FIRST INDUSTRIAL REALTY TRUST, INC. (FR): what the price requires
At today's price, FIRST INDUSTRIAL REALTY TRUST, INC. (FR) is priced for +6.4% FFO growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FR
Headline
| Field | Value |
|---|---|
| Ticker | FR |
| Company | FIRST INDUSTRIAL REALTY TRUST, INC. |
| Current price | $65.01/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Implied FFO growth | 6.4% |
| Price-to-FFO | 19.9x |
| FFO yield | 5.0% |
Solve inputs: computed at a 9.5% cost of equity with 4% terminal growth over a 5-year stage; each 1pp of cost of equity moves the implied growth ~4.3pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.13σ |
| cohort percentile (of 88 peers) | 76 |
| sustained it ~5 years at this level | 65% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.00x | 4 | expensive |
| Earnings | 1.76x | 4 | expensive |
| Relative | 1.45x | 6 | expensive |
| Growth | 1.13x | 4 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $73.97 | 0.88x | yes | FCF base $0.5B, growth 9% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $68.42 | 0.95x | yes | Exit EV/EBITDA: 42.9x / 44.9x / 46.9x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $84.52 | 0.77x | yes | P/E 35x (static sector reference · 2026-04), scenarios: 29.1x / 35.0x / 40.9x (bear / base = reference held flat / bull), EV/EBITDA 27.46x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $49.41 | 1.32x | yes | Stage 1: 13% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $27.91 | 2.33x | yes | BV/sh $20.79, ROE (TTM) 12.4%, ke 9.3% |
| Two-Stage Excess Return | Asset | $32.11 | 2.02x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $35.44 | 1.83x | yes | Rev $0.7B, growth 9% (input: historical growth; tapered), Terminal P/S: 6.6x / 8.0x / 9.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $43.24 | 1.50x | yes | FFO/share $3.26, growth 13% (input: historical FFO/share growth, 10y median), PEG=1.90 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $32.98 | 1.97x | yes | BV $20.79 + 5yr PV of (ROE (TTM) 12.4% − Kₑ 9.3%) × BV; BV grows 8.1%/yr |
| Graham Number | Asset | $39.05 | 1.66x | yes | √(22.5 × FFO/share $3.26 × BVPS $20.79) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $29.11 | 2.23x | yes | EBITDA $0.19B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $37.83 | 1.72x | yes | FCF $461.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $36.09 | 1.80x | yes | SBC-adj FCF $0.44B (FCF $0.46B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $95.70 | 0.68x | yes | FFO/share $3.26 × (8.5 + 2×13.3%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $33.69 | 1.93x | yes | Revenue $0.74B × sector P/S 6.0x |
| PEG Fair Value | Relative | $64.86 | 1.00x | yes | FFO/share $3.26 × (PEG 1.5 × growth 13.3% (input: historical FFO/share growth, 10y median)) → PE 19.9x |
| Earnings Yield | Earnings | $35.24 | 1.84x | yes | FFO/share $3.26 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $46.24 | 1.41x | yes | FFO/share $3.26 × 14.2x P/FFO (route cohort median, n=85); FFO $0.43B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 133M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Funds from operations (trailing) | $432.6m |
| Share count CAGR (dilution) | 0.1% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other. Net debt could not be resolved from the corporate debt tags in the filings (REIT notes and mortgage debt are often tagged outside the corporate ladder), so the leverage ratio is withheld rather than rendered from incomplete tags. Interest expense is not separately reported in the cached statements, so fixed-charge coverage cannot be computed.
Bullet Takeaways
- First Industrial is a pure-play industrial and logistics landlord whose pricing power is showing up in the releasing spreads: cash rents on new and renewal leases jumped 41% in the first quarter, above the top of management's own guidance range, a sign that in-place rents still sit well below where the market will pay.
- The clearest risk is that the price already pays for that strength: at roughly 20 times adjusted funds from operations, the stock embeds about 5.6% annual growth in that cash measure, so a slip in occupancy from today's 94.3% or a fade in releasing spreads would pressure both the cash and the multiple at once.
- Watch the same-store NOI trajectory against guidance: management guides 5% to 6% cash same-store NOI growth for 2026 but printed 8.7% in the first quarter, and full-year FFO guidance of $3.09 to $3.19 a share implies roughly 6% growth at the midpoint.
