SEC Filing | First Industrial Realty Trust, Inc.

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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-13225
SUBJECT TO COMPLETION, DATED OCTOBER 7, 1996

PROSPECTUS SUPPLEMENT
[LOGO]
, 1996
(TO PROSPECTUS DATED OCTOBER 4, 1996)
5,000,000 SHARES
FIRST INDUSTRIAL REALTY TRUST, INC.
COMMON STOCK
First Industrial Realty Trust, Inc. (the "Company" or "First Industrial") is
a real estate investment trust ("REIT") which owns, manages, acquires and
develops bulk warehouse and light industrial properties. As of June 30, 1996,
First Industrial owned 320 in service bulk warehouse and light industrial
properties located in 14 states.
All of the shares of common stock, par value $.01 per share (the "Common
Stock"), offered hereby (the "Offering") are being sold by the Company. The
Common Stock is listed on the New York Stock Exchange ("NYSE") under the symbol
"FR." On October 4, 1996, the reported last sale price of the Common Stock on
the NYSE was $25 1/2 per share. See "Price Range of Common Stock and
Distributions."
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION
WITH AN INVESTMENT IN THE COMMON STOCK, SEE "RISK FACTORS" ON PAGES 3 TO 5 IN
THE ACCOMPANYING PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE ACCOMPANYING PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)

Per Share......................... $ $ $
Total(3).......................... $ $ $

(1) SEE "UNDERWRITING" FOR INDEMNIFICATION ARRANGEMENTS WITH THE UNDERWRITERS.
(2) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY ESTIMATED AT APPROXIMATELY
$875,000.
(3) THE COMPANY HAS GRANTED TO THE UNDERWRITERS A 30-DAY OPTION TO PURCHASE UP
TO AN AGGREGATE OF 750,000 ADDITIONAL SHARES AT THE PRICE TO THE PUBLIC,
LESS UNDERWRITING DISCOUNTS AND COMMISSIONS, SOLELY TO COVER
OVER-ALLOTMENTS, IF ANY. IF SUCH OPTION IS EXERCISED IN FULL, THE TOTAL
PRICE TO THE PUBLIC, UNDERWRITING DISCOUNTS AND COMMISSIONS AND PROCEEDS TO
THE COMPANY WILL BE $ , $ AND $ , RESPECTIVELY. SEE
"UNDERWRITING."
The shares of Common Stock offered hereby are offered by the several
Underwriters, subject to prior sale, when, as and if issued to and accepted by
them and subject to approval of certain legal matters by Rogers & Wells, counsel
for the Underwriters. The Underwriters reserve the right to reject orders in
whole or in part. It is expected that delivery of the Common Stock offered
hereby will be made against payment therefor in New York, New York on or about
, 1996.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

MERRILL LYNCH & CO.
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.

[LOGO]

[MAP]

THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

PHOTOGRAPHS
OF
PROPERTIES

PROSPECTUS SUPPLEMENT SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION INCLUDED ELSEWHERE AND
INCORPORATED BY REFERENCE IN THE ACCOMPANYING PROSPECTUS. UNLESS THE CONTEXT
OTHERWISE REQUIRES, ALL REFERENCES IN THIS PROSPECTUS SUPPLEMENT TO "FIRST
INDUSTRIAL" OR THE "COMPANY" REFER TO FIRST INDUSTRIAL REALTY TRUST, INC. AND
ITS SUBSIDIARIES. UNLESS OTHERWISE INDICATED, ALL INFORMATION REGARDING THE
COMPANY'S PROPERTIES RELATES TO PROPERTIES OWNED BY THE COMPANY AND IN SERVICE
AS OF JUNE 30, 1996 (THE "PROPERTIES") AND THE INFORMATION CONTAINED IN THIS
PROSPECTUS SUPPLEMENT ASSUMES AN OFFERING PRICE PER SHARE OF COMMON STOCK OF
$25.50 AND THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS NOT EXERCISED. THIS
PROSPECTUS SUPPLEMENT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE COMPANY'S ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS.
CERTAIN FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE ARE DISCUSSED UNDER THE
CAPTION "RISK FACTORS" COMMENCING ON PAGE 3 OF THE ACCOMPANYING PROSPECTUS.

THE COMPANY

First Industrial Realty Trust, Inc. is a REIT which owns, manages, acquires
and develops bulk warehouse and light industrial properties. Markets in which
the Company currently operates include: Chicago, Illinois; Detroit, Michigan;
Minneapolis/St. Paul, Minnesota; Atlanta, Georgia; Grand Rapids, Michigan;
Central Pennsylvania; Indianapolis, Indiana; St. Louis, Missouri; Nashville,
Tennessee; Cincinnati, Ohio; Des Moines, Iowa; Milwaukee, Wisconsin; and Dayton
and Columbus, Ohio (such 14 markets, the "Operating Markets"). The Company owns
320 Properties containing an aggregate of approximately 28.3 million square feet
of gross leasable area ("GLA") which, as of June 30, 1996, was approximately 96%
leased to more than 860 tenants. First Industrial is a self-administered and
fully integrated industrial real estate company, and is one of the largest
publicly traded industrial property REITs in the United States (in terms of
total market capitalization).

The Company believes that investment in industrial properties offers
attractive returns and stable cash flow for the following reasons:

- The construction-on-demand nature of, and relatively short development
cycle for, industrial properties allow developers to match supply more
closely with prevailing market demand, resulting in greater stability in
market occupancy levels and rental rates.

- Industrial properties are often net leased pursuant to leases that
require tenants to pay many operating costs, and such leases frequently
include built-in rental increases. This provides stability of cash flow
and reduces the impact of inflation.

- Industrial properties are less management intensive than most other
classes of real estate, thereby reducing both operating and
administrative expenses.

- Despite changes in manufacturing and delivery processes, industrial
property construction, design and layout have changed little over the
last thirty years, thus extending the useful economic life of industrial
buildings.

- Industrial properties generally require lower tenant improvement
expenditures by the landlord to induce tenants to lease space than do
other types of commercial property. Frequently, tenants make substantial
improvements to the properties which increases the likelihood of the
tenant renewing its lease.

RECENT DEVELOPMENTS

During 1996, the Company has grown principally by acquiring industrial
properties as well as by improving the operating performance of its existing
portfolio. Such improvement in operating performance

S-3

is a result of the Company increasing minimum rents per square foot and
aggressively controlling costs while maintaining high occupancies. The Company
also has sought to increase the size of its portfolio by developing additional
properties.

Significant developments relating to the Company in 1996 include:

ACQUISITIONS. During the six months ended June 30, 1996, the Company
acquired 54 Properties containing an aggregate of approximately 6.0 million
square feet of GLA. The aggregate purchase price of these Properties was
approximately $142.1 million, approximately $14.1 million of which was paid
through the issuance of limited partnership interests ("Units") in the Company's
subsidiary, First Industrial, L.P. (the "Operating Partnership"). Since June 30,
1996, the Company has acquired 11 properties containing an aggregate of 1.8
million square feet of GLA for an aggregate purchase price of approximately
$44.2 million, approximately $1.3 million of which was paid through the issuance
of Units in the Operating Partnership. Such 65 properties are expected to
provide approximately an 11.7% unleveraged return on cost (computed as the
weighted average property annual contractual net operating income from leases in
place at the date of acquisition divided by total purchase price). In addition,
certain of these acquisitions resulted in the Company entering the following
four new markets: Indianapolis, Indiana and Cincinnati, Dayton and Columbus,
Ohio.

PENDING ACQUISITIONS. The Company has an active acquisition program through
which it is continually engaged in identifying, negotiating and consummating
portfolio and individual industrial property acquisitions. The Company's
acquisition department typically is considering in excess of $500 million of
property acquisition opportunities at any time. The Company has entered into
contracts or reached understandings with respect to the purchase price (for
aggregate consideration of approximately $66.4 million) and certain other
material terms with sellers of 36 properties (with an aggregate of approximately
2.8 million square feet of GLA). If all of these properties are purchased, the
Company anticipates funding approximately $37.1 million of the acquisition price
of these properties with the proceeds of this Offering and the balance from the
Acquisition Facility (as hereinafter defined). Because some of these possible
acquisitions are not yet under contract and all are subject to completion of due
diligence and a number of other contingencies, there can be no assurance that
any of these acquisitions will be completed.

DEVELOPMENT ACTIVITIES. At June 30, 1996, the Company had under development
two bulk warehouse properties and two light industrial properties which it
anticipates placing in service in the fourth quarter of 1996 and which, in the
aggregate, contain 732,604 square feet of GLA and are anticipated to cost
approximately $18.4 million. In addition, since June 30, 1996, the Company has
commenced the development of two bulk warehouse properties which will contain
313,165 square feet of GLA and are expected to cost approximately $12.6 million.
These six developments, assuming anticipated leasing activity, are expected to
provide approximately a 12.4% unleveraged return on cost (computed as the
weighted average property annual contractual net operating income from leases
with respect to such developments divided by estimated total development cost).

