-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LMOi52Mmh8ZqKSW7j5eAgBchPoc03WNJlPTuubdFGrdprqfboUfuk4Uc63uIGyS0 5zkbCqJ91k7s+7/4q17Cig== 0000950137-06-003168.txt : 20060316 0000950137-06-003168.hdr.sgml : 20060316 20060316171329 ACCESSION NUMBER: 0000950137-06-003168 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060316 DATE AS OF CHANGE: 20060316 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST INDUSTRIAL LP CENTRAL INDEX KEY: 0001033128 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363924586 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-21873 FILM NUMBER: 06692922 BUSINESS ADDRESS: STREET 1: 311 S WACKER DR STREET 2: STE 4000 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123444300 MAIL ADDRESS: STREET 1: 150 N WACKER DR STREET 2: STE 150 CITY: CHICAGO STATE: IL ZIP: 60606 10-K 1 c03085e10vk.htm ANNUAL REPORT e10vk
Table of Contents

 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
Form 10-K
 
 
     
þ
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the fiscal year ended December 31, 2005
OR
o
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the transition period from           to          .
 
 
Commission File Number 333-21873
 
 
FIRST INDUSTRIAL, L.P.
(Exact name of Registrant as specified in its Charter)
 
 
     
Delaware   36-3924586
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)   Identification No.)
     
311 S. Wacker Drive, Suite 4000,
Chicago, Illinois 		  60606
(Zip Code)
(Address of principal executive offices)    
 
 
(Registrant’s telephone number, including area code)
(312) 344-4300
 
 
Securities registered pursuant to Section 12(b) of the Act:
None
 
 
Securities registered pursuant to Section 12(g) of the Act:
None
 
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o
 
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.  Yes o     No þ
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ
 
 

 

 
FIRST INDUSTRIAL, L.P.
 
TABLE OF CONTENTS
 
             
        Page
 
  Business   3
  Risk Factors   9
  Unresolved SEC comments   16
  Properties   17
  Legal Proceedings   27
  Submission of Matters to a Vote of Security Holders   27
 
  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities   27
  Selected Financial Data   29
  Management’s Discussion and Analysis of Financial Condition and Results of Operations   31
  Quantitative and Qualitative Disclosures About Market Risk   49
  Financial Statements and Supplementary Data   49
  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   49
  Controls and Procedures   49
  Other Information   51
 
  Directors and Executive Officers of the Registrant   51
  Executive Compensation   51
  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters   51
  Certain Relationships and Related Transactions   51
  Principal Accountant Fees and Services   51
 
  Exhibits and Financial Statement Schedules   51
  S-29
Computation of Ratio of Earnings to Fixed Charges
   
Consent of PricewaterhouseCoopers LLP
   
Certification of Principal Executive Officer
   
Certification of Principal Financial Officer
   
Certification of the Principal Executive Officer and Principal Financial Officer
   
 Computation of Ratios of Earnings to Fixed Charges
 Consent of PricewaterhouseCoopers LLP
 Consent of Principal Executive Officer
 Certification of Principal Financial Officer
 Certifications


1

Table of Contents

This report contains certain 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. First Industrial, L.P. (the “Operating Partnership”) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Operating Partnership, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. The Operating Partnership’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Operating Partnership on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rates, competition, supply and demand for industrial properties in the Operating Partnership’s current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Operating Partnership and its business, including additional factors that could materially affect the Operating Partnership’s financial results, is included herein in Item 1A, “Risk Factors” and in the Operating Partnership’s other filings with the Securities and Exchange Commission.


2

Table of Contents

 
PART I
THE COMPANY
 
Item 1.   Business
 
General
 
First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 86.8% ownership interest at December 31, 2005. The Company also owns a preferred general partnership interest in the Operating Partnership (“Preferred Units”) with an aggregate liquidation priority of $312.5 million. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code. The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership owned, in the aggregate, approximately a 13.2% interest in the Operating Partnership at December 31, 2005.
 
