital gain, return of capital or qualified dividends. For the three years ended December 31, 2006, 2005 and 2004, the distributions per common share were classified as follows:
 
                         
     As a Percentage
     As a Percentage
     As a Percentage
 
  2006  of Distributions  2005  of Distributions  2004  of Distributions 
 
Ordinary income
 $0.2613   9.30% $0.3278   11.77% $0.3622   13.17%
Short-term capital gains
              0.0423   1.54%
Long-term capital gains
  0.3364   11.97%  0.4289   15.40%  0.8654   31.47%
Unrecaptured Section 1250 gain
  0.2408   8.57%  0.2158   7.75%  0.2503   9.10%
Return of capital
  1.3918   49.53%  1.6276   58.44%  1.2298   44.72%
Qualified Dividends
  0.5797   20.63%  0.1849   6.64%      
                         
  $2.810   100.00% $2.785   100.00% $2.7500   100.00%
                         
 
For income tax purposes, distributions paid to preferred shareholders are classified as ordinary income, capital gain, or qualified dividends. For the three years ended December 31, 2006, 2005 and 2004, the preferred distributions per depositary share were classified as follows:
 
                         
     As a Percentage
     As a Percentage
     As a Percentage
 
Series C Cumulative Preferred Stock
 2006  of Distributions  2005  of Distributions  2004  of Distributions 
 
Ordinary income
 $0.3972   18.42% $0.5992   27.79% $0.9249   23.81%
Short-term capital gains
              0.1080   2.78%
Long-term capital gains
  0.5115   23.72%  0.8023   37.21%  2.2119   56.94%
Unrecaptured Section 1250 gain
  0.3661   16.98%  0.4041   18.74%  0.6398   16.47%
Qualified Dividends
  0.8814   40.88%  0.3506   16.26%      
                         
  $2.1562   100.00% $2.1562   100.00% $3.8846   100.00%
                         


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

         
     As a Percentage
 
Series J Cumulative Redeemable Preferred Stock
 2006  of Distributions 
 
Ordinary income
 $0.3227   18.42%
Long-term capital gains
  0.4156   23.72%
Unrecaptured Section 1250 gain
  0.2975   16.98%
Qualified Dividends
  0.7163   40.88%
         
  $1.7521   100.00%
         
 
         
     As a Percentage
 
Series K Cumulative Redeemable Preferred Stock
 2006  of Distributions 
 
Ordinary income
 $0.1215   18.42%
Long-term capital gains
  0.1564   23.72%
Unrecaptured Section 1250 gain
  0.1120   16.98%
Qualified Dividends
  0.2696   40.88%
         
  $0.6595   100.00%
         
 
The components of income tax (expense) benefit for the Company’s taxable REIT subsidiary (the “TRS”) for the years ended December 31, 2006, 2005 and 2004 are comprised of the following:
 
             
  2006  2005  2004 
 
Current:
            
Federal
 $(39,531) $(19,265) $(8,074)
State
  (7,734)  (4,519)  (1,654)
Deferred:
            
Federal
  3,548   4,299   1,070 
State
  695   1,009   219 
             
  $(43,022) $(18,476) $(8,439)
             
 
In addition to income tax expense/benefit recognized by the TRS, $317 and $1,956 of state income taxes was recognized by the Company and is included in income tax expense (benefit) on the consolidated statement of operations for the years ended December 31, 2006 and 2005, respectively.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Deferred income taxes represent the tax effect of the temporary differences between the book and tax basis of assets and liabilities. Deferred tax assets (liabilities) of the TRS include the following as of December 31, 2006, 2005 and 2004:
 
             
  2006  2005  2004 
 
Bad debt expense
 $119  $118  $ 
Investment in partnerships
  2,519   648    
Fixed assets
  7,133   4,363   2,012 
Prepaid rent
  556   461   323 
Capitalized general and administrative expense under 263A
  2,408   2,696   818 
Deferred losses/gains
  968   878   334 
Mark-to-Marketof interest rate protection agreements
     6    
Capitalized interest under 263A
  191   184    
Accrued contingency loss
  297       
             
Total deferred tax assets
 $14,191  $9,354  $3,487 
             
Straight-line rent
  (1,483)  (923)  (430)
Build to suit development
  (100)  (66)   
             
Total deferred tax liabilities
 $(1,583) $(989) $(430)
             
Total net deferred tax asset
 $12,608  $8,365  $3,057 
             
 
The TRS does not have any net operating loss carryforwards or tax credit carryforwards.
 
The TRS’s components of income tax expense for the years ended December 31, 2006, 2005 and 2004 are as follows:
 
             
  2006  2005  2004 
 
Tax expense associated with income from operations on sold properties which is included in discontinued operations
 $(2,629) $(3,054) $(2,346)
Tax expense associated with gains and losses on the sale of real estate which is included in discontinued operations
  (47,511)  (20,529)  (8,659)
Tax expense associated with gains and losses on the sale of real estate
  (2,119)  (10,871)  (5,371)
Income tax benefit
  9,237   15,978   7,937 
             
Income tax expense
 $(43,022) $(18,476) $(8,439)
             
 
The income tax benefit pertaining to income from continuing operations and gain on sale of real estate for the TRS differs from the amounts computed by applying the applicable federal statutory rate as follows:
 
             
  2006  2005  2004 
 
Tax benefit at Federal rate related to continuing operations
 $5,873  $2,785  $2,256 
State tax benefit, net of Federal benefit
  700   403   282 
Meals and Entertainment
  (24)  (19)  (16)
Prior year provision to return adjustments
  484   1,886    
Other
  85   52   44 
             
Net Income tax benefit
 $7,118  $5,107  $2,566 
             


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12.  Future Rental Revenues
 
The Company’s properties are leased to tenants under net and semi-netoperating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under non-cancelable operating leases in effect as of December 31, 2006 are approximately as follows:
 
     
2007
 $280,654 
2008
  236,882 
2009
  189,035 
2010
  140,853 
2011
  106,194 
Thereafter
  460,231 
     
Total
 $1,413,849 
     
 
13.  Stock Based Compensation
 
The Company maintains three stock incentive plans (the “Stock Incentive Plans”) which are administered by the Compensation Committee of the Board of Directors. There are approximately 10.0 million shares reserved under the Stock Incentive Plans. Only officers, other employees of the Company, its Independent Directors and its affiliates generally are eligible to participate in the Stock Incentive Plans.
 
The Stock Incentive Plans authorize (i) the grant of stock options that qualify as incentive stock options under Section 422 of the Code, (ii) the grant of stock options that do not so qualify, (iii) restricted stock awards, (iv) performance share awards and (v) dividend equivalent rights. The exercise price of the stock options is determined by the Compensation Committee. Special provisions apply to awards granted under the Stock Incentive Plans in the event of a change in control in the Company. As of December 31, 2006, stock options and restricted stock covering 1.2 million shares were outstanding and 2.3 million shares were available under the Stock Incentive Plans. At December 31, 2006 all outstanding stock options are vested. Stock option transactions are summarized as follows:
 
                 
     Weighted
       
     Average
  Exercise
  Aggregate
 
     Exercise
  Price
  Intrinsic
 
  Shares  Price  per Share  Value 
 
Outstanding at December 31, 2004
  823,421  $30.74  $18.25-$33.15  $8,230 
Exercised
  (248,881) $29.57  $18.25-$33.15  $2,588 
Expired or Terminated
  (27,817) $30.71  $25.13-$33.13     
                 
Outstanding at December 31, 2005
  546,723  $31.27  $22.75-$33.15  $3,954 
Exercised
  (125,780) $30.24  $22.75-$33.15  $1,846 
Expired or Terminated
  (38,967) $30.88  $27.25-$33.13     
                 
Outstanding at December 31, 2006
  381,976  $31.65  $25.13-$33.15  $5,823 
                 
 
The following table summarizes currently outstanding and exercisable options as of December 31, 2006:
 
             
  Number
  Weighted
  Weighted
 
  Outstanding
  Average
  Average
 
  and
  Remaining
  Exercise
 
Range of Exercise Price
 Exercisable  Contractual Life  Price 
 
$25.13 - $30.53
  117,576   3.98   29.90 
$31.05 - $33.15
  264,400   3.45   32.42 


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In September 1994, the Board of Directors approved and the Company adopted a 401(k)/Profit Sharing Plan. Under the Company’s 401(k)/Profit Sharing Plan, all eligible employees may participate by making voluntary contributions. The Company may make, but is not required to make, matching contributions. For the years ended December 31, 2006, 2005 and 2004, the Company made matching contributions of approximately $451, $358, and $305, respectively.
 
For the twelve months ended December 31, 2006, 2005 and 2004, the Company awarded 319,374, 200,042 and 216,617 restricted stock awards to its employees and directors of the Company having a fair value at grant date of $12,152, $8,381 and $8,379 respectively. Restricted stock awards granted to employees generally vest over a period of three years and restricted stock awards granted to directors generally vest over a period of five to ten years. For the twelve months ended December 31, 2006, 2005 and 2004, the Company recognized $9,624, $8,845 and $6,869 in restricted stock amortization related to restricted stock awards, of which $1,323, $1,357, and $1,140 respectively, was capitalized in connection with development activities. At December 31, 2006, the Company has $18,541 in unearned compensation related to unvested restricted stock awards. The weighted average period that the unrecognized compensation is expected to be incurred is 1.84 years. The Company has not awarded options to employees or directors of the Company during the twelve months ended December 31, 2006, 2005 and 2004, and therefore no stock-based employee compensation expense related to options is included in net income available to common stockholders.
 
Restricted stock transactions for the years ended December 31, 2006 and 2005 are summarized as follows:
 
         
     Weighted
 
     Average
 
     Grant Date
 
  Shares  Fair Value 
 
Outstanding at December 31, 2004
  823,836  $31.88 
Issued
  200,042  $41.89 
Vested
  (279,266) $32.78 
Forfeited
  (44,589) $34.37 
         
Outstanding at December 31, 2005
  700,023  $34.23 
Issued
  319,374  $38.05 
Vested
  (217,168) $36.57 
Forfeited
  (23,694) $34.55 
         
Outstanding at December 31, 2006
  778,535  $35.49 
         
 
14.  Related Party Transactions
 
The Company periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of one of the Company’s officers/Directors is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2006, 2005 and 2004 this relative received brokerage commissions in the amount of $341, $285 and $29, respectively.
 
15.  Commitments and Contingencies
 
In the normal course of business, the Company is involved in legal actions arising from the ownership of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the consolidated financial position, operations or liquidity of the Company.


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Twelve properties have leases granting the tenants options to purchase the property. Such options are exercisable at various times at appraised fair market value or at a fixed purchase price in excess of the Company’s depreciated cost of the asset. The Company has no notice of any exercise of any tenant purchase option.
 
The Company has committed to the construction of certain industrial properties totaling approximately 3.2 million square feet (unaudited) of GLA. The estimated total construction costs are approximately $168,614 (unaudited). Of this amount, approximately $101,050 (unaudited) remains to be funded. There can be no assurance that the actual completion cost will not exceed the estimated completion cost stated above.
 
At December 31, 2006, the Company had 23 other letters of credit outstanding in the aggregate amount of $9,012. These letters of credit expire between March 31, 2007 and January 13, 2010.
 
Ground and Operating Lease Agreements
 
Future minimum rental payments under the terms of all non-cancelable ground and operating leases under which the Company is the lessee, as of December 31, 2006, are as follows:
 
     
2007
 $2,561 
2008
  2,433 
2009
  1,984 
2010
  1,789 
2011
  1,715 
Thereafter
  31,167 
     
Total
 $41,649 
     
 
16.  Subsequent Events
 
On January 2, 2007, the Company paid fourth quarter 2006 dividends of $53.91 per share ($0.5391 per Depositary Share) on its Series C Preferred Stock, totaling, in the aggregate, approximately $1,078; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate, approximately $2,719; and a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $906.
 
On January 22, 2007, the Company and the Operating Partnership paid a fourth quarter 2006 distribution of $.7100 per common share/unit, totaling approximately $36,613.
 
On February 28, 2007, the Company declared a first quarter 2007 distribution of $.7100 per common share/unit on its common stock/units which is payable on April 16, 2007. The Company also declared first quarter 2007 dividends of $53.91 per share ($0.5391 per Depositary Share), on its Series C Preferred Stock, totaling, in the aggregate, approximately $1,078, which is payable on April 2, 2007; semi-annual dividends of $3,118.00 per share ($31.1800 per Depositary Share) on its Series F Preferred Stock, totaling, in the aggregate, approximately $1,559, which is payable on April 2, 2007; semi-annual dividends of $3,618.00 per share ($36.1800 per Depositary Share) on its Series G Preferred Stock, totaling, in the aggregate, approximately $905, which is payable on April 2, 2007; a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series J Preferred Stock, totaling, in the aggregate, approximately $2,719, which is payable on April 2, 2007; and a dividend of $4,531.30 per share ($0.4531 per Depositary Share) on its Series K Preferred Stock, totaling, in the aggregate, approximately $906, which is payable on April 2, 2007.
 
From January 1, 2007 to February 22, 2007, the Company awarded 1,598 shares of restricted common stock to certain Directors. These shares of restricted common stock had a fair value of approximately $73 on


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the date of grant. The restricted common stock vests over a period of five years. Compensation expense will be charged to earnings over the respective vesting period.
 
From January 1, 2007 to February 22, 2007, the Company acquired 55 industrial properties (including 41 properties in connection with the purchase of the 90% equity interest from the institutional investor in the September 1998 Joint Venture on January 31, 2007) and several land parcels for a total estimated investment of approximately $135,937. The Company also sold 14 industrial properties for approximately $74,430 of gross proceeds during this period.
 
17.  Quarterly Financial Information (unaudited)
 
The following table summarizes quarterly financial information of the Company. The first, second and third fiscal quarters of 2006 and all fiscal quarters in 2005 have been revised in accordance with FAS 144.
 
Net income available to common stockholders and basic and diluted EPS from net income available to common stockholders has not been affected.
 