In order to take advantage of management's property development experience,
the Company's inventory of developable land and increasing customer requests for
build-to-suit projects, the Company recently created a new subsidiary to focus
on development activities (the "Development Services Group"). The Development
Services Group will actively seek development opportunities, continuing the
Company's focus on build-to-suit projects which are pre-leased or substantially
pre-leased prior to commencement of construction. The Company is currently
evaluating a number of development projects (with an aggregate of approximately
2.3 million square feet of GLA). There can be no assurance that any such
development will be completed. As of June 30, 1996, the Company had sufficient
available land, substantially all of which is zoned for industrial use, to
permit the development of approximately four million square feet of GLA.

S-4

PROPERTY MANAGEMENT. During the six months ended June 30, 1996, the Company
executed leases relating to in excess of 1.6 million feet of GLA at a weighted
average first year rent of $3.99 per square foot, as compared to a weighted
average final year rent of $3.82 per square foot for the same space under prior
leases. The Company achieved this 4.5% increase in the weighted average annual
rent per square foot for new leases signed while retaining in excess of 78% of
existing tenants under expiring leases. Retention of existing tenants generally
results in significantly lower capital expenditure, tenant improvement and
leasing commission costs than would be the case when leasing space to a new
tenant. The Company believes that opportunities exist to continue to increase
rents as leases expire at the Properties, because average rents per square foot
of GLA for the Company's existing leases are generally lower than the prevailing
rents per square foot in the Operating Markets.

PROPERTY DISPOSITIONS. The Company continually evaluates local market
conditions and property-related factors and will sell a property when it
believes it is to the Company's advantage to do so. During the six months ended
June 30, 1996, the Company sold five properties for an aggregate price of
approximately $12.1 million, recognizing a gain of approximately $4.3 million.

EQUITY OFFERING. On February 2, 1996, the Company completed a public
offering (the "February Offering") of 5,175,000 shares of Common Stock, which
resulted in net proceeds of approximately $106.3 million. Such net proceeds were
used to repay indebtedness and to fund property acquisitions and developments
during the first quarter of 1996.

DEBT FINANCING. In July 1996, the interest rate on the Company's $150
million floating rate collateralized revolving credit facility (the "Acquisition
Facility"), under which the Company may borrow to finance the acquisition and
development of additional properties and for other corporate purposes, including
working capital, was reduced from the London Interbank Offered Rate ("LIBOR")
plus 2.00% to LIBOR plus 1.75%. The Acquisition Facility matures in June 1997.
On September 30, 1996, the Company entered into a $40 million floating rate
collateralized revolving credit agreement (the "1996 Acquisition Facility" and,
together with the Acquisition Facility, the "Acquisition Facilities") under
which the Company may borrow to finance the acquisition and development of
additional properties and for other corporate purposes, including working
capital. The 1996 Acquisition Facility bears interest at a rate equal to LIBOR
plus 2.00% and matures in March 1997. The Company is currently negotiating with
several lenders for a $200 million unsecured revolving credit facility to
replace the Acquisition Facilities, although there can be no assurance that the
Company will be successful in obtaining such a facility on acceptable terms.

S-5

THE OFFERING

Common Stock offered by the Company......... 5,000,000 shares

Common Stock to be outstanding after the
Offering assuming exchange of all Units... 31,307,476 shares(1)

Use of Proceeds............................. Repayment of approximately $82.8 million of
floating rate borrowings which were incurred
to finance the Company's acquisition and
development activities ($42.9 million of
which borrowings were incurred or are
anticipated to be incurred on or after
September 30, 1996) and approximately $37.1
million for future acquisitions and
development. See "Use of Proceeds."

NYSE Symbol................................. FR

- ------------------------------

(1) As of September 30, 1996. Includes 2,169,595 shares of Common Stock issuable
upon the exchange of Units and excludes 1,096,000 shares of Common Stock
issuable upon the exercise of outstanding options under the Company's Stock
Incentive Plan.

S-6

SUMMARY CONSOLIDATED FINANCIAL AND PROPERTY DATA
(IN THOUSANDS, EXCEPT PER SHARE AND PROPERTY DATA)

The following summary consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" for the Company and the financial statements which
are incorporated by reference in the accompanying Prospectus. Operating results
for the historical periods presented are not necessarily indicative of the
results that may be expected for any other period.

SIX MONTHS ENDED
JUNE 30, YEAR ENDED
-------------------- DECEMBER 31,
1996 1995 1995

STATEMENTS OF OPERATIONS DATA:
Total revenues............................................................. $ 65,424 $ 51,473 $ 106,486
Property expenses.......................................................... 18,996 13,641 28,302
General and administrative expense......................................... 1,901 1,465 3,135
Interest expense........................................................... 13,997 13,764 28,591
Amortization of interest rate protection agreements and deferred financing
costs.................................................................... 1,574 2,979 4,438
Depreciation and other amortization........................................ 13,412 10,756 22,264
Disposition of interest rate protection agreement(1)....................... -- -- 6,410
--------- --------- ------------
Income before gain on sales of properties, extraordinary loss and minority
interest................................................................. 15,544 8,868 13,346
Gain on sales of properties................................................ 4,320 -- --
Extraordinary loss(2)...................................................... 821 -- --
Income allocated to minority interest...................................... 1,405 668 997
--------- --------- ------------
Net income................................................................. 17,638 8,200 12,349
Dividends on preferred stock............................................... 1,960 -- 468
--------- --------- ------------
Net income available to common stockholders................................ $ 15,678 $ 8,200 $ 11,881
--------- --------- ------------
--------- --------- ------------
Net income per common share................................................ $ 0.68 $ 0.43 $ 0.63
--------- --------- ------------
--------- --------- ------------
Weighted average number of common shares outstanding....................... 23,222 18,881 18,889

AS OF JUNE 30, 1996
--------------------------

HISTORICAL AS ADJUSTED(3)
BALANCE SHEET DATA:
Real estate, before accumulated depreciation........................................ $ 906,012 $ 950,966
Real estate, after accumulated depreciation......................................... 827,119 872,073
Total assets........................................................................ 884,300 984,571
Total debt.......................................................................... 412,250 392,590
Total liabilities................................................................... 445,092 425,432
Limited partners' interest in Operating Partnership................................. 34,492 34,492
Stockholders' equity................................................................ 404,716 524,647

AS OF JUNE 30,
-------------------------- AS OF DECEMBER 31,
1996 1995 1995

PROPERTY DATA(4):
Total Properties.................................................. 320 261 271
Total GLA......................................................... 28,259,055 20,849,659 22,562,755
Occupancy rate.................................................... 96% 97% 97%

- ------------------------------

(1) Represents a one-time charge, $6.3 million of which was non-cash, in
connection with the replacement of an interest rate protection agreement
with new interest rate protection agreements and the entry into interest
rate swap agreements.

(2) Represents a one-time, non-cash write-off of certain unamortized loan costs
and additional costs to retire debt prior to maturity in connection with the
repayment of certain indebtedness with proceeds of the February Offering.

(3) As adjusted to give effect to: (i) the acquisition of additional industrial
properties after June 30, 1996 and through October 4, 1996; and (ii) the
Offering and the application of a portion of the net proceeds therefrom to
repay indebtedness under the Acquisition Facilities.

(4) Does not include information as to properties under development.

S-7

THE COMPANY

First Industrial owns, manages, acquires and develops bulk warehouse and
light industrial properties. Markets in which the Company currently operates
include: Chicago, Illinois; Detroit, Michigan; Minneapolis/St. Paul, Minnesota;
Atlanta, Georgia; Grand Rapids, Michigan; Central Pennsylvania; Indianapolis,
Indiana; St. Louis, Missouri; Nashville, Tennessee; Cincinnati, Ohio; Des
Moines, Iowa; Milwaukee, Wisconsin; and Dayton and Columbus, Ohio. The Company
owns 320 Properties containing an aggregate of approximately 28.3 million square
feet of GLA which, as of June 30, 1996, was approximately 96% leased to more
than 860 tenants. First Industrial is a self-administered and fully integrated
industrial real estate company, and is one of the largest publicly traded
industrial property REITs in the United States (in terms of total market
capitalization). The Company's executive offices are located at 150 N. Wacker
Drive, Suite 150, Chicago, Illinois 60606, and its telephone number is (312)
704-9000.

GROWTH STRATEGIES

First Industrial has implemented internal and external growth strategies
which include the following elements:

INTERNAL GROWTH STRATEGIES

The Company seeks to generate internal growth by: (i) increasing revenues by
renewing or releasing space subject to expiring leases at higher rental levels;
(ii) increasing occupancy levels at properties where vacancies exist and
maintaining occupancy elsewhere; (iii) controlling and minimizing operating
expenses; and (iv) renovating existing properties.

During the six months ended June 30, 1996, the Company executed leases
relating to in excess of 1.6 million square feet of GLA at a weighted average
first year rent of $3.99 per square foot of GLA as compared to a weighted
average final year rent of $3.82 per square foot for the same space under prior
leases. The Company achieved this 4.5% increase in the weighted average annual
rent per square foot of new leases signed while retaining in excess of 78% of
existing tenants under expiring leases. Retention of existing tenants generally
involves significantly lower capital expenditure, tenant improvement and leasing
commission costs than would be the case when leasing space to a new tenant. The
Company believes that opportunities exist to continue to increase rents as
leases expire at the Properties, because average rents per square foot of GLA
for the Company's existing leases are generally lower than the prevailing rents
per square foot in the Operating Markets.

