UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FIRST INDUSTRIAL REALTY TRUST, INC.

Maryland		36-3935116
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
311 S. Wacker Drive, Suite 4000,		60606
Chicago, Illinois		(Zip Code)
(Address of principal executive offices)

(312) 344-4300
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 8.01. Other Events

     During the period from January 1, 2008 to March 31, 2008, we sold 38 industrial properties comprising approximately 3.2 million square feet of Gross Leasable Area (“GLA”) that meet the criteria established by the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”) to be included in discontinued operations. Two of these 38 properties were classified as held for sale at December 31, 2007 and were already included in discontinued operations. In addition, at March 31, 2008, we classified 22 industrial properties comprising approximately 1.2 million square feet of GLA as held for sale. In accordance with FAS 144, the results of operations of these 22 industrial properties held for sale at March 31, 2008 are included in discontinued operations.

     FAS 144 requires that we report the results of operations and gains/(losses) on the sale of industrial properties sold and the results of operations from properties that are classified as held for sale at March 31, 2008 as income from discontinued operations for each period presented in our quarterly report filed on Form 10-Q for the first quarter ended March 31, 2008. We are filing this Form 8-K to reclassify the results of operations of the sold industrial properties that previously were not classified as held for sale at December 31, 2007 and the industrial properties held for sale at March 31, 2008 as discontinued operations in our historical financial statements for each of the years ended December 31, 2007, 2006, 2005, 2004, and 2003. This reclassification has no effect on our reported net income available to common stockholders.

     This report on Form 8-K updates certain information in Items 6, 7, 8 and 15 of our Annual Report on Form 10-K for the year ended December 31, 2007 to reflect the reclassification of operations from properties sold from January 1, 2008 to March 31, 2008 that were not previously classified as held for sale at December 31, 2007 and industrial properties held for sale at March 31, 2008 that were not previously classified as held for sale at December 31, 2007 as discontinued operations for all periods presented. As a matter of convenience, we have provided a complete restatement of the updated items, incorporating the necessary changes. All other items of the Annual Report on Form 10-K for the year ended December 31, 2007 remain unchanged. No attempt has been made to update matters in our Annual Report on Form 10-K for the year ended December 31, 2007 except to reflect the retrospective adjustment requirements of FAS 144. Readers should refer to our quarterly report on Form 10-Q and current reports on Form 8-K for periods subsequent to December 31, 2007 for further information.

     Unless the context otherwise requires, the terms the “Company,” “we,” “us,” and “our” refer to First Industrial Realty Trust, Inc., First Industrial, L.P. and their other controlled subsidiaries. We refer to our operating partnership, First Industrial, L.P., as the “Operating Partnership,” and our taxable REIT subsidiary, First Industrial Investment, Inc., as the “TRS.”

Item 9.01. Financial Statements and Exhibits

     (c) Exhibits:

Exhibits		Description
23.1*		Consent of PricewaterhouseCoopers LLP.
99.1*		Revised “Item 6. Selected Financial Data” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 to reflect the impact of the reclassification described in Item 8.01 of this Form 8-K.
99.2 *		Revised “Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 to reflect the impact of the reclassification described in Item 8.01 of this Form 8-K.
99.3 *		Revised “Item 8. Financial Statements and Supplementary Data” and “Item 15. Exhibits and Financial Statement Schedules” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 to reflect the impact of the reclassification described in Item 8.01 of this Form 8-K.

SIGNATURES

     Pursuant to the requirements 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.

Date: July 1, 2008

Date: July 1, 2008

Date: July 1, 2008

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File Nos. 33-95190, 333-039999, 333-21887, 333-57355, 333-53835, 333-64743, 333-38850, 33-104211, 333-70638, 333-142470, 333-142472, and 333-142474) and Form S-8 (File Nos. 33-95188, 333-36699, 333-45317, 333-67824 and 333-100630) of First Industrial Realty Trust, Inc. of our report dated February 25, 2008, except with respect to our opinion on the consolidated financial statements insofar as it relates to the effects of discontinued operations as described in Note 19, as to which the date is July 1, 2008, relating to the consolidated financial statements, financial statement schedule and the effectiveness of internal control over financial reporting of First Industrial Realty Trust, Inc., and our report dated May 16, 2006, except with respect to our opinion on the consolidated statement of operations in so far as it relates to the effects of discontinued operations described in Note 5, as to which the date is February 25, 2008, relating to the consolidated financial statements of FirstCal Industrial, LLC, which appears in this Current Report on Form 8-K.

/s/ PricewaterhouseCoopers LLP
Chicago, Illinois

July 1, 2008

Exbibit 99.1

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 Consolidated Financial Statements and Notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Current Report on Form 8-K. The historical statements of operations for the years ended December 31, 2007, 2006, 2005, 2004, and 2003 include the results of operations of the Company as derived from our audited financial statements, adjusted for discontinued operations. 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) we 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, 2007, 2006, 2005, 2004, and 2003 include the balances of the Company as derived from our audited financial statements.

		Year Ended				Year Ended				Year Ended				Year Ended				Year Ended
		12/31/07				12/31/06				12/31/05				12/31/04				12/31/03
		(In thousands, except per unit and property data)
Statement of Operations Data:
Total Revenues		$	404,956			$	323,755			$	261,984			$	208,705			$	192,718
Interest Income			1,926				1,614				1,486				3,632				2,416
Mark-to-Market/(Loss) Gain on Settlement of Interest Rate Protection Agreements			—				(3,112	)			811				1,583				—
Property Expenses			(118,708	)			(105,343	)			(85,192	)			(69,680	)			(64,903	)
General and Administrative Expense			(92,101	)			(77,497	)			(55,812	)			(39,569	)			(26,953	)
Interest Expense			(119,314	)			(121,141	)			(108,339	)			(98,636	)			(94,895	)
Amortization of Deferred Financing Costs			(3,210	)			(2,666	)			(2,125	)			(1,931	)			(1,764	)
Depreciation and Other Amortization			(145,905	)			(123,151	)			(87,358	)			(62,787	)			(51,078	)
Contractor Expenses			(34,553	)			(10,263	)			(15,574	)			—				—
(Loss) Gain from Early Retirement from Debt			(393	)			—				82				(515	)			(1,466	)
Equity in Income of Joint Ventures			30,045				30,673				3,699				37,301				539
Income Tax Benefit			10,655				9,882				14,337				8,195				5,878
Minority Interest Allocable to Continuing Operations			11,387				12,875				10,822				4,952				8,649
Loss from Continuing Operations			(55,215	)			(64,374	)			(61,179	)			(8,750	)			(30,859	)
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $244,962, $213,442, $132,139, $88,245 and $79,485 for the Years Ended December 31, 2007, 2006, 2005, 2004, and 2003, respectively)			272,474				249,996				175,973				138,215				160,302
Provision for Income Taxes Allocable to Discontinued Operations (Including $36,032, $47,511, $20,529, $8,659 and $2,154 allocable to Gain on Sale of Real Estate for the Years ended December 31, 2007, 2006, 2005, 2004, and 2003, respectively)			(38,128	)			(51,102	)			(23,898	)			(11,275	)			(3,866	)
Minority Interest Allocable to Discontinued Operations			(29,621	)			(25,876	)			(20,013	)			(17,416	)			(23,043	)
Gain on Sale of Real Estate			9,425				6,071				29,550				16,755				15,794
Provision for Income Taxes Allocable to Gain on Sale of Real Estate			(3,082	)			(2,119	)			(10,871	)			(5,359	)			(2,614	)
Minority Interest Allocable to Gain on Sale of Real Estate			(802	)			(514	)			(2,458	)			(1,564	)			(1,941	)
Net Income			155,051				112,082				87,104				110,606				113,773
Redemption of Preferred Stock			(2,017	)			(672	)			—				(7,959	)			—
Preferred Dividends			(21,320	)			(21,424	)			(10,688	)			(14,488	)			(20,176	)
Net Income Available to Common Stockholders		$	131,714			$	89,986			$	76,416			$	88,159			$	93,597
Basic and Diluted Earnings Per Weighted