                 
  Year Ended December 31, 2006 
  First
  Second
  Third
  Fourth
 
  Quarter  Quarter  Quarter  Quarter 
 
Total Revenues
 $90,591  $94,487  $97,512  $113,446 
Equity in Income (Loss) of Joint Ventures
  (34)  7,307   4,747   18,654 
Minority Interest Allocable to Continuing Operations
  2,916   2,231   2,892   1,756 
Loss from Continuing Operations, Net of Income Tax and Minority Interest
  (13,754)  (10,635)  (14,063)  (5,325)
Income from Discontinued Operations, Net of Income Tax
  41,284   47,874   48,190   37,869 
Minority Interest Allocable to Discontinued Operations
  (5,442)  (6,228)  (6,260)  (4,866)
Gain on Sale of Real Estate, Net of Income Tax
  982   1,475   1,729   (234)
Minority Interest Allocable to (Gain) Loss Sale of Real Estate
  (127)  (192)  (225)  30 
Net Income
  22,943   32,294   29,371   27,474 
Preferred Stock Dividends
  (5,019)  (5,029)  (5,442)  (5,934)
Less: Redemption of Preferred Stock
  (672)         
                 
Net Income Available to Common Stockholders
 $17,252  $27,265  $23,929  $21,540 
                 
Basic Earnings Per Share:
                
Loss From Continuing Operations
 $(0.42) $(0.33) $(0.41) $(0.26)
                 
Income from Discontinued Operations
 $0.82  $0.95  $0.95  $0.75 
                 
Net Income Available to Common Stockholders
 $0.39  $0.62  $0.54  $0.49 
                 
Weighted Average Shares Outstanding
  43,887   44,006   44,032   44,118 
                 
Diluted Earnings Per Share:
                
Loss From Continuing Operations
 $(0.42) $(0.33) $(0.41) $(0.26)
                 
Income from Discontinued Operations
 $0.82  $0.95  $0.95  $0.75 
                 
Net Income Available to Common Stockholders
 $0.39  $0.62  $0.54  $0.49 
                 
Weighted Average Shares Outstanding
  43,887   44,006   44,032   44,118 
                 


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

                 
  Year Ended December 31, 2005 
  First
  Second
  Third
  Fourth
 
  Quarter  Quarter  Quarter  Quarter 
 
Total Revenues
 $73,267  $72,365  $88,861  $91,037 
Equity in (Loss) Income of Joint Ventures
  (122)  (98)  3,978   (59)
Minority Interest Allocable to Continuing Operations
  1,724   1,954   1,854   2,448 
Loss from Continuing Operations, Net of Income Tax and Minority Interest
  (9,238)  (10,828)  (9,901)  (12,457)
Income from Discontinued Operations, Net of Income Tax
  15,714   35,666   36,943   42,155 
Minority Interest Allocable to Discontinued Operations
  (2,053)  (4,665)  (4,880)  (5,573)
Gain on Sale of Real Estate, Net of Income Tax
  13,780   1,818   1,538   1,543 
Minority Interest Allocable to Gain on Sale of Real Estate
  (1,813)  (238)  (203)  (204)
Net Income
  16,390   21,753   23,497   25,464 
Preferred Stock Dividends
  (2,310)  (2,310)  (2,310)  (3,758)
                 
Net Income Available to Common Stockholders
 $14,080  $19,443  $21,187  $21,706 
                 
Basic Earnings Per Share:
                
Income (Loss) From Continuing Operations
 $0.01  $(0.27) $(0.26) $(0.35)
                 
Income From Discontinued Operations
 $0.32  $0.73  $0.75  $0.85 
                 
Net Income Available to Common Stockholders
 $0.33  $0.46  $0.50  $0.51 
                 
Weighted Average Shares Outstanding
  42,158   42,285   42,468   42,806 
                 
Diluted Earnings Per Share:
                
Income (Loss) From Continuing Operations
 $0.01  $(0.27) $(0.26) $(0.35)
                 
Income From Discontinued Operations
 $0.32  $0.73  $0.75  $0.85 
                 
Net Income Available to Common Stockholders
 $0.33  $0.46  $0.50  $0.51 
                 
Weighted Average Shares Outstanding
  42,466   42,285   42,468   42,806 
                 


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

18.  Pro Forma Financial Information (unaudited)
 
The following Pro Forma Condensed Statements of Operations for the years ended December 31, 2006 and 2005 (the “Pro Forma Statements”) are presented as if the acquisition of 56 operating industrial properties between January 1, 2006 and December 31, 2006 had occurred at the beginning of each year. The Pro Forma Statements do not include acquisitions between January 1, 2006 and December 31, 2006 for industrial properties that were vacant upon purchase, were leased back to the sellers upon purchase or were subsequently sold before December 31, 2006. The Pro Forma Condensed Statements of Operations include all necessary adjustments to reflect the occurrence of purchases and sales of properties during 2006 as of January 1, 2006 and 2005.
 
The Pro Forma Statements are not necessarily indicative of what the Company’s results of operations would have been for the years ended December 31, 2006 and 2005, nor do they purport to present the future results of operations of the Company.
 
Pro Forma Condensed Statements of Operations
 
         
  Year Ended
  Year Ended
 
  December 31,
  December 31,
 
  2006  2005 
 
Pro Forma Revenues
 $409,229  $355,126 
Pro Forma Loss from Continuing Operations Available to Common Stockholders, Net of Minority Interest and Income Taxes
 $(58,391) $(36,017)
Pro Forma Net Income Available to Common Stockholders
 $94,029  $77,290 
         
Per Share Data:
        
Basic Earnings Per Share Data:
        
Income from Continuing Operations Available to Common Stockholders
 $(1.31) $(0.85)
         
Net Income Available to Common Stockholders
 $2.14  $1.82 
         
Diluted Earnings Per Share Data:
        
Income from Continuing Operations Available to Common Stockholders
 $(1.31) $(0.85)
         
Net Income Available to Common Stockholders
 $2.14  $1.82 
         
 
The following Pro Forma Condensed Statements of Operations for the years ended December 31, 2005 and 2004 (the “Pro Forma Statements”) are presented as if the acquisition of 73 operating industrial properties between January 1, 2005 and December 31, 2005 had occurred at the beginning of each year. The Pro Forma Statements do not include acquisitions between January 1, 2005 and December 31, 2005 for industrial properties that were vacant upon purchase, were leased back to the sellers upon purchase or were subsequently sold before December 31, 2005. The Pro Forma Condensed Statements of Operations include all necessary adjustments to reflect the occurrence of purchases and sales of properties during 2005 as of January 1, 2005 and 2004.
 
The Pro Forma Statements are not necessarily indicative of what the Company’s results of operations would have been for the years ended December 31, 2005 and 2004, nor do they purport to present the future results of operations of the Company.
 


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FIRST INDUSTRIAL REALTY TRUST, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

         
  Year Ended
  Year Ended
 
  December 31,
  December 31,
 
  2005  2004 
 
Pro Forma Revenues
 $390,716  $329,152 
Pro Forma (Loss) Income from Continuing Operations Available to Common Stockholders, Net of Minority Interest and Income Taxes
  (16,869)  17,661 
Pro Forma Net Income Available to Common Stockholders
  85,580   100,982 
Per Share Data:
        
Basic Earnings Per Share Data:
        
Income from Continuing Operations Available to Common Stockholders
 $(0.40) $0.44 
         
Net Income Available to Common Stockholders
 $2.02  $2.49 
         
Diluted Earnings Per Share Data:
        
Income from Continuing Operations Available to Common Stockholders
 $(0.40) $0.43 
         
Net Income Available to Common Stockholders
 $2.02  $2.47 
         

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FIRST INDUSTRIAL REALTY TRUST, INC.

SCHEDULE III:

REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2006
 
                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
Atlanta
                                        
4250 River Green Parkway
 Duluth, GA      264  $1,522  $186  $264  $1,708  $1,972  $515  1988  (o)
3450 Corporate Parkway
 Duluth, GA      506   2,904   444   506   3,348   3,854   1,100  1988  (o)
1650 GA Highway 155
 McDonough, GA      788   4,544   203   788   4,747   5,535   1,453  1991  (o)
14101 Industrial Park Boulevard
 Covington, GA      285   1,658   703   285   2,361   2,646   640  1984  (o)
801-804Blacklawn Road
 Conyers, GA      361   2,095   859   361   2,954   3,316   879  1982  (o)
1665 Dogwood Drive
 Conyers, GA      635   3,662   481   635   4,143   4,778   1,335  1973  (o)
1715 Dogwood Drive(j)
 Conyers, GA      288   1,675   1,042   288   2,717   3,005   544  1973  (o)
11235 Harland Drive
 Covington, GA      125   739   88   125   827   952   251  1988  (o)
4050 Southmeadow Parkway
 Atlanta, GA      401   2,813   328   425   3,117   3,542   972  1991  (o)
4051 Southmeadow Parkway
 Atlanta, GA      726   4,130   1,429   726   5,558   6,284   1,820  1989  (o)
4071 Southmeadow Parkway
 Atlanta, GA      750   4,460   1,094   828   5,476   6,304   1,705  1991  (o)
4081 Southmeadow Parkway
 Atlanta, GA      1,012   5,918   1,649   1,157   7,423   8,579   2,077  1989  (o)
370 Great Southwest Parkway(c)
 Atlanta, GA      527   2,984   578   546   3,542   4,088   935  1986  (o)
955 Cobb Place
 Kennesaw, GA      780   4,420   627   804   5,023   5,827   1,161  1991  (o)
1005 Sigman Road
 Conyers, GA      566   3,134   160   574   3,285   3,860   600  1986  (o)
2050 East Park Drive
 Conyers, GA      452   2,504   111   459   2,608   3,067   470  1998  (o)
1256 Oakbrook Drive
 Norcross, GA      336   1,907   346   339   2,250   2,589   368  1984  (o)
1265 Oakbrook Drive
 Norcross, GA      307   1,742   636   309   2,377   2,686   310  1984  (o)
1266 Oakbrook Drive
 Norcross, GA      234   1,326   95   235   1,419   1,654   194  1984  (o)
1275 Oakbrook Drive
 Norcross, GA      400   2,269   235   403   2,502   2,905   352  1986  (o)
1280 Oakbrook Drive
 Norcross, GA      281   1,592   345   283   1,935   2,218   290  1986  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
1300 Oakbrook Drive
 Norcross, GA      420   2,381   185   423   2,563   2,986   342  1986  (o)
1325 Oakbrook Drive
 Norcross, GA      332   1,879   260   334   2,137   2,470   297  1986  (o)
1351 Oakbrook Drive
 Norcross, GA      370   2,099   173   373   2,270   2,643   316  1984  (o)
1346 Oakbrook Drive
 Norcross, GA      740   4,192   132   744   4,319   5,063   602  1985  (o)
1412 Oakbrook Drive
 Norcross, GA      313   1,776   209   315   1,983   2,298   300  1985  (o)
7800 The Bluffs
 Austell, GA      490   2,415   564   496   2,974   3,469   372  1995  (o)
Greenwood Industrial Park
 McDonough, GA      1,550      7,485   1,550   7,485   9,035   441  2003  (o)
3060 South Park Blvd
 Ellenwood, GA      1,600   12,464   862   1,603   13,323   14,926   1,392  1992  (o)
46 Kent Drive
 Cartersville, GA      875   2,476   13   879   2,485   3,364   148  2001  (o)
100 Dorris Williams Industrial -King
 Atlanta, GA  (l)  401   3,754   42   406   3,791   4,197   343  2000  (o)
605 Stonehill Diver
 Atlanta, GA      485   1,979   24   490   1,998   2,488   316  1970  (o)
5095 Phillips Lee Drive(j)
 Atlanta, GA      735   3,627   54   740   3,676   4,416   330  1985/1990  (o)
6514 Warren Drive
 Norcross, GA      510   1,250   (165)  513   1,082   1,595   57  1999  (o)
6544 Warren Drive
 Norcross, GA      711   2,310   52   715   2,358   3,073   140  1999  (o)
720 Industrial Boulevard
 Dublin, GA      250   2,632   39   255   2,667   2,921   389  1973/2000  (o)
5356 East Ponce DeLeon
 One Mountain, GA      604   3,888   7   610   3,890   4,499   284  1982  (o)
5390 East Ponce DeLeon
 One Mountain, GA      397   1,791   8   402   1,794   2,196   136  1982  (o)
1755 Enterprise Drive
 Buford, GA      712   2,118   41   716   2,155   2,871   45  1997  (o)
4555 Atwater Court(j)
 Buford, GA      881   3,550   34   885   3,580   4,465   63  1999  (o)
195 & 197 Collins Boulevard
 Athens, GA      1,410   5,344   64   1,426   5,393   6,818   747  1969/1984  (o)
Baltimore
                                        
1820 Portal
 Baltimore, MD      884   4,891   455   899   5,330   6,230   1,151  1982  (o)
8900 Yellow Brick Road
 Baltimore, MD      447   2,473   409   475   2,853   3,328   624  1982  (o)
504 Advantage Way
 Aberdeen, MD      2,799   15,864   953   2,807   16,809   19,616   1,651  1987/92  (o)
9700 Martin Luther King Hwy
 Lanham, MD      700   1,920   729   700   2,649   3,349   447  1980  (o)
9730 Martin Luther King Hwy
 Lanham, MD      500   955   418   500   1,373   1,873   212  1980  (o)
4621 Boston Way
 Lanham, MD      1,100   3,070   614   1,100   3,684   4,784   469  1980  (o)
4720 Boston Way
 Lanham, MD      1,200   2,174   735   1,200   2,909   4,109   512  1979  (o)
2250 Randolph Drive
 Dulles, VA      3,200   8,187   36   3,208   8,215   11,423   654  1999  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
22630 Dulles Summit Court
 Dulles, VA      2,200   9,346   128   2,206   9,468   11,674   747  1998  (o)
4201 Forbes Boulevard(j)
 Lanham, MD      356   1,823   403   375   2,207   2,582   176  1989  (o)
4370-4383Lottsford Vista Road
 Lanham, MD      279   1,358   247   296   1,588   1,884   109  1989  (o)
4400 Lottsford Vista Road
 Lanham, MD      351   1,955   112   372   2,046   2,418   140  1989  (o)
4420 Lottsford Vista Road
 Lanham, MD      539   2,196   165   568   2,332   2,900   187  1989  (o)
11204 McCormick Road
 Hunt Valley, MD      1,017   3,132   86   1,038   3,197   4,235   231  1962  (o)
11110 Pepper Road
 Hunt Valley, MD      918   2,529   252   938   2,762   3,699   152  1964  (o)
11100 Gilroy Road
 Hunt Valley, MD      901   1,455   43   919   1,480   2,399   107  1972  (o)
318 Clubhouse
 Hunt Valley, MD      701   1,691   (3)  718   1,671   2,389   128  1984  (o)
336 Clubhouse(j)
 Hunt Valley, MD      982   3,158   98   1,004   3,234   4,238   240  1976  (o)
10709 Gilroy Road
 Hunt Valley, MD      907   2,884   (173)  913   2,705   3,618   195  1978  (o)
10707 Gilroy Road
 Hunt Valley, MD      1,111   3,819   96   1,136   3,890   5,026   274  1977  (o)
10947 Golden West
 Hunt Valley, MD      1,134   3,436   70   1,135   3,504   4,640   168  1983  (o)
38 Loveton Circle
 Hunt Valley, MD      1,664   2,151   78   1,701   2,191   3,893   239  1983  (o)
7120-7132Ambassador Road
 Hunt Valley, MD      829   1,329   145   847   1,456   2,303   117  1970  (o)
7142 Ambassador Road
 Hunt Valley, MD      924   2,876   86   942   2,945   3,886   119  1973  (o)
7144-7160Ambassador Road
 Hunt Valley, MD      979   1,672   162   1,000   1,813   2,813   178  1974  (o)
7223-7249Ambassador Road
 Hunt Valley, MD      1,283   2,674   136   1,311   2,782   4,093   260  1967/87  (o)
7200 Rutherford(j)
 Hunt Valley, MD      1,032   2,150   145   1,054   2,274   3,327   211  1978  (o)
2700 Lord Baltimore(j)
 Hunt Valley, MD      875   1,826   261   897   2,065   2,962   169  1978  (o)
9800 Martin Luther King Hwy
 Lanham, MD      1,200   2,457   309   1,200   2,766   3,966   360  1978  (o)
Central Pennsylvania
                                        
1214-B Freedom Road
 Cranberry Township, PA      31   994   612   200   1,438   1,637   817  1982  (o)
401 Russell Drive
 Middletown, PA      262   857   2,065   287   2,896   3,184   1,577  1990  (o)
2700 Commerce Drive
 Middletown, PA      196   997   710   206   1,697   1,903   892  1990  (o)
2701 Commerce Drive
 Middletown, PA      141   859   1,160   164   1,996   2,160   908  1989  (o)
2780 Commerce Drive
 Middletown, PA      113   743   1,090   209   1,737   1,946   902  1989  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
5020 Louise Drive
 Mechanicsburg, PA      707      2,908   716   2,899   3,615   815  1995  (o)
350 Old Silver Springs Road(j)
 Mechanicsburg, PA      510   2,890   5,281   541   8,140   8,681   1,639  1968/97  (o)
16522 Hunters Green Parkway
 Hagerstown, MD(m)      1,390   13,104   3,902   1,863   16,534   18,396   1,496  2000  (o)
18212 Shawley Drive
 Hagerstown, MD      1,000   5,847   119   1,016   5,950   6,966   484  1992  (o)
301 Railroad Avenue
 Shiremanstown, PA      1,181   4,447   1,583   1,357   5,853   7,211   614  1970  (o)
431 Railroad Avenue
 Shiremanstown, PA      1,293   7,164   204   1,340   7,321   8,661   681  1968  (o)
Golden Eagle Business Center
 Harrisburg, PA      585   3,176   68   601   3,229   3,829   169  2000  (o)
37 Valleyview Business Park
 Jessup, PA      542      2,971   542   2,972   3,513   151  2004  (o)
1351 Eisenhower Blvd., Bldg 1
 Harrisburg, PA      382   2,343   25   387   2,363   2,750   50  2003  (o)
1351 Eisenhower Blvd., Bldg 2
 Harrisburg, PA      436   1,587   19   443   1,599   2,042   39  2001  (o)
320 Museum Road
 Washington, PA      201   1,819   56   208   1,868   2,076   128  1967/75  (o)
Chicago
                                        