EXTERNAL GROWTH STRATEGIES

The Company seeks to grow externally through: (i) the acquisition of
portfolios of industrial properties, industrial property businesses or
individual properties which meet the Company's investment parameters; (ii) the
development of properties, generally on a build-to-suit basis; and (iii) the
expansion of its properties.

When evaluating potential acquisitions, the Company considers such factors
as: (i) the geographic area and type of property; (ii) the location,
construction quality, condition and design of the property;

S-8

(iii) the potential for capital appreciation of the property; (iv) the ability
of the Company to improve the property's performance through renovation; (v) the
terms of tenant leases, including the potential for rent increases; (vi) the
potential for economic growth and the tax and regulatory environment of the area
in which the property is located; (vii) the potential for expansion of the
physical layout of the property and/or the number of sites; (viii) the occupancy
and demand for tenants for properties of a similar type in the vicinity; and
(ix) competition from existing properties and the potential for the construction
of new properties in the area.

Between January 1 and June 30, 1996, the Company completed the following
acquisitions:

PERCENT
LEASED AT
ACQUISITION DATE METROPOLITAN AREA PROPERTY TYPE PURCHASE PRICE GLA JUNE 30, 1996

1st Qtr 96......... Chicago, IL Light Industrial $ 4,950,000 364,000 100%
1st Qtr 96......... Chicago, IL Light Industrial 1,065,000 43,636 100
1st Qtr 96......... Chicago, IL Light Industrial 1,454,000 65,450 100
1st Qtr 96......... Atlanta, GA Bulk Warehouse 19,580,559 1,040,000 100
1st Qtr 96......... Detroit, MI Light Industrial 1,871,065 55,680 100
1st Qtr 96......... Detroit, MI Light Industrial 2,719,162 88,700 100
1st Qtr 96......... Detroit, MI Light Industrial 798,593 19,200 100
1st Qtr 96......... Detroit, MI Light Industrial 433,898 10,350 100
1st Qtr 96......... Detroit, MI Light Industrial 541,398 14,287 0(1)
1st Qtr 96......... Detroit, MI Light Industrial 1,177,162 33,300 100
1st Qtr 96......... Detroit, MI Light Industrial 1,257,329 38,500 100
1st Qtr 96......... Detroit, MI Light Industrial 1,262,557 41,380 100
1st Qtr 96......... Detroit, MI Light Industrial 1,620,746 48,630 37(2)
1st Qtr 96......... Detroit, MI Light Industrial 1,215,008 36,456 66(3)
1st Qtr 96......... Indianapolis, IN Bulk Warehouse 15,959,851 976,273 98
1st Qtr 96......... Indianapolis, IN Light Industrial 3,060,477 115,200 95
1st Qtr 96......... Indianapolis, IN Bulk Warehouse 4,433,772 166,400 100
1st Qtr 96......... Indianapolis, IN Bulk Warehouse 1,647,914 63,000 81
1st Qtr 96......... Indianapolis, IN Light Industrial 261,271 10,000 100
1st Qtr 96......... Indianapolis, IN Light Industrial 3,904,817 132,000 98
1st Qtr 96......... Indianapolis, IN Bulk Warehouse 1,363,834 38,460 100
1st Qtr 96......... Indianapolis, IN Light Industrial 376,501 14,000 100
1st Qtr 96......... Indianapolis, IN Light Industrial 872,052 32,400 100
1st Qtr 96......... Indianapolis, IN Light Industrial 965,558 36,000 93
1st Qtr 96......... Indianapolis, IN Light Industrial 1,449,714 54,000 93
1st Qtr 96......... Indianapolis, IN Light Industrial 474,360 17,600 100
1st Qtr 96......... Indianapolis, IN Light Industrial 1,097,045 40,800 100
1st Qtr 96......... Indianapolis, IN Light Industrial 1,454,745 54,000 100
1st Qtr 96......... Indianapolis, IN Light Industrial 355,242 13,200 100
1st Qtr 96......... Indianapolis, IN Light Industrial 807,094 30,000 100
1st Qtr 96......... Indianapolis, IN Light Industrial 1,183,404 44,000 100
1st Qtr 96......... Indianapolis, IN Light Industrial 538,664 20,000 100
1st Qtr 96......... Indianapolis, IN Light Industrial 345,295 12,800 100
1st Qtr 96......... Indianapolis, IN Light Industrial 136,022 5,000 100
1st Qtr 96......... Indianapolis, IN Light Industrial 687,914 15,000 100
1st Qtr 96......... Indianapolis, IN Light Industrial 1,702,758 44,000 100
1st Qtr 96......... Indianapolis, IN Light Industrial 519,177 7,820 100
1st Qtr 96......... Indianapolis, IN Bulk Warehouse 2,563,517 87,500 100
1st Qtr 96......... Cincinnati, OH Bulk Warehouse 3,630,684 185,580 97

S-9

PERCENT
LEASED AT
ACQUISITION DATE METROPOLITAN AREA PROPERTY TYPE PURCHASE PRICE GLA JUNE 30, 1996

1st Qtr 96......... Cincinnati, OH Bulk Warehouse 11,444,957 500,500 100
1st Qtr 96......... Cincinnati, OH Bulk Warehouse 7,195,370 265,000 96
1st Qtr 96......... Columbus, OH Light Industrial 2,088,818 56,849 88
1st Qtr 96......... Chicago, IL Bulk Warehouse 3,080,000 151,469 100
2nd Qtr 96......... Minneapolis, MN Light Industrial 3,360,000 59,782 100
2nd Qtr 96......... Minneapolis, MN Light Industrial 2,680,000 47,735 100
2nd Qtr 96......... Minneapolis, MN Light Industrial 5,495,000 74,337 100
2nd Qtr 96......... Minneapolis, MN Light Industrial 1,200,000 30,476 100
2nd Qtr 96......... Indianapolis, IN Bulk Warehouse 5,600,000 327,997 100
2nd Qtr 96......... Milwaukee, WI Light Industrial 2,500,000 78,000 100
2nd Qtr 96......... Minneapolis, MN Light Industrial 2,660,000 78,029 64(4)
2nd Qtr 96......... Dayton, OH Light Industrial 1,066,402 43,200 100
2nd Qtr 96......... Dayton, OH Light Industrial 1,548,080 64,000 100
2nd Qtr 96......... Dayton, OH Light Industrial 2,056,416 60,800 100
2nd Qtr 96......... Dayton, OH Light Industrial 354,642 12,000 100
-------------- ----------
TOTAL............................................................ $ 142,067,844 5,964,776
-------------- ----------
-------------- ----------

- ------------------------------
(1) This property was sold in April 1996.

(2) As of September 30, 1996, this Property was 79% leased.

(3) As of September 30, 1996, this Property was 88% leased.

(4) As of September 30, 1996, this Property was 77% leased.

PENDING ACQUISITIONS. The Company has an active acquisition program through
which it is continually engaged in identifying, negotiating and consummating
portfolio and individual industrial property acquisitions. The Company's
acquisition department typically is considering in excess of $500 million of
property acquisition opportunities at any time. The Company has entered into
contracts or reached understandings with respect to the purchase price (for
aggregate consideration of approximately $66.4 million) and certain other
material terms with sellers of 36 properties (with an aggregate of approximately
2.8 million square feet of GLA). If all of these properties are purchased, the
Company anticipates funding approximately $37.1 million of the acquisition price
of these properties with the proceeds of this Offering and the balance from the
Acquisition Facility. Because some of these possible acquisitions are not yet
under contract and all are subject to completion of due diligence and a number
of other contingencies, there can be no assurance that any of these acquisitions
will be completed.

DEVELOPMENT ACTIVITIES. The Company develops properties, generally on a
build-to-suit basis where such properties are pre-leased or substantially
pre-leased prior to the commencement of construction. The pre-construction lease
commitment reduces the development and leasing risks generally associated with
the construction of new facilities. The Company generally will consider
facilities that are designed as generic bulk distribution or light industrial
buildings and are located in markets in which the Company's management has
previous development experience. The Company's management team has significant
experience in all phases of the development process, including site selection,
zoning, design, pre-development leasing and construction management. In order to
take advantage of this experience, and to take advantage of the Company's
inventory of available land (sufficient as of June 30, 1996 to permit the
development of approximately four million square feet of GLA) and increasing
customer requests for build-to-suit projects, the Company recently formed the
Development Services Group.

At June 30, 1996, the Company had under development two bulk warehouse
properties and two light industrial properties which it anticipates placing in
service in the fourth quarter of 1996 and which, in the aggregate, contain
732,604 square feet of GLA and are anticipated to cost approximately $18.4
million. In

S-10

addition, since June 30, 1996, the Company has commenced the development of two
bulk warehouse properties which will contain 313,165 square feet of GLA and are
expected to cost approximately $12.6 million. In October 1996, one of these
properties was placed in service. These six developments, assuming anticipated
leasing activity, are expected to provide approximately a 12.4% unleveraged
return on cost.