		Year Ended				Year Ended				Year Ended				Year Ended				Year Ended
		12/31/07				12/31/06				12/31/05				12/31/04				12/31/03
		(In thousands, except per unit and property data)
Average Common Share Outstanding:
Loss from Continuing Operations Available to Common Stockholders		$	(1.66	)		$	(1.89	)		$	(1.31	)		$	(0.53	)		$	(1.03	)
Net Income Available to Common Stockholders		$	2.99			$	2.04			$	1.80			$	2.17			$	2.43
Distributions Per Share		$	2.8500			$	2.8100			$	2.7850			$	2.7500			$	2.7400
Basic and Diluted Weighted Average Number of Common Shares Outstanding			44,086				44,012				42,431				40,557				38,542
Net Income		$	155,051			$	112,082			$	87,104			$	110,606			$	113,773
Other Comprehensive Income (Loss):
Settlement of Interest Rate Protection Agreements			(4,261	)			(1,729	)			—				6,816				—
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income			—				—				(159	)			—				—
Mark-to-Market of Interest Rate Protection Agreements and Interest Rate Swap Agreements, Net of Tax Provision			3,819				(2,800	)			(1,414	)			106				251
Amortization of Interest Rate Protection Agreements			(916	)			(912	)			(1,085	)			(512	)			198
Foreign Currency Translation Adjustment, Net of Tax Provision			2,134				—				—				—				—
Other Comprehensive (Income) Loss Allocable to Minority Interest			(142	)			698				837				—				—
Other Comprehensive Income		$	155,685			$	107,339			$	85,283			$	117,016			$	114,222
Balance Sheet Data (End of Period):
Real Estate, Before Accumulated Depreciation		$	3,326,268			$	3,219,728			$	3,260,761			$	2,856,474			$	2,738,034
Real Estate, After Accumulated Depreciation			2,816,287				2,754,310				2,850,195				2,478,091				2,388,782
Real Estate Held for Sale, Net			37,875				115,961				16,840				52,790				—
Total Assets			3,258,033				3,224,399				3,226,243				2,721,890				2,648,023
Mortgage Loans Payable, Net, Unsecured Lines of Credit and Senior Unsecured Debt, Net			1,946,670				1,834,658				1,813,702				1,574,929				1,453,798
Total Liabilities			2,183,755				2,048,873				2,020,361				1,719,463				1,591,732
Stockholders’ Equity			923,919				1,022,979				1,043,562				845,494				889,173
Other Data:
Cash Flow From Operating Activities		$	92,736			$	59,551			$	49,350			$	77,657			$	103,156
Cash Flow From Investing Activities			126,909				129,147				(371,654	)			9,992				29,037
Cash Flow From Financing Activities			(230,023	)			(180,800	)			325,617				(83,546	)			(131,372	)
Total In-Service Properties			804				858				884				827				834
Total In-Service GLA, in Square Feet			64,028,533				68,610,505				70,193,161				61,670,735				57,925,466
In-Service Occupancy Percentage			95	%			94	%			92	%			90	%			88	%

Exhibit 99.2

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 this Current Report on Form 8-K.

     In addition, the following discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend 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 are 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. Our 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: international, national, regional and local 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, competition, supply and demand for industrial properties in our current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts and risks related to doing business internationally (including foreign currency exchange risks). 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 our financial results, is included in Item 1A. “Risk Factors,” and in our other filings with the Securities and Exchange Commission (the “SEC”).

     The Company was organized in the state of Maryland on August 10, 1993. We are a real estate investment trust (“REIT”), as defined in the Internal Revenue Code of 1986 (the “Code”). We began operations on July 1, 1994. Our interests in our properties and land parcels are held through partnerships, corporations, and limited liability companies controlled, directly or indirectly, by us, including First Industrial, L.P. (the “Operating Partnership”), of which we are the sole general partner, as well as, among others, our taxable REIT subsidiary, First Industrial Investment, Inc. (the “TRS”), of which the Operating Partnership is the sole stockholder, all of whose operating data is consolidated with that of the Company as presented herein.

     We also own minority equity interests in, and provide services to, five joint ventures which invest in industrial properties (the “2003 Net Lease Joint Venture,” the “2005 Development/Repositioning Joint Venture,” the “2005 Core Joint Venture,” the “2006 Net Lease Co-Investment Program” and the “2006 Land/Development Joint Venture”). We also owned a minority interest in and provided property management services to a sixth joint venture (the “1998 Core Joint Venture”). On January 31, 2007, we purchased the 90% equity interest from the institutional investor in the 1998 Core Joint Venture. Effective January 31, 2007, the assets and liabilities and results of operations of the 1998 Core Joint Venture are consolidated with the Company since we effectively own 100% of the equity interest. Prior to January 31, 2007, the 1998 Core Joint Venture was accounted for under the equity method of accounting. Additionally, on December 28, 2007 we entered into two new joint ventures with institutional investors (the “2007 Canada Joint Venture” and the “2007 Europe Joint Venture”; together with 2003 Net Lease Joint Venture, 2005 Development/Repositioning Joint Venture, 2005 Core Joint Venture, the 2006 Net Lease Co-Investment Program, the 2006 Land/Development Joint Venture and the 1998 Core Joint Venture, the “Joint Ventures”). The operating data of our Joint Ventures is not consolidated with that of the Company as presented herein. However, the operating data of the 2005 Development/Repositioning Joint Venture, referred to as FirstCal Industrial, LLC, is separately presented on a consolidated basis, separate from that of the Company.

     We believe our financial condition and results of operations are, primarily, a function of our performance and our 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.

     We generate revenue primarily from rental income and tenant recoveries from long-term (generally three to six years) operating leases of our industrial properties and our 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. Our revenue growth is dependent, in part, on our ability to (i) increase rental income, through increasing either or both occupancy rates and rental rates at our properties and our 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 our properties and our joint ventures’ properties (as discussed below),

for our 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 our control. The leasing of property also entails various risks, including the risk of tenant default. If we were unable to maintain or increase occupancy rates and rental rates at our properties and our joint ventures’ properties or to maintain tenant recoveries and operating and certain other expenses consistent with historical levels and proportions, our revenue growth would be limited. Further, if a significant number of our tenants and our joint ventures’ tenants were unable to pay rent (including tenant recoveries) or if we or our joint ventures were unable to rent our properties on favorable terms, our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock would be adversely affected.

     Our revenue growth is also dependent, in part, on our ability and our joint ventures’ ability to acquire existing, and acquire and develop new, additional industrial properties on favorable terms. The Company itself, and through our 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 they are leased, generate revenue from rental income, tenant recoveries and fees, income from which, as discussed above, is a source of funds for our 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 our control. The acquisition and development of properties also entails various risks, including the risk that our investments and our joint ventures’ investments may not perform as expected. For example, acquired existing and acquired and developed new properties may not sustain and/or achieve anticipated occupancy and rental rate levels. With respect to acquired and developed new properties, we 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, we, as well as our 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, we and our joint ventures may not be able to finance the acquisition and development opportunities we identify. If we and our joint ventures were unable to acquire and develop sufficient additional properties on favorable terms, or if such investments did not perform as expected, our revenue growth would be limited and our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock would be adversely affected.

     We also generate income from the sale of our properties and our joint ventures’ properties (including existing buildings, buildings which we or our joint ventures have developed or re-developed on a merchant basis, and land). The Company itself and through our various joint ventures is continually engaged in, and our 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, we and our 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 our income and are a significant source of funds, in addition to revenues generated from rental income and tenant recoveries, for our distributions. Also, a significant portion of our 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 our control. The sale of properties also entails various risks, including competition from other sellers and the availability of attractive financing for potential buyers of our properties and our joint ventures’ properties. Further, our 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 we and our joint ventures were unable to sell properties on favorable terms, our income growth would be limited and our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock would be adversely affected.

     Currently, we utilize a portion of the net sales proceeds from property sales, borrowings under our unsecured line of credit (the “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 and to fund our equity commitments to our joint ventures. Access to external capital on favorable terms plays a key role in our financial condition and results of operations, as it impacts our cost of capital and our ability and cost to refinance existing indebtedness as it matures and to fund acquisitions, developments and contributions to our joint ventures or through the issuance, when and as warranted, of additional equity securities. Our ability to access external capital on favorable terms is dependent on various factors, including general market conditions, interest rates, credit ratings on our capital stock and debt, the market’s perception of our growth potential, our current and potential future earnings and cash distributions and the market price of our capital stock. If we were unable to access external capital on favorable terms, our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our common stock would be adversely affected.

