First Industrial Realty Trust November 20, 2008 Brian Bird Ryan Foelske

Overview Company Overview Industry Overview Macroeconomic Financials Valuation RCMP Portfolio Recommendation

Company Overview Headquartered in Chicago, Illinois First Industrial Realty-Trust (FR), founded in 1994, is an established REIT and owner of industrial real estate serving customers worldwide. FR engages in the buying, selling, leasing, development and management of industrial real estate solutions for every stage of the industrial supply chain. Their mission is to create industrial real estate solutions that mutually benefit their customers and their investors.

Description of a REIT A Real Estate Investment Trust (REIT) is a company that owns and operates income-producing real estates. REITs’ shares are traded publicly on major stock exchanges, giving anyone the ability to invest in large- scale real estate. REITs are required to distribute 90% of their taxable income annually in the form of dividends, giving high yields to its investors Diversification advantage of REIT Give individual investors opportunity to access real estate market Typically, relatively low correlation between REITs and other stocks and bonds

First Industrial’s Portfolio From FR Annual Report

Industry Overview Real Estate Investment Trust (REIT): a company that owns and operates income-producing real estate. REIT shares are publicly traded on major stock exchanges, giving anyone the ability to invest in large-scale real estate. REITs are required to distribute 90% of their annual income in the form of dividends, giving high dividend yields to its investors. Diversification advantage of REIT Give individual investors opportunity to access real estate market. Fairly low correlation between REITs and other risky assets.

Macroeconomic Outlook Increasing borrowing rates make expanding property holdings more difficult. Decline in property values means fewer will be sold, especially at a gain. Ability to meet current debt obligations in question as sale of property is a major part of income.

Macroeconomic Outlook Customers (occupants) of industrial property having financial issues: –Automotive Manufacturers downsizing if not heading towards bankruptcy. –Retail Industry expecting declining sales, meaning less need for warehouses.

SWOT Analysis Strengths: Geographic Diversification Most debt not mature until 2011 Large in-place joint ventures Weaknesses: Large amounts of debt Poor credit rating Small player in industry Opportunities: Purchase undervalued property Continue to grow revenues related to contracting Threats: Ability to raise capital Meeting current debt obligations without selling properties at huge losses

Relative Valuation FRPLDAMBDRE Market Cap (Millions) , P/E P/B P/S Book/Share

Relative Valuation $2.75$10.57

Current Position Purchased on Dec 10, 1999 –500 shares at $ and 500 shares for $24.75 –Original Book Value of $24, The current stock price is $5.88 –Unrealized loss of $18, % Held by insiders

Portfolio Composition

Portfolio Correlation

Income Statement From FR Supplemental Info

Debt Maturity Schedule DEBT MATURITY Debt Maturity By Year as of 9/30/08 – – ,297 – ,815 – ,657 – ,028 –2013 2,523 – ,334 –2015 1,704 – ,594 – ,968 –2018 4,388 –Thereafter 269,124 –Total Debt $ 2,001,316 From FR Supplemental Info

WACC WeightCost Equity10.36%14.20%Risk Free Rate0.04 Debt89.64%10.00%Beta1.7 WACC %Mkt Risk Prem.0.06

Calculating Revenue Values assumed are the minimum values the company needs to remain profitable.

Valuation Values assumed are the minimum values the company needs to remain profitable.

Recommendation We recommend a market sale of 1000 shares of First Industrial. It is our belief that the values assumed are not capable under current economic conditions. This yielded an approximate loss of $18,807.50