The Operating Partnership is the sole member of several limited liability companies (the “L.L.C.s”) and the sole stockholder of First Industrial Development Services, Inc., (together with the Operating Partnership and the L.L.C.’s, the “Consolidated Operating Partnership”), the operating data of which is consolidated with that of the Operating Partnership as presented herein. The Operating Partnership also holds at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, (the “Mortgage Partnership”), L.P First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), TK-SV, LTD., and FI Development Services L.P. and wholly owned LLC’s (together, the “Other Real Estate Partnerships”). The Other Real Estate Partnerships’ operating data is presented herein on a combined basis, separate from that of the Consolidated Operating Partnership. The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company. The Operating Partnership or First Industrial Development Services, Inc., through separate wholly-owned limited liability companies in which it is the sole member, also owns minority equity interests in, and provides various services to, four joint ventures which invest in industrial properties (the “September 1998 Joint Venture” the “May 2003 Joint Venture”, the “March 2005 Joint Venture” and the “September 2005 Joint Venture”). The Operating Partnership, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in, and provided property management services to, a fifth joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture and the September 2005 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. The operating data of the Joint Ventures is not consolidated with that of the Consolidated Operating Partnership as presented herein. The Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting.
 
As of December 31, 2005, the Consolidated Operating Partnership owned 786 in-service industrial properties, containing an aggregate of approximately 61.7 million square feet of gross leasable area (“GLA”). On a combined basis, as of December 31, 2005, the Other Real Estate Partnerships owned 98 in-service industrial properties, containing an aggregate of approximately 8.5 million square feet of GLA. Of the 98 industrial properties owned by the Other Real Estate Partnerships at December 31, 2005, 11 are held by the Mortgage Partnership, 37 are held by the Pennsylvania Partnership, 14 are held by the Securities Partnership, 21 are held by the Financing Partnership, 10 are held by the Harrisburg Partnership, four are held by the Indianapolis Partnership and one is held by TK-SV, LTD. The Consolidated Operating Partnership’s and Other Real Estate Partnerships’ in-service properties include all properties other than developed, redeveloped and acquired properties that have not yet reached stabilized occupancy (generally defined as properties that are 90% leased).


3

Table of Contents

The Consolidated Operating Partnership utilizes an operating approach which combines the effectiveness of decentralized, locally based property management, acquisition, sales and development functions with the cost efficiencies of centralized acquisition, sales and development support, capital markets expertise, asset management and fiscal control systems. At March 6, 2006, the Consolidated Operating Partnership had 441 employees.
 
The Consolidated Operating Partnership has grown and will seek to continue to grow through the development and the acquisition of additional industrial properties, through additional joint venture investments, and through its corporate services program.
 
The Company maintains a website at www.firstindustrial.com. Copies of the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports are available without charge on the Company’s website as soon as reasonably practicable after such reports are filed with or furnished to the SEC. In addition, the Company’s Corporate Governance Guidelines, Code of Business Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter, Nominating/Corporate Governance Committee Charter, along with supplemental financial and operating information prepared by the Company, are all available without charge on the Company’s website or upon request to the Company. Amendments to, or waivers from, the Company’s Code of Business Conduct and Ethics that apply to the Company’s executive officers or directors shall be posted to the Company’s website at www.firstindustrial.com. Please direct requests as follows:
 
First Industrial Realty Trust, Inc.
311 S. Wacker, Suite 4000
Chicago, IL 60606
Attention: Investor Relations
 
Business Objectives and Growth Plans
 
The Consolidated Operating Partnership’s fundamental business objective is to maximize the total return to its partners through increases in per unit distributions and increases in the value of the Consolidated Operating Partnership’s properties and operations. The Consolidated Operating Partnership’s growth plans include the following elements:
 
  •  Internal Growth.  The Consolidated Operating Partnership seeks to grow internally by (i) increasing revenues by renewing or re-leasing spaces subject to expiring leases at higher rental levels; (ii) increasing occupancy levels at properties where vacancy exists and maintaining occupancy elsewhere; (iii) controlling and minimizing property operating and general and administrative expenses; (iv) renovating existing properties; and (v) increasing ancillary revenues from non-real estate sources.
 