CRITICAL ACCOUNTING POLICIES

     Our significant accounting policies are described in more detail in Note 3 to the consolidated financial statements. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

	•		We maintain an allowance for doubtful accounts which is based on estimates of potential losses which could result from the inability of our tenants to satisfy outstanding billings with us. The allowance for doubtful accounts is an estimate based on our assessment of the creditworthiness of our tenants.
	•		Properties are classified as held for sale when our management has approved the sales of such properties. When properties are classified as held for sale, we cease depreciating the properties and estimate the values of such properties and measure 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, we decide not to sell a property previously classified as held for sale, we will reclassify such property as held and used. We estimate the value of such property and measure 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.
	•		We review our properties on a quarterly basis for possible impairment and provide a provision if impairments are determined. We utilize 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. We review 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, we 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.
	•		We are engaged in the acquisition of individual properties as well as multi-property portfolios. In accordance with FAS No. 141, “Business Combinations” (“FAS 141”), we are required to allocate purchase price between land, building, tenant improvements, leasing commissions, in please leases, tenant relationship 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) our 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. In-place lease and tenant relationship values for acquired properties are recorded based on our evaluation of the specific characteristics of each tenant’s lease and our overall relationship with the respective tenant. The value allocated to in-place lease intangible assets is amortized to depreciation and amortization expense over the remaining lease term of the respective lease. The value allocated to tenant relationship is amortized to depreciation and amortization expense over the expected term of the relationship, which includes an estimate of the probability of lease renewal and its estimated term. We also must allocate purchase price on multi-property portfolios to individual properties. The allocation of purchase price is based our assessment of various characteristics of the markets where the property is located and the expected cash flows of the property.
	•		We capitalize (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 performing development, renovations or rehabilitation up to the time the property is substantially complete. The determination and calculation of certain costs requires estimates by us. Amounts included in capitalized costs are included in the investment basis of real estate assets.
	•		We analyze our investments in joint ventures to determine whether the joint venture should be accounted for under the equity method of accounting or consolidated into our financial statements based on standards set forth under FAS 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 Position 78-9, Accounting for Investments in Real Estate Ventures. Based on the guidance set forth in these

			pronouncements, we do not consolidate any of our joint venture investments because either the joint venture has been determined not to be a variable interest entity or it has been determined we are not the primary beneficiary. Our assessment of whether we are the primary beneficiary of a variable interest involves the consideration of various factors including the form of our ownership interest, our representation on the entity’s governing body, the size of our investment and future cash flows of the entity.
	•		In the preparation of our consolidated financial statements, significant management judgment is required to estimate our current and deferred income tax liabilities, and our compliance with REIT qualification requirements. Our estimates are based on our interpretation of tax laws. These estimates may have an impact on the income tax expense recognized. Adjustments may be required by a change in assessment of our deferred income tax assets and liabilities, changes due to audit adjustments by federal and state tax authorities, our inability to qualify as a REIT, and changes in tax laws. Adjustments required in any given period are included within the income tax provision.

RESULTS OF OPERATIONS

Comparison of Year Ended December 31, 2007 to Year Ended December 31, 2006

     Our net income available to common stockholders was $131.7 million and $90.0 million for the year ended December 31, 2007 and 2006, respectively. Basic and diluted net income available to common stockholders were $2.99 per share for the year ended December 31, 2007 and $2.04 per share for the year ended December 31, 2006.

     The tables below summarize our revenues, property expenses and depreciation and other amortization by various categories for the year ended December 31, 2007 and December 31, 2006. Same store properties are properties owned prior to January 1, 2006 and held as an operating property through December 31, 2007 and developments and redevelopments that were stabilized (generally defined as 90% occupied) prior to January 1, 2006 or were substantially completed for 12 months prior to January 1, 2006. Acquired properties are properties that were acquired subsequent to December 31, 2005 and held as an operating property through December 31, 2007. Sold properties are properties that were sold between January 1, 2006 and December 31, 2007. (Re)Developments and land are land parcels and developments and redevelopments that were not: a) substantially complete 12 months prior to January 1, 2006 or b) stabilized prior to January 1, 2006. Other revenues are derived from the operations of our maintenance company, fees earned from our joint ventures, and other miscellaneous revenues. Contractor revenues and expenses represent revenues earned and expenses incurred in connection with the TRS acting as general contractor to construct industrial properties, including industrial properties for the 2005 Development/Repositioning Joint Venture and also includes revenues and expenses related to the development of properties for third parties. Other expenses are derived from the operations of our maintenance company and other miscellaneous regional expenses.

     Our future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. Our future revenues and expenses may vary materially from historical rates.

     At December 31, 2007 and 2006, the occupancy rates of our same store properties were 94.1% and 92.3%, respectively.

		2007				2006				$ Change				% Change
		($ in 000’s)
REVENUES
Same Store Properties		$	301,404			$	289,761			$	11,643				4.0	%
Acquired Properties			55,724				16,844				38,880				230.8	%
Sold Properties			41,037				80,409				(39,372	)			(49.0	)%
(Re)Developments and Land, Not Included Above			8,213				5,973				2,240				37.5	%
Other			36,890				29,958				6,932				23.1	%
		$	443,268			$	422,945			$	20,323				4.8	%
Discontinued Operations			(73,940	)			(109,730	)			35,790				(32.6	)%
Subtotal Revenues		$	369,328			$	313,215			$	56,113				17.9	%
Contractor Revenues			35,628				10,540				25,088				238.0	%
Total Revenues		$	404,956			$	323,755			$	81,201				25.1	%

     Revenues from same store properties increased by $11.6 million due primarily to an increase in same store property occupancy rates and an increase in same store rental rates. Revenues from acquired properties increased $38.9 million due to the 196 industrial properties acquired subsequent to December 31, 2005 totaling approximately 19.1 million square feet of gross leasable area (“GLA”). Revenues from sold properties decreased $39.4 million due to the 289 industrial properties sold subsequent to December 31, 2005 totaling approximately 30.8 million square feet of GLA. Revenues from (re)developments and land increased $2.2 million due to an increase in occupancy. Other revenues increased by approximately $6.9 million due primarily to an increase in joint venture fees and fees earned related to us assigning our interest in certain purchase contracts to third parties for consideration. Contractor revenues increased $25.1 million for the year ended December 31, 2007 due primarily to increased third party development activity and an increased number of construction projects for which the TRS acted as general contractor.

		2007				2006				$ Change				% Change
		($ in 000’s)
PROPERTY AND CONTRACTOR EXPENSES
Same Store Properties		$	96,368			$	94,400			$	1,968				2.1	%
Acquired Properties			13,680				4,037				9,643				238.9	%
Sold Properties			12,346				23,532				(11,186	)			(47.5	)%
(Re) Developments and Land, Not Included Above			4,512				3,979				533				13.4	%
Other			16,603				15,427				1,176				7.6	%
		$	143,509			$	141,375			$	2,134				1.5	%
Discontinued Operations			(24,801	)			(36,032	)			11,231				(31.2	)%
Property Expenses		$	118,708			$	105,343			$	13,365				12.7	%
Contractor Expenses			34,553				10,263				24,290				236.7	%
Total Property and Contractor Expenses		$	153,261			$	115,606			$	37,655				32.6	%

     Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses, and contractor expenses. Property expenses from same store properties increased $2.0 million due primarily to an increase in real estate taxes due to a reassessment of values of certain properties of ours, as well as an increase in repairs and maintenance. Property expenses from acquired properties increased by $9.6 million due to properties acquired subsequent to December 31, 2005. Property expenses from sold properties decreased by $11.2 million due to properties sold subsequent to December 31, 2005. Property expenses from (re)developments and land increased $0.5 million due to an increase in occupancy. The $1.2 million increase in other expense is primarily attributable to increases in employee compensation. Contractor expenses increased $24.3 million for the year ended December 31, 2007 due primarily to increased third party development activity and an increased number of construction projects for which the TRS acted as general contractor.