Bull Case
Industrial real estate is in an unusual spot in the cycle, and First Industrial sits right in the sweet part of it. The leases signed years ago were priced for a different rent environment, and the gap between those in-place rents and what the market charges today is wide. You can see it in the numbers: cash rental rates on new and renewal leases rose 41% in the first quarter, beating the top of management's guidance range. Every lease that rolls over gets remarked to current rates, so a landlord with below-market leases is sitting on embedded growth that simply unlocks as contracts expire. That is the engine here, and it is mechanical rather than speculative.
What makes that engine durable is occupancy and discipline together. Quarter-end in-service occupancy was 94.3%, in line with a full-year guide of 94% to 95%, which means the buildings are nearly full while rents are being marked up. A landlord can push rent or push occupancy; doing both at once is the sign of a genuinely tight market. Cash same-store NOI grew 8.7% in the first quarter, well ahead of the 5% to 6% full-year guide, driven by higher rental rates and less free rent given away. Less free rent is a quiet tell: in a soft market landlords buy occupancy with months of waived rent, and First Industrial is giving away less of it.
The cash this produces is growing at a healthy clip. Take funds from operations, subtract the recurring spending that keeps logistics buildings competitive, and the adjusted cash measure that funds the dividend is on track to compound. Management's full-year FFO guidance of $3.09 to $3.19 a share implies roughly 6% growth at the midpoint, and the maintenance burden on modern warehouse space is light compared with older property types, so a large share of funds from operations survives into the adjusted figure. This is a portfolio that converts rent growth into shareholder cash efficiently.
There is also restraint on the share count, which matters more than it sounds. Many REITs fund growth by issuing equity, diluting the per-share claim even as the portfolio expands. First Industrial's share count has been essentially flat, growing only a fraction of a percent. That means the releasing spreads and the NOI growth land on the existing shareholder base rather than getting spread thinner across new shares. Combined with a strategic land sale that added to first-quarter results, the company is growing the cash per share through operations and selective transactions rather than through the printing press.
Bear Case
The strength is real, and the price already knows it. That is the bear's whole argument. At about $61.84 (June 28, 2026) the stock trades near 20 times adjusted funds from operations, the cash measure left after the recurring spending that keeps warehouses competitive. To support that multiple, the price requires that adjusted cash to grow roughly 5.6% a year, every year, for the bet to pay. That is not an outrageous demand for an industrial landlord with below-market leases. But it is a demand, and it is set against a market that has been running hot, which means the question is durability: will today's releasing spreads and occupancy hold long enough to deliver the growth the price has already booked?
The releasing spread is where the fragility hides. A 41% cash mark-up on renewals is a function of the gap between old in-place rents and current market rents. That gap is finite. As the below-market leases roll and reset to market, the spread on the next batch narrows, because the starting rents are now higher. The very success that produces 8.7% same-store NOI today shrinks the runway for tomorrow, since each lease marked to market removes a piece of the embedded upside. Management's own full-year guide already steps the pace down to 5% to 6% same-store NOI, an acknowledgment that the first-quarter print is not the run rate. If new supply arrives or tenant demand cools, the spread compresses faster, and the growth the multiple requires gets harder to hit.
Now run the arithmetic the other way. The price sits near 20 times adjusted cash because the market credits forward growth. If that growth disappoints, two things compress together. The cash itself grows more slowly, and the multiple the market is willing to pay for that cash contracts, because a slower-growing income stream does not earn a 20-times multiple. That double compression is why a growth-priced REIT can fall further than the earnings miss alone would suggest: the stock is paying for both the cash and the optimism about the cash, and a stumble takes some air out of each. The methods bear this out. The peer-multiple and forward-growth lenses are the only ones that reach today's price; the asset-value and earnings-power frames already mark it as expensive. The price rests on the growth case being right, with no support underneath it from the static methods.
Industrial cyclicality is the macro overlay. Warehouse demand tracks goods flow, inventory cycles, and trade, and the sector adds supply when rents spike. The current tightness that lets First Industrial push 41% spreads is exactly the condition that invites developers to build, and new logistics supply is faster to deliver than rent growth is to compound. A landlord priced for continued mid-single-digit cash growth is exposed if the supply response or a demand softening arrives before the below-market lease book is fully harvested. The balance sheet is not the worry here; the worry is paying a growth multiple at what may be a cyclical high in releasing economics.