720-730Landwehr Road
 Northbrook, IL      521   2,982   1,526   521   4,508   5,029   1,406  1978  (o)
20W201 101st Street
 Lemont, IL      967   5,554   878   968   6,431   7,399   2,107  1988  (o)
3600 West Pratt Avenue
 Lincolnwood, IL      1,050   5,767   1,158   1,050   6,925   7,975   2,179  1953/88  (o)
6750 South Sayre Avenue
 Bedford Park, IL      224   1,309   477   224   1,786   2,010   499  1975  (o)
585 Slawin Court
 Mount Prospect, IL      611   3,505   183   611   3,688   4,299   1,115  1992  (o)
2300 Windsor Court
 Addison, IL      688   3,943   590   696   4,525   5,221   1,482  1986  (o)
3505 Thayer Court
 Aurora, IL      430   2,472   71   430   2,543   2,973   788  1989  (o)
305-311Era Drive
 Northbrook, IL      200   1,154   146   205   1,296   1,501   396  1978  (o)
12241 Melrose Street
 Franklin Park, IL      332   1,931   1,915   469   3,709   4,178   1,290  1969  (o)
3150-3160MacArthur Boulevard
 Northbrook, IL      429   2,518   32   429   2,551   2,979   800  1978  (o)
365 North Avenue
 Carol Stream, IL      1,081   6,882   4,614   1,111   11,465   12,577   3,283  1969  (o)
305-307East North Ave
 Carol Stream, IL      126      2,732   128   2,731   2,859   432  1999  (o)
11939 S Central Avenue
 Alsip, IL      1,208   6,843   2,523   1,305   9,268   10,573   2,132  1972  (o)
405 East Shawmut
 LaGrange, IL      368   2,083   359   387   2,422   2,809   606  1965  (o)
1010-50Sesame Street
 Bensenville, IL      979   5,546   2,306   1,048   7,782   8,831   1,500  1976  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
7501 S. Pulaski
 Chicago, IL      318   2,038   767   318   2,805   3,123   590  1975/86  (o)
385 Fenton Lane
 West Chicago, IL      868   4,918   554   884   5,455   6,340   1,451  1990  (o)
905 Paramount
 Batavia, IL      243   1,375   439   252   1,805   2,057   401  1977  (o)
1005 Paramount
 Batavia, IL      282   1,600   451   293   2,041   2,334   472  1978  (o)
2120-24Roberts
 Broadview, IL      220   1,248   565   231   1,802   2,033   451  1960  (o)
700 Business Center Drive
 Mount Prospect, IL      270   1,492   297   288   1,771   2,059   243  1980  (o)
800 Business Center Drive
 Mount Prospect, IL      631   3,493   233   666   3,691   4,358   561  1988/99  (o)
580 Slawin Court
 Mount Prospect, IL      233   1,292   234   254   1,505   1,760   218  1985  (o)
1150 Feehanville Drive
 Mount Prospect, IL      260   1,437   131   273   1,555   1,829   247  1983  (o)
1331 Business Center Drive
 Mount Prospect, IL      235   1,303   177   255   1,460   1,716   219  1985  (o)
19W661 101st Street
 Lemont, IL      1,200   6,643   2,227   1,220   8,850   10,069   1,243  1988  (o)
175 Wall Street
 Glendale Heights, IL      427   2,363   162   433   2,519   2,952   307  1990  (o)
800-820Thorndale Avenue(j)
 Bensenville, IL      751   4,159   323   761   4,473   5,233   455  1985  (o)
830-890Supreme Drive
 Bensenville, IL      671   3,714   319   679   4,025   4,704   485  1981  (o)
1661 Feehanville Drive
 Mount Prospect, IL      985   5,455   1,159   1,044   6,555   7,599   1,096  1986  (o)
2250 Arthur Avenue
 Elk Grove Village, IL      800   1,543   (6)  809   1,529   2,337   237  1973/86  (o)
1850 Touhy &1158-60McCage Ave.
 Elk Grove Village, IL      1,500   4,842   57   1,514   4,885   6,399   573  1978  (o)
1088-1130Thorndale Avenue(j)
 Bensenville, IL      2,103   3,674   4   2,108   3,673   5,781   291  1983  (o)
855-891Busse(Route 83)
 Bensenville, IL      1,597   2,767   11   1,601   2,774   4,375   243  1983  (o)
1060-1074 W. ThorndaleAve.(j)
 Bensenville, IL      1,704   2,108   52   1,709   2,156   3,864   214  1982  (o)
400 Crossroads Parkway
 Bolingbrook, IL      1,178   9,453   264   1,181   9,714   10,895   601  1988  (o)
7609 West Industrial Drive(j)
 Forest Park, IL      1,207   2,343   182   1,213   2,518   3,732   200  1974  (o)
7801 West Industrial Drive
 Forest Park, IL      1,215   3,020   19   1,220   3,034   4,254   249  1976  (o)
825 East 26th Street(j)
 LaGrange Park, IL      1,547   2,078   106   1,617   2,115   3,731   275  1959/88  (o)
1111 Davis Road(j)
 Elgin, IL      998   1,859   646   1,046   2,458   3,503   245  1974/97  (o)
2800 Forbes Avenue
 Hoffman Estates, IL      2,157       9,931   2,158   9,931   12,088   225  2005  (o)
501 Airport Road
 Aurora, IL      694      5,267   694   5,268   5,961   659  2002  (o)
251 Airport Road
 Aurora, IL      983      6,675   983   6,675   7,658   990  2002  (o)


S-5


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
1900-1960Devon Avenue
 Elk Grove Village, IL      1,154   2,552   319   1,167   2,858   4,025   309  1979  (o)
725 Kimberly Drive
 Carol Stream, IL      793   1,395   11   801   1,398   2,199   94  1987  (o)
17001 S. Vincennes
 Thornton, IL      497   504   29   513   518   1,030   64  1974  (o)
750 South Schmidt Road
 Bolingbrook, IL      1,894   14,416   105   1,907   14,507   16,415   208  1997  (o)
550 North West Frontage Road
 Bolingbrook, IL      2,210   23,889   324   2,240   24,183   26,423   311  2004  (o)
525 Crossroads Parkway
 Bolingbrook, IL      790   5,414   40   795   5,448   6,244   80  1998  (o)
Cincinnati
                                        
9900-9970Princeton
 Cincinnati, OH      545   3,088   2,137   566   5,203   5,769   1,524  1970  (o)
2940 Highland Avenue
 Cincinnati, OH      1,717   9,730   2,279   1,772   11,954   13,726   3,577  1969/74  (o)
4700-4750Creek Road
 Blue Ash, OH      1,080   6,118   703   1,109   6,791   7,900   1,966  1960  (o)
12072 Best Place
 Springboro, OH      426      3,177   443   3,160   3,604   710  1984  (o)
901 Pleasant Valley Drive
 Springboro, OH      304   1,721   244   316   1,954   2,269   425  1984/94  (o)
4440 Mulhauser Road
 Cincinnati, OH      655   39   5,796   655   5,835   6,490   1,395  1999  (o)
4434 Mulhauser Road
 Cincinnati, OH      444   16   4,858   463   4,854   5,318   977  1999  (o)
9449 Glades Drive
 Hamilton, OH      465      4,106   477   4,094   4,571   673  1999  (o)
420 Wars Corner Road
 Loveland, OH      600   1,083   1,040   606   2,117   2,723   393  1985  (o)
422 Wards Corner Road
 Loveland, OH      600   1,811   468   605   2,274   2,879   527  1985  (o)
4436 Muhlhauser Road
 Hamilton, OH      630      5,669   630   5,670   6,299   916  2001  (o)
4438 Muhlhauser Road
 Hamilton, OH      779      7,156   779   7,156   7,935   1,020  2000  (o)
9345 Princeton-Glendale Road
 West Chester, OH      818   1,648   27   827   1,665   2,493   69  1973  (o)
4663 Dues Drive(j)
 West Chester, OH      858   2,273   1,203   875   3,460   4,334   456  1972  (o)
Cleveland
                                        
2368 E. Enterprise Parkway
 Twinsburg, OH      294   1,857   29   298   1,881   2,180   105  1991/95  (o)
30311 Emerald Valley Parkway(j)
 Glenwillow, OH      681   11,838   176   691   12,003   12,694   233  2005  (o)
30333 Emerald Valley Parkway
 Glenwillow, OH      466   5,913   (363)  475   5,541   6,016   121  2004  (o)
7800 Cochran Road
 Glenwillow, OH      972   7,033   65   980   7,090   8,070   155  1999  (o)
7900 Cochran Road
 Glenwillow, OH      775   6,244   205   801   6,424   7,224   131  2003  (o)
7905 Cochran Road
 Glenwillow, OH      920   6,174   173   945   6,322   7,267   147  2001  (o)
30600 Carter Street(j)
 Solon, OH      989   3,492   102   1,022   3,561   4,583   183  1970  (o)


S-6


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
Columbus
                                        
3800 Lockbourne Industrial Pkwy
 Columbus, OH      1,045   6,421   21   1,045   6,442   7,486   1,718  1986  (o)
3880 Groveport Road
 Columbus, OH      1,955   12,154   616   1,955   12,770   14,725   3,497  1986  (o)
1819 North Walcutt Road
 Columbus, OH      637   4,590   (322)  634   4,271   4,905   1,239  1973  (o)
4300 Cemetary Road
 Hillard, OH      764   6,248   (5,628)  764   620   1,384   10  1968/74  (o)
4115 Leap Road(c)
 Hillard, OH      756   4,297   815   756   5,111   5,867   1,022  1977  (o)
3300 Lockbourne
 Columbus, OH      708   3,920   1,504   710   5,422   6,132   1,269  1964  (o)
1076 Pittsburgh Drive
 Delaware, OH  (n)  2,497   5,103   37   2,505   5,132   7,637   426  1996  (o)
6150 Huntley Road
 Columbus, OH      986   5,162   17   990   5,175   6,165   274  2002  (o)
4985 Frusta Drive
 Obetz, OH      318   837   23   326   852   1,178   41  1979  (o)
4600 S. Hamilton Road
 Groveport, OH      681   5,941   55   688   5,989   6,677   42  1996/2003  (o)
Dallas/Fort Worth
                                        
1275-1281Roundtable Drive
 Dallas, TX      117   839   53   117   892   1,009   210  1966  (o)
2406-2416Walnut Ridge
 Dallas, TX      178   1,006   294   183   1,295   1,478   325  1978  (o)
1324-1343Roundtable Drive
 Dallas, TX      178   1,006   227   184   1,227   1,411   273  1972  (o)
2401-2419Walnut Ridge
 Dallas, TX      148   839   119   153   953   1,106   234  1978  (o)
900-906Great Southwest Pkwy
 Arlington, TX      237   1,342   596   270   1,905   2,175   444  1972  (o)
3000 West Commerce
 Dallas, TX      456   2,584   530   469   3,101   3,570   681  1980  (o)
3030 Hansboro
 Dallas, TX      266   1,510   419   276   1,920   2,195   410  1971  (o)
405-407113th
 Arlington, TX      181   1,026   462   185   1,484   1,669   308  1969  (o)
816 111th Street
 Arlington, TX      251   1,421   224   258   1,638   1,896   417  1972  (o)
7341 Dogwood Park
 Richland Hills, TX      79   435   237   84   666   750   197  1973  (o)
7427 Dogwood Park
 Richland Hills, TX      96   532   571   102   1,098   1,200   203  1973  (o)
7348-54Tower Street
 Richland Hills, TX      88   489   213   94   696   790   147  1978  (o)
7370 Dogwood Park
 Richland Hills, TX      91   503   97   96   594   691   145  1987  (o)
7339-41Tower Street
 Richland Hills, TX      98   541   97   104   632   735   123  1980  (o)
7437-45Tower Street
 Richland Hills, TX      102   563   72   108   629   736   128  1977  (o)
7331-59Airport Freeway
 Richland Hills, TX      354   1,958   394   372   2,333   2,706   539  1987  (o)
7338-60Dogwood Park
 Richland Hills, TX      106   587   122   112   704   816   155  1978  (o)


S-7


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
7450-70Dogwood Park
 Richland Hills, TX      106   584   122   112   700   812   166  1985  (o)
7423-49Airport Freeway
 Richland Hills, TX      293   1,621   331   308   1,936   2,245   437  1985  (o)
7400 Whitehall Street
 Richland Hills, TX      109   603   91   115   688   804   148  1994  (o)
1602-1654Terre Colony
 Dallas, TX      458   2,596   214   468   2,800   3,268   547  1981  (o)
3330 Duncanville Road
 Dallas, TX      197   1,114   28   199   1,139   1,338   187  1987  (o)
6851-6909Snowden Road
 Fort Worth, TX      1,025   5,810   480   1,038   6,277   7,315   1,104  1985/86  (o)
2351-2355Merritt Drive
 Garland, TX      101   574   134   103   706   809   145  1986  (o)
701-735North Plano Road
 Richardson, TX      696   3,944   152   705   4,087   4,792   682  1972/94  (o)
2220 Merritt Drive
 Garland, TX      352   1,993   638   356   2,627   2,983   391  1986/2000  (o)
2010 Merritt Drive
 Garland, TX      350   1,981   469   354   2,445   2,799   390  1986  (o)
2363 Merritt Drive
 Garland, TX      73   412   117   74   529   602   85  1986  (o)
2447 Merritt Drive
 Garland, TX      70   395   89   71   483   554   81  1986  (o)
2465-2475Merritt Drive
 Garland, TX      91   514   158   92   671   763   90  1986  (o)
2485-2505Merritt Drive
 Garland, TX      431   2,440   415   436   2,849   3,285   427  1986  (o)
2081 Hutton Drive — Bldg 1(d)
 Carrolton, TX      448   2,540   465   453   3,000   3,453   531  1981  (o)
2150 Hutton Drive
 Carrolton, TX      192   1,089   514   194   1,601   1,795   306  1980  (o)
2110 Hutton Drive
 Carrolton, TX      374   2,117   487   377   2,600   2,977   417  1985  (o)
2025 McKenzie Drive
 Carrolton, TX      437   2,478   156   442   2,629   3,071   458  1985  (o)
2019 McKenzie Drive
 Carrolton, TX      502   2,843   529   507   3,368   3,874   524  1985  (o)
1420 Valwood Parkway — Bldg 1(c)
 Carrolton, TX      460   2,608   710   466   3,313   3,778   498  1986  (o)
1620 Valwood Parkway(d)
 Carrolton, TX      1,089   6,173   1,190   1,100   7,352   8,452   1,333  1986  (o)
1505 Luna Road — Bldg II
 Carrolton, TX      167   948   180   169   1,126   1,294   200  1988  (o)
1625 West Crosby Road
 Carrolton, TX      617   3,498   739   631   4,223   4,854   840  1988  (o)
2029-2035McKenzie Drive
 Carrolton, TX      306   1,870   997   306   2,867   3,173   802  1985  (o)
1840 Hutton Drive(c)
 Carrolton, TX      811   4,597   687   819   5,277   6,095   791  1986  (o)
1420 Valwood Pkwy — Bldg II
 Carrolton, TX      373   2,116   343   377   2,455   2,832   387  1986  (o)
2015 McKenzie Drive
 Carrolton, TX      510   2,891   321   516   3,206   3,722   481  1986  (o)
2105 McDaniel Drive
 Carrolton, TX      502   2,844   735   507   3,573   4,080   555  1986  (o)
2009 McKenzie Drive
 Carrolton, TX      476   2,699   482   481   3,176   3,657   527  1987  (o)
1505 Luna Road — Bldg I
 Carrolton, TX      521   2,953   579   529   3,524   4,053   558  1988  (o)