  •  External Growth.  The Consolidated Operating Partnership seeks to grow externally through (i) the development of industrial properties; (ii) the acquisition of portfolios of industrial properties, industrial property businesses or individual properties which meet the Consolidated Operating Partnership’s investment parameters and target markets; (iii) additional joint venture investments; and (iv) the expansion of its properties.
 
  •  Corporate Services.  Through its corporate services program, the Consolidated Operating Partnership builds for, purchases from, and leases and sells industrial properties to companies that need industrial facilities. The Consolidated Operating Partnership seeks to grow this business by targeting both large and middle-market public and private companies.
 
Business Strategies
 
The Consolidated Operating Partnership utilizes the following six strategies in connection with the operation of its business:
 
  •  Organization Strategy.  The Consolidated Operating Partnership implements its decentralized property operations strategy through the deployment of experienced regional management teams and local


4

Table of Contents

property managers. Each operating region is headed by a managing director, who is a senior executive officer of, and has an equity interest in, the Company. The Consolidated Operating Partnership provides acquisition, development and financing assistance, asset management oversight and financial reporting functions from its headquarters in Chicago, Illinois to support its regional operations. The Consolidated Operating Partnership believes the size of its portfolio enables it to realize operating efficiencies by spreading overhead among many properties and by negotiating purchasing discounts.
 
  •  Market Strategy.  The Consolidated Operating Partnership’s market strategy is to concentrate on the top industrial real estate markets in the United States. These top markets are based upon one or more of the following characteristics: (i) the strength of the market’s industrial real estate fundamentals, including increased industrial demand expectations; (ii) the history and outlook for continued economic growth and industry diversity; and (iii) a minimum market size of 100 million square feet of industrial space. The Consolidated Operating Partnership is currently evaluating industrial real estate investments outside of the United States, including Canada.
 
  •  Leasing and Marketing Strategy.  The Consolidated Operating Partnership has an operational management strategy designed to enhance tenant satisfaction and portfolio performance. The Consolidated Operating Partnership pursues an active leasing strategy, which includes marketing available space, seeking to renew 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 Consolidated Operating Partnership also has local and national marketing programs which focus on the business and real estate brokerage communities and national tenants.
 
  •  Acquisition/Development Strategy.  The Consolidated Operating Partnership’s acquisition/development strategy is to invest in properties and other assets with higher yield potential in the top industrial real estate markets in the United States. Of the 884 industrial properties in the Consolidated Operating Partnership’s and Other Real Estate Partnerships’ combined in-service portfolios at December 31, 2005, 131 properties have been developed by the Consolidated Operating Partnership, the Other Real Estate Partnerships, or its former management. The Consolidated Operating Partnership will continue to leverage the development capabilities of its management, many of whom are leading industrial property developers in their respective markets. The Consolidated Operating Partnership is currently evaluating industrial real estate investments outside of the United States, including Canada.
 
  •  Disposition Strategy.  The Consolidated Operating Partnership continuously evaluates local market conditions and property-related factors in all of its markets for purposes of identifying assets suitable for disposition.
 
  •  Financing Strategy.  The Consolidated Operating Partnership plans on utilizing a portion of net sales proceeds from property sales, borrowings under its unsecured lines of credit, and proceeds from the issuance, when and as warranted, of additional debt and equity securities to finance future acquisitions and developments. The Company continually evaluates joint ventures arrangements as another source of capital. As of March 6, 2006, the Consolidated Operating Partnership had approximately $212.4 million available in additional borrowings under its unsecured line of credit.
 
Recent Developments
 
In 2005, the Consolidated Operating Partnership acquired or placed in-service developments totaling 161 industrial properties and acquired several parcels of land for a total investment of approximately $832.5 million. The Consolidated Operating Partnership also sold 82 industrial properties and several parcels of land for a gross sales price of approximately $561.6 million. At December 31, 2005, the Consolidated Operating Partnership owned 786 in-service industrial properties containing approximately 61.7 million square feet of GLA.
 