Valuation
At roughly 20 times adjusted funds from operations, First Industrial is priced as a grower, and the multiple makes the bet explicit. Adjusted funds from operations is the cash left after the recurring spending that keeps logistics buildings competitive, and at about $61.84 the stock trades near 19.96 times that figure. Run the multiple backward and the price embeds roughly 5.6% annual growth in that adjusted cash. That is the headline: the buyer is paying today for mid-single-digit compounding in the cash the portfolio generates, not for a static income stream. Funds from operations before the maintenance deduction is the gross figure the adjusted number refines, and it carries a slightly lower multiple near 19 times because it has not yet absorbed the upkeep; the adjusted measure is the one that funds the dividend and the one the price properly rests on.
The growth the price asks for is also the growth the company has been delivering, which is what keeps this from looking stretched. The methods used to triangulate the stock split cleanly. The peer-multiple lens and the forward-growth lens reach the price, crediting the releasing spreads and the same-store NOI momentum. The asset-value lens and the earnings-power lens, which lean on book value and depreciation-burdened trailing returns, both mark it as expensive, the familiar REIT distortion where heavy accounting depreciation understates the buildings' real economics. The pattern is a price defended only by the forward-looking frames. That is the signature of a name where the bet is durability of growth rather than cheapness against assets.
So the concrete thing that has to be true is straightforward: the adjusted cash has to keep growing around the mid-single digits the multiple has booked. The company is currently running ahead of that, with first-quarter cash same-store NOI of 8.7% against a 5% to 6% full-year guide and full-year FFO guidance of $3.09 to $3.19 a share, roughly 6% growth at the midpoint. The gap between the hot first-quarter print and the more measured full-year guide is itself the market's question: how much of the recent pace is run rate and how much is the harvest of below-market leases that eventually thins. A recent analyst note nudged the price target up to around $66.93 while moving to a hold rating, citing a less attractive valuation and limited total-return upside; that is the same tension the priced-in growth shows, a quality grower whose forward growth is now substantially in the price.
On solvency, the leverage for a REIT is read against funds from operations rather than depreciation-reduced operating income, and the cleaner signal here is the share count. It has been essentially flat, up only a fraction of a percent, which means the growth in adjusted cash accrues to existing shareholders instead of being diluted across a swelling share base. For a company priced on forward per-share growth, that capital discipline is not a footnote; it is part of why the per-share math can work. The decisive point for First Industrial is not balance-sheet stress, it is whether the releasing engine keeps the adjusted cash compounding at the rate the multiple already assumes.
Catalysts
The first-quarter print set the tone for the year and reframed the debate from whether First Industrial is growing to whether the price already pays for it. Cash same-store NOI rose 8.7%, well ahead of the 5% to 6% full-year guide, on a 41% cash mark-up in new and renewal leasing and less free rent, with quarter-end in-service occupancy of 94.3%. A strategic land sale added to the quarter as well. The next earnings print is the key readout: confirmation that releasing spreads and occupancy are holding would validate the full-year FFO guide of $3.09 to $3.19 a share, while any softening in spreads or a step-down in occupancy would test the mid-single-digit growth the multiple has booked.
The analyst posture has shifted from accumulate toward wait. One firm raised its price target to roughly $66.93 from about $65.47 while downgrading the stock from buy to hold, citing a less attractive valuation and limited total-return potential at current levels. That is not a thesis-breaking call; it is a valuation call, and it lines up with the reading that the forward growth is now largely in the price. The variables to watch through the rest of the year are the pace of new logistics supply entering First Industrial's markets and the trajectory of same-store NOI as the below-market lease book is progressively marked to market, since both bear directly on how much embedded growth remains to harvest.
Peer Cohorts (Per Segment, With Filing Citations)
Industrial real estate (reported)
- LXP (LXP INDUSTRIAL TRUST)
- (no filing in the citation store)
- PLD (Prologis, Inc.)
- (no filing in the citation store)
- REXR (Rexford Industrial Realty, Inc.)
- (no filing in the citation store)
- EGP (EASTGROUP PROPERTIES, INC.)
- (no filing in the citation store)
- STAG (STAG Industrial, Inc.)
- (no filing in the citation store)
- TRNO (Terreno Realty Corporation)
- (no filing in the citation store)
- WPC (W. P. Carey Inc.)
- (no filing in the citation store)
- GTY (GETTY REALTY CORP.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
First Industrial Q1 2026 results · First Industrial 2026 guidance · analyst note, 2026