S-8


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
900-1100Avenue S
 Grand Prairie, TX      623   3,528   324   629   3,846   4,474   576  1985  (o)
15001 Trinity Blvd
 Ft. Worth, TX      529   2,998   50   534   3,043   3,578   329  1984  (o)
Plano Crossing(e)
 Plano, TX      1,961   11,112   346   1,981   11,437   13,418   1,244  1998  (o)
7413A-C Dogwood Park
 Richland Hills, TX      110   623   106   111   728   839   76  1990  (o)
7450 Tower Street
 Richland Hills, TX      36   204   191   36   394   431   50  1977  (o)
7436 Tower Street
 Richland Hills, TX      57   324   161   58   485   543   60  1979  (o)
7501 Airport Freeway
 Richland Hills, TX      113   638   50   115   686   800   91  1983  (o)
7426 Tower Street
 Richland Hills, TX      76   429   105   76   533   610   49  1978  (o)
7427-7429Tower Street
 Richland Hills, TX      75   427   27   76   453   529   48  1981  (o)
2840-2842Handley Ederville Rd
 Richland Hills, TX      112   635   58   113   692   805   78  1977  (o)
7451-7477Airport Freeway
 Richland Hills, TX      256   1,453   155   259   1,605   1,864   212  1984  (o)
7415 Whitehall Street
 Richland Hills, TX      372   2,107   148   375   2,251   2,627   258  1986  (o)
7450 Whitehall Street
 Richland Hills, TX      104   591   30   105   620   725   64  1978  (o)
7430 Whitehall Street
 Richland Hills, TX      143   809   15   144   822   966   89  1985  (o)
7420 Whitehall Street
 Richland Hills, TX      110   621   35   111   655   766   80  1985  (o)
300 Wesley Way
 Richland Hills, TX      208   1,181   17   211   1,196   1,407   128  1995  (o)
825-827Avenue H(c)
 Arlington, TX      600   3,006   300   604   3,302   3,906   395  1979  (o)
1013-31Avenue M
 Grand Prairie, TX      300   1,504   66   302   1,568   1,870   180  1978  (o)
1172-84113th Street(c)
 Grand Prairie, TX      700   3,509   59   704   3,564   4,268   347  1980  (o)
1200-16Avenue H(c)
 Arlington, TX      600   2,846   30   604   2,873   3,476   311  1981/82  (o)
1322-66 N. CarrierParkway(d)
 Grand Prairie, TX      1,000   5,012   73   1,006   5,079   6,085   522  1979  (o)
2401-2407Centennial Dr. 
 Arlington, TX      600   2,534   141   604   2,672   3,275   287  1977  (o)
3111 West Commerce Street
 Dallas, TX      1,000   3,364   53   1,011   3,405   4,417   390  1979  (o)
4201 Kellway
 Addison, TX      306   1,342   31   317   1,361   1,679   86  1980  (o)
9150 West Royal Lane(j)
 Irving, TX      818   3,767   234   820   3,999   4,819   260  1985  (o)
13800 Senlac Drive
 Farmers Ranch, TX      823   4,042   12   825   4,052   4,877   324  1988  (o)
801-831 S. GreatSouthwest Pkwy(j)(y)
 Grand Prairie, TX      2,581   16,556   401   2,586   16,952   19,538   1,829  1975  (o)
801-842Heinz Way(j)
 Grand Prairie, TX      599   3,327   74   601   3,399   4,000   250  1977  (o)
901-937Heinz Way
 Grand Prairie, TX      493   2,823   (62)  481   2,773   3,254   238  1997  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
2104 Hutton Drive
 Carrolton, TX      246   1,393   172   249   1,563   1,811   243  1990  (o)
7451 Dogwood Park
 Richland Hills, TX      133   753   195   134   947   1,081   209  1977  (o)
2900 Avenue E(j)
 Arlington, TX      296      1,936   296   1,936   2,232   88  1968  (o)
5801 Martin Luther King Blvd
 Lubbock, TX      1,119   35,324   74   1,125   35,391   36,516   1,163  2000  (o)
3730 Wheeler Avenue
 Fort Smith, AR      720   2,800   27   726   2,822   3,547   19  1960/97  (o)
Denver
                                        
7100 North Broadway — 1
 Denver, CO      201   1,141   380   217   1,505   1,722   401  1978  (o)
7100 North Broadway — 2
 Denver, CO      203   1,150   264   204   1,413   1,617   347  1978  (o)
7100 North Broadway — 3
 Denver, CO      139   787   134   140   920   1,060   232  1978  (o)
7100 North Broadway — 5
 Denver, CO      178   1,018   218   178   1,236   1,414   288  1978  (o)
7100 North Broadway — 6
 Denver, CO      269   1,526   304   271   1,828   2,099   464  1978  (o)
20100 East 32nd Avenue Parkway
 Aurora, CO      314   1,888   168   314   2,055   2,370   624  1997  (o)
700 West 48th Street
 Denver, CO      302   1,711   429   307   2,135   2,442   611  1984  (o)
702 West 48th Street
 Denver, CO      135   763   103   139   861   1,000   220  1984  (o)
6425 North Washington
 Denver, CO      374   2,118   326   385   2,433   2,817   627  1983  (o)
3370 North Peoria Street
 Aurora, CO      163   924   106   163   1,030   1,193   263  1978  (o)
3390 North Peoria Street
 Aurora, CO      145   822   104   147   924   1,071   245  1978  (o)
3508-3538North Peoria Street
 Aurora, CO      260   1,472   505   264   1,973   2,237   612  1978  (o)
3568 North Peoria Street
 Aurora, CO      222   1,260   333   225   1,590   1,815   453  1978  (o)
4785 Elati
 Denver, CO      173   981   177   175   1,156   1,332   314  1972  (o)
4770 Fox Street
 Denver, CO      132   750   128   134   875   1,009   233  1972  (o)
1550 W. Evans
 Denver, CO      385   2,200   466   385   2,665   3,050   613  1975  (o)
3871 Revere
 Denver, CO      361   2,047   534   368   2,574   2,942   607  1980  (o)
4570 Ivy Street
 Denver, CO      219   1,239   201   220   1,438   1,658   361  1985  (o)
5855 Stapleton Drive North
 Denver, CO      288   1,630   267   290   1,896   2,186   489  1985  (o)
5885 Stapleton Drive North
 Denver, CO      376   2,129   251   380   2,376   2,756   531  1985  (o)
5977-5995North Broadway
 Denver, CO      268   1,518   529   271   2,044   2,315   490  1978  (o)
2952-5978North Broadway
 Denver, CO      414   2,346   690   422   3,029   3,451   764  1978  (o)
4721 Ironton Street
 Denver, CO      232   1,313   1,520   236   2,827   3,064   1,236  1969  (o)
7100 North Broadway — 7
 Denver, CO      215   1,221   186   219   1,403   1,622   368  1985  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
7100 North Broadway — 8
 Denver, CO      79   448   109   82   554   636   132  1985  (o)
6804 East 48th Avenue
 Denver, CO      253   1,435   395   256   1,827   2,084   438  1973  (o)
445 Bryant Street
 Denver, CO      1,829   10,219   1,722   1,829   11,941   13,770   2,843  1960  (o)
East 47th Drive — A
 Denver, CO      441   2,689   (25)  441   2,664   3,105   647  1997  (o)
9500 West 49th Street — A
 Wheatridge, CO      283   1,625   328   286   1,951   2,236   561  1997  (o)
9500 West 49th Street — B
 Wheatridge, CO      225   1,272   67   226   1,338   1,564   312  1997  (o)
9500 West 49th Street — C
 Wheatridge, CO      600   3,409   126   600   3,536   4,136   846  1997  (o)
9500 West 49th Street — D
 Wheatridge, CO      246   1,537   293   246   1,830   2,076   603  1997  (o)
8100 South Park Way — A
 Littleton, CO      423   2,507   220   423   2,727   3,150   669  1997  (o)
8100 South Park Way — B
 Littleton, CO      103   582   162   104   743   847   210  1984  (o)
8100 South Park Way — C
 Littleton, CO      568   3,219   223   575   3,435   4,010   785  1984  (o)
451-591East 124th Avenue
 Littleton, CO      383   2,145   816   383   2,961   3,344   835  1979  (o)
608 Garrison Street
 Lakewood, CO      265   1,501   404   267   1,903   2,170   455  1984  (o)
610 Garrison Street
 Lakewood, CO      264   1,494   421   266   1,913   2,179   491  1984  (o)
15000 West 6th Avenue
 Golden, CO      913   5,174   1,230   916   6,402   7,318   1,690  1985  (o)
14998 West 6th Avenue Bldg E
 Golden, CO      565   3,199   224   568   3,419   3,987   870  1995  (o)
14998 West 6th Avenue Bldg F
 Englewood, CO      269   1,525   86   271   1,610   1,881   415  1995  (o)
12503 East Euclid Drive
 Denver, CO      1,208   6,905   1,024   1,208   7,930   9,138   2,058  1986  (o)
6547 South Racine Circle
 Denver, CO      739   4,241   173   739   4,415   5,153   1,021  1996  (o)
7800 East Iliff Avenue
 Denver, CO      188   1,067   255   190   1,320   1,510   311  1983  (o)
2369 South Trenton Way
 Denver, CO      292   1,656   193   294   1,848   2,141   480  1983  (o)
2422 S. Trenton Way
 Denver, CO      241   1,364   399   243   1,762   2,005   421  1983  (o)
2452 South Trenton Way
 Denver, CO      421   2,386   269   426   2,650   3,076   624  1983  (o)
1600 South Abilene
 Aurora, CO      465   2,633   140   467   2,771   3,238   650  1986  (o)
1620 South Abilene
 Aurora, CO      268   1,520   99   270   1,617   1,887   391  1986  (o)
1640 South Abilene
 Aurora, CO      368   2,085   147   382   2,219   2,600   556  1986  (o)
13900 East Florida Ave
 Aurora, CO      189   1,071   81   190   1,151   1,341   276  1986  (o)
14401-14492East 33rd Place
 Aurora, CO      440   2,519   288   440   2,806   3,246   675  1979  (o)
11701 East 53rd Avenue
 Denver, CO      416   2,355   193   422   2,542   2,964   575  1985  (o)
5401 Oswego Street
 Denver, CO      273   1,547   341   278   1,882   2,160   551  1985  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
3811 Joilet
 Denver, CO      735   4,166   448   752   4,597   5,349   977  1977  (o)
2650 West 2nd Avenue
 Denver, CO      221   1,252   190   223   1,440   1,663   349  1970  (o)
14818 West 6th Avenue Bldg A
 Golden, CO      468   2,799   300   468   3,099   3,567   754  1985  (o)
14828 West 6th Avenue Bldg B
 Golden, CO      503   2,942   566   503   3,508   4,011   943  1985  (o)
12055 E 49th Ave/4955 Peoria
 Denver, CO      298   1,688   439   305   2,120   2,424   487  1984  (o)
4940-4950Paris
 Denver, CO      152   861   174   156   1,032   1,187   233  1984  (o)
4970 Paris
 Denver, CO      95   537   69   97   604   701   128  1984  (o)
7367 South Revere Parkway
 Englewood, CO      926   5,124   507   934   5,623   6,557   1,217  1997  (o)
8200 East Park Meadows Drive(c)
 Lone Tree, CO      1,297   7,348   1,236   1,304   8,577   9,881   1,548  1984  (o)
3250 Quentin(c)
 Aurora, CO      1,220   6,911   615   1,230   7,515   8,745   1,383  1984/2000  (o)
11585 E. 53rd Ave.(c)
 Denver, CO      1,770   10,030   1,052   1,780   11,072   12,852   1,644  1984  (o)
10500 East 54th Ave.(d)
 Denver, CO      1,253   7,098   890   1,260   7,980   9,240   1,347  1986  (o)
8835 W. 116th Street
 Broomfield, CO      1,151   6,523   869   1,304   7,239   8,543   725  2002  (o)
3101-3151 S. PlatteRiver Dr. 
 Englewood, CO      2,500   8,549   184   2,504   8,729   11,233   825  1974  (o)
3155-3199 S. PlatteRiver Dr. 
 Englewood, CO      1,700   7,787   199   1,702   7,983   9,686   691  1974  (o)
3201-3273 S. PlatteRiver Dr. 
 Englewood, CO      1,600   6,592   170   1,602   6,760   8,362   708  1974  (o)
18150 E. 32nd Street
 Aurora, CO      563   3,188   1,164   572   4,344   4,915   995  2000  (o)
8820 W. 116th Street(j)
 Broomfield, CO      338   1,918   543   372   2,426   2,798   245  2001  (o)
3400 Fraser Street
 Aurora, CO      616   3,593   9   620   3,598   4,218   264  1965  (o)
7005 East 46th Avenue
 Denver, CO      512   2,025   9   517   2,029   2,546   112  1996  (o)
Hilltop Business Center I — Bldg. B(j)
 Littleton, CO      739      3,622   781   3,580   4,361   621  2001  (o)
Jeffco Business Center A
 Broomfield, CO      312      1,358   370   1,299   1,670   163  2001  (o)
Park Centre A(j)
 Westminister, CO      441      4,238   441   4,238   4,679   820  2001  (o)
Park Centre B(j)
 Westminister, CO      374      3,048   374   3,047   3,422   582  2001  (o)
Park Centre C(j)
 Westminister, CO      374      3,031   374   3,031   3,405   614  2001  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
Park Centre D(j)
 Westminister, CO      441      3,762   441   3,762   4,203   629  2001  (o)
4001 Salazar Way
 Frederick, CO      1,271   6,577   26   1,276   6,598   7,874   253  1999  (o)
1690 S. Abilene
 Aurora, CO      406   2,814   37   411   2,846   3,257   100  1985  (o)
5909-5915 N. Broadway
 Denver, CO      495   1,268   19   500   1,281   1,782   49  1972  (o)
9586 Interstate 25 East Frontage
 Longmont, CO      898   5,038   377   967   5,346   6,313   346  1997  (o)
555 Corporate Circle
 Golden, CO      397   2,673   345   448   2,968   3,416   308  1996  (o)
Des Moines
                                        
2250 Delaware Ave
 Des Moines, IA      277   1,609   520   277   2,130   2,407   479  1975  (o)
1021 W. First Street, Hwy 93
 Sumner, IA      99   2,540   20   100   2,559   2,659   197  1990/1995  (o)
Detroit
                                        
1731 Thorncroft
 Troy, MI      331   1,904   173   331   2,077   2,408   641  1969  (o)
1653 E. Maple
 Troy, MI      192   1,104   156   192   1,260   1,451   363  1990  (o)
47461 Clipper
 Plymouth Township, MI      122   723   76   122   799   921   239  1992  (o)
238 Executive Drive
 Troy, MI      52   173   554   100   679   779   606  1973  (o)
301 Executive Drive
 Troy, MI      71   293   731   133   962   1,095   789  1974  (o)
449 Executive Drive
 Troy, MI      125   425   1,030   218   1,362   1,580   1,073  1975  (o)
501 Executive Drive
 Troy, MI      71   236   678   129   856   985   487  1984  (o)
451 Robbins Drive
 Troy, MI      96   448   961   192   1,313   1,505   1,018  1975  (o)
1095 Crooks Road(j)
 Troy, MI      331   1,017   1,075   360   2,063   2,423   1,214  1986  (o)
1416 Meijer Drive
 Troy, MI      94   394   403   121   771   891   515  1980  (o)
1624 Meijer Drive
 Troy, MI      236   1,406   940   373   2,209   2,582   1,378  1984  (o)
1972 Meijer Drive
 Troy, MI      315   1,301   721   372   1,965   2,337   1,205  1985  (o)
1621 Northwood Drive
 Troy, MI      85   351   918   215   1,140   1,354   1,011  1977  (o)
1707 Northwood Drive
 Troy, MI      95   262   1,221   239   1,339   1,578   901  1983  (o)
1788 Northwood Drive
 Troy, MI      50   196   549   103   692   795   528  1977  (o)
1821 Northwood Drive
 Troy, MI      132   523   756   220   1,192   1,411   1,037  1977  (o)
1826 Northwood Drive
 Troy, MI      55   208   394   103   554   657   491  1977  (o)
1864 Northwood Drive
 Troy, MI      57   190   437   107   577   684   510  1977  (o)
2277 Elliott Avenue
 Troy, MI      48   188   501   104   633   737   512  1975  (o)
2451 Elliott Avenue
 Troy, MI      78   319   742   164   975   1,139   841  1974  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
2730 Research Drive
 Rochester Hills, MI      903   4,215   675   903   4,891   5,793   2,862  1988  (o)
2791 Research Drive
 Rochester Hills, MI      557   2,731   719   560   3,447   4,007   1,728  1991  (o)
2871 Research Drive
 Rochester Hills, MI      324   1,487   372   327   1,856   2,183   982  1991  (o)
3011 Research Drive
 Rochester Hills, MI      457   2,104   346   457   2,450   2,907   1,469  1988  (o)
2870 Technology Drive
 Rochester Hills, MI      275   1,262   290   279   1,548   1,827   886  1988  (o)
2900 Technology Drive
 Rochester Hills, MI      214   977   531   219   1,503   1,722   721  1992  (o)
2920 Technology Drive
 Rochester Hills, MI      153   671   196   153   868   1,020   444  1992  (o)
2930 Technology Drive
 Rochester Hills, MI      131   594   380   138   966   1,105   466  1991  (o)
2950 Technology Drive
 Rochester Hills, MI      178   819   223   185   1,035   1,220   552  1991  (o)
23014 Commerce Drive
 Farmington Hills, MI      39   203   169   56   355   411   225  1983  (o)
23028 Commerce Drive
 Farmington Hills, MI      98   507   247   125   727   852   464  1983  (o)
23035 Commerce Drive
 Farmington Hills, MI      71   355   262   93   596   688   374  1983  (o)
23042 Commerce Drive
 Farmintgon Hills, MI      67   277   313   89   568   657   357  1983  (o)
23065 Commerce Drive
 Farmington Hills, MI      71   408   227   93   613   706   378  1983  (o)
23070 Commerce Drive
 Farmington Hills, MI      112   442   673   125   1,102   1,227   810  1983  (o)
23079 Commerce Drive
 Farmington Hills, MI      68   301   316   79   605   685   348  1983  (o)
23093 Commerce Drive
 Farmington Hills, MI      211   1,024   844   295   1,784   2,079   1,134  1983  (o)
23135 Commerce Drive
 Farmington Hills, MI      146   701   279   158   969   1,126   555  1986  (o)
23163 Commerce Drive
 Farmington Hills, MI      111   513   350   138   836   974   468  1986  (o)
23177 Commerce Drive
 Farmington Hills, MI      175   1,007   642   254   1,570   1,824   926  1986  (o)
23206 Commerce Drive
 Farmington Hills, MI      125   531   350   137   868   1,006   514  1985  (o)
23370 Commerce Drive
 Farmington Hills, MI      59   233   308   66   534   600   347  1980  (o)
1451 East Lincoln Avenue
 Madison Heights, MI      299   1,703   248   306   1,944   2,250   586  1967  (o)
4400 Purks Drive
 Auburn Hills, MI      602   3,410   3,022   612   6,421   7,033   1,632  1987  (o)
6515 Cobb Drive
 Sterling Heights, MI      305   1,753   323   305   2,076   2,380   597  1984  (o)
32450 N Avis Drive
 Madison Heights, MI      281   1,590   193   286   1,778   2,064   469  1974  (o)
12707 Eckles Road
 Plymouth Township, MI      255   1,445   129   267   1,562   1,829   401  1990  (o)
9300-9328Harrison Rd
 Romulus, MI      147   834   397   154   1,223   1,378   347  1978  (o)
9330-9358Harrison Rd
 Romulus, MI      81   456   278   85   731   815   209  1978  (o)
28420-28448Highland Rd
 Romulus, MI      143   809   220   149   1,023   1,172   305  1979  (o)
28450-28478Highland Rd
 Romulus, MI      81   461   280   85   738   823   226  1979  (o)
28421-28449Highland Rd
 Romulus, MI      109   617   291   114   903   1,017   258  1980  (o)