     General and administrative expense increased by approximately $14.6 million, or 18.8%, due primarily to increases in employee compensation related to compensation for additional employees as well as an increase in incentive compensation.

		2007				2006				$ Change				% Change
		($ in 000’s)
DEPRECIATION AND OTHER AMORTIZATION
Same Store Properties		$	109,896			$	107,451			$	2,445				2.3	%
Acquired Properties			38,988				13,727				25,261				184.0	%
Sold Properties			12,568				28,383				(15,815	)			(55.7	)%
(Re) Developments and Land, Not Included Above			4,243				8,821				(4,578	)			(51.9	)%
Corporate Furniture, Fixtures and Equipment			1,837				1,913				(76	)			(4.0	)%
		$	167,532			$	160,295			$	7,237				4.5	%
Discontinued Operations			(21,627	)			(37,144	)			15,517				(41.8	)%
Total Depreciation and Other Amortization		$	145,905			$	123,151			$	22,754				18.5	%

     Depreciation and other amortization for same store properties remained relatively unchanged. Depreciation and other amortization from acquired properties increased by $25.3 million due to properties acquired subsequent to December 31, 2005. Depreciation and other amortization from sold properties decreased by $15.8 million due to properties sold subsequent to December 31, 2005. Depreciation and other amortization for (re)developments and land decreased by $4.6 million due primarily to accelerated depreciation recognized for the year ended December 31, 2006 on one property in Columbus, OH which was razed during 2006.

     Interest income increased $0.3 million due primarily to an increase in the average mortgage loans receivable outstanding during the year ended December 31, 2007, as compared to the year ended December 31, 2006, partially offset by a decrease in interest income earned on funds held with intermediaries in connection with completing property transactions in accordance with Section 1031 of the Code.

     Interest expense decreased by approximately $1.8 million primarily due to a decrease in the weighted average interest rate for the year ended December 31, 2007 (6.45%), as compared to the year ended December 31, 2006 (6.72%) and due to an increase in capitalized interest for the year ended December 31, 2007 due to an increase in development activities, partially offset by an increase in the weighted average debt balance outstanding for the year ended December 31, 2007 ($1,981.4 million), as compared to the year ended December 31, 2006 ($1,878.5 million).

     Amortization of deferred financing costs increased by $0.5 million, or 20.4%, due primarily to financing fees incurred associated with the issuance of $200.0 million of senior unsecured debt in September 2006.

     In October 2005, we entered into an interest rate protection agreement which hedged the change in value of a build to suit development project we were constructing. This interest rate protection agreement had a notional value of $50.0 million, 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 FAS 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 is recognized immediately in net income as opposed to other comprehensive income. On January 5, 2006, we settled the interest rate protection agreement for a payment of $0.2 million. Included in Mark-to-Market/Loss on Settlement of Interest Rate Protection Agreement for the year ended December 31, 2006 is the settlement and mark-to-market of the interest rate protection agreement.

     In April 2006, we entered into interest rate protection agreements which we 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 we disclosed in our hedge designation. We settled the interest rate protection agreements and paid the counterparties $2.9 million.

     We recognized a $0.4 million loss from early retirement of debt for the year ended December 31, 2007. This includes $0.1 million write-off of financing fees associated with our previous line of credit agreement which was amended and restated on September 28, 2007. The loss from early retirement of debt also includes $0.3 million due to early payoffs on mortgage loans.

     Equity in income of joint ventures decreased by $0.6 million primarily due to a decrease in our economic share of the gains and earn outs on property sales from the 2005 Development/Repositioning Joint Venture during the year ended December 31, 2007, partially offset by an increase in our economic share of the gains on property sales from the 2005 Core Joint Venture for the year ended December 31, 2007.

     The year to date income tax provision (included in continuing operations, discontinued operations and gain of sale) decreased $12.8 million, in the aggregate, due primarily to a decrease in rental income and gain on sale of real estate and an increase in general and administrative expenses, partially offset by an increase in joint venture fees and management/leasing fees, and a decrease in interest expense within the TRS.

     The $9.4 million gain on sale of real estate for the year ended December 31, 2007, resulted from the sale of three industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. 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 following table summarizes certain information regarding the industrial properties included in our discontinued operations for the year ended December 31, 2007 and December 31, 2006.

		2007				2006
		($ in 000’s)
Total Revenues		$	73,940			$	109,730
Property Expenses			(24,801	)			(36,032	)
Depreciation and Amortization			(21,627	)			(37,144	)
Gain on Sale of Real Estate			244,962				213,442
Provision for Income Taxes			(38,128	)			(51,102	)
Minority Interest			(29,621	)			(25,876	)
Income from Discontinued Operations		$	204,725			$	173,018

     Income from discontinued operations (net of income taxes and minority interest) for the year ended December 31, 2007 reflects the results of operations and gain on sale of real estate relating to 161 industrial properties that were sold during the year ended December 31, 2007, the results of operations of 38 industrial properties that were sold during the period from January 1, 2008 to March 31, 2008 and 22 industrial properties that were held for sale at March 31, 2008.

     Income from discontinued operations (net of income taxes and minority interest) for the year ended December 31, 2006 reflects the results of operations of the 161 industrial properties that were sold during the year ended December 31, 2007, the results of operations of 125 industrial properties that were sold during the year ended December 31, 2006, the gain on sale of real estate relating to 125 industrial properties that were sold during the year ended December 31, 2006, the results of operations of 38 industrial properties that were sold during the period from January 1, 2008 to March 31, 2008 and 22 industrial properties that were held for sale at March 31, 2008.

Comparison of Year Ended December 31, 2006 to Year Ended December 31, 2005

     Our 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 per share for the year ended December 31, 2006, and $1.80 per share for the year ended December 31, 2005.

     The tables below summarize our 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 properties owned prior to January 1, 2005 and held as an operating property through December 31, 2006 and developments and redevelopments that were stabilized (generally defined as 90% occupied) prior to January 1, 2005 or were substantially completed for 12 months prior to January 1, 2005. Acquired properties are properties that were acquired subsequent to December 31, 2004 and held as an operating property through December 31, 2006. Sold properties are properties that were sold between January 1, 2005 and December 31, 2006. (Re)Developments and land are land parcels and developments and redevelopments that were not: a) substantially complete 12 months prior to January 1, 2005 or b) stabilized prior to January 1, 2005. Other revenues are derived from the operations of our maintenance company, fees earned from our joint ventures, and other miscellaneous revenues. Contractor revenues and expenses represent revenues earned and expenses incurred in connection with the TRS acting as general contractor to construct industrial properties, including industrial properties for the 2005 Development/Repositioning Joint Ventures and also includes revenues and expenses related to the development of properties for third parties. Other expenses are derived from the operations of our maintenance company and other miscellaneous regional expenses.

     At December 31, 2006 and 2005, the occupancy rates of our same store properties were 92.6% and 91.7%, respectively.

		2006				2005				$ Change				% Change
		($ in 000’s)
REVENUES
Same Store Properties		$	257,525			$	255,963			$	1,562				0.6	%
Acquired Properties			86,150				18,565				67,585				364.0	%
Sold Properties			27,072				63,585				(36,513	)			(57.4	)%
(Re)Developments and Land, Not Included Above			22,217				18,789				3,428				18.2	%
Other			29,981				19,118				10,863				56.8	%
		$	422,945			$	376,020			$	46,925				12.5	%
Discontinued Operations			(109,730	)			(130,277	)			20,547				(15.8	)%
Subtotal Revenues		$	313,215			$	245,743			$	67,472				27.5	%
Contractor Revenues			10,540				16,241				(5,701	)			(35.1	)%
Total Revenues		$	323,755			$	261,984			$	61,771				23.6	%

     Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $67.6 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 $36.5 million due to the 221 industrial properties totaling approximately 29.9 million square feet of GLA sold subsequent to December 31, 2004. Revenues from (re)developments and land 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. Contractor revenues decreased $5.7 million due to decreased third party development activity.