The Company is currently evaluating a number of development projects (with
an aggregate of approximately 2.3 million square feet of GLA). There can be no
assurance that any such development will be completed.

As of June 30, 1996, the Company was engaged in the following development
activities:

DEVELOPMENT
COST
(IN MILLIONS)
----------------------------

PERCENT
THROUGH ESTIMATED LEASED AT
JUNE 30, ADDITIONAL JUNE 30,
IN SERVICE DATE METROPOLITAN AREA PROPERTY TYPE 1996 COSTS GLA 1996
4th Qtr 96.............. Detroit, MI Light Industrial $ 1.4 $ 0.3 27,990 100%
4th Qtr 96.............. Atlanta, GA Light Industrial 3.0 2.5 180,000 0
4th Qtr 96.............. Central Pennsylvania Bulk Warehouse 2.2 2.2 206,173 59
4th Qtr 96.............. Central Pennsylvania Bulk Warehouse 1.8 5.0 318,441 72
--- ----- ---------
TOTAL.............................................................. $ 8.4 $ 10.0 732,604
--- ----- ---------
--- ----- ---------

PROPERTY DISPOSITIONS. When the Company believes that it is to the
Company's advantage to do so, it will sell properties. In making a decision
whether to sell a particular property, factors which would contribute to a
decision to sell the property include: (1) the property is in a market where
demand for similar properties is high; (2) investor interest in the type of
property is high; (3) the tenant is not expected to make significant capital
improvements to the property; (4) vacancy rates for similar properties are
expected to increase in the relevant market; (5) income from the property is not
expected to increase at an acceptable rate; and (6) the property's
characteristics no longer meet the Company's portfolio requirements. During the
six months ended June 30, 1996, the Company sold five properties for an
aggregate price of approximately $12.1 million, recognizing a gain of
approximately $4.3 million.

BUSINESS STRATEGIES

The Company seeks to achieve its objectives by implementing the following
seven strategies in connection with the operation of its business:

ORGANIZATION STRATEGY

The Company implements its decentralized property operations strategy
through the use of experienced regional management teams and local property
managers. Each operating region is headed by a senior regional director who is a
senior executive officer of, and has an equity interest in, the Company. The
Company provides acquisition and financing assistance, property management
oversight and financial reporting functions from its headquarters in Chicago to
support its regional operations. The Company believes the size of its portfolio
enables it to realize operating efficiencies by spreading overhead over many
properties and by negotiating quantity purchasing discounts.

MARKET CONCENTRATION STRATEGY

The Company invests in markets where it can achieve size and economies of
scale. By focusing on specific markets, properties can be added without
incurring appreciable increases in overhead. Based on the size of its portfolios
in the Operating Markets, which average approximately 2.0 million square feet
per

S-11

market, and the experience of its senior regional directors, the Company
believes that it has sufficient market presence and resources to compete
effectively.

LEASING AND MARKETING STRATEGY

The Company has an operational management strategy designed to enhance
tenant satisfaction and portfolio performance. The Company pursues an active
leasing strategy, which includes aggressively marketing available space,
renewing existing leases at higher rents per square foot and seeking leases
which provide for the pass-through of property-related expenses to the tenant.
The Company also has local and national marketing programs which focus on the
business and brokerage communities and national tenants.

ACQUISITION STRATEGY

The primary focus of First Industrial's acquisition strategy is to acquire
properties in the Operating Markets to capitalize on local market expertise and
maximize operating effectiveness and efficiencies. As appropriate opportunities
arise, the Company will acquire additional properties in other markets where it
can achieve sufficient size and scale as well as hire top-quality management.

DEVELOPMENT STRATEGY

Of the buildings currently in First Industrial's portfolio, 97 were
developed by its management. The Company will continue to leverage the
development capabilities of its management, many of whom are leading developers
in their respective markets and formed the Development Services Group to focus
on such activities.

DISPOSITION STRATEGY

The Company continually evaluates local market conditions and
property-related factors and will sell a property when it believes it is to the
Company's advantage to do so.

FINANCING STRATEGY

The Company believes that the size of its portfolio and the diversity of its
buildings and tenants will allow it access to the public and private capital
markets which are not generally available to smaller, less diversified property
owners because of the portfolio size and diversity requirements of those
markets. As of June 30, 1996, as adjusted for the Offering and assuming that
proceeds of the Offering not used to repay indebtedness are used to acquire
properties, the Company's ratio of debt to total market capitalization (I.E.,
total consolidated debt of the Company as a percentage of the aggregate market
value of all outstanding shares of Common Stock (assuming a market price of
$25.50 per share), assuming the exchange of all Units in the Operating
Partnership for shares of Common Stock, plus the stated value of all outstanding
shares of preferred stock plus total consolidated debt) would have been
approximately 31.9% and for the six months ended June 30, 1996, the Company's
coverage ratio (computed as total revenues minus property expenses and general
administrative expenses divided by interest expense plus dividends on preferred
stock) would have been 3.3:1. See "Risk Factors--Risks Associated with Debt
Financing and Leverage--No Limitation on Debt" in the accompanying Prospectus.

Amounts repaid under the Acquisition Facilities may be reborrowed to fund
the Company's continuing acquisition and development activities and for working
capital purposes. Immediately following the Offering, no amounts will be
outstanding under such facilities. The Company believes that it has available to
it sources to finance on a long-term basis its unencumbered Properties and
properties acquired in the future, and is currently negotiating with several
lenders for a $200 million unsecured revolving credit facility to replace the
Acquisition Facilities, although there can be no assurance that the Company will
be successful in obtaining such a facility on acceptable terms.

S-12

PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS

The Company's Common Stock is traded on the NYSE under the symbol "FR." The
distributions declared per share and the high and low closing prices of shares
of Common Stock are set forth below for the periods indicated.

PRICE RANGE
OF COMMON STOCK DISTRIBUTIONS
----------------- DECLARED PER
HIGH LOW SHARE

Year Ended December 31, 1994:

2nd Quarter from June 24,
1994........................ $23 5/8 $23 5/8 $ --
3rd Quarter................... 23 5/8 20 5/8 0.4725
4th Quarter................... 21 1/8 17 1/2 0.4725

Year Ended December 31, 1995:

1st Quarter................... $19 5/8 $17 3/4 $ 0.4725
2nd Quarter................... 20 1/2 17 3/8 0.4725
3rd Quarter................... 20 1/2 19 1/2 0.4725
4th Quarter................... 22 1/2 19 3/8 0.4875

Year Ending December 31, 1996:

1st Quarter................... $24 1/2 $21 5/8 $ 0.4875
2nd Quarter................... 24 3/8 22 0.4875
3rd Quarter................... 26 22 1/2 0.4875(1)
4th Quarter through October 4,
1996........................ 25 1/2 25 1/8 --

- ------------------------------

(1) Payable October 21, 1996 to stockholders of record on September 27, 1996.

The reported last sale price of the Common Stock on the NYSE on October 4,
1996 was $25 1/2 per share. As of October 3, 1996, there were 307 record holders
of Common Stock.

Prior to the consummation of the Company's initial public offering (the
"Initial Offering") in June 1994, the Company did not pay any distributions to
its stockholders. Since the consummation of the Initial Offering, the Company
has paid regular and uninterrupted distributions. The Company intends to
continue to declare quarterly distributions on its Common Stock. No assurance,
however, can be given as to the amounts or timing of future distributions, as
such distributions are subject to the Company's earnings, financial condition,
capital requirements and such other factors as the Company's Board of Directors
deems relevant.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby are expected to be approximately $119.9 million (approximately
$138.0 million if the Underwriters' over-allotment option is exercised in full).
The Company intends to use approximately $82.8 million of such net proceeds for
the repayment of borrowings under the Acquisition Facilities which were incurred
to finance acquisition and development activities ($42.9 million of which
borrowings were incurred or are anticipated to be incurred on or after September
30, 1996) and the balance of $37.1 million (approximately $55.2 million if the
Underwriters' over-allotment option is exercised in full) to finance future
acquisitions and development. As of October 4, 1996, the Acquisition Facilities
bore interest at a weighted average interest rate of 7.39% and had a weighted
average maturity of approximately nine months.

Pending such uses, the net proceeds may be invested in short-term income
producing investments such as investment grade commercial paper, government and
government agency securities, money market funds that invest in government
securities, certificates of deposit, interest-bearing bank accounts and mortgage
loan participations.

S-13

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company as of June 30, 1996 and as adjusted to reflect the Offering and the
application of a portion of the net proceeds therefrom to repay indebtedness
under the Acquisition Facilities.