On August 23, 2005, Operating Partnership, amended and restated its $300 million unsecured line of credit, which was due September 28, 2007, and bore interest at a floating rate of LIBOR plus .7%, or the Prime Rate, at the Company’s election. The amended and restated unsecured line of credit (the “2005 Unsecured Line of Credit I”) will mature on September 28, 2008, has a borrowing capacity of $500,000, with


5

Table of Contents

the right, subject to certain conditions, to increase the borrowing capacity up to $600,000 and bears interest at a floating rate of LIBOR plus .625%, or the Prime Rate, at the Company’s election. In December 2005, the Operating Partnership, entered into another unsecured line of credit (the “2005 Unsecured Line of Credit II”). The 2005 Unsecured Line of Credit II has a borrowing capacity of $125.0 million and matures on March 15, 2006. The 2005 Unsecured Line of Credit II provides for interest only payments at LIBOR plus .625% or at Prime, at the Operating Partnership’s election. In January 2006, the Consolidated Operating Partnership paid off and retired the 2005 Unsecured Line of Credit II. Together, the 2005 Unsecured Line of Credit I and 2005 Unsecured Line of Credit II, the “Unsecured Lines of Credit.”
 
On January 12, 2005, in conjunction with the acquisition of a parcel of land, the seller provided the Operating Partnership a mortgage loan in the amount of $1.2 million (the “Acquisition Mortgage Loan XV”). The Acquisition Mortgage Loan XV is collateralized by a land parcel in Lebanon, TN, does not require principal payments prior to maturity on January 12, 2006 and has a 0% interest rate (which the Consolidated Operating Partnership paid off and retired at maturity).
 
On March 31, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $2.0 million (the “Acquisition Mortgage Loan XVI”). The Acquisition Mortgage Loan XVI is collateralized by one property in New Hope, MN, bears interest at a fixed rate of 5.50% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan XVI matures on September 30, 2024. In conjunction with the assumption of the Acquisition Mortgage Loan XVI, the Consolidated Operating Partnership recorded a premium in the amount of $.03 million which will be amortized as an adjustment to interest expense through March 31, 2009. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVI is 5.30%. The Acquisition Mortgage Loan XVI may be prepaid on April 1, 2009 without incurring a prepayment fee.
 
On June 27, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $3.1 million (the “Acquisition Mortgage Loan XVII”). The Acquisition Mortgage Loan XVII is collateralized by one property in Villa Rica, GA, bears interest at a fixed rate of 7.38% and provides for monthly principal and interest payments based on a 15-year amortization schedule. The Acquisition Mortgage Loan XVII matures on May 1, 2016. In conjunction with the assumption of the Acquisition Mortgage Loan XVII, the Consolidated Operating Partnership recorded a premium in the amount of $.3 million which will be amortized as an adjustment to interest expense through May 1, 2016. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVII is 5.70%. The Acquisition Mortgage Loan XVII may not be prepaid until maturity without incurring a prepayment fee.
 
On June 30, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $6.5 million (the “Acquisition Mortgage Loan XVIII”). The Acquisition Mortgage Loan XVIII is collateralized by one property in Hammonton, NJ, bears interest at a fixed rate of 7.58% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan XVIII matures on March 1, 2011. In conjunction with the assumption of the Acquisition Mortgage Loan XVIII, the Consolidated Operating Partnership recorded a premium in the amount of $.7 million which will be amortized as an adjustment to interest expense through November 30, 2010. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVIII is 4.93%. The Acquisition Mortgage Loan XVIII may be prepaid on December 1, 2010 without incurring a prepayment fee.
 
On September 30, 2004, the Consolidated Operating Partnership assumed a mortgage loan in the amount of $12.0 million and borrowed an additional $1.4 million (collectively referred to as the “Acquisition Mortgage Loan XIII”). The Acquisition Mortgage Loan XIII was collateralized by three properties in Phoenix, Arizona, bore interest at a fixed rate of 5.60% and provided for monthly principal and interest payments based on a 30-year amortization schedule. The Acquisition Mortgage Loan XIII matures on November 10, 2012. In conjunction with the assumption of the Acquisition Mortgage Loan XIII, the Consolidated Operating Partnership recorded a premium in the amount of $.5 million which was being amortized over the remaining