		2006				2005				$ Change				% Change
		($ in 000’s)
PROPERTY AND CONTRACTOR EXPENSES
Same Store Properties		$	87,047			$	85,220			$	1,827				2.1	%
Acquired Properties			21,784				5,688				16,096				283.0	%
Sold Properties			7,603				19,385				(11,782	)			(60.8	)%
(Re)Developments and Land, Not Included Above			9,512				9,005				507				5.6	%
Other			15,429				11,321				4,108				36.3	%
		$	141,375			$	130,619			$	10,756				8.2	%
Discontinued Operations			(36,032	)			(45,427	)			9,395				(20.7	)%
Property Expenses		$	105,343			$	85,192			$	20,151				23.7	%
Contractor Expenses			10,263				15,574				(5,311	)			(34.1	)%
Total Property and Contractor Expenses		$	115,606			$	100,766			$	14,840				14.7	%

     Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses and contractor expenses. 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 $16.1 million primarily due to properties acquired subsequent to December 31, 2004. Property expenses from sold properties decreased $11.8 million due to properties sold subsequent to December 31, 2004. Property expenses from (re)developments and land 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. Contractor expenses decreased $5.3 million due to decreased third party development activity.

     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.

		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	)%
(Re)Developments and Land, Not Included Above			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			(37,144	)			(40,643	)			3,499				(8.6	)%
Total Depreciation and Other Amortization		$	123,151			$	87,358			$	35,793				41.0	%

     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 (re)developments and land 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, we entered into interest rate protection agreements which we 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 we disclosed in our hedge designation. We settled the interest rate protection agreements and paid the counterparties $2.9 million. In October 2005, we entered into an interest rate protection agreement which hedged the change in value of a build-to-suit development project we were constructing. This interest rate protection agreement did not qualify for hedge accounting. We 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 the mark-to-market/(loss) gain on settlement of interest rate protection agreements caption on the consolidated statement of operations.

     We recognized a $0.6 million gain related to the settlement/mark-to-market of two interest rate protection agreements we 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 ($1,878.5 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 our Unsecured Line of Credit in August 2005, the issuance of the 2016 Notes in January 2006 and the issuance of the 2011 Exchangeable Notes in September 2006.

     We 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 our 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 our economic share of gains and earn outs on property sales from the 2005 Development/Repositioning Joint Venture and the 2005 Core 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 TRS.

     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 ten 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 our discontinued operations for the years ended December 31, 2006 and December 31, 2005.

		Year Ended
		December 31,
		2006				2005
		($ in 000’s)
Total Revenues		$	109,730			$	130,277
Property Expenses			(36,032	)			(45,427	)
Interest Expense			—				(373	)
Depreciation and Amortization			(37,144	)			(40,643	)
Gain on Sale of Real Estate			213,442				132,139
Provision for Income Taxes			(51,102	)			(23,898	)
Minority Interest			(25,876	)			(20,013	)
Income from Discontinued Operations			173,018				132,062

     Income from discontinued operations, net of income taxes and minority interest, for the year ended December 31, 2006 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2007, 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, the results of operations of 38 industrial properties that were sold during the period from January 1, 2008 to March 31, 2008 and 22 industrial properties that were held for sale at March 31, 2008.

     Income from discontinued operations, net of income taxes and minority interest, for the year ended December 31, 2005 reflects the results of operations of industrial properties that were sold during the years ended December 31, 2007 and 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, the results of operations of 38 industrial properties that were sold during the period from January 1, 2008 to March 31, 2008 and 22 industrial properties that were held for sale at March 31, 2008.

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 2007, our cash and restricted cash was approximately $5.8 and $24.9 million, respectively. Restricted cash is primarily comprised of cash held in escrow in connection with mortgage debt requirements and gross proceeds from the sales of certain industrial properties. These sales proceeds will be disbursed as we exchange industrial properties under Section 1031 of the Code.

     We have considered our short-term (one year or less) liquidity needs and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs. We believe that our principal short-term liquidity needs are to fund normal recurring expenses, debt service requirements and the minimum distribution required to maintain our REIT qualification under the Code. We anticipate that these needs will be met with cash flows provided by operating and investment activities.

     We expect 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, long-term unsecured indebtedness and the issuance of additional equity securities. On April 30, 2007 we filed a registration statement with the SEC covering an indefinite number or amount of securities to be issued in the following three years.

     We also may finance the development or acquisition of additional properties through borrowings under our Unsecured Line of Credit. At December 31, 2007, borrowings under our Unsecured Line of Credit bore interest at a weighted average interest rate of 5.787%. Our Unsecured Line of Credit bears interest at a floating rate of LIBOR plus 0.475% or the Prime Rate, at our election. As of February 15, 2008, we had approximately $47.9 million available for additional borrowings under our Unsecured Line of Credit. Our Unsecured Line of Credit contains certain financial covenants including limitations on incurrence of debt and debt service coverage. Our access to borrowings may be limited if we fail to meet any of these covenants. Also, our borrowing rate on our Unsecured Line of Credit may increase in the event of a downgrade on our unsecured notes by the rating agencies.

     We currently have credit ratings from Standard & Poor’s, Moody’s and Fitch Ratings of BBB/Baa2/BBB, respectively. Our goal is to maintain our existing credit ratings. In the event of a downgrade, we believe we would continue to have access to sufficient capital; however, our cost of borrowing would increase and our ability to access certain financial markets may be limited.

Year Ended December 31, 2007

     Net cash provided by operating activities of approximately $92.7 million for the year ended December 31, 2007 was comprised primarily of net income before minority interest of approximately $174.1 million and net distributions from joint ventures of $1.3 million, offset by adjustments for non-cash items of approximately $82.2 million and the net change in operating assets and liabilities of approximately $0.5 million. The adjustments for the non-cash items of approximately $82.2 million are primarily comprised of the gain on sale of real estate of approximately $254.4 million and the effect of the straight-lining of rental income of approximately $9.7 million, offset by depreciation and amortization of approximately $179.3 million, the provision for bad debt of approximately $2.2 million, and loss on early retirement of debt of approximately $0.4 million.

     Net cash provided by investing activities of approximately $126.9 million for the year ended December 31, 2007 was comprised primarily of the net proceeds from the sale of real estate, the repayment of notes receivable, and distributions from our 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, our industrial real estate joint ventures, the increase in restricted cash that is held by an intermediary for Section 1031 exchange purposes, and the funding of notes receivable.

     During the year ended December 31, 2007, we acquired 105 industrial properties comprising approximately 8.6 million square feet of GLA and several land parcels. The purchase price of these acquisitions totaled approximately $470.8 million, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. We also substantially completed the development of 15 industrial properties comprising approximately 3.7 million square feet of GLA at a cost of approximately $114.8 million for the year ended December 31, 2007.

     We invested approximately $27.7 million in, and received total distributions of approximately $54.2 million from, our industrial real estate joint ventures. As of December 31, 2007, our industrial real estate joint ventures owned 113 industrial properties comprising approximately 19.9 million square feet of GLA and several land parcels.

     During the year ended December 31, 2007, we sold 164 industrial properties comprising approximately 13.7 million square feet of GLA and several land parcels. Net proceeds from the sales of the 164 industrial properties and several land parcels were approximately $800.1 million.

     Net cash used in financing activities of approximately $230.0 million for the year ended December 31, 2007 was derived primarily from repayments of senior unsecured debt, common and preferred stock dividends and unit distributions, redemption of preferred stock, repayments on mortgage loans payable, purchase of treasury shares, other costs of senior unsecured debt, the repurchase of restricted stock from our employees to pay for withholding taxes on the vesting of restricted stock and costs incurred in connection with the early retirement of debt, partially offset by the net proceeds from the issuance of senior unsecured debt, net borrowings under our Unsecured Line of Credit, net proceeds from the exercise of stock options and a cash book overdraft.

     During the year ended December 31, 2007, we repurchased 1,797,714 shares of our common stock, totaling approximately $69.4 million.

     On June 7, 2007, we redeemed the Series C Preferred Stock for $25.00 per Depositary Share, or $50.0 million in the aggregate, and paid a prorated second quarter dividend of $0.40729 per Depositary Share, totaling approximately $0.8 million.

     For the year ended December 31, 2007, certain directors and employees of the Company exercised 19,600 non-qualified employee stock options. Net proceeds to us were approximately $0.6 million.