AS OF JUNE 30, 1996
-----------------------

(IN THOUSANDS)

ACTUAL AS ADJUSTED

Debt:
Mortgage loans....................................................................... $ 392,590 $ 392,590
Acquisition Facilities(1)............................................................ 19,660 --
---------- -----------
Total debt......................................................................... 412,250 392,590
---------- -----------

Limited partners' interest in Operating Partnership...................................... 34,492 34,492

Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized; 1,650,000 shares
issued and outstanding............................................................. 17 17
Common stock, $.01 par value, 100,000,000 shares authorized; 24,137,881 shares issued
and outstanding; 29,137,881 shares issued and outstanding as adjusted(2)........... 241 291
Additional paid-in capital........................................................... 445,402 565,283
Distributions in excess of accumulated earnings...................................... (40,944) (40,944)
---------- -----------
Total stockholders' equity......................................................... 404,716 524,647
---------- -----------
Total capitalization..................................................................... $ 851,458 $ 951,729
---------- -----------
---------- -----------

- ------------------------

(1) At October 4, 1996, the aggregate outstanding balance under the Acquisition
Facilities was $67.8 million. The Company anticipates that immediately prior
to the consummation of the Offering, the aggregate outstanding balance under
the Acquisition Facilities will be approximately $82.8 million.

(2) Excludes 2,115,750 shares issuable as of June 30, 1996 upon the exchange of
Units and 1,096,000 shares issuable upon the exercise of outstanding options
under the Company's Stock Incentive Plan.

S-14

THE PROPERTIES

GENERAL

The Company owns 320 Properties containing an aggregate of approximately
28.3 million square feet of GLA in 14 states, with a diverse base of more than
860 tenants. The Properties are generally located in business parks which have
convenient access to interstate highways and rail and air transportation. The
median age of the Properties is approximately ten years. The Company classifies
its Properties into two industrial categories: bulk warehouse and light
industrial.

The following table summarizes certain information with respect to the
Properties, each of which is wholly owned by a subsidiary of the Company.

BULK WAREHOUSE LIGHT INDUSTRIAL TOTAL
--------------------------------------------- -------------------------------------------- -----------
NUMBER OF AVERAGE NUMBER OF AVERAGE
METROPOLITAN AREA GLA PROPERTIES OCCUPANCY GLA PROPERTIES OCCUPANCY GLA

Chicago.......... 2,914,075 19 94% 1,070,682 13 99% 3,984,757
Detroit.......... 1,558,403 34 96 2,417,461 57 97 3,975,864
Minneapolis/St.
Paul........... 1,376,820 11 100 2,574,772 36 98 3,951,592
Atlanta.......... 3,118,110 16 96 507,744 8 68 3,625,854
Grand Rapids..... 2,773,211 22 87 40,400 3 68 2,813,611
Central
Pennsylvania(1).. 1,745,729 12 99 678,667 13 97 2,424,396
Indianapolis..... 1,659,630 6 98 697,820 19 98 2,357,450
St. Louis........ 750,282 13 99 385,713 3 100 1,135,995
Nashville........ 760,229 4 100 227,747 3 95 987,976
Cincinnati....... 951,080 3 98 -- -- -- 951,080
Des Moines....... 879,060 5 100 -- -- -- 879,060
Milwaukee........ -- -- -- 254,613 5 100 254,613
Dayton........... -- -- -- 180,000 4 100 180,000
Columbus......... -- -- -- 56,849 1 88 56,849
Other (2)........ 301,355 4 100 378,603 6 100 679,958
----------- --- ---------- --- -----------
TOTAL OR
AVERAGE...... 18,787,984 149 96% 9,471,071 171 96% 28,259,055
----------- --- ---------- --- -----------
----------- --- ---------- --- -----------

GLA AS
A PERCENT
NUMBER OF AVERAGE OF TOTAL
METROPOLITAN AREA PROPERTIES OCCUPANCY PORTFOLIO

Chicago.......... 32 96% 14%
Detroit.......... 91 97 14
Minneapolis/St.
Paul........... 47 98 14
Atlanta.......... 24 92 13
Grand Rapids..... 25 87 10
Central
Pennsylvania(1).. 25 98 9
Indianapolis..... 25 98 8
St. Louis........ 16 99 4
Nashville........ 7 99 3
Cincinnati....... 3 98 3
Des Moines....... 5 100 3
Milwaukee........ 5 100 1
Dayton........... 4 100 1
Columbus......... 1 88 --
Other (2)........ 10 100 2
--- ---
TOTAL OR
AVERAGE...... 320 96% 100%
--- ---
--- ---

- ------------------------

(1) Includes the Harrisburg, Allentown and Reading markets.

(2) Includes Denton, Texas; Wichita, Kansas; West Lebanon, New Hampshire and
Abilene, Texas.

The Company's bulk warehouse properties are designed for bulk storage of
materials and manufactured goods and have internal heights between 18 and 30
feet. Most of the Company's bulk warehouse properties have dock facilities for
trucks as well as grade level loading for lighter vehicles and vans. The typical
lease for a bulk warehouse property covers 50,000 square feet of GLA. Of the
Properties, 149 are bulk warehouse facilities, containing an aggregate of
approximately 18.8 million square feet of GLA (67% of the total GLA of the
Properties).

The Company's light industrial properties are generally used for the design,
assembly, packaging and distribution of goods and/or the provision of services
and typically offer tenants internal heights of between 14 and 20 feet, have
grade level loading and many provide dock facilities as well. The typical lease
for a light industrial property covers 16,000 square feet of GLA. The Company's
light industrial properties typically have less building depth and a greater
office finish component than the Company's bulk warehouse properties. Of the
Properties, 171 are light industrial facilities, containing an aggregate of
approximately 9.5 million square feet of GLA (33% of the total GLA of the
Properties).

THE OPERATING MARKETS

The Company's business is focused on industrial properties located in the
Operating Markets which are in the central portion of the United States with a
significant midwestern presence. According to publicly available reports
prepared by CB Commercial Real Estate Group, Inc. ("CB Commercial"), the midwest
region (where approximately 73% of the Properties (based on GLA) are located)
has had the highest average occupancy rate for industrial properties of the
major regions in the United States since

S-15

1991. The Operating Markets are generally recognized as important and
established manufacturing bases and distribution centers. The Company believes
that the Operating Markets are well-positioned for long-term growth because of
the extensive roadway, rail and water transportation infrastructure which
interconnects within the Company's operating region.

By operating similar buildings in targeted geographic regions, the Company
has also been able to realize operating efficiencies. At the same time, presence
in a number of markets has left the Company less exposed to market specific
economic downturns. The Company currently expects that it will make further
investments in the Operating Markets and will expand into other markets as
investment opportunities it considers attractive become available.

The following table shows occupancy rates for industrial property in certain
of the Operating Markets for the periods shown.

1991 1992 1993 1994 1995

Chicago(1)............................................................ 89.7% 91.5% 91.2% 91.9% 93.9%
Detroit(1)............................................................ 95.6 93.2 92.3 94.2 95.8
Minneapolis/St. Paul(1)............................................... 93.9 94.3 96.5 96.5 95.7
Atlanta(1)............................................................ 89.1 87.9 89.8 89.8 89.7
Grand Rapids(2)....................................................... 98.6 96.1 97.1 96.5 95.5
Indianapolis(1)....................................................... 94.1 94.5 95.0 96.4 97.5
St. Louis(1).......................................................... 98.6 97.3 95.3 95.1 94.6
Nashville(1).......................................................... 96.8 97.7 97.0 97.0 96.0
Cincinnati(1)......................................................... 95.5 94.1 95.1 96.3 97.1
Des Moines(2)......................................................... 88.7 88.4 88.7 92.5 95.5
Milwaukee(2).......................................................... 94.1 93.3 (3) 97.5 99.4
Dayton(2)............................................................. (3) (3) (3) 89.9 90.4
Columbus(1)........................................................... 93.0 94.2 97.7 94.7 94.1

United States(1)...................................................... 92.1 91.3 91.7 92.6 93.1

- ------------------------

(1) Source: CB Commercial.

(2) Source: 1991-1996 Comparative Statistics of Industrial and Office Real
Estate Markets from the Society of Industrial and Office Realtors.

(3) Not available.

TENANT AND LEASE INFORMATION

The Company has a diverse base of more than 860 tenants engaged in a wide
variety of businesses including manufacturing, retailing, wholesale trade,
distribution and professional services. Most leases have an initial term of
between three and six years and provide for periodic rental increases that are
either fixed or based on changes in the Consumer Price Index. Industrial tenants
typically have net or semi-net leases and pay as additional rent their
percentage of the property's operating costs, including the costs of common area
maintenance, property taxes and insurance. As of June 30, 1996 approximately 96%
of the GLA of the Properties was leased, and no single tenant accounted for more
than 2.3%, or group of related tenants accounted for more than 2.5%, of the
Company's total revenues for the six months ended June 30, 1996, nor did any
single tenant or group of related tenants occupy more than 2.9% of the Company's
total GLA as of June 30, 1996.

S-16

LEASE EXPIRATIONS

The following table shows scheduled lease expirations for all leases for the
Properties as of June 30, 1996.

