First Industrial Realty Trust(US:FR)2020-04-23 22:00Financial Data and Key Metrics Changes - Diluted EPS for Q1 2020 was $0.32, compared to $0.19 in the same period last year [29] - NAREIT funds from operations (FFO) were $0.45 per fully diluted share, up from $0.41 per share in Q1 2019 [30] - Occupancy rate was 97.1%, down 50 basis points from the prior quarter and down 20 basis points from a year ago [32] - Same-store NOI growth on a cash basis was 8.4%, with cash rental rates up 10.8% overall [33][34] Business Line Data and Key Metrics Changes - The company signed 72% of its 2020 lease expirations as of April 22, with a cash rental rate increase of 8.4% [17] - Approximately 2.6 million square feet of leases were commenced during the quarter, with 459,000 square feet being new leases [32] - Rent relief requests from tenants represented approximately 19% of April billings, with 8% from tenants asking for specific terms [14][55] Market Data and Key Metrics Changes - The company experienced a significant impact on commerce due to COVID-19, with unemployment rising sharply [9] - Prior to the pandemic, most tenants' businesses were performing well, leading to optimism for recovery as restrictions are lifted [10] Company Strategy and Development Direction - The company is focusing on maintaining liquidity and has postponed new speculative development starts [22] - It plans to continue with developments in process totaling 1.5 million square feet and a total investment of $154 million [22] - The company expects an increase in demand for industrial space due to accelerated e-commerce adoption and inventory increases [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the economy's recovery, assuming a return to work in early summer [40] - The company is prepared for potential economic disruptions and is focused on disciplined risk management [50] - Management noted that the situation is fluid, with daily updates on tenant payments and requests for rent relief [58] Other Important Information - The company has closed on $40 million of sales in 2020, aiming for a total sales guidance range of $125 million to $175 million [20] - An additional $1 million of reserves for bad debt has been included in the updated guidance due to the economic impact of COVID-19 [13] Q&A Session Summary Question: Can you clarify the 19% of April billings that requested relief? - The 19% is based on dollar amounts, with requests typically for rent deferrals or abatements [55] Question: How do you anticipate handling rent deferrals? - The company plans to evaluate each request on a case-by-case basis, aiming to recover rent in 2020 [58] Question: What is the bad debt assumption for the remainder of the year? - The bad debt expense assumption has been increased to $900,000 per quarter, based on historical data and current tenant quality [66] Question: Are there any tenants similar to Pier 1 that are concerning? - Currently, there are no tenants identified as concerning, and the company has security deposits from tenants like Karma [91] Question: How will uncollected rent be reported? - Uncollected rent will be evaluated for deferral or bad debt expense based on tenant creditworthiness [94] Question: What is the outlook for leasing activity post-COVID? - The company expects a gradual return to normalcy, with some leasing activity already occurring [120]