6

Table of Contents

life of the Acquisition Mortgage Loan XIII as an adjustment to interest expense. On July 13, 2005, the Consolidated Operating Partnership sold the properties that collateralized the Acquisition Mortgage Loan XIII. In conjunction with the sale, the buyer assumed the Acquisition Mortgage Loan XIII and the Consolidated Operating Partnership paid $.3 million in fees related to the assignment of the Acquisition Mortgage Loan XIII. Consequently, the Consolidated Operating Partnership wrote-off the remaining premium on the note of $.4 million. Both the $.3 million of fees and $.4 million premium write-off are included in the Gain on Early Retirement of Debt on the Consolidated Operating Partnership’s Statement of Operations.
 
On November 20, 1997, the Consolidated Operating Partnership, issued $50 million of senior unsecured debt which matured on November 21, 2005 and bore a coupon interest rate of 6.90%, which was the effective interest rate (the “2005 Notes”). On November 21, 2005 the Consolidated Operating Partnership, paid off and retired the 2005 Notes for $50 million plus accrued interest.
 
On March 18, 2005, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which First Industrial Development Services, Inc. is the sole member entered into a joint venture arrangement (the “March 2005 Joint Venture”) with an institutional investor to invest in, own, develop, redevelop and operate certain industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Development Services, Inc., owns a 10% equity interest in the March 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the March 2005 Joint Venture. As of December 31, 2005, the March 2005 Joint Venture owned 47 industrial properties comprising approximately 4.2 million square feet (unaudited) of GLA and several land parcels.
 
On September 7, 2005, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which First Industrial Development Services, Inc. is the sole member entered into a joint venture arrangement (the “September 2005 Joint Venture”) with an institutional investor to invest in, own and operate certain industrial properties. The Company, through wholly-owned limited liability companies of the Operating Partnership, or First Industrial Development Services, Inc. owns a 10% equity interest in the September 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the September 2005 Joint Venture. As of December 31, 2005, the September 2005 Joint Venture owned 217 industrial properties comprising approximately 14.0 million square feet (unaudited) of GLA and several land parcels.
 
From January 1, 2006 to March 6, 2006, the Consolidated Operating Partnership acquired 21 industrial properties and several land parcels for a total estimated investment of approximately $142.4 million (approximately $.9 million of which was made through the issuance of limited partnership interests in the Operating Partnership (“Units”)). The Consolidated Operating Partnership also sold 16 industrial properties including the industrial property that is accounted for as a build to suit development for sale, for approximately $241.1 million of gross proceeds during this period.
 
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Depositary Shares, respectively, each representing, $.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock, (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187.5 million. Net of offering costs, the Company received net proceeds of approximately $181.5 million from the issuance of the Series I Preferred Stock which were contributed to the Operating Partnership in exchange for Series I Cumulative Preferred Units (the “Series I Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner preferred unit contribution. Dividends on the Series I Depositary Shares were payable monthly in arrears commencing December 31, 2005 at an initial dividend rate of One-Month LIBOR plus 1.25%, subject to reset on the four-month, six-month and one year anniversary of the date of issuance. The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $.4 million. The Series I Preferred Units were redeemed on January 13, 2006 as well. In accordance with EITF D-42, due to the redemption of the Series I Preferred Units, the initial offering costs associated with the issuance of the Series I Preferred Units of approximately


7

Table of Contents

$.7 million is reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per Unit for the three months ended March 31, 2006.
 
On December 9, 2005, the Company issues 1,250,000 shares of $.01 par value common stock (the “December 2005 Equity Offering”). The net proceeds of $48.8 million received from the December 2005 Equity Offering were contributed to the Operating Partnership in exchange for 1,250,000 Units and are reflected in the Operating Partnership’s financial statements as a general partner contribution.
 