ANNUAL BASE
PERCENTAGE OF RENT UNDER PERCENTAGE OF TOTAL
NUMBER OF GLA SUBJECT GLA REPRESENTED EXPIRING ANNUAL BASE RENT
YEAR OF LEASE LEASES TO EXPIRING BY EXPIRING LEASES(3) REPRESENTED BY
EXPIRATION(1) EXPIRING LEASES(2) LEASES (IN THOUSANDS) EXPIRING LEASES

1996(4).................................. 133 2,380,198 9% $ 9,651 9%
1997..................................... 203 3,987,163 15 14,996 14
1998..................................... 190 4,890,526 18 20,016 19
1999..................................... 145 4,505,443 17 17,249 16
2000..................................... 111 3,560,331 13 15,868 15
2001..................................... 65 3,235,751 12 11,102 11
2002..................................... 17 589,558 2 3,007 3
2003..................................... 21 1,372,878 5 5,167 5
2004..................................... 9 813,341 3 2,425 2
2005..................................... 10 804,757 3 3,142 3
2006 and thereafter...................... 11 975,629 3 3,371 3
--- ------------ --- -------------- ---
TOTAL................................ 915 27,115,575 100% $ 105,994 100%
--- ------------ --- -------------- ---
--- ------------ --- -------------- ---

- ------------------------

(1) Lease expirations, assuming tenants do not exercise existing renewal,
termination or purchase options.

(2) Does not include vacancy of 1,143,480 square feet.

(3) Reflects monthly base rent provided for under the terms of each expiring
lease as in effect on June 30, 1996 multiplied by 12 and does not take into
account any contractual rent escalations.

(4) For the period July 1, 1996 through December 31, 1996.

OCCUPANCY AND AVERAGE RENTAL INCOME

The following table summarizes the occupancy and average rental income per
square foot for the Properties for the periods shown.

SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -------------------------------------------
JUNE 30, 1996 1995 1994 1993

Average GLA(1)................................... 25,410,905 20,866,038 17,837,690 17,297,126
Average percentage occupancy(1).................. 96.4% 96.7% 96.5% 94.1%
Average annual (six months in the case of the
period ended June 30, 1996) rental income per
square foot leased(2).......................... $ 2.04 $ 4.14 $ 4.09(3) $ 3.90
Total rental income.............................. $ 49,881,000 $ 83,522,000 $ 70,408,000(3) $ 63,428,000

- ------------------------

(1) Average GLA and average percentage occupancy for the six months ended June
30, 1996 and the year ended December 31, 1995 were determined by averaging
each of the beginning of period and end of period GLA and percentage
occupancy, respectively, excluding GLA of properties under development.
Adjusted average GLA for the period January 1, 1994 to June 30, 1994 was
17,393,813. Average GLA and average percentage occupancy for the period July
1, 1994 to December 31, 1994 were determined by averaging each of the
beginning of period and end of period GLA and percentage occupancy,
respectively, excluding GLA of properties under development. Adjusted
average GLA and average percentage occupancy for the year ended December 31,
1993 were determined by averaging each of the beginning of period and end of
period GLA and percentage occupancy, respectively, excluding GLA of
properties under development. References to "adjusted" or "as adjusted" data
herein refer to historical data which have been adjusted for the Initial
Offering and related transactions.

S-17

(2) Average annual rental income per square foot leased was determined by
dividing total rental income by the product of average percentage occupancy
and average GLA.

(3) Presents as adjusted information for the period January 1, 1994 to June 30,
1994 and actual information from July 1, 1994 to December 31, 1994.

CAPITAL EXPENDITURES

The following table summarizes the capital expenditures for the Properties
for the periods shown.

SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -------------------------------------------
JUNE 30, 1996 1995 1994 1993

Cost per square foot............................. $ .04 $ .08 $ 0.04(1) $ 0.07
Average GLA(2)................................... 25,410,905 20,866,038 17,837,690 17,297,126
Total capital expenditures....................... $ 1,129,924 $ 1,610,014 $ 702,892(1) $ 1,145,305

- ------------------------

(1) Based on annualized information from July 1, 1994 to December 31, 1994,
since information on an as adjusted basis is not available for the full
year.

(2) Average GLA for the six months ended June 30, 1996 and the year ended
December 31, 1995 were determined by averaging the beginning of period and
end of period GLA, excluding GLA of properties under development. Adjusted
average GLA for the period January 1, 1994 to June 30, 1994 was 17,393,813.
Average GLA for the period July 1, 1994 to December 31, 1994 was determined
by averaging the beginning of period and end of period GLA, excluding GLA of
properties under development. Adjusted average GLA for the year ended
December 31, 1993 was determined by averaging the beginning of period and
end of period GLA, excluding GLA of properties under development.

TENANT IMPROVEMENTS AND LEASING COMMISSIONS

The following table summarizes the tenant improvement and leasing commission
expenditures incurred in the renewal or re-leasing of previously occupied space
for the periods shown. The costs associated with renewing leases with current
tenants generally are significantly less than the costs associated with
re-leasing space to new tenants.

SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ----------------------------------------
JUNE 30, 1996 1995 1994(1) 1993

Cost per square foot..................................... $ 0.65 $ 0.76 $ 0.80 $ 1.15
Renewed or re-leased space in square feet(2)............. 1,664,221 5,190,061 2,636,312 2,847,444
Total expenditures....................................... $ 1,078,275 $ 3,922,794 $ 2,107,738 $ 3,270,497

- ------------------------

(1) Based on annualized information from July 1, 1994 to December 31, 1994,
since information on an as adjusted basis is not available for the full
year.

(2) The Company believes that it incurs lower costs when it enters into a new
lease (a "Category 1 Lease") (a) with a tenant that is renewing an existing
lease, (b) with a tenant that is expanding its space either in the same or a
different building owned by the Company or (c) covering space for which the
Company negotiates the early termination of an existing lease or permits an
existing lease to expire where a new tenant has already agreed to lease the
space, than when it enters into a new lease (a "Category 2 Lease") for
previously vacant space or space vacated by a tenant when the Company does
not have a replacement tenant that has agreed to lease such space. During
the six months ended June 30, 1996, approximately 85% of the space
identified above was covered by Category 1 Leases and approximately 15% of
such space was covered by Category 2 Leases. During the years ended December
31, 1995 and 1994, on an annualized basis, approximately 89% and 82%,
respectively, of the space identified above was covered by Category 1 Leases
and approximately 11% and 18%, respectively, of such space was covered by
Category 2 Leases. Comparable information for all Properties for periods
prior to the Initial Offering is not available.

S-18

MANAGEMENT

The directors and senior officers of the Company are as follows:

NAME AGE OFFICE

Jay H. Shidler................................. 50 Chairman of the Board of Directors
Michael T. Tomasz.............................. 54 President, Chief Executive Officer and Director
Michael W. Brennan............................. 39 Chief Operating Officer and Director
Michael J. Havala.............................. 36 Chief Financial Officer
Gary H. Heigl.................................. 41 Senior Vice President, Capital Markets
Johannson L. Yap............................... 34 Senior Vice President, Acquisitions
John L. Lesher................................. 62 Director
Kevin W. Lynch................................. 43 Director
John Rau....................................... 48 Director
Robert J. Slater............................... 59 Director
J. Steven Wilson............................... 52 Director
Michael G. Damone.............................. 62 Senior Regional Director and Director
David P. Draft................................. 45 Senior Regional Director
Duane H. Lund.................................. 32 Senior Regional Director
Peter F. Murphy................................ 31 Senior Regional Director
Anthony Muscatello............................. 47 Senior Regional Director
Matthew J. Ochalski............................ 42 Senior Regional Director
Christopher M. Schneider....................... 35 Vice President, Finance and Accounting
Cindy Thorson.................................. 34 Vice President, Investor Relations
Randall L. Axelson............................. 37 Vice President, Operations and Research
Scott A. Musil................................. 28 Controller

The Company's Board of Directors consists of nine directors, a majority of
whom are and will be independent. Messrs. Lesher, Lynch, Rau, Slater and Wilson
are independent directors.

JAY H. SHIDLER. Mr. Shidler has been Chairman of the Board of Directors
since the formation of the Company in August 1993. He is the Founder and
Managing Partner of The Shidler Group. A nationally acknowledged expert in the
field of real estate investment and finance, Mr. Shidler has over 20 years of
experience in real estate investment and has acquired and managed properties
involving over $3 billion in aggregate value. Since 1970, Mr. Shidler has been
directly involved in the acquisition and management of over 700 properties in 40
states and Canada. Mr. Shidler serves on the boards of directors of several
private companies and is active as a trustee of several charitable
organizations, including The Shidler Family Foundation. Mr. Shidler is also a
Founder and Director of TriNet Corporate Realty Trust, Inc., of which he was
Co-Chairman of the Board of Directors from March 1993 through May 1996, and is a
member of the National Association of Real Estate Investment Trusts ("NAREIT").

MICHAEL T. TOMASZ. Mr. Tomasz has been President, Chief Executive Officer
and a Director of the Company since April 1994. He joined The Shidler Group in
1986, where he was Managing Partner of the Chicago office and was involved in
the acquisition, financing, leasing, managing and disposition of over $270
million of commercial property. Prior to joining The Shidler Group, Mr. Tomasz
was a commercial real estate broker with CB Commercial (formerly Coldwell
Banker) from 1974 to 1985 in which capacity he was involved in the sale and
leasing of over $200 million of industrial property. In 1979, Mr. Tomasz was
named the "Commercial Salesperson of the Year" by the Chicago Real Estate Board.
His professional affiliations include the Society of Industrial and Office
Realtors, the Urban Land Institute, the Association of Industrial Real Estate
Brokers and NAREIT.