S-14


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
28451-28479Highland Rd
 Romulus, MI      107   608   302   112   905   1,017   204  1980  (o)
28825-28909Highland Rd
 Romulus, MI      70   395   236   73   627   700   162  1981  (o)
28933-29017Highland Rd
 Romulus, MI      112   634   137   117   766   883   188  1982  (o)
28824-28908Highland Rd
 Romulus, MI      134   760   244   140   997   1,137   256  1982  (o)
28932-29016Highland Rd
 Romulus, MI      123   694   330   128   1,019   1,147   275  1982  (o)
9710-9734Harrison Rd
 Romulus, MI      125   706   149   130   850   980   239  1987  (o)
9740-9772Harrison Rd
 Romulus, MI      132   749   164   138   906   1,044   236  1987  (o)
9840-9868Harrison Rd
 Romulus, MI      144   815   146   151   954   1,105   253  1987  (o)
9800-9824Harrison Rd
 Romulus, MI      117   664   126   123   785   907   191  1987  (o)
29265-29285Airport Dr
 Romulus, MI      140   794   220   147   1,008   1,155   258  1983  (o)
29185-29225Airport Dr
 Romulus, MI      140   792   258   146   1,044   1,191   279  1983  (o)
29149-29165Airport Dr
 Romulus, MI      216   1,225   377   226   1,592   1,818   380  1984  (o)
29101-29115Airport Dr
 Romulus, MI      130   738   306   136   1,038   1,175   272  1985  (o)
29031-29045Airport Dr
 Romulus, MI      124   704   144   130   842   972   216  1985  (o)
29050-29062Airport Dr
 Romulus, MI      127   718   133   133   845   978   239  1986  (o)
29120-29134Airport Dr
 Romulus, MI      161   912   244   169   1,149   1,317   277  1986  (o)
29200-29214Airport Dr
 Romulus, MI      170   963   352   178   1,307   1,485   378  1985  (o)
9301-9339Middlebelt Rd
 Romulus, MI      124   703   186   130   883   1,013   244  1983  (o)
26980 Trolley Industrial Drive
 Taylor, MI      450   2,550   1,014   463   3,551   4,014   925  1997  (o)
32975 Capitol Avenue
 Livonia, MI      135   748   332   144   1,071   1,215   251  1978  (o)
2725 S. Industrial Highway
 Ann Arbor, MI      660   3,654   470   704   4,080   4,784   850  1997  (o)
32920 Capitol Avenue
 Livonia, MI      76   422   88   82   504   586   109  1973  (o)
11923 Brookfield Avenue
 Livonia, MI      120   665   495   128   1,151   1,280   431  1973  (o)
11965 Brookfield Avenue
 Livonia, MI      120   665   67   128   724   852   156  1973  (o)
13405 Stark Road
 Livonia, MI      46   254   136   49   387   436   97  1980  (o)
1170 Chicago Road
 Troy, MI      249   1,380   256   266   1,618   1,885   328  1983  (o)
1200 Chicago Road
 Troy, MI      268   1,483   274   286   1,739   2,025   350  1984  (o)
450 Robbins Drive
 Troy, MI      166   920   257   178   1,165   1,343   227  1976  (o)
1230 Chicago Road
 Troy, MI      271   1,498   156   289   1,636   1,925   349  1996  (o)
12886 Westmore Avenue
 Livonia, MI      190   1,050   194   202   1,232   1,434   257  1981  (o)
12898 Westmore Avenue
 Livonia, MI      190   1,050   235   202   1,273   1,475   283  1981  (o)


S-15


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
33025 Industrial Road
 Livonia, MI      80   442   130   85   567   652   133  1980  (o)
47711 Clipper Street
 Plymouth Township, MI      539   2,983   265   575   3,212   3,787   691  1996  (o)
32975 Industrial Road
 Livonia, MI      160   887   341   171   1,217   1,388   298  1984  (o)
32985 Industrial Road
 Livonia, MI      137   761   149   147   900   1,047   193  1985  (o)
32995 Industrial Road
 Livonia, MI      160   887   180   171   1,056   1,227   242  1983  (o)
12874 Westmore Avenue
 Livonia, MI      137   761   239   147   990   1,137   220  1984  (o)
33067 Industrial Road
 Livonia, MI      160   887   305   171   1,181   1,352   256  1984  (o)
1775 Bellingham
 Troy, MI      344   1,902   297   367   2,176   2,543   447  1987  (o)
1785 East Maple
 Troy, MI      92   507   86   98   587   685   126  1985  (o)
1807 East Maple
 Troy, MI      321   1,775   210   342   1,964   2,306   427  1984  (o)
980 Chicago
 Troy, MI      206   1,141   176   220   1,303   1,523   265  1985  (o)
1840 Enterprise Drive
 Rochester Hills, MI      573   3,170   371   611   3,503   4,114   767  1990  (o)
1885 Enterprise Drive
 Rochester Hills, MI      209   1,158   115   223   1,259   1,482   273  1990  (o)
1935-55Enterprise Drive
 Rochester Hills, MI      1,285   7,144   701   1,371   7,759   9,130   1,679  1990  (o)
5500 Enterprise Court
 Warren, MI      675   3,737   447   721   4,138   4,859   886  1989  (o)
750 Chicago Road
 Troy, MI      323   1,790   381   345   2,149   2,494   468  1986  (o)
800 Chicago Road
 Troy, MI      283   1,567   519   302   2,067   2,369   577  1985  (o)
850 Chicago Road
 Troy, MI      183   1,016   262   196   1,265   1,461   258  1984  (o)
2805 S. Industrial Highway
 Ann Arbor, MI      318   1,762   402   340   2,142   2,482   474  1990  (o)
6833 Center Drive
 Sterling Heights, MI      467   2,583   220   493   2,777   3,270   613  1998  (o)
32201 North Avis Drive
 Madison Heights, MI      345   1,911   519   349   2,427   2,776   709  1974  (o)
1100 East Mandoline Road
 Madison Heights, MI      888   4,915   1,452   897   6,357   7,255   1,621  1967  (o)
30081 Stephenson Highway
 Madison Heights, MI      271   1,499   389   274   1,884   2,158   418  1967  (o)
1120 John A. Papalas Drive(d)
 Lincoln Park, MI      586   3,241   843   593   4,077   4,670   849  1985  (o)
4872 S. Lapeer Road
 Lake Orion Twsp, MI      1,342   5,441   2,007   1,412   7,378   8,790   1,994  1999  (o)
22701 Trolley Industrial
 Taylor, MI      795      7,224   849   7,169   8,018   1,027  1999  (o)
1400 Allen Drive
 Troy, MI      209   1,154   120   212   1,271   1,483   192  1979  (o)
1408 Allen Drive
 Troy, MI      151   834   171   153   1,003   1,156   226  1979  (o)
1305 Stephenson Hwy
 Troy, MI      345   1,907   171   350   2,072   2,423   359  1979  (o)
32505 Industrial Drive
 Madison Heights, MI      345   1,910   418   351   2,322   2,673   449  1979  (o)


S-16


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
1799-1813Northfield Drive(c)
 Rochester Hills, MI      481   2,665   266   490   2,922   3,412   473  1980  (o)
32200 N. Avis(j)
 Madison Heights, MI      503   3,367   865   503   4,232   4,735   146  1973  (o)
100 Kay Industrial
 Orion, MI      677   2,018   403   685   2,414   3,098   269  1987  (o)
1849 West Maple Road
 Troy, MI      1,688   2,790   29   1,700   2,808   4,507   163  1986  (o)
42555 Merrill Road
 Sterling Heights, MI      1,080   2,300   3,550   1,090   5,840   6,930   175  1979/2006  (o)
28435 Automation Blvd. 
 Wixom, MI      621       3,804   628   3,797   4,425   217  2004  (o)
2441 N. Opdyke Road
 Auburn Hills, MI      530   737   16   538   745   1,283   16  1989/94  (o)
200 Northpointe Drive
 Orion Township, MI      723   2,063   35   734   2,088   2,821   27  1997  (o)
12163 Globe Street(j)
 Detroit, MI      595   979   154   596   1,132   1,728   135  1980  (o)
32500 Capitol Avenue
 Livonia, MI      258   1,032   154   260   1,185   1,444   35  1970  (o)
32650 Capitol Avenue
 Livonia, MI      282   1,128   54   284   1,181   1,464   44  1970  (o)
11800 Sears Drive(j)
 Livonia, MI      693   1,507   1,222   703   2,718   3,422   254  1971  (o)
1099 Church Road
 Troy, MI      702   1,332   45   721   1,358   2,079   147  1980  (o)
Grand Rapids
                                        
5050 Kendrick Court(j)
 Grand Rapids, MI      1,721   11,433   7,167   1,721   18,600   20,320   5,158  1988/94  (o)
5015 52nd Street SE
 Grand Rapids, MI      234   1,321   143   234   1,464   1,698   492  1987  (o)
Houston
                                        
2102-2314Edwards Street
 Houston, TX      348   1,973   1,174   382   3,113   3,496   631  1961  (o)
4545 Eastpark Drive
 Houston, TX      235   1,331   735   240   2,061   2,301   530  1972  (o)
3351 Rauch St
 Houston, TX      272   1,541   189   278   1,724   2,002   382  1970  (o)
3851 Yale St
 Houston, TX      413   2,343   680   425   3,012   3,437   777  1971  (o)
3337-3347Rauch Street
 Houston, TX      227   1,287   217   233   1,499   1,731   337  1970  (o)
8505 N Loop East
 Houston, TX      439   2,489   744   449   3,223   3,672   737  1981  (o)
4749-4799Eastpark Dr
 Houston, TX      594   3,368   1,159   611   4,510   5,121   1,112  1979  (o)
4851 Homestead Road
 Houston, TX      491   2,782   913   504   3,682   4,186   846  1973  (o)
3365-3385Rauch Street
 Houston, TX      284   1,611   119   290   1,724   2,014   388  1970  (o)
5050 Campbell Road
 Houston, TX      461   2,610   330   470   2,930   3,401   669  1970  (o)
4300 Pine Timbers
 Houston, TX      489   2,769   597   499   3,355   3,854   751  1980  (o)
2500-2530Fairway Park Drive
 Houston, TX      766   4,342   764   792   5,080   5,872   1,157  1974  (o)
6550 Longpointe
 Houston, TX      362   2,050   549   370   2,591   2,961   589  1980  (o)


S-17


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
1815 Turning Basin Dr
 Houston, TX      487   2,761   522   531   3,239   3,770   731  1980  (o)
1819 Turning Basin Dr
 Houston, TX      231   1,308   567   251   1,854   2,105   424  1980  (o)
1805 Turning Basin Drive
 Houston, TX      564   3,197   655   616   3,800   4,415   856  1980  (o)
9835A Genard Road
 Houston, TX      1,505   8,333   3,310   1,581   11,568   13,149   2,245  1980  (o)
9835B Genard Road
 Houston, TX      245   1,357   463   256   1,809   2,065   302  1980  (o)
10325-10415Landsbury Drive(d)
 Houston, TX      696   3,854   499   704   4,345   5,049   569  1982  (o)
8705 City Park Loop
 Houston, TX      710   2,983   933   714   3,912   4,626   452  1982  (o)
11505 State Highway 225
 LaPorte City, TX      940   4,675   615   940   5,290   6,230   338  2003  (o)
6955 Portwest Drive
 Houston, TX      314   1,686   213   320   1,892   2,213   91  1985  (o)
6925 Portwest Drive(j)
 Houston, TX      402   1,360   230   407   1,585   1,992   112  1985  (o)
600 Kenrick(j)
 Houston, TX      900   1,791   235   913   2,013   2,926   280  1981  (o)
1500 E. Main
 LaPorte City, TX      201   1,328   24   204   1,348   1,553   121  1972/1982  (o)
Indianapolis
                                        
2900 N Shadeland Avenue
 Indianapolis, IN      2,057   13,565   3,327   2,057   16,892   18,949   4,698  1957/1992  (o)
7901 West 21st St. 
 Indianapolis, IN      1,048   6,027   427   1,048   6,454   7,502   1,661  1985  (o)
1445 Brookville Way
 Indianapolis, IN      459   2,603   737   476   3,323   3,799   967  1989  (o)
1440 Brookville Way
 Indianapolis, IN      665   3,770   1,080   685   4,831   5,516   1,219  1990  (o)
1240 Brookville Way
 Indianapolis, IN      247   1,402   308   258   1,700   1,958   496  1990  (o)
1345 Brookville Way
 Indianapolis, IN  (o)  586   3,321   910   601   4,215   4,816   1,196  1992  (o)
1350 Brookville Way
 Indianapolis, IN      205   1,161   179   212   1,333   1,544   379  1994  (o)
1341 Sadlier Circle E Dr
 Indianapolis, IN  (p)  131   743   374   136   1,112   1,248   352  1971/1992  (o)
1322-1438Sadlier Circle E Dr
 Indianapolis, IN  (p)  145   822   283   152   1,099   1,251   337  1971/1992  (o)
1327-1441Sadlier Circle E Dr
 Indianapolis, IN  (p)  218   1,234   426   225   1,653   1,877   484  1992  (o)
1304 Sadlier Circle E Dr
 Indianapolis, IN  (p)  71   405   153   75   554   629   175  1971/1992  (o)
1402 Sadlier Circle E Dr
 Indianapolis, IN  (p)  165   934   437   171   1,365   1,536   425  1970/1992  (o)
1504 Sadlier Circle E Dr
 Indianapolis, IN  (p)  219   1,238   318   226   1,549   1,774   381  1971/1992  (o)
1311 Sadlier Circle E Dr
 Indianapolis, IN  (p)  54   304   105   57   405   462   105  1971/1992  (o)
1365 Sadlier Circle E Dr
 Indianapolis, IN  (p)  121   688   287   126   970   1,096   240  1971/1992  (o)
1352-1354Sadlier Circle E Dr
 Indianapolis, IN  (p)  178   1,008   383   184   1,384   1,568   385  1970/1992  (o)