On March 8, 2006, the Company declared a first quarter 2006 distribution of $.7000 per Unit on its Units which is payable on April 17, 2006. The Company also declared a first quarter 2006 dividend of $53.906 per Unit, on its Series C Preferred Units, totaling, in the aggregate, approximately $1.1 million, which is payable on March 31, 2006; a semi-annual dividend of $3,118 per Unit on its Series F Preferred Units, totaling, in the aggregate, approximately $1.6 million, which is payable on March 31, 2006; a semi-annual dividend of $3,618 per Unit on its Series G Preferred Units, totaling, in the aggregate, approximately $.9 million, which is payable on March 31, 2006; and a quarterly dividend of $3,927 per Unit on its Series J Preferred Units, totaling, in the aggregate, approximately $2.4 million, which is payable on March 31, 2006.
 
On January 10, 2006, the Consolidated Operating Partnership, issued $200 million of senior unsecured debt which matures on January 15, 2016 and bears a coupon interest rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. Interest is paid semi-annually in arrears on January 15 and July 15. The Consolidated Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Consolidated Operating Partnership settled the interest rate protection agreements for a payment of approximately $1.7 million, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2016 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreements, the Consolidated Operating Partnership’s effective interest rate on the 2016 Notes is 5.91%. The 2016 Notes contain certain covenants, including limitations on incurrence of debt and debt service coverage.
 
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. Gross proceeds of $150 million, net of offering costs from the issuance of the Series J Preferred Stock which were contributed to the Operating Partnership in exchange for Series J Cumulative Preferred Units (the “Series J Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series J Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. However, during any period that both (i) the Depositary Shares are not listed on the NYSE or AMEX, or quoted on NASDAQ, and (ii) the Company is not subject to the reporting requirements of the Exchange Act, but the Series J Preferred Stock is outstanding, the Company will increase the dividend on the Series J Preferred Stock to a rate of 8.25% of the liquidation preference per year. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series G Preferred Stock. The Series J Preferred Stock is not redeemable prior to January 15, 2011. However, if at any time both (i) the Depositary Shares cease to be listed on the NYSE or the AMEX, or quoted on NASDAQ, and (ii) the Company ceases to be subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, then the preferred shares will be redeemable, in whole but not in part at the Company’s option, within 90 days of the date upon which the depositary shares cease to be listed and the Company ceases to be subject to such reporting requirements, at a redemption price equivalent to $25.00 per Depositary Share, plus all accrued and unpaid dividends to the date of redemption. On or after January 15, 2011, the Series J Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150.0 million in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.


8

Table of Contents

Future Property Acquisitions, Developments and Property Sales
 
The Consolidated Operating Partnership has an active acquisition and development program through which it is continually engaged in identifying, negotiating and consummating portfolio and individual industrial property acquisitions and developments. As a result, the Consolidated Operating Partnership is currently engaged in negotiations relating to the possible acquisition and development of certain industrial properties located in the United States.
 
The Consolidated Operating Partnership also sells properties based on market conditions and property related factors. As a result, the Consolidated Operating Partnership is currently engaged in negotiations relating to the possible sales of certain industrial properties in the Consolidated Operating Partnership’s current portfolio.
 
When evaluating potential industrial property acquisitions and developments, as well as potential industrial property sales, the Consolidated Operating Partnership will consider such factors as: (i) the geographic area and type of property; (ii) the location, construction quality, condition and design of the property; (iii) the potential for capital appreciation of the property; (iv) the ability of the Consolidated Operating Partnership 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 by 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.
 
INDUSTRY
 
Industrial properties are typically used for the design, assembly, packaging, storage and distribution of goods and/or the provision of services. As a result, the demand for industrial space in the United States is related to the level of economic output. Historically, occupancy rates for industrial property in the United States have been higher than those for other types of commercial property. The Consolidated Operating Partnership believes that the higher occupancy rate in the industrial property sector is a result of the construction-on-demand nature of, and the comparatively short development time required for, industrial property. For the five years ended December 31, 2005, the occupancy rates for industrial properties in the United States have ranged from 88.5%* to 92.9%*, with an occupancy rate of 90.4%* at December 31, 2005.
 
Item 1A.   Risk Factors
 
Risk Factors
 
The Consolidated Operating Partnership’s operations involve various risks that could adversely affect its financial condition, results of operations, cash flow, ability to pay distributions on its Units and the market value of its Units. These risks, among others contained in the Consolidated Operating Partnership’s other filings with the Securities and Exchange Commission, include:
 
Real estate investments’ value fluctuates depending on conditions in the general economy and the real estate business. These conditions may limit the Consolidated Operating Partnership’s revenues and available cash.
 