MICHAEL W. BRENNAN. Mr. Brennan has been a Director of the Company since
March 1996, and became Chief Operating Officer of the Company in December 1995,
prior to which time he was Senior

S-19

Vice President, Asset Management of the Company since April 1994. He was a
Partner of The Shidler Group between 1988 and 1994 and the President of
Brennan/Tomasz/Shidler Investment Corporation and was in charge of asset
management, leasing, project finance, accounting and treasury functions for The
Shidler Group's Chicago operations. Between 1986 and 1988, Mr. Brennan served as
The Shidler Group's principal acquisition executive, with responsibility for the
acquisition of over $70 million of commercial properties. Prior to joining The
Shidler Group, Mr. Brennan was an investment specialist with CB Commercial. His
professional affiliations include the Society of Industrial and Office Realtors,
the Urban Land Institute, the National Association of Industrial and Office
Parks, NAREIT and the Chicago Union League Club Real Estate Group.

MICHAEL J. HAVALA. Mr. Havala has been Chief Financial Officer of the
Company since April 1994. He joined The Shidler Group in 1989, and was Chief
Financial Officer for The Shidler Group's midwest region with responsibility for
accounting, finance and treasury functions. With The Shidler Group, Mr. Havala
structured joint ventures, obtained and refinanced project financing, developed
and implemented management information systems and coordinated all financial
aspects of a three million square foot portfolio located in various states
throughout the Midwest. Prior to joining The Shidler Group, Mr. Havala was a
Senior Tax Consultant with Arthur Andersen & Co., where he worked in both the
tax and audit areas, specializing in real estate, banking and corporate finance.
Mr. Havala is a certified public accountant. His professional affiliations
include NAREIT and the Illinois CPA Society.

GARY H. HEIGL. Mr. Heigl has been Senior Vice President, Capital Markets of
the Company since December 1995. For the preceding 18 years, Mr. Heigl
specialized in commercial real estate finance, arranging project debt totaling
in excess of $6 billion. During 1994 and 1995, Mr. Heigl was Senior Vice
President--Director New Business Development for ITT Real Estate Services, Inc.
From 1991 through 1993, he operated his own real estate consulting firm. From
1984 through 1990, Mr. Heigl served in various project finance capacities at VMS
Realty Partners culminating as Senior Vice President--Finance and Dispositions.
Prior to 1984, he served in lending officer positions for the commercial real
estate groups of ITT Financial and Aid Association for Lutherans. Mr. Heigl's
professional affiliations include the Urban Land Institute and NAREIT.

JOHANNSON L. YAP. Mr. Yap has been Senior Vice President, Acquisitions of
the Company since May 1996 and prior to that was Vice President, Acquisitions of
the Company since April 1994. He joined The Shidler Group in 1988 and became a
Vice President in 1991, with responsibility for acquisitions, property
management, leasing, financing, sales and construction management functions.
Between 1988 and 1994, Mr. Yap assisted in the acquisition, underwriting and due
diligence of over $300 million of commercial properties. His professional
affiliations include the Urban Land Institute, the Chicago Real Estate Council
and the National Association of Investors Corporation, NAREIT and the National
Association of Industrial and Office Parks.

JOHN L. LESHER. Mr. Lesher has been a Director of the Company since June
1994. Since April 1994, Mr. Lesher has been the President of Resource
Evaluation, Inc., a consulting firm specializing in working capital management.
He is presently a Director of Resource Evaluation, Inc. and The Sound Shore
Fund. From 1990 to 1993, he was a Managing Director of Korn/Ferry International,
an executive recruiting organization. From 1985 to 1989, he was Vice President
of the New York financial services practices of Cresap, McCormick & Paget, a
management consulting organization; President of Home Group Financial Services,
a subsidiary of Home Insurance Company; and President of Mars & Company, an
international strategic planning consulting firm. Prior to 1985, he served for
24 years in various capacities at Booz, Allen & Hamilton, including from 1976 to
1985 as its President.

KEVIN W. LYNCH. Mr. Lynch has been a Director of the Company since June
1994. Mr. Lynch is the Co-Founder and Principal of The Townsend Group
("Townsend"), an institutional real estate consulting firm founded in 1983 which
provides real estate consulting for pension funds and institutional investors.
In his capacity as Principal, Mr. Lynch is responsible for the development of
client portfolio strategic

S-20

planning, investment planning, oversight of advisor/manager real estate
compliance and monitoring portfolios on behalf of Townsend's clients. Prior to
founding Townsend, Mr. Lynch was associated with Stonehenge Capital Corporation
where he was involved in the acquisition of institutional real estate properties
and the structuring of institutional real estate transactions. He is a member of
the National Advisory Board for New York University's Real Estate Institute. Mr.
Lynch's professional affiliations include the National Council of Real Estate
Investment Fiduciaries, the Pension Real Estate Association, the American
Society for Real Estate Research and the Urban Land Institute.

JOHN RAU. Mr. Rau has been a Director of the Company since June 1994. Since
July 1993, Mr. Rau has been Dean of the Indiana University School of Business.
He is presently a Director of LaSalle National Bank and a member of the Board of
Overseers of the CARE Foundation. From 1991 to 1993, Mr. Rau served as Chairman
of the Illinois Economic Development Board and as special advisor to Illinois
Governor James Edgar. From 1990 to 1993, he was Chairman of the Banking Research
Center Board of Advisors and a Visiting Scholar at Northwestern University's
J.L. Kellogg Graduate School of Management. During that time he also served as
Special Consultant to McKinsey & Company, a worldwide strategic consulting firm.
From 1989 to 1991, Mr. Rau served as President and Chief Executive Officer of
LaSalle National Bank. From 1979 to 1989, he was associated with The Exchange
National Bank, serving as President from 1983 to 1989, at which time The
Exchange National Bank merged with LaSalle National Bank. Prior to 1979, he was
associated with First National Bank of Chicago. Mr. Rau also served as Chairman
of the Board of Trustees of the CARE Foundation.

ROBERT J. SLATER. Mr. Slater has been a Director of the Company since June
1994. Since 1985, Mr. Slater has been President of Jackson Consulting, Inc., a
private consulting company specializing in advising basic industries. Mr. Slater
is presently a Director of National Steel Corporation, a major steel
manufacturing company, and a Director of Southdown, Inc., a major cement and
cement product manufacturing company. Prior to 1985, Mr. Slater had been
associated with Crane Co. for 17 years. Crane Co. is a diversified company
involved in the distribution and manufacturing of building products, steel,
cement and aerospace products. He served as President and Chief Operating
Officer and a Director of Crane from 1980 to 1985. He became Vice Chairman of
that company in 1985. Prior to that, he was President of Crane Co.'s largest
subsidiary, CF&I Steel Corporation, from 1976 to 1980. While President of Crane
Co., Mr. Slater also served as Chairman and Director of Medusa Corporation,
Chairman of the Executive Committee and a director of Huttig Sash and Door Co.,
Director, Chairman and Chief Executive Officer of CF&I Steel Corporation and
Director of Crane Co.'s European, Australian, Canadian and Mexican operations.

J. STEVEN WILSON. Mr. Wilson has been a Director of the Company since June
1994. Since 1991, Mr. Wilson has been Chairman of the Board of Directors,
President and Chief Executive Officer and a director of Wickes Lumber Company,
which is one of the largest lumber yard chains in the United States. For more
than five years, Mr. Wilson has been President, Chief Executive Officer and a
Director of Riverside Group, Inc., an insurance holding company with operations
in real estate and mortgage banking; Chairman of the Board of Directors and
President of Atlantic Group, Inc., a supplier of building materials; and
Chairman of the Board of Directors, President and Chief Executive Officer of
Wilson Financial Corp., a real estate and investment firm.

MICHAEL G. DAMONE. Mr. Damone has been a Senior Regional Director and
Director of the Company since June 1994. Between 1973 and 1994, Mr. Damone was
Chief Executive Officer of Damone/ Andrew, a full service real estate
organization, which has developed more than three million square feet of
industrial, warehouse, distribution and research and development buildings.
Prior to co-founding Damone/ Andrew in 1973, Mr. Damone was for over six years
the Executive Vice President of a privately-held, Michigan based real estate
development and construction company, where he was responsible for the
development of industrial business parks, and he has worked in the real estate
development and management business since 1960. His professional affiliations
include the Society of Industrial and Office

S-21

Realtors, the National Association of Realtors, the Michigan Association of
Realtors and the South Oakland County Board of Realtors.