S-18


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
1335 Sadlier Circle E Dr
 Indianapolis, IN  (p)  81   460   139   85   594   679   158  1971/1992  (o)
1327 Sadlier Circle E Dr
 Indianapolis, IN  (p)  52   295   80   55   372   427   120  1971/1992  (o)
1425 Sadlier Circle E Dr
 Indianapolis, IN  (p)  21   117   39   23   154   177   40  1971/1992  (o)
1230 Brookville Way
 Indianapolis, IN      103   586   90   109   672   780   175  1995  (o)
6951 E 30th St
 Indianapolis, IN      256   1,449   238   265   1,678   1,943   486  1995  (o)
6701 E 30th St
 Indianapolis, IN      78   443   43   82   482   564   131  1995  (o)
6737 E 30th St
 Indianapolis, IN      385   2,181   307   398   2,474   2,873   722  1995  (o)
1225 Brookville Way
 Indianapolis, IN      60      458   68   450   518   94  1997  (o)
6555 E 30th St
 Indianapolis, IN      484   4,760   1,874   484   6,634   7,118   1,900  1969/1981  (o)
8402-8440E 33rd St
 Indianapolis, IN      222   1,260   638   230   1,890   2,120   518  1977  (o)
8520-8630E 33rd St
 Indianapolis, IN      326   1,848   706   336   2,545   2,881   733  1976  (o)
8710-8768E 33rd St
 Indianapolis, IN      175   993   405   187   1,385   1,572   384  1979  (o)
3316-3346 N. PagosaCourt
 Indianapolis, IN      325   1,842   605   335   2,436   2,771   696  1977  (o)
6751 E 30th St
 Indianapolis, IN      728   2,837   256   741   3,079   3,820   740  1997  (o)
9200 East 146th Street
 Noblesville, IN      181   1,221   1,045   181   2,266   2,446   566  1961/1981  (o)
6575 East 30th Street
 Indianapolis, IN      118      1,997   128   1,987   2,115   415  1998  (o)
6585 East 30th Street
 Indianapolis, IN      196      3,293   196   3,292   3,489   685  1998  (o)
8525 E. 33rd Street
 Indianapolis, IN      1,300   2,091   1,230   1,308   3,314   4,621   937  1978  (o)
5705-97Park Plaza Ct
 Indianapolis, IN  (q)  600   2,194   872   609   3,057   3,666   701  1977  (o)
8219 Northwest Blvd. 
 Indianapolis, IN      900   3,081   397   902   3,476   4,378   467  1990  (o)
8227 Northwest Blvd. 
 Indianapolis, IN      600   5,502   699   602   6,198   6,801   772  1990  (o)
9319-9341Castlegate Drive
 Indianapolis, IN      530   1,235   1,111   544   2,332   2,876   478  1983  (o)
9332-9350Castlegate Drive
 Indianapolis, IN      420   646   663   429   1,300   1,729   290  1983  (o)
2855 Michigan Road
 Madison, IN      504   1,169   49   521   1,201   1,722   625  1962  (o)
1133 Northwest L Street
 Richmond, IN  (r)  201   1,358   26   208   1,378   1,586   150  1955/92  (o)
1380 Perry Road
 Plainfield, IN      781   5,156   35   785   5,187   5,972   352  1997  (o)
9210 East 146th Street
 Noblesville, IN      66   684   799   66   1,483   1,549   520  1978  (o)
4640 Martin Luther King Jr. Boulevard
 Anderson, IN      161   664   6   163   669   831   67  1999  (o)
6512 Production Drive
 Anderson, IN      58   281   3   58   284   342   19  1995  (o)
6628 Production Drive
 Anderson, IN      150   680   7   151   686   837   48  1995  (o)
2902 Enterprise Drive
 Anderson, IN      230   4,573   44   232   4,615   4,847   224  1995  (o)


S-19


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
Los Angeles
                                        
12616 Yukon Ave
 Hawthorne, CA      685   3,884   217   696   4,090   4,786   457  1987  (o)
333 Turnbull Canyon Road
 City of Industry, CA      2,700   1,824   572   2,700   2,396   5,096   362  1968/1985  (o)
350-390Manville St. 
 Compton, CA      2,300   3,768   103   2,313   3,857   6,171   377  1979  (o)
1944 Vista Bella Way
 Rancho Dominguez, CA      1,746   3,148   586   1,821   3,660   5,480   244  1976  (o)
2000 Vista Bella Way
 Rancho Dominguez, CA      817   1,673   292   852   1,931   2,782   126  1971  (o)
2835 East Ana Street Drive
 Rancho Dominguez, CA      1,682   2,750   133   1,770   2,796   4,565   186  1972/2000  (o)
665 N. Baldwin Park Blvd
 City of Industry, CA      2,124   5,219   53   2,139   5,257   7,396   228  1965/92  (o)
27801 Avenue Scott(j)
 Santa Clarita, CA      2,890   7,020   192   2,899   7,203   10,102   69  1984  (o)
2610 & 2660 Columbia Street
 Torrance, CA      3,008   5,826   36   3,021   5,849   8,870   153  1969  (o)
433 Alaska Avenue
 Torrance, CA      681   168   4   684   169   853   4  1962  (o)
201 West Manville Avenue
 Compton, CA      7,639   5,022   310   7,807   5,164   12,971   434  1956  (o)
14300 Bonelli Street(j)
 City of Industry, CA      2,000   8,000   1,130   2,096   9,034   11,130   309  1973/2002  (o)
4020 S. Compton Ave
 Los Angeles, CA      3,800   7,330   71   3,825   7,376   11,201   109  1986  (o)
Louisville
                                        
9001 Cane Run Road
 Louisville, KY      524      5,817   560   5,781   6,341   1,675  1998  (o)
9101 Cane Run Road
 Louisville, KY      608      6,114   608   6,113   6,722   917  2000  (o)
Milwaukee
                                        
N25 W23050 Paul Road
 Pewaukee, WI      474   2,723   1,932   485   4,645   5,130   1,266  1989  (o)
N25 W23255 Paul Road
 Pewaukee, WI      569   3,270   128   569   3,398   3,967   1,030  1987  (o)
N27 W23293 Roundy Drive
 Pewaukee, WI      412   2,837   81   420   2,910   3,330   891  1989  (o)
6523 N Sydney Place
 Glendale, WI      172   976   189   176   1,163   1,338   316  1978  (o)
4560 N 124th Street
 Wauwatosa, WI      118   667   85   129   741   870   177  1976  (o)
4410-80North 132nd Street
 Butler, WI      355      4,023   359   4,019   4,378   680  1999  (o)
5355 South Westridge Drive
 New Berlin, WI      1,630   7,058   92   1,646   7,134   8,780   565  1997  (o)
320-34 W. Vogel
 Milwaukee, WI      506   3,199   41   508   3,238   3,746   375  1970  (o)
4950 S. 6th Avenue
 Milwaukee, WI      299   1,565   85   301   1,648   1,949   230  1970  (o)
1711 Paramount Court
 Waukesha, WI      308   1,762   19   311   1,778   2,089   122  1997  (o)
17005 W. Ryerson Road
 New Berlin, WI      403   3,647   32   405   3,676   4,082   287  1985/88  (o)
W 140 N9059 Lilly Road
 Iomonee Falls, WI      343   1,153   242   366   1,372   1,738   100  1995  (o)


S-20


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
200 W. Vogel Ave., Bldg B
 Milwaukee, WI      301   2,150   13   302   2,162   2,464   225  1970  (o)
16600 West Glendale Avenue
 New Berlin, WI      704   1,923   385   715   2,298   3,012   177  1969/84  (o)
4921 S. 2nd Street
 Milwaukee, WI      101   713   2   101   715   816   68  1970  (o)
1500 Peebles Drive
 Richland Center, WI      1,577   1,018   34   1,603   1,027   2,629   358  1967/72  (o)
Minneapolis/St. Paul
                                        
6507-6545Cecilia Circle
 Bloomington, MN      357   1,320   1,289   386   2,580   2,966   1,444  1980  (o)
6201 West 111th Street
 Bloomington, MN  (s)  1,358   8,622   4,139   1,499   12,620   14,119   6,307  1987  (o)
6403-6545Cecilia Drive
 Bloomington, MN      366   1,363   1,141   395   2,475   2,870   1,455  1980  (o)
7251-7267Washington Avenue
 Edina, MN      129   382   715   182   1,044   1,226   769  1972  (o)
7301-7325Washington Avenue
 Edina, MN      174   391   103   193   475   668   150  1972  (o)
7101 Winnetka Avenue North
 Brooklyn Park, MN      2,195   6,084   3,707   2,228   9,758   11,986   5,183  1990  (o)
7600 Golden Triangle Drive
 Eden Prairie, MN      566   1,394   1,418   615   2,764   3,378   1,489  1989  (o)
9901 West 74th Street
 Eden Prairie, MN      621   3,289   3,211   639   6,482   7,121   3,440  1983/88  (o)
12220-12222Nicollet Avenue
 Burnsville, MN      105   425   400   114   817   930   518  1989/90  (o)
12250-12268Nicollet Avenue
 Burnsville, MN      260   1,054   523   296   1,540   1,837   715  1989/90  (o)
12224-12226Nicollet Avenue
 Burnsville, MN      190   770   715   207   1,468   1,675   650  1989/90  (o)
1030 Lone Oak Road
 Eagan, MN      456   2,703   575   456   3,278   3,734   966  1988  (o)
1060 Lone Oak Road
 Eagan, MN      624   3,700   701   624   4,401   5,026   1,349  1988  (o)
5400 Nathan Lane
 Plymouth, MN      749   4,461   1,302   757   5,754   6,512   2,059  1990  (o)
10120 W 76th Street
 Eden Prairie, MN      315   1,804   1,378   315   3,181   3,496   1,498  1987  (o)
7615 Golden Triangle
 Eden Prairie, MN      268   1,532   785   268   2,317   2,585   612  1987  (o)
7625 Golden Triangle
 Eden Prairie, MN      415   2,375   1,107   415   3,482   3,897   1,129  1987  (o)
2605 Fernbrook Lane North
 Plymouth, MN      443   2,533   672   445   3,203   3,647   835  1987  (o)
12155 Nicollet Ave
 Burnsville, MN      286      1,731   288   1,729   2,017   482  1995  (o)
6655 Wedgewood Road
 Maple Grove, MN      1,466   8,342   3,291   1,466   11,633   13,099   3,183  1989  (o)
900 Apollo Road
 Eagan, MN      1,029   5,855   1,178   1,030   7,032   8,062   2,003  1970  (o)


S-21


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
7316 Aspen Lane North
 Brooklyn Park, MN      368   2,156   822   377   2,969   3,346   875  1978  (o)
4100 Peavey Road
 Chaska, MN      277   2,261   795   277   3,056   3,333   768  1988  (o)
11300 Hamshire Ave South
 Bloomington, MN      527   2,985   1,460   541   4,430   4,972   980  1983  (o)
375 Rivertown Drive
 Woodbury, MN      1,083   6,135   2,720   1,503   8,435   9,938   1,987  1996  (o)
5205 Highway 169
 Plymouth, MN      446   2,525   1,000   740   3,230   3,970   793  1960  (o)
6451-6595Citywest Parkway
 Eden Prairie, MN      525   2,975   1,258   538   4,220   4,758   1,116  1984  (o)
7100-7198Shady Oak Road
 Eden Prairie, MN      715   4,054   1,212   736   5,245   5,981   1,747  1982/2002  (o)
7500-7546Washington Square
 Eden Prairie, MN      229   1,300   795   235   2,090   2,325   515  1975  (o)
7550-7558Washington Square
 Eden Prairie, MN      153   867   184   157   1,048   1,205   251  1975  (o)
5240-5300Valley Industrial Blvd S
 Shakopee, MN      362   2,049   1,011   371   3,049   3,421   816  1973  (o)
6477-6525City West Parkway
 Eden Prairie, MN      810   4,590   984   819   5,564   6,384   1,355  1984  (o)
1157 Valley Park Drive
 Shakopee, MN      760      6,160   888   6,032   6,920   1,145  1997  (o)
500-530Kasota Avenue SE
 Minneapolis, MN      415   2,354   998   432   3,335   3,767   913  1976  (o)
770-786Kasota Avenue SE
 Minneapolis, MN      333   1,888   512   347   2,386   2,733   504  1976  (o)
800 Kasota Avenue SE
 Minneapolis, MN      524   2,971   743   597   3,641   4,238   872  1976  (o)
2530-2570Kasota Avenue
 St. Paul, MN      407   2,308   780   465   3,030   3,495   707  1976  (o)
1280 Energy Park Drive
 St. Paul, MN      700   2,779   83   705   2,857   3,562   271  1984  (o)
9600 West 76th Street
 Eden Prairie, MN      1,000   2,450   36   1,034   2,451   3,486   188  1997  (o)
9700 West 76th Street
 Eden Prairie, MN      1,000   2,709   101   1,038   2,772   3,810   227  1984/97  (o)
5017 Boone Avenue North
 New Hope, MN  (t)  1,000   1,599   58   1,009   1,648   2,657   263  1971/74  (o)
2300 West Highway 13(I-35 Dist Ctr)
 Burnsville, MN      2,517   6,069   579   2,524   6,640   9,165   1,218  1970/76  (o)
1087 Park Place
 Shakopee, MN      1,195   4,891   15   1,198   4,903   6,101   372  1996/2000  (o)
5391 12th Avenue SE
 Shakopee, MN      1,392   8,149   230   1,395   8,375   9,771   580  1998  (o)
4701 Valley Industrial Boulevard
 Shakopee, MN      1,296   7,157   (81)  1,299   7,073   8,372   518  1997  (o)
Park 2000 III(j)
 Shakopee, MN      590      4,953   590   4,953   5,543   619  2001  (o)
7600 69th Avenue
 Greenfield, MN      1,500   8,328   1,808   1,510   10,126   11,636   945  2004  (o)


S-22


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
316 Lake Hazeltine Drive
 Chaska, MN      714   944   155   729   1,084   1,813   108  1986  (o)
6455 City West Parkway
 Eden Prairie, MN      659   3,189   48   666   3,229   3,895   257  1995/97  (o)
1225 Highway 169 North
 Plymouth, MN      1,190   1,979   59   1,207   2,022   3,228   39  1968  (o)
Nashville
                                        
1621 Heil Quaker Boulevard
 Nashville, TN      413   2,383   1,467   430   3,833   4,263   1,133  1975  (o)
3099 Barry Drive
 Portland, TN      418   2,368   192   421   2,557   2,978   702  1995  (o)
3150 Barry Drive
 Portland, TN      941   5,333   477   981   5,770   6,750   1,447  1993  (o)
5599 Highway 31 West
 Portland, TN      564   3,196   211   571   3,400   3,971   950  1995  (o)
1650 Elm Hill Pike
 Nashville, TN      329   1,867   172   332   2,036   2,368   486  1984  (o)
1931 Air Lane Drive
 Nashville, TN      489   2,785   273   493   3,054   3,547   722  1984  (o)
470 Metroplex Drive(c)
 Nashville, TN      619   3,507   1,216   626   4,716   5,342   1,405  1986  (o)
1150 Antiock Pike
 Nashville, TN      661   3,748   523   669   4,264   4,932   1,033  1987  (o)
4640 Cummings Park
 Nashville, TN      360   2,040   181   365   2,216   2,581   390  1986  (o)
556 Metroplex Drive
 Nashville, TN      227   1,285   124   231   1,405   1,636   234  1983  (o)
1740 River Hills Drive
 Nashville, TN      848   4,383   515   888   4,858   5,746   614  1978  (o)
Northern New Jersey
                                        