     On May 7, 2007, we issued the 2017 II Notes. Net of issuance discount, we received net proceeds of $149.6 million from the issuance of the 2017 II Notes. In April 2006, we entered into interest rate protection agreements to fix the interest rate on the 2017 II Notes prior to issuance. We settled the effective portion of the interest rate protection agreements on May 1, 2007 for a payment of $4.3 million which is included in other comprehensive income.

     On May 15, 2007, we paid off and retired the 2007 Unsecured Notes in the amount of $150.0 million.

Contractual Obligations and Commitments

     The following table lists our contractual obligations and commitments as of December 31, 2007 (In thousands):

						Payments Due by Period
						Less Than
		Total				1 Year				1-3 Years				3-5 Years				Over 5 Years
Operating and Ground Leases*		$	52,764			$	3,339			$	5,821			$	4,692			$	38,912
Real Estate Development*			64,641				63,335				1,306				—				—
Long-term Debt			1,958,553				3,111				148,412				933,757				873,273
Interest Expense on Long-Term Debt*			894,138				104,003				196,559				141,551				452,025
Total		$	2,970,096			$	173,788			$	352,098			$	1,080,000			$	1,364,210

Off-Balance Sheet Arrangements

     Letters of credit are issued in most cases as pledges to governmental entities for development purposes. At December 31, 2007, we have $9.6 million in outstanding letters of credit, none of which are reflected as liabilities on our balance sheet. We have no other off-balance sheet arrangements other than those disclosed on the Contractual Obligations and Commitments table above.

Environmental

     We incurred environmental costs of approximately $0.6 million and $0.6 million in 2007 and 2006, respectively. We estimate 2008 costs of approximately $0.5 million. We estimate that the aggregate cost which needs to be expended in 2008 and beyond with regard to currently identified environmental issues will not exceed approximately $2.6 million.

Inflation

     For the last several years, inflation has not had a significant impact on the Company because of the relatively low inflation rates in our markets of operation. Most of our leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing our 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 us 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 our 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. Our business subjects us to market risk from interest rates, and to a much lessor extent, foreign currency fluctuations.

Interest Rate Risk

     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 us at December 31, 2007 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.

     In the normal course of business, we also face 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, 2007, $1,624.5 million (approximately 83.5% of total debt at December 31, 2007) of our debt was fixed rate debt and $322.1 million (approximately 16.5% of total debt at December 31, 2007) was variable rate debt. Currently, we do 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 our earnings or cash flows. Conversely, for variable rate debt, changes in the interest rate generally do not impact the fair value of the debt, but would affect our 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 us until we are required to refinance such debt. See Note 5 to the consolidated financial statements for a discussion of the maturity dates of our various fixed rate debt.

     Based upon the amount of variable rate debt outstanding at December 31, 2007, a 10% increase or decrease in the interest rate on our variable rate debt would decrease or increase, respectively, future net income and cash flows by approximately $1.9 million per year. A 10% increase in interest rates would decrease the fair value of the fixed rate debt at December 31, 2007 by approximately $55.3 million to $1,624.6 million. A 10% decrease in interest rates would increase the fair value of the fixed rate debt at December 31, 2007 by approximately $59.3 million to $1,739.2 million.

     The use of derivative financial instruments allows us 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, 2007, we had no outstanding derivative instruments.

Foreign Currency Exchange Rate Risk

     Owning, operating and developing industrial property outside of the United States exposes the Company to the possibility of volatile movements in foreign exchange rates. Changes in foreign currencies can affect the operating results of international operations reported in U.S. dollars and the value of the foreign assets reported in U.S. dollars. The economic impact of foreign exchange rate movements is complex because such changes are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. At December 31, 2007, the Company had only one property and one land parcel for which the U.S. dollar

was not the functional currency. This property and land parcel are located in Ontario, Canada and use the Canadian dollar as their functional currency.

Subsequent Events

     On January 22, 2008, we paid a fourth quarter 2007 distribution of $0.7200 per share, totaling approximately $36.1 million.

     From January 1, 2008 to February 15, 2008, we awarded 2,168 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 vest over a period of five years. Compensation expense will be charged to earnings over the respective vesting period.

     From January 1, 2008 to February 15, 2008, we acquired 11 industrial properties and several land parcels for a total estimated investment of approximately $79.1 million. We also sold three industrial properties and one land parcel for approximately $3.6 million of gross proceeds during this period.

     In January 2008, we entered into two interest rate protection agreements which fixed the interest rate on forecasted offerings of unsecured debt which we designated as cash flow hedges (the “January 2008 Agreements”). The January 2008 Agreements each have a notional value of $59.8 million and are effective from May 15, 2009 through May 15, 2014. The January 2008 Agreements fix the LIBOR rate at 4.0725% and 4.0770%, respectively.

Other Events

     Subsequent to the filing of the Company’s annual report on Form 10-K on February 26, 2008, we have revised our audited consolidated financial statements for the years ended December 31, 2007, 2006, 2005, 2004 and 2003, due to certain provisions of FAS 144 that require us to report the results of operations of a property if it has either been disposed or is classified as held for sale in discontinued operations and meets certain other criteria. Accordingly, we have retrospectively adjusted our audited consolidated financial statements for the years ended December 31, 2007, 2006, 2005, 2004 and 2003 to reflect 36 properties that were sold during the three months ended March 31, 2008 that were not classified as held for sale at December 31, 2007, and 22 properties that were held for sale at March 31, 2008, that met the criteria to be classified as discontinued operations. The effect of the reclassification represents a $10.0 million, $8.6 million, $7.4 million, $7.4 million and $9.4 million decrease in our previously reported income from continuing operations for the years ended December 31, 2007, 2006, 2005, 2004 and 2003, respectively. As a result of the foregoing, Notes 8, 10, 11, 17 (unaudited), and 18 (unaudited) to the consolidated financial statements for the years ended December 31, 2007, 2006, 2005, 2004 and 2003 have been updated. There is no effect on our previously reported net income, financial condition or cash flows.

Related Party Transactions

     We periodically engage 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, 2007, 2006 and 2005 this relative received approximately $0.2, $0.3, and $0.3 million in brokerage commissions.

Other

     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. For financial assets and liabilities and nonfinancial assets and liabilities that are remeasured at least annually, this statement is effective for fiscal years beginning after November 15, 2007. We do not expect that the implementation of this statement will have a material effect on our consolidated financial position or results of operations.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” which permits entities to choose to measure many financial instruments and certain other items at fair value. This statement is effective for fiscal years beginning after November 15, 2007. We do not expect that the implementation of this statement will have a material effect on our consolidated financial position or results of operations.

     In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in it’s financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008. We are currently evaluating the potential impact of adoption of SFAS 141R on our consolidated financial statements.

     In December 2007, the FASB issued SFAS No. 160. “Noncontrolling Interests in Consolidated Financial Statements-and Amendment of ARB No. 51 (“SFAS 160”) SFAS 160 establishes accounting and reporting standards pertaining to ownership interests in subsidiaries held by parties other than the parent, the amount of net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of any retained noncontrolling equity investment when a subsidiary is deconsolidated. This statement also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008. We are currently evaluating the potential impact of adoption of SFAS 160 on our consolidated financial statements.

EXHIBIT 99.3

Item 8.  Financial Statements and Supplementary Data

See Index to Financial Statements and Financial Statement Schedule included in Item 15.

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.

FIRST INDUSTRIAL REALTY TRUST, INC.

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

		Page
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm			24
Consolidated Balance Sheets of First Industrial Realty Trust, Inc. (the “Company”) as of December 31, 2007 and 2006			25
Consolidated Statements of Operations of the Company for the Years Ended December 31, 2007, 2006 and 2005			26
Consolidated Statements of Comprehensive Income of the Company for the Years Ended December 31, 2007, 2006 and 2005			27
Consolidated Statements of Changes in Stockholders’ Equity of the Company for the Years Ended December 31, 2007, 2006 and 2005			28
Consolidated Statements of Cash Flows of the Company for the Years Ended December 31, 2007, 2006 and 2005			29
Notes to the Consolidated Financial Statements			30
FINANCIAL STATEMENT SCHEDULE
Schedule III: Real Estate and Accumulated Depreciation			84

FIRSTCAL INDUSTRIAL, L.L.C.

INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

		Page
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm			55
Consolidated Statements of Financial Position of FirstCal Industrial, L.L.C. as of December 31, 2007 and 2006 (not covered by the report included herein)			56
Consolidated Statements of Operations of FirstCal Industrial, L.L.C. for the Years Ended December 31, 2007 and 2006 (not covered by the report included herein) and for the period from March 18, 2005 (inception) to December 31, 2005			57
Consolidated Statements of Changes in Members’ Capital of FirstCal Industrial, L.L.C. for the Years Ended December 31, 2007 and 2006 (not covered by the report included herein) and for the period from March 18, 2005 (inception) to December 31, 2005			58
Consolidated Statements of Cash Flows of FirstCal Industrial, L.L.C. for the Years Ended December 31, 2007 and 2006 (not covered by the report included herein) and for the period from March 18, 2005 (inception) to December 31, 2005			59
Notes to the Consolidated Financial Statements			60

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
First Industrial Realty Trust, Inc.:

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, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007 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 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. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included 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. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide 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 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.

/s/ PricewaterhouseCoopers LLP
Chicago, Illinois

February 25, 2008, except with respect to our opinion on the consolidated financial statements insofar as it relates to the effects of discontinued operations as described in Note 19, as to which the date is July 1, 2008

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

		December 31,				December 31,
		2007				2006
		(Dollars in thousands, except share and per share data)
ASSETS
Assets:
Investment in Real Estate:
Land		$	655,523			$	558,425
Buildings and Improvements			2,599,784				2,626,284
Construction in Progress			70,961				35,019
Less: Accumulated Depreciation			(509,981	)			(465,418	)
Net Investment in Real Estate			2,816,287				2,754,310
Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $3,038 and $9,688 at December 31, 2007 and December 31, 2006, respectively			37,875				115,961
Cash and Cash Equivalents			5,757				16,135
Restricted Cash			24,903				15,970
Tenant Accounts Receivable, Net			9,665				8,014
Investments in Joint Ventures			57,543				55,527
Deferred Rent Receivable, Net			32,665				28,839
Deferred Financing Costs, Net			15,373				15,210
Deferred Leasing Intangibles, Net			87,019				86,265
Prepaid Expenses and Other Assets, Net			170,946				128,168
Total Assets		$	3,258,033			$	3,224,399
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Mortgage Loans Payable, Net		$	73,550			$	77,926
Senior Unsecured Debt, Net			1,550,991				1,549,732
Unsecured Line of Credit			322,129				207,000
Accounts Payable and Accrued Expenses			146,308				119,027
Deferred Leasing Intangibles, Net			22,041				19,486
Rents Received in Advance and Security Deposits			31,425				30,844
Leasing Intangibles Held for Sale, Net of Accumulated Amortization of $0 and $183 at December 31, 2007 and December 31, 2006, respectively			—				2,310
Dividends Payable			37,311				42,548
Total Liabilities			2,183,755				2,048,873
Commitments and Contingencies			—				—
Minority Interest			150,359				152,547
Stockholders’ Equity:
Preferred Stock ($0.01 par value, 10,000,000 shares authorized, 500, 250, 600, and 200 shares of Series F, G, J, and K Cumulative Preferred Stock, respectively, issued and outstanding at December 31, 2007, having a liquidation preference of $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, 2006, 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, 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)			—				—
Common Stock ($0.01 par value, 100,000,000 shares authorized, 47,996,263 and 47,537,030 shares issued and 43,672,149 and 45,010,630 shares outstanding at December 31, 2007 and December 31, 2006, respectively)			480				475
Additional Paid-in-Capital			1,354,674				1,388,311
Distributions in Excess of Accumulated Earnings			(281,587	)			(284,955	)
Accumulated Other Comprehensive Loss			(9,630	)			(10,264	)
Treasury Shares at Cost (4,324,114 and 2,526,400 shares at December 31, 2007 and December 31, 2006, respectively)			(140,018	)			(70,588	)
Total Stockholders’ Equity			923,919				1,022,979
Total Liabilities and Stockholders’ Equity		$	3,258,033			$	3,224,399

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

		Year Ended				Year Ended				Year Ended
		December 31,				December 31,				December 31,
		2007				2006				2005
		(In thousands except per share data)
Revenues:
Rental Income		$	260,406			$	220,098			$	176,578
Tenant Recoveries and Other Income			108,922				93,117				69,165
Contractor Revenues			35,628				10,540				16,241
Total Revenues			404,956				323,755				261,984
Expenses:
Property Expenses			118,708				105,343				85,192
General and Administrative			92,101				77,497				55,812
Depreciation and Other Amortization			145,905				123,151				87,358
Contractor Expenses			34,553				10,263				15,574
Total Expenses			391,267				316,254				243,936
Other Income/Expense:
Interest Income			1,926				1,614				1,486
Interest Expense			(119,314	)			(121,141	)			(108,339	)
Amortization of Deferred Financing Costs			(3,210	)			(2,666	)			(2,125	)
Mark-to-Market/(Loss) Gain on Settlement of Interest Rate Protection Agreements			—				(3,112	)			811
(Loss) Gain From Early Retirement of Debt			(393	)			—				82
Total Other Income/Expense			(120,991	)			(125,305	)			(108,085	)
Loss from Continuing Operations Before Equity in Income of Joint Ventures, Income Tax Benefit and Income Allocated To Minority Interest			(107,302	)			(117,804	)			(90,037	)
Equity in Income of Joint Ventures			30,045				30,673				3,699
Income Tax Benefit			10,655				9,882				14,337
Minority Interest Allocable to Continuing Operations			11,387				12,875				10,822
Loss from Continuing Operations			(55,215	)			(64,374	)			(61,179	)
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $244,962, $213,442, and $132,139 for the Years Ended December 31, 2007, 2006 and 2005, respectively)			272,474				249,996				175,973
Provision for Income Taxes Allocable to Discontinued Operations (including $36,032, $47,511, and $20,529 allocable to Gain on Sale of Real Estate for the Years Ended December 31, 2007, 2006 and 2005, respectively)			(38,128	)			(51,102	)			(23,898	)
Minority Interest Allocable to Discontinued Operations			(29,621	)			(25,876	)			(20,013	)
Income Before Gain on Sale of Real Estate			149,510				108,644				70,883
Gain on Sale of Real Estate			9,425				6,071				29,550
Provision for Income Taxes Allocable to Gain on Sale of Real Estate			(3,082	)			(2,119	)			(10,871	)
Minority Interest Allocable to Gain on Sale of Real Estate			(802	)			(514	)			(2,458	)
Net Income			155,051				112,082				87,104
Less: Preferred Dividends			(21,320	)			(21,424	)			(10,688	)
Less: Redemption of Preferred Stock			(2,017	)			(672	)			—
Net Income Available to Common Stockholders		$	131,714			$	89,986			$	76,416
Basic and Diluted Earnings Per Share:
Loss from Continuing Operations Available to Common Stockholders		$	(1.66	)		$	(1.89	)		$	(1.31	)
Income from Discontinued Operations		$	4.64			$	3.93			$	3.11
Net Income Available to Common Stockholders		$	2.99			$	2.04			$	1.80
Weighted Average Shares Outstanding			44,086				44,012				42,431
Dividends/Distributions declared per Common Share/Unit Outstanding		$	2.8500			$	2.8100			$	2.7850

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

		Year Ended				Year Ended				Year Ended
		December 31,				December 31,				December 31,
		2007				2006				2005
		(Dollars in thousands)
Net Income		$	155,051			$	112,082			$	87,104
Other Comprehensive Income (Loss):
Settlement of Interest Rate Protection Agreements			(4,261	)			(1,729	)			—
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income			—				—				(159	)
Mark-to-Market of Interest Rate Protection Agreements, Net of Tax Provision			3,819				(2,800	)			(1,414	)
Amortization of Interest Rate Protection Agreements			(916	)			(912	)			(1,085	)
Foreign Currency Translation Adjustment, Net of Tax Provision			2,134				—				—
Other Comprehensive (Income) Loss Allocable to Minority Interest			(142	)			698				837
Other Comprehensive Income		$	155,685			$	107,339			$	85,283