The factors that affect the value of the Consolidated Operating Partnership’s real estate and the revenues the Consolidated Operating Partnership derives from its properties include, among other things:
 
  •  general economic conditions;
 
  •  local conditions such as oversupply or a reduction in demand in an area;
 
 
* Source: Torto Wheaton Research


9

Table of Contents

 
  •  the attractiveness of the properties to tenants;
 
  •  tenant defaults;
 
  •  zoning or other regulatory restrictions;
 
  •  competition from other available real estate;
 
  •  our ability to provide adequate maintenance and insurance; and
 
  •  increased operating costs, including insurance premiums and real estate taxes.
 
Many real estate costs are fixed, even if income from properties decreases.
 
The Consolidated Operating Partnership’s financial results depend on leasing space in the Consolidated Operating Partnership’s real estate to tenants on terms favorable to the Consolidated Operating Partnership. The Consolidated Operating Partnership’s income and funds available for distribution to its unitholders will decrease if a significant number of the Consolidated Operating Partnership’s tenants cannot pay their rent or the Consolidated Operating Partnership is unable to lease properties on favorable terms. In addition, if a tenant does not pay its rent, the Consolidated Operating Partnership might not be able to enforce its rights as landlord without delays and the Consolidated Operating Partnership might incur substantial legal costs. Costs associated with real estate investment, such as real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the investment. For the year ended December 31, 2005, approximately 69.0% of the Consolidated Operating Partnership’s gross revenues from continuing operations came from rentals of real property.
 
The Consolidated Operating Partnership may be unable to sell properties when appropriate because real estate investments are not as liquid as certain other types of assets.
 
Real estate investments generally cannot be sold quickly and, therefore, will tend to limit the Consolidated Operating Partnership’s ability to adjust its property portfolio promptly in response to changes in economic or other conditions. The inability to respond promptly to changes in the performance of the Consolidated Operating Partnership’s property portfolio could adversely affect the Consolidated Operating Partnership’s financial condition and ability to service debt and make distributions to its unitholders. In addition, like other companies qualifying as REITs under the Internal Revenue Code, the Company must comply with the safe harbor rules relating to the number of properties disposed of in a year, their tax basis and the cost of improvements made to the properties, or meet other tests which enable a REIT to avoid punitive taxation on the sale of assets. Thus, the Consolidated Operating Partnership’s ability at any time to sell assets may be restricted.
 
The Consolidated Operating Partnership may be unable to sell or contribute properties on advantageous terms.
 
The Consolidated Operating Partnership has sold to third parties a significant number of properties in recent years and, as part of its business, the Consolidated Operating Partnership intends to continue to sell properties to third parties. The Consolidated Operating Partnership’s ability to sell properties on advantageous terms depends on factors beyond the Consolidated Operating Partnership’s control, including competition from other sellers and the availability of attractive financing for potential buyers of the Consolidated Operating Partnership’s properties. If the Consolidated Operating Partnership is unable to sell properties on favorable terms or redeploy the proceeds of property sales in accordance with the Consolidated Operating Partnership’s business strategy, then the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, the Consolidated Operating Partnership’s Units could be adversely affected.
 
The Consolidated Operating Partnership has also sold to its joint ventures a significant number of properties in recent years and, as part of its business, the Consolidated Operating Partnership intends to continue to sell properties to its joint ventures as opportunities arise. If the Consolidated Operating Partnership


10

Table of Contents

does not have sufficient properties available that meet the investment criteria of current or future joint ventures, or if the joint ventures have reduced or no access to capital on favorable terms, then such sales could be delayed or prevented, adversely affecting the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, the Consolidated Operating Partnership’s Units.
 
The Consolidated Operating Partnership may be unable to acquire properties on advantageous terms or acquisitions may not perform as the Consolidated Operating Partnership expects.
 