14 World’s Fair Drive
 Franklin, NJ      483   2,735   553   503   3,268   3,771   787  1980  (o)
12 World’s Fair Drive
 Franklin, NJ      572   3,240   539   593   3,757   4,350   920  1981  (o)
22 World’s Fair Drive
 Franklin, NJ      364   2,064   302   375   2,355   2,730   528  1983  (o)
26 World’s Fair Drive
 Franklin, NJ      361   2,048   293   377   2,325   2,703   553  1984  (o)
24 World’s Fair Drive
 Franklin, NJ      347   1,968   487   362   2,441   2,802   620  1984  (o)
20 World’s Fair Drive Lot 13
 Sumerset, NJ      9      2,632   691   1,950   2,641   365  1999  (o)
45 Route 46
 Pine Brook, NJ      969   5,491   790   978   6,272   7,250   1,045  1974/1987  (o)
43 Route 46
 Pine Brook, NJ      474   2,686   454   479   3,136   3,614   582  1974/1987  (o)
39 Route 46
 Pine Brook, NJ      260   1,471   179   262   1,647   1,909   286  1970  (o)
26 Chapin Road
 Pine Brook, NJ      956   5,415   520   965   5,925   6,890   970  1983  (o)
30 Chapin Road
 Pine Brook, NJ      960   5,440   592   969   6,023   6,992   997  1983  (o)
20 Hook Mountain Road
 Pine Brook, NJ      1,507   8,542   1,050   1,534   9,566   11,100   1,488  1972/1984  (o)
30 Hook Mountain Road
 Pine Brook, NJ      389   2,206   368   396   2,567   2,963   424  1972/1987  (o)
55 Route 46
 Pine Brook, NJ      396   2,244   211   403   2,448   2,851   396  1978/1994  (o)
16 Chapin Road
 Pine Brook, NJ      885   5,015   323   901   5,323   6,223   881  1987  (o)


S-23


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
20 Chapin Road
 Pine Brook, NJ      1,134   6,426   523   1,154   6,929   8,083   1,144  1987  (o)
Sayreville Lot 3
 Sayreville, NJ      996      5,301   996   5,301   6,297   318  2002  (o)
Sayreville Lot 4
 Sayreville, NJ      944      4,749   944   4,749   5,693   532  2001  (o)
400 Raritan Center Parkway
 Edison, NJ      829   4,722   552   851   5,253   6,104   769  1983  (o)
300 Columbus Circle
 Edison, NJ      1,257   7,122   950   1,277   8,052   9,329   1,180  1983  (o)
400 Apgar
 Franklin Township, NJ      780   4,420   624   822   5,002   5,824   639  1987  (o)
500 Apgar
 Franklin Township, NJ      361   2,044   440   368   2,476   2,845   367  1987  (o)
201 Circle Dr. North
 Piscataway, NJ      840   4,760   696   857   5,439   6,296   634  1987  (o)
1 Pearl Ct. 
 Allendale, NJ      623   3,528   1,304   649   4,806   5,454   498  1978  (o)
2 Pearl Ct. 
 Allendale, NJ      255   1,445   1,280   403   2,577   2,980   267  1979  (o)
3 Pearl Ct. 
 Allendale, NJ      440   2,491   203   458   2,675   3,133   327  1978  (o)
4 Pearl Ct. 
 Allendale, NJ      450   2,550   613   469   3,144   3,613   440  1979  (o)
5 Pearl Ct. 
 Allendale, NJ      505   2,860   510   526   3,349   3,875   403  1977  (o)
6 Pearl Ct. 
 Allendale, NJ      1,160   6,575   774   1,177   7,332   8,509   807  1980  (o)
7 Pearl Ct. 
 Allendale, NJ      513   2,907   260   520   3,159   3,680   349  1979  (o)
59 Route 17
 Allendale, NJ      518   2,933   1,122   539   4,033   4,572   631  1979  (o)
309-319Pierce Street
 Somerset, NJ      1,300   4,628   340   1,309   4,958   6,268   412  1986  (o)
50 Triangle Blvd
 Carlstadt, NJ      497   2,195   203   532   2,363   2,895   154  1967  (o)
Orlando
                                        
Lake Point IV
 Tampa, FL      909   4,613   137   920   4,739   5,659   348  1987  (o)
Philadelphia
                                        
230-240Welsh Pool Road
 Exton, PA      154   851   128   170   963   1,133   210  1975/1997  (o)
264 Welsh Pool Road
 Exton, PA      147   811   121   162   918   1,079   206  1975/1996  (o)
254 Welsh Pool Road
 Exton, PA      152   842   463   184   1,273   1,457   332  1975/1998  (o)
213 Welsh Pool Road
 Exton, PA      149   827   171   173   974   1,147   217  1975/1998  (o)
251 Welsh Pool Road
 Exton, PA      144   796   274   159   1,056   1,214   206  1975/1991  (o)
253-255Welsh Pool Road
 Exton, PA      113   626   176   125   790   915   171  1975/1980  (o)
151-161Philips Road
 Exton, PA      191   1,059   303   229   1,324   1,553   318  1975/1990  (o)
216 Philips Road
 Exton, PA      199   1,100   238   220   1,317   1,537   290  1985  (o)
964 Postal Road
 Lehigh, PA      215   1,216   116   224   1,322   1,546   192  1986  (o)
966 Postal Road
 Lehigh, PA      268   1,517   125   279   1,630   1,910   245  1987  (o)


S-24


Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
999 Postal Road
 Lehigh, PA      439   2,486   644   458   3,112   3,569   454  1988  (o)
7331 William Avenue
 Lehigh, PA      311   1,764   144   325   1,894   2,219   271  1989  (o)
7350 William Ave. 
 Lehigh, PA      552   3,128   699   576   3,803   4,379   766  1989  (o)
7377 William Ave. 
 Lehigh, PA      290   1,645   229   303   1,861   2,164   307  1989  (o)
2000 Cabot Boulevard West
 Langhorne, PA      414   2,346   646   424   2,982   3,406   362  1984  (o)
2005 Cabot Boulevard West
 Langhorne, PA      315   1,785   218   322   1,995   2,317   262  1984  (o)
2010 Cabot Boulevard West
 Langhorne, PA      513   2,907   596   525   3,490   4,015   525  1984  (o)
2200 Cabot Boulevard West
 Langhorne, PA      428   2,427   346   438   2,763   3,201   400  1979  (o)
2260-2270Cabot Boulevard West
 Langhorne, PA      361   2,044   453   369   2,488   2,858   351  1980  (o)
3000 Cabot Boulevard West
 Langhorne, PA      509   2,886   733   521   3,607   4,128   561  1986  (o)
180 Wheeler Court
 Langhorne, PA      447   2,533   178   458   2,700   3,157   346  1974  (o)
2512 Metropolitan Drive
 Trevose, PA      242   1,369   218   248   1,581   1,828   221  1981  (o)
2515 Metropolitan Drive
 Trevose, PA      259   1,466   97   265   1,557   1,822   221  1974  (o)
2450 Metropolitan Drive
 Trevose, PA      571   3,234   725   586   3,944   4,530   589  1983  (o)
4667 Somerton Road
 Trevose, PA      637   3,608   751   652   4,344   4,996   736  1974  (o)
835 Wheeler Way
 Langhorne, PA      293   1,658   477   319   2,107   2,427   366  1974  (o)
14 McFadden Road
 Palmer, PA      600   1,349   56   625   1,380   2,005   176  1994/2000  (o)
2801 Red Lion Road
 Philadelphia, PA      950   5,916   88   964   5,990   6,954   865  1969/90  (o)
3240 S.78th Street
 Philadelphia, PA      515   1,245   70   539   1,291   1,830   73  1980  (o)
Phoenix
                                        
1045 South Edward Drive
 Tempe, AZ      390   2,160   86   394   2,242   2,636   433  1976  (o)
46 N. 49th Ave. 
 Phoenix, AZ      283   1,704   732   283   2,436   2,719   459  1986  (o)
240 N. 48th Ave. 
 Phoenix, AZ      482   1,913   96   482   2,009   2,491   293  1977  (o)
220 N. 48th Ave. 
 Phoenix, AZ      530   1,726   252   531   1,977   2,508   257  1977  (o)
54 N. 48th Ave. 
 Phoenix, AZ      130   625   50   131   674   805   94  1977  (o)
64 N. 48th Ave. 
 Phoenix, AZ      180   458   55   181   512   693   79  1977  (o)
236 N. 48th Ave. 
 Phoenix, AZ      120   322   42   120   363   484   50  1977  (o)
10 S. 48th Ave. 
 Phoenix, AZ      510   1,687   170   513   1,855   2,367   249  1977  (o)
115 E. Watkins St. 
 Phoenix, AZ      170   816   112   171   928   1,098   120  1979  (o)
135 E. Watkins St. 
 Phoenix, AZ      380   1,962   127   382   2,087   2,469   280  1977  (o)
10220 S. 51st Street
 Phoenix, AZ      400   1,493   42   406   1,529   1,935   174  1985  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
50 South 56th Street
 Chandler, AZ      1,200   3,333   (49)  1,207   3,277   4,484   236  1991/97  (o)
4701 W. Jefferson
 Phoenix, AZ      926   2,195   628   929   2,820   3,749   322  1984  (o)
8150 S. Kyrene Road
 Tempe, AZ      1,597   4,065   107   1,633   4,137   5,769   178  1999  (o)
7102 W. Roosevelt(j)
 Phoenix, AZ      1,613   6,451   88   1,620   6,532   8,152   65  1998  (o)
4137 West Adams Street
 Phoenix, AZ      990   2,661   131   1,029   2,753   3,782   30  1985/92  (o)
Portland
                                        
2315 NW 21st Place
 Portland, OR      301   1,247   38   309   1,277   1,586   59  1966/79  (o)
Salt Lake City
                                        
512 Lawndale Drive(f)
 Salt Lake City, UT      2,705   15,749   2,985   2,705   18,733   21,438   4,806  1981  (o)
1270 West 2320 South
 West Valley, UT      138   784   144   143   924   1,067   232  1986/92  (o)
1275 West 2240 South
 West Valley, UT      395   2,241   473   408   2,702   3,109   652  1986/92  (o)
1288 West 2240 South
 West Valley, UT      119   672   180   123   849   971   249  1986/92  (o)
2235 South 1300 West
 West Valley, UT      198   1,120   259   204   1,373   1,577   376  1986/92  (o)
1293 West 2200 South
 West Valley, UT      158   896   202   163   1,093   1,256   309  1986/92  (o)
1279 West 2200 South
 West Valley, UT      198   1,120   56   204   1,170   1,374   270  1986/92  (o)
1272 West 2240 South
 West Valley, UT      336   1,905   437   347   2,331   2,677   694  1986/92  (o)
1149 West 2240 South
 West Valley, UT      217   1,232   99   225   1,324   1,549   294  1986/92  (o)
1142 West 2320 South
 West Valley, UT      217   1,232   139   225   1,364   1,588   346  1997  (o)
1152 West 2240 South
 West Valley, UT      2,067      3,549   2,114   3,503   5,617   542  1999  (o)
369 Orange Street
 Salt Lake City, UT      600   2,855   170   602   3,022   3,625   375  1980  (o)
2323 South 900 W
 Salt Lake City, UT      886   2,995   55   898   3,037   3,936   209  1972  (o)
9140 South 150 East-Eckman
 Sandy City, UT      1,417   3,668   192   1,580   3,697   5,277   65  1984/2006  (o)
4625 West 1730 South
 Salt Lake City, UT      903   4,005   17   907   4,018   4,925   43  1997  (o)
1815-1957South 4650 West
 Salt Lake City, UT      1,707   10,873   161   1,713   11,028   12,741   101  1997  (o)
1330 W. 3300 South Avenue
 Ogden, UT      1,100   2,353   654   1,100   3,007   4,107   448  1982  (o)
4517 West 1730 South
 Salt Lake City, UT      704   2,737   220   748   2,913   3,661   29  1989  (o)
San Diego
                                        
9051 Siempre Viva Rd
 San Diego, CA      540   1,598   189   541   1,786   2,327   224  1989  (o)
9163 Siempre Viva Rd
 San Diego, CA      430   1,621   210   431   1,830   2,261   227  1989  (o)
9295 Siempre Viva Rd
 San Diego, CA      540   1,569   123   541   1,691   2,232   195  1989  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
9255 Customhouse Plaza
 San Diego, CA      3,230   11,030   902   3,234   11,928   15,162   1,401  1989  (o)
16275 Technology Drive
 San Diego, CA      2,848   8,641   42   2,859   8,672   11,531   367  1963/85  (o)
6305 El Camino Real(j)
 Carlsbad, CA      1,590   6,360   0   1,590   6,360   7,950   85  1980  (o)
42374 Avenida Alvarado(c)
 Temecula, CA      447   2,529   336   462   2,849   3,311   283  1987  (o)
9375 Customhouse Plaza
 San Diego, CA      430   1,384   287   431   1,670   2,101   227  1989  (o)
9465 Customhouse Plaza
 San Diego, CA      430   1,437   226   431   1,662   2,093   237  1989  (o)
9485 Customhouse Plaza
 San Diego, CA      1,200   2,792   286   1,201   3,077   4,278   364  1989  (o)
2675 Customhouse Court
 San Diego, CA      590   2,082   388   591   2,469   3,060   259  1989  (o)
2325 Camino Vida Roble(j)
 Carlsbad, CA      1,441   1,239   37   1,446   1,271   2,717   52  1981/98  (o)
2335 Camino Vida Roble
 Carlsbad, CA      817   762   27   820   786   1,606   39  1981/98  (o)
2345 Camino Vida Roble
 Carlsbad, CA      562   456   28   564   481   1,046   25  1981/98  (o)
2355 Camino Vida Roble
 Carlsbad, CA      481   365   33   483   396   879   23  1981/98  (o)
2365 Camino Vida Roble
 Carlsbad, CA      1,098   630   8   1,102   634   1,736   43  1981/98  (o)
2375 Camino Vida Roble(j)
 Carlsbad, CA      1,210   874   121   1,214   991   2,205   50  1981/98  (o)
6451 El Camino Real(j)
 Carlsbad, CA      2,885   1,931   52   2,894   1,973   4,868   98  1986/98  (o)
Southern New Jersey
                                        
5 North Olnev Ave
 Cherry Hill, NJ      157   1,524   (451)  157   1,073   1,229   204  1963/1985  (o)
4 Springdale Road(c)
 Cherry Hill, NJ      332   1,853   1,271   332   3,124   3,456   594  1963/85  (o)
8 Springdale Road
 Cherry Hill, NJ      258   1,436   874   258   2,311   2,568   505  1966  (o)
2050 Springdale Road
 Cherry Hill, NJ      277   1,545   1,149   277   2,693   2,970   626  1965  (o)
16 Springdale Road
 Cherry Hill, NJ      240   1,336   134   240   1,471   1,710   312  1967  (o)
5 Esterbrook Lane
 Cherry Hill, NJ      240   1,336   236   240   1,572   1,812   329  1966/88  (o)
2 Pin Oak Lane
 Cherry Hill, NJ      314   1,757   695   314   2,452   2,766   552  1968  (o)
28 Springdale Road
 Cherry Hill, NJ      190   1,060   211   190   1,272   1,462   270  1967  (o)
3 Esterbrook Lane
 Cherry Hill, NJ      198   1,102   486   198   1,588   1,786   328  1968  (o)
4 Esterbrook Lane(j)
 Cherry Hill, NJ      232   1,294   44   232   1,338   1,570   291  1969  (o)
26 Springdale Road
 Cherry Hill, NJ      226   1,257   555   226   1,811   2,037   375  1968  (o)
1 Keystone Ave
 Cherry Hill, NJ      218   1,223   973   218   2,196   2,415   473  1969  (o)
21 Olnev Ave
 Cherry Hill, NJ      68   380   75   68   455   523   93  1969  (o)
19 Olnev Ave
 Cherry Hill, NJ      200   1,119   1,160   200   2,279   2,479   444  1971  (o)
2 Keystone Ave
 Cherry Hill, NJ      214   1,194   559   214   1,753   1,967   404  1970  (o)
18 Olnev Ave
 Cherry Hill, NJ      247   1,382   428   247   1,810   2,057   327  1974  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
2030 Springdale Rod
 Cherry Hill, NJ      523   2,914   1,417   523   4,331   4,854   972  1977  (o)
111 Whittendale Drive
 Morrestown, NJ      522   2,916   130   522   3,046   3,568   547  1991/96  (o)
9 Whittendale
 Morrestown, NJ      337   1,911   100   343   2,005   2,348   277  2000  (o)
1931 Olney Road
 Cherry Hill, NJ      262   1,486   101   267   1,582   1,849   182  1969  (o)
7851 Airport
 Pennsauken, NJ      160   508   382   163   888   1,050   157  1966  (o)
103 Central
 Mt. Laurel, NJ      610   1,847   1,561   619   3,398   4,018   625  1970  (o)
7890 Airport Hwy/7015 Central
 Pennsauken, NJ      300   989   1,062   425   1,926   2,351   442  1969  (o)
999 Grand Avenue
 Hammonton, NJ  (u)  969   8,793   713   979   9,495   10,475   940  1980  (o)
7860-7870Airport
 Pennsauken, NJ      120   366   286   122   650   772   114  1968  (o)
855 Hylton Road(j)
 Pennsauken, NJ      264   1,025   105   269   1,125   1,394   37  1986  (o)
St. Louis
                                        
