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A New Era for Industrial REITs: Standardizing Property Metrics

On April 1, 2025, First Industrial Realty Trust, Inc. (NYSE: FR) announced a significant initiative aimed at standardizing key property metrics among a coalition of industrial real estate investment trusts (REITs). This coalition includes industry giants such as EastGroup Properties, Prologis, and STAG Industrial, collectively referred to as the Industrial REIT Group. The overarching goal of this coalition is to enhance comparability across the sector by refining the methodology used in calculating non-GAAP property metrics.

The Push for Standardization

The importance of standardizing metrics cannot be overstated in the competitive arena of industrial real estate investment. By adopting a unified methodology for metrics such as property stabilization, occupancy rates, rent changes, and customer retention, these REITs aim to offer a clearer picture to investors and stakeholders.

This initiative builds on a previous harmonization effort that took place in 2018. The Industrial REIT Group has reiterated its approach, particularly in determining what constitutes a stabilized property and the specific criteria for including properties in their annual same-store portfolio. One notable aspect of their methodology is the exclusion of value-added and redevelopment properties from the same-store calculations, ensuring that the data reflects only stabilized assets.

Implications for the Industry

From this point forward, all members of the Industrial REIT Group will align their non-GAAP metrics with these revised methodologies. While minor differences in calculation methods or terminologies might persist, the coalition seeks to foster an environment of enhanced consistency and transparency across the industry. Companies will begin aligning their disclosures as these methodologies are integrated into their annual guidance, particularly for 2025 and beyond.

However, it's essential to note that these standardized metrics are not expected to significantly impact First Industrial's non-GAAP metrics for periods preceding 2025. This move signifies a progressive step toward clearer communication and comparability within the real estate sector, thereby assisting investors in making more informed decisions.

About the Coalition and First Industrial Realty Trust

First Industrial Realty Trust, Inc. is a prominent owner, operator, developer, and acquirer of logistics properties in the United States. Their approach is centered around providing high-quality facilities paired with exceptional service to both multinational corporations and regional firms essential for their supply chains. Currently, First Industrial boasts approximately 69.5 million square feet of industrial space, heavily focused on supply-constrained markets across 15 targeted metropolitan statistical areas (MSAs).

As the coalition progresses, the reforms and methodologies adopted stand to impact how properties are valued and assessed across the board, potentially influencing investor strategies and capital flows within the sector. This move towards standardization is expected to set a precedent for future initiatives aimed at improving transparency and accountability in industrial real estate.

Conclusion

The establishment of this coalition represents more than just a procedural change; it embodies a shift towards a more transparent and standardized operating environment in the industrial REIT sector. As these practices take hold, they are likely to not only enhance operational efficiencies but also foster greater trust and reliability in the eyes of investors.

In summary, as First Industrial Realty Trust leads the charge in standardizing key metrics, it sets a crucial benchmark for other players in the real estate investment trust landscape. The collaborative efforts of these industry leaders signal a commitment to clarity and integrity within the real estate investment community, paving the way for a more cohesive future.

For further details, visit First Industrial Realty Trust.