DAVID P. DRAFT. Mr. Draft has been a Senior Regional Director of the
Company since March 1996. Over the last 23 years, he has been responsible for
the leasing, management and/or development of over four million square feet of
industrial real estate. Between 1994 and March 1996, Mr. Draft was Co-Founder
and Principal of Draft & Gantos Properties, L.L.C., where he was responsible for
real estate management, construction and development. From 1990 to 1994, Mr.
Draft was Director of Development and Operations for Robert Grooters Development
Company where he was responsible for the development and management of
industrial properties. Mr. Draft is a licensed real estate broker and member of
the National Association of Realtors and the Michigan Association of Realtors.

DUANE H. LUND. Mr. Lund has been a Senior Regional Director of the Company
since April 1994. In 1989, he joined The Shidler Group's Minneapolis office
where he was involved in coordinating the underwriting and due diligence for
over $200 million of commercial property. In 1991 and 1992, Mr. Lund served as
Senior Vice President of Asset Management, where he oversaw the management and
leasing of a real estate portfolio of three million square feet located in four
states. Prior to joining The Shidler Group's Minneapolis office, Mr. Lund was a
tax consultant with Peat Marwick Main & Company from 1986 to 1988. Mr. Lund is a
certified public accountant. His professional affiliations include the National
Association of Industrial and Office Parks, the Minneapolis Area Association of
Realtors and the Wisconsin Real Estate Alumni Association, Inc., of which he is
a Regional Director.

PETER F. MURPHY. Mr. Murphy has been a Senior Regional Director of the
Company since March 1996. Between 1991 and March 1996, Mr. Murphy was a Vice
President of First Highland Management and Development Corporation where he was
responsible for the acquisition, development, management and leasing activities
for a 2 million square foot portfolio of properties in Indiana and Ohio. Mr.
Murphy is a member of the Indianapolis Environmental Commission.

ANTHONY MUSCATELLO. Mr. Muscatello has been a Senior Regional Director of
the Company since June 1994 and has been President of the Development Services
Group since September 1996. Over the last 25 years, he has been responsible for
the leasing, management and/or development of over two million square feet of
office, industrial and residential real estate. From 1987 to 1994, he served as
Managing General Partner of the central Pennsylvania operations of Rouse &
Associates, where he was responsible for day-to-day operations, including profit
and loss, marketing, leasing, acquisition, financing, construction and asset
management functions. From 1982 to 1987, he served in various capacities with
Rouse & Associates. From 1969 to 1982, Mr. Muscatello worked for several real
estate development firms, where his responsibilities included land acquisition,
market analysis and marketing, sales, financing and construction of single
family and multi-family homes. He is an active member in the National
Association of Industrial and Office Parks and the Industrial Real Estate
Brokers of Metropolitan New York.

MATTHEW J. OCHALSKI. Mr. Ochalski has been a Senior Regional Director of
the Company since September 1995. From 1991 to 1995, Mr. Ochalski was Senior
Vice President of Northern Builders Inc., responsible for approximately one
million square feet of new building construction and industrial real estate
development. Prior to 1991, Mr. Ochalski spent two years with Matthew Stevens
Realty Partners, managing a one million square foot portfolio of industrial,
office and retail properties and redeveloping a 500,000 square foot industrial
project. From 1980 through 1989, Mr. Ochalski served in various executive
capacities with CB Commercial, including as a member of the Board of Directors
of CB Commercial Real Estate Brokerage Services. His professional affiliations
have included being a member of the National Association of Industrial and
Office Parks, the Association of Industrial Real Estate Brokers, the Chicago
Office Leasing Broker Association and the National Association of Realtors.

CHRISTOPHER M. SCHNEIDER. Mr. Schneider has been Vice President, Finance
and Accounting of the Company since March 1996, prior to which time he had been
Financial Manager of the Company since

S-22

December 1994. From 1991 through 1994, he was Controller for The Shidler Group's
midwest region with responsibility for its accounting, tax and treasury
functions. From 1989 to 1991, Mr. Schneider was a tax consultant with Arthur
Andersen & Co., where he specialized in real estate and partnership tax. From
1983 to 1989, he was Asset Manager for two residential and commercial property
management firms. Mr. Schneider is a certified public accountant and a member of
the Minnesota CPA Society.

CINDY THORSON. Ms. Thorson has been Vice President, Investor Relations of
the Company since July 1995. From 1992 to 1995, she was the Investor Relations
Manager for Chicago and North Western Transportation Company. From 1985 to 1989,
she held various positions with the Institute of Real Estate Management and the
National Association of Realtors. Ms. Thorson is a member of NAREIT and the
National Investor Relations Institute.

RANDALL L. AXELSON. Mr. Axelson has been Vice President, Operations and
Research of the Company since March 1996 and was Assistant Vice President, Asset
Management of the Company from August 1995 until March 1996. Between 1984 and
July 1995, he held various positions with Travelers Realty Investment Company,
most recently as Assistant Vice President--Investment Administration where he
directed and oversaw an 80-property, $900 million commercial portfolio and was
responsible for all financial matters related to sales of two national
portfolios with an aggregate value of nearly $1 billion. From 1981 to 1984, Mr.
Axelson was an accountant at Homart Development Company. He is a certified
public accountant and a member of NAREIT, the Urban Land Institute and the
Illinois CPA Society.

SCOTT A. MUSIL. Mr. Musil has been Controller of the Company since December
1995. From 1988 to August 1995, Mr. Musil served in various capacities with
Arthur Andersen & Co., culminating as an audit manager specializing in the real
estate and finance industries. He is a certified public accountant and a member
of the American Institute of Certified Public Accountants.

S-23

UNDERWRITING

Subject to the terms and conditions contained in the Underwriting Agreement,
the Underwriters named below have severally agreed to purchase from the Company,
and the Company has agreed to sell to each of the Underwriters, for whom
Donaldson, Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Prudential Securities Incorporated and Smith Barney
Inc. are acting as representatives (the "Representatives"), the number of shares
of Common Stock set forth below opposite their respective names at the offering
price less the underwriting discounts set forth on the cover of this Prospectus
Supplement.

NUMBER OF
UNDERWRITER SHARES

Donaldson, Lufkin & Jenrette Securities Corporation..............................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...........................................................
Prudential Securities Incorporated...............................................
Smith Barney Inc. ...............................................................

----------
Total........................................................................ 5,000,000
----------
----------

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of shares of Common Stock are
subject to approval of certain legal matters by their counsel and to certain
other conditions. The Underwriters are obligated to take and pay for all of the
shares of Common Stock offered hereby (other than the shares of Common Stock
covered by the over-allotment option described below) if any such shares of
Common Stock are taken.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock to the public at the offering price
set forth on the cover page of this Prospectus Supplement and to certain dealers
at such price, less a concession not in excess of $ per share of Common
Stock. The Underwriters may allow, and such dealers may re-allow, a concession
of not in excess of $ per share of Common Stock on sales to certain
other dealers. After the Offering, the offering price and other selling terms
may be changed by the Representatives. The Company has granted to the
Underwriters an option, exercisable not later than 30 calendar days from the
date of this Prospectus Supplement, to purchase up to an additional 750,000
shares of Common Stock at the same price per share of Common Stock as the
Company receives for the shares of Common Stock that the Underwriters have
agreed to purchase.

To the extent the Underwriters exercise such option, each of the
Underwriters will have a firm commitment to purchase approximately the same
percentage of such additional shares of Common Stock as the number of shares of
Common Stock to be purchased by it shown in the above table bears to the total
number of shares of Common Stock shown in the above table, and the Company will
be obligated, pursuant to the option, to sell such shares of Common Stock to the
Underwriters. The Underwriters may exercise such option only to cover
over-allotments made in connection with the sale of the shares of Common Stock
offered hereby. If purchased, the Underwriters will sell such additional 750,000
shares of Common Stock on the same terms as those on which the shares of Common
Stock are being offered.

The Underwriting Agreement contains covenants of indemnity among the
Underwriters and the Company against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended.

S-24

The Company, its executive officers and Mr. Shidler have agreed, with
certain exceptions, that they will not, without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation, register the sale of, sell,
offer to sell, contract to sell, grant any option to purchase or otherwise
dispose of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or in any other manner transfer
all or a portion of the economic consequences associated with the ownership of
Common Stock, for a period of 90 days after the date of the Underwriting
Agreement.

S-25

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PHOTOGRAPH OF
CUSTOMER LOGOS

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NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL.

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TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT PAGE

Prospectus Supplement Summary............................................. S-3
The Company............................................................... S-8
Price Range of Common Stock and Distributions............................. S-13
Use of Proceeds........................................................... S-13
Capitalization............................................................ S-14
The Properties............................................................ S-15
Management................................................................ S-19
Underwriting.............................................................. S-24
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Company............................................................... 3
Risk Factors.............................................................. 3
Use of Proceeds........................................................... 6
Description of Common Stock............................................... 6
Restrictions on Transfers of Capital Stock................................ 7
Certain Federal Income Tax Considerations................................. 8
Plan of Distribution...................................................... 10
Legal Matters............................................................. 11
Experts................................................................... 11

5,000,000 SHARES

[LOGO]

FIRST INDUSTRIAL REALTY
TRUST, INC.

COMMON STOCK

----------------------------------

P R O S P E C T U S S U P P L E M E N T

----------------------------------

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.

, 1996

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