8921-8971Fost Avenue
 Hazelwood, MO      431   2,479   114   431   2,593   3,025   834  1971  (o)
9043-9083Frost Avenue
 Hazelwood, MO      319   1,838   750   319   2,588   2,907   771  1970/77  (o)
10431-10449Midwest Industrial Blvd
 Olivette, MO      237   1,360   524   237   1,884   2,121   689  1967  (o)
10751 Midwest Industrial Boulevard
 Olivette, MO      193   1,119   355   194   1,474   1,667   527  1965  (o)
6951 N Hanley(c)
 Hazelwood, MO      405   2,295   1,398   419   3,679   4,098   922  1965  (o)
1037 Warson — Bldg A(j)
 St. Louis, MO      246   1,359   364   251   1,718   1,969   178  1968  (o)
1037 Warson — Bldg B(j)
 St. Louis, MO      380   2,103   1,604   388   3,698   4,086   330  1968  (o)
1037 Warson — Bldg C
 St. Louis, MO      303   1,680   1,085   310   2,759   3,068   309  1968  (o)
1037 Warson — Bldg D(j)
 St. Louis, MO      353   1,952   364   360   2,308   2,668   253  1968  (o)
6821-6857Hazelwood Ave
 Berkeley, MO      985   6,205   702   985   6,907   7,892   868  2001  (o)
13701 Rider Trail North
 Earth City, MO      800   2,099   545   804   2,640   3,444   516  1985  (o)
1908-2000Innerbelt(c)
 Overland, MO      1,590   9,026   826   1,591   9,852   11,442   1,454  1987  (o)
8449-95Mid-County Industrial
 Vinita Park, MO      520   1,590   217   520   1,807   2,327   294  1988  (o)
84104-76Mid County Industrial
 Vinita Park, MO      540   2,109   50   540   2,159   2,699   312  1989  (o)
2001 Innerbelt Business Center
 Overland, MO      1,050   4,451   169   1,050   4,620   5,670   673  1987  (o)
9060 Latty Avenue
 Berkeley, MO      687   1,947   38   698   1,974   2,672   193  1965  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
21-25Gateway Commerce Center
 Edwardsville, IL  (v)  1,874   31,958   942   1,927   32,847   34,774   392  2003/06  (o)
Tampa
                                        
6202 Benjamin Road
 Tampa, FL      203   1,151   512   211   1,655   1,866   486  1981  (o)
6204 Benjamin Road
 Tampa, FL      432   2,445   560   454   2,982   3,436   689  1982  (o)
6206 Benjamin Road
 Tampa, FL      397   2,251   481   416   2,713   3,129   667  1983  (o)
6302 Benjamin Road
 Tampa, FL      214   1,212   236   224   1,438   1,662   338  1983  (o)
6304 Benjamin Road
 Tampa, FL      201   1,138   216   209   1,346   1,555   333  1984  (o)
6306 Benjamin Road
 Tampa, FL      257   1,457   261   269   1,706   1,975   386  1984  (o)
6308 Benjamin Road
 Tampa, FL      345   1,958   313   362   2,254   2,616   531  1984  (o)
5313 Johns Road
 Tampa, FL      204   1,159   220   257   1,326   1,583   301  1991  (o)
5525 Johns Road
 Tampa, FL      192   1,086   389   200   1,468   1,667   266  1993  (o)
5709 Johns Road
 Tampa, FL      192   1,086   160   200   1,239   1,438   318  1990  (o)
5711 Johns Road
 Tampa, FL      243   1,376   174   255   1,537   1,793   341  1990  (o)
5453 W Waters Avenue
 Tampa, FL      71   402   116   82   507   589   125  1987  (o)
5455 W Waters Avenue
 Tampa, FL      307   1,742   377   326   2,101   2,426   475  1987  (o)
5553 W Waters Avenue
 Tampa, FL      307   1,742   262   326   1,986   2,312   448  1987  (o)
5501 W Waters Avenue
 Tampa, FL      154   871   169   142   1,051   1,194   276  1990  (o)
5503 W Waters Avenue
 Tampa, FL      71   402   40   66   447   513   108  1990  (o)
5555 W Waters Avenue
 Tampa, FL      213   1,206   140   221   1,337   1,559   325  1990  (o)
5557 W Waters Avenue
 Tampa, FL      59   335   47   62   379   442   86  1990  (o)
5463 W Waters Avenue
 Tampa, FL      497   2,751   770   560   3,458   4,018   770  1996  (o)
5461 W Waters
 Tampa, FL      261      1,226   265   1,222   1,487   240  1998  (o)
5481 W. Waters Avenue
 Tampa, FL      558      2,307   561   2,304   2,865   453  1999  (o)
4515-4519George Road
 Tampa, FL      633   3,587   491   640   4,072   4,712   616  1985  (o)
6301 Benjamin Road
 Tampa, FL      292   1,657   84   295   1,738   2,033   254  1986  (o)
5723 Benjamin Road
 Tampa, FL      406   2,301   251   409   2,548   2,958   326  1986  (o)
6313 Benjamin Road
 Tampa, FL      229   1,296   267   231   1,561   1,792   245  1986  (o)
5801 Benjamin Road
 Tampa, FL      564   3,197   163   569   3,355   3,924   477  1986  (o)
5802 Benjamin Road
 Tampa, FL      686   3,889   607   692   4,491   5,183   672  1986  (o)
5925 Benjamin Road
 Tampa, FL      328   1,859   370   331   2,227   2,557   323  1986  (o)
6089 Johns Road
 Tampa, FL  (w)  180   987   93   186   1,074   1,260   103  1985  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
6091 Johns Road
 Tampa, FL  (w)  140   730   33   144   759   903   72  1986  (o)
6103 Johns Road
 Tampa, FL  (w)  220   1,160   60   226   1,214   1,440   114  1986  (o)
6201 Johns Road
 Tampa, FL  (w)  200   1,107   96   205   1,198   1,403   134  1981  (o)
6203 Johns Road
 Tampa, FL  (w)  300   1,460   111   311   1,560   1,871   179  1987  (o)
6205 Johns Road
 Tampa, FL  (w)  270   1,363   32   278   1,388   1,665   92  2000  (o)
6101 Johns Road
 Tampa, FL      210   833   71   216   898   1,114   97  1981  (o)
4908 Tampa West Blvd
 Tampa, FL      2,622   8,643   36   2,635   8,666   11,301   558  1979/83  (o)
7201-7245Bryan Dairy Road(j)(c)
 Largo, FL      1,895   5,408   59   1,909   5,453   7,362   195  1988  (o)
11701 Belcher Road South(j)
 Largo, FL      1,657   2,768   109   1,669   2,864   4,533   123  1985  (o)
4900-4914Creekside Drive(aa)
 Clearwater, FL      3,702   7,338   108   3,730   7,418   11,148   325  1985  (o)
4908 Creekside Drive(j)
 Clearwater, FL      506   645   17   509   659   1,168   30  1985  (o)
7381-7431114th Avenue North(j)(z)
 Largo, FL      1,711   6,662   12   1,362   7,023   8,385   432  1986  (o)
12345 Starkey Road(j)
 Largo, FL      898   2,078   15   905   2,087   2,992   77  1980  (o)
Toronto
                                        
135 Dundas Street
 Cambridge Ontario, Canada      3,128   4,958   137   3,179   5,044   8,223   724  1953/59  (o)
678 Erie Street
 Stratford Ontario, Canada      786   557   77   828   592   1,420   261  1955/76  (o)
777 Bayly Street West
 Ajax Ontario, Canada      7,224   13,156   828   7,539   13,669   21,208   120  1987  (o)
Other
                                        
3501 Maple Street(j)
 Abilene, TX      67   1,057   1,422   266   2,280   2,546   1,057  1980  (o)
4200 West Harry Street(d)
 Wichita, KS      193   2,224   1,777   532   3,662   4,194   2,040  1972  (o)
6601 S. 33rd Street
 McAllen, TX      231   1,276   166   233   1,440   1,673   304  1975  (o)
9601A Dessau Road
 Austin, TX      255      2,204   366   2,094   2,459   544  1999  (o)
9601B Dessau Road
 Austin, TX      248      1,747   355   1,639   1,994   282  1999  (o)
9601C Dessau Road
 Austin, TX      248      2,204   355   2,097   2,452   819  1999  (o)
6266 Hurt Road
 Horn Lake, MS      427      3,211   427   3,212   3,638   346  1963  (o)
6266 Hurt Road Building B(j)
 Horn Lake, MS            868   99   769   868   48  1963  (o)
6266 Hurt Road Building C
 Horn Lake, MS            292   278   14   292   1  1963  (o)
7601 NW 107th Terrace
 Kansas City, MO      746   4,712   30   750   4,738   5,488   578  1982/87  (o)


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Table of Contents

                                         
             (s)
                  
             Costs
                  
             Capitalized
                  
             Subsequent to
                  
             Acquisition or
  Gross Amount Carried
         
       (b)
  Completion
  At Close of Period 12/31/06  Accumulated
      
  Location
 (a)
  Initial Cost  and Valuation
     Building and
     Depreciation
  Year Built/
 Depreciable
 
Building Address
 
(City/State)
 Encumbrances  Land  Buildings  Provision  Land  Improvements  Total  12/31/06  Renovated Lives (Years) 
  (Dollars in thousands) 
 
12626 Silicon Drive
 San Antonio, TX      768   3,448   22   779   3,459   4,238   253  1981/95  (o)
3100 Pinson Valley Parkway
 Birmingham, AL      303   742   20   310   756   1,065   45  1970  (o)
1245 N. Hearne Avenue
 Shreveport, LA      99   1,263   32   102   1,292   1,394   91  1981/2004  (o)
10330 I Street
 Omaha, NE      1,808   8,340   5   1,809   8,344   10,153   448  1979/2005  (o)
                                         
Redevelopments/Developments/ Developable Land
        62,777   3,203   59,052   66,297   58,738   125,035   759       
                                         
         556,544  $2,151,303  $581,553  $574,654  $2,714,749  $3,289,403  $473,882(k)      
                                         


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Table of Contents

NOTES:
 
(a) See description of encumbrances in Note 5 to Notes to Consolidated Financial Statements.
 
(b) Initial cost for each respective property is tangible purchase price allocated in accordance with SFAS No. 141.
 
(c) Comprised of two properties.
 
(d) Comprised of three properties.
 
(e) Comprised of four properties.
 
(f) Comprised of 28 properties.
 
(g) These properties represent developable land and redevelopments that have not been placed in service.
 
(h) Improvements are net of write-off of fully depreciated assets.
 
(j) Property is not in-service as of December 31, 2006.
 
(k)
 
             
        Gross Amount
 
  Amounts
     Carried At
 
  Included
  Amounts Within
  Close of Period
 
  in Real Estate
  Net Investment
  December 31,
 
  Held for Sale  in Real Estate  2006 
 
Land
 $16,229  $558,425  $574,654 
Buildings & Improvements
  88,465   2,626,284   2,714,749 
Accumulated Depreciation
  (8,464)  (465,418)  (473,882)
             
Subtotal
  96,230   2,719,291   2,815,521 
Construction in Progress
  6,960   35,019   41,979 
Leasing Commissions, Net and Deferred Leasing Intangibles
  12,771      12,771 
             
Total at December 31, 2006
 $115,961  $2,754,310  $2,870,271 
             
 
(l) This property collateralizes a $3.0 million mortgage loan which matures on May 1, 2016.
 
(m) This property collateralizes a $15.2 million mortgage loan which matures on December 1, 2010.
 
(n) This property collateralizes a $5.1 million mortgage loan which matures on December 1, 2019.
 
(o) This property collateralizes a $1.6 million mortgage loan which matures on January 1, 2013.
 
(p) These properties collateralize a $1.8 million mortgage loan which matures on September 1, 2009.
 
(q) This property collateralizes a $2.4 million mortgage loan which matures on January 1, 2012.
 
(r) This property collateralizes a $1.9 million mortgage loan which matures on June 1, 2014.
 
(s) This property collateralizes a $5.3 million mortgage loan which matures on December 1, 2019.
 
(t) This property collateralizes a $1.9 million mortgage loan which matures on September 30, 2024.
 
(u) This property collateralizes a $6.7 million mortgage loan which matures on March 1, 2011.
 
(v) This property collateralizes a $14.2 million mortgage loan and a $12.0 million mortgage loan which both mature on January 1, 2014.
 
(w) These properties collateralize a $6.0 million mortgage loan which matures on July 1, 2009.
 
(x) This property collateralizes a $0.8 million mortgage loan which matures on February 1, 2017.
 
(y) Comprised of five properties.
 
(z) Comprised of six properties.
 
(aa) Comprised of 8 properties.
 
At December 31, 2006, the aggregate cost of land and buildings and equipment for federal income tax purpose was approximately $3.1 billion (excluding construction in progress.)

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FIRST INDUSTRIAL REALTY TRUST, INC.
 
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
As of December 31, 2006
 
The changes in total real estate assets for the three years ended December 31, 2006 are as follows:
 
             
  2006  2005  2004 
  (Dollars in thousands) 
 
Balance, Beginning of Year
 $3,278,740  $2,910,468  $2,738,034 
Acquisition, Construction Costs and Improvements
  763,571   875,028   508,572 
Disposition of Assets
  (693,159)  (473,743)  (313,940)
Write-off of Fully Depreciated Assets
  (17,770)  (33,013)  (22,198)
             
Balance, End of Year
 $3,331,382  $3,278,740  $2,910,468 
             
 
The changes in accumulated depreciation for the three years ended December 31, 2006 are as follows:
 
             
  2006  2005  2004 
 
Balance, Beginning of Year
 $412,039  $381,297  $349,252 
Depreciation for Year
  121,347   99,338   82,757 
Disposition of Assets
  (41,734)  (35,946)  (28,514)
Write-off of Fully Depreciated Assets
  (17,770)  (32,650)  (22,198)
             
Balance, End of Year
 $473,882  $412,039  $381,297 
             


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Table of Contents

 
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
FIRST INDUSTRIAL REALTY TRUST, INC.
 
  By: 
/s/  Michael W. Brennan
Michael W. Brennan
President, Chief Executive Officer and Director
(Principal Executive Officer)
 
Date: February 28, 2007
 
  By: 
/s/  Michael J. Havala
Michael J. Havala
Chief Financial Officer
(Principal Financial Officer)
 
Date: February 28, 2007
 
  By: 
/s/  Scott A. Musil
Scott A. Musil
Chief Accounting Officer
(Principal Accounting Officer)
 
Date: February 28, 2007
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
       
Signature
 
Title
 
Date
 
/s/  Jay H. Shidler

Jay H. Shidler
 Chairman of the Board of Directors February 28, 2007
     
/s/  Michael W. Brennan

Michael W. Brennan
 President, Chief Executive Officer and Director February 28, 2007
     
/s/  Michael G. Damone

Michael G. Damone
 Director of Strategic Planning and Director February 28, 2007
     
/s/  Kevin W. Lynch

Kevin W. Lynch
 Director February 28, 2007
     
/s/  Robert D. Newman

Robert D. Newman
 Director February 28, 2007


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Table of Contents

       
Signature
 
Title
 
Date
 
/s/  John E. Rau

John E. Rau
 Director February 28, 2007
     
/s/  Robert J. Slater

Robert J. Slater
 Director February 28, 2007
     
/s/  W. Edwin Tyler

W. Edwin Tyler
 Director February 28, 2007
     
/s/  J. Steven Wilson

J. Steven Wilson
 Director February 28, 2007


S-35