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

		Year Ended				Year Ended				Year Ended
		December 31,				December 31,				December 31,
		2007				2006				2005
		(Dollars in thousands)
Preferred Stock — Beginning of Year		$	—			$	—			$	—
Issuance of Preferred Stock			—				—				—
Redemption of Preferred Stock			—				—				—
Preferred Stock — End of Year		$	—			$	—			$	—
Common Stock — Beginning of Year		$	475			$	470			$	454
Net Proceeds from the Issuance of Common Stock			—				1				15
Issuance of Restricted Stock			5				3				2
Repurchase and Retirement of Common Stock			—				(1	)			(1	)
Restricted Stock Forfeitures			—				—				(1	)
Conversion of Units to Common Stock			—				2				1
Common Stock — End of Year		$	480			$	475			$	470
Additional Paid-In-Capital — Beginning of Year		$	1,388,311			$	1,384,712			$	1,142,356
Net Proceeds from the Issuance of Common Stock			567				3,819				56,109
Issuance of Restricted Stock			(5	)			(3	)			8,379
Repurchase and Retirement of Restricted Stock/Common Stock			(3,210	)			(2,463	)			(2,741	)
Restricted Stock Forfeitures			—				—				(2,825	)
Call Spread			—				(6,835	)			—
Net Proceeds from the Issuance of Preferred Stock			—				192,624				181,484
Redemption of Preferred Stock			(47,997	)			(181,484	)			—
Conversion of Units to Common Stock			2,858				5,142				1,950
Reclassification to initially adopt SFAS No. 123R			—				(16,825	)			—
Amortization of Restricted Stock Grants			14,150				9,624				—
Additional Paid-In-Capital — End of Year		$	1,354,674			$	1,388,311			$	1,384,712
Dist. In Excess of Accum. Earnings — Beginning of Year		$	(284,955	)		$	(248,686	)		$	(203,417	)
Preferred Stock Dividends			(21,320	)			(21,424	)			(10,688	)
Distributions ($2.8500, $2.8100 and $2.7850 per Share/Unit at December 31, 2007, 2006 and 2005, respectively)			(146,126	)			(144,720	)			(139,168	)
Redemption of Preferred Stock			(2,017	)			(672	)			—
Repurchase and Retirement of Restricted Stock/Common Stock			(728	)			(269	)			(543	)
Restricted Stock Forfeitures			—				—				(147	)
Net Income Before Minority Interest			174,087				125,597				98,753
Minority Interest:
Allocation of Income			(19,036	)			(13,515	)			(11,649	)
Distributions ($2.8500, $2.8100 and $2.7850 per Unit at December 31, 2007, 2006 and 2005, respectively)			18,508				18,734				18,173
Dist. In Excess of Accum. Earnings — End of Year		$	(281,587	)		$	(284,955	)		$	(248,686	)
Unearned Value of Rest. Stock Grants — Beginning of Year		$	—			$	(16,825	)		$	(19,611	)
Issuance of Restricted Stock			—				—				(8,381	)
Amortization of Restricted Stock Grants			—				—				8,845
Restricted Stock Forfeitures			—				—				2,322
Reclassification to initially adopt SFAS No. 123R			—				16,825				—
Unearned Value of Rest. Stock Grants — End of Year		$	—			$	—			$	(16,825	)
Treasury Shares, at cost — Beginning of Year		$	(70,588	)		$	(70,588	)		$	(70,588	)
Purchase of Treasury Shares			(69,430	)			—				—
Treasury Shares, at cost — End of Year		$	(140,018	)		$	(70,588	)		$	(70,588	)
Accum. Other Comprehensive Loss — Beginning of Year		$	(10,264	)		$	(5,521	)		$	(3,700	)
Settlement of Interest Rate Protection Agreements			(4,261	)			(1,729	)			—
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income			—				—				(159	)
Mark-to-Market of Interest Rate Protection Agreements, Net of Tax Provision			3,819				(2,800	)			(1,414	)
Amortization of Interest Rate Protection Agreements			(916	)			(912	)			(1,085	)
Foreign Currency Translation Adjustment, Net of Tax Provision			2,134				—				—
Other Comprehensive (Income) Loss Allocable to Minority Interest			(142	)			698				837
Accum. Other Comprehensive Loss — End of Year		$	(9,630	)		$	(10,264	)		$	(5,521	)
Total Stockholders’ Equity at End of Year		$	923,919			$	1,022,979			$	1,043,562

The accompanying notes are an integral part of the financial statements.

FIRST INDUSTRIAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Year Ended				Year Ended				Year Ended
		December 31,				December 31,				December 31,
		2007				2006				2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income		$	155,051			$	112,082			$	87,104
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Allocation of Income to Minority Interest			19,036				13,515				11,649
Depreciation			121,584				121,347				99,338
Amortization of Deferred Financing Costs			3,210				2,666				2,125
Other Amortization			54,556				40,965				33,728
Provision for Bad Debt			2,212				2,289				1,817
Mark-to-Market/Loss on Settlement of Interest Rate Protection Agreements			—				(16	)			(143	)
Loss (Gain) From Early Retirement of Debt			393				—				(82	)
Equity in Income of Joint Ventures			(30,045	)			(30,673	)			(3,699	)
Distributions from Joint Ventures			31,365				31,664				3,866
Decrease (Increase) in Developments for Sale Costs			1,209				5,883				(16,241	)
Gain on Sale of Real Estate			(254,387	)			(219,513	)			(161,689	)
Increase in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net			(20,140	)			(16,524	)			(23,371	)
Increase in Deferred Rent Receivable			(9,710	)			(10,154	)			(9,459	)
Increase in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits			18,408				6,020				24,407
Increase in Restricted Cash			(6	)			—				—
Net Cash Provided by Operating Activities			92,736				59,551				49,350
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of and Additions to Investment in Real Estate			(677,461	)			(813,840	)			(920,707	)
Net Proceeds from Sales of Investments in Real Estate			800,147				907,428				537,252
Contributions to and Investments in Joint Ventures			(27,696	)			(32,773	)			(45,175	)
Distributions from Joint Ventures			22,863				19,734				2,971
Funding of Notes Receivable			(8,385	)			—				—
Repayment and Sale of Mortgage Loans Receivable			26,350				34,987				83,561
(Increase) Decrease in Restricted Cash			(8,909	)			13,611				(29,556	)
Net Cash Provided by (Used in) Investing Activities			126,909				129,147				(371,654	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds from the Issuance of Common Stock			567				3,462				55,754
Proceeds from the Issuance of Preferred Stock			—				200,000				187,500
Preferred Stock Offering Costs			—				(7,103	)			(5,906	)
Redemption of Preferred Stock			(50,014	)			(182,156	)			—
Repurchase of Restricted Stock			(3,938	)			(2,660	)			(3,285	)
Proceeds from Senior Unsecured Debt			149,595				399,306				—
Other Costs from Senior Unsecured Debt			(4,261	)			(1,729	)			—
Repayment of Senior Unsecured Debt			(150,000	)			(150,000	)			(50,000	)
Dividends/Distributions			(146,660	)			(143,858	)			(137,672	)
Preferred Stock Dividends			(26,023	)			(19,248	)			(8,162	)
Purchase of Treasury Shares			(69,430	)			—				—
Proceeds from Mortgage Loans Payable			—				—				1,167
Repayments of Mortgage Loans Payable			(41,475	)			(12,618	)			(1,987	)
Proceeds from Unsecured Lines of Credit			879,129				779,300				647,500
Repayments on Unsecured Lines of Credit			(764,000	)			(1,029,800	)			(357,500	)
Call Spread			—				(6,835	)			—
Debt Issuance Costs and Costs Incurred in Connection with the Early Retirement of Debt			(3,766	)			(6,861	)			(1,792	)
Cash Book Overdraft			253				—				—
Net Cash (Used in) Provided by Financing Activities			(230,023	)			(180,800	)			325,617
Net (Decrease) Increase in Cash and Cash Equivalents			(10,378	)			7,898				3,313
Cash and Cash Equivalents, Beginning of Period			16,135				8,237				4,924
Cash and Cash Equivalents, End of Period		$	5,757			$	16,135			$	8,237