The Consolidated Operating Partnership acquires and intends to continue to acquire primarily industrial properties. The acquisition of properties entails various risks, including the risks that the Consolidated Operating Partnership’s investments may not perform as expected and that the Consolidated Operating Partnership’s cost estimates for bringing an acquired property up to market standards may prove inaccurate. Further, the Consolidated Operating Partnership faces significant competition for attractive investment opportunities from other well-capitalized real estate investors, including both publicly-traded real estate investment trusts and private investors. This competition increases as investments in real estate become attractive relative to other forms of investment. As a result of competition, the Consolidated Operating Partnership may be unable to acquire additional properties as it desires or the purchase price may be elevated. In addition, the Consolidated Operating Partnership expects to finance future acquisitions through a combination of borrowings under the Consolidated Operating Partnership’s 2005 Unsecured Line of Credit I, proceeds from equity or debt offerings by the Consolidated Operating Partnership and proceeds from property sales, which may not be available and which could adversely affect the Consolidated Operating Partnership’s cash flow. Any of the above risks could adversely affect the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, the Consolidated Operating Partnership’s Units.
 
The Consolidated Operating Partnership may be unable to complete development and re-development projects on advantageous terms.
 
As part of its business, the Consolidated Operating Partnership develops new and re-develops existing properties. In addition, the Consolidated Operating Partnership has sold to third parties or sold to the Company’s joint ventures a significant number of development and re-development properties in recent years and the Consolidated Operating Partnership intends to continue to sell such properties to third parties or to sell such properties to the Consolidated Operating Partnership’s joint ventures as opportunities arise. The real estate development and re-development business involves significant risks that could adversely affect the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay distributions on, and the market value of, the Consolidated Operating Partnership’s Units which include:
 
  •  the Consolidated Operating Partnership may not be able to obtain financing for development projects on favorable terms and complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties and generating cash flow;
 
  •  the Consolidated Operating Partnership may not be able to obtain, or may experience delays in obtaining, all necessary zoning, land-use, building, occupancy and other governmental permits and authorizations;
 
  •  the properties may perform below anticipated levels, producing cash flow below budgeted amounts and limiting the Consolidated Operating Partnership’s ability to sell such properties to third parties or to sell or contribute such properties to the Consolidated Operating Partnership’s joint ventures.
 
The Consolidated Operating Partnership may be unable to renew leases or find other lessees.
 
The Consolidated Operating Partnership is subject to the risks that, upon expiration, leases may not be renewed, the space subject to such leases may not be relet or the terms of renewal or reletting, including the cost of required renovations, may be less favorable than expiring lease terms. If the Consolidated Operating Partnership were unable to promptly renew a significant number of expiring leases or to promptly relet the


11

Table of Contents

space covered by such leases, or if the rental rates upon renewal or reletting were significantly lower than the then current rates, the Consolidated Operating Partnership’s cash funds from operations and ability to make expected distributions to stockholders might be adversely affected. As of December 31, 2005, leases with respect to approximately 12.7 million, 9.6 million and 8.8 million square feet of GLA, representing 24%, 18% and 16%, of GLA expire in the remainder of 2006, 2007 and 2008, respectively.
 
The Company might fail to qualify or remain qualified as a REIT.
 
First Industrial Realty Trust, Inc. intends to operate so as to qualify as a REIT under the Internal Revenue Code of 1986 (the “Code”). Although First Industrial Realty Trust, Inc. believes that it is organized and will operate in a manner so as to qualify as a REIT, qualification as a REIT involves the satisfaction of numerous requirements, some of which must be met on a recurring basis. These requirements are established under highly technical and complex Code provisions of which there are only limited judicial or administrative interpretations and involve the determination of various factual matters and circumstances not entirely within First Industrial Realty Trust, Inc.’s control.
 
First Industrial Realty Trust, Inc. (through one of its subsidiary partnerships) entered into certain development agreements in 2000 through 2003, the performance of which has been completed. Under these agreements, First Industrial Realty Trust, Inc, provided services to unrelated third parties and certain payments were made by the unrelated third parties for services provided by certain contractors hired by First Industrial Realty Trust. Inc. First Industrial Realty Trust, Inc, believes that these payments were properly characterized by it as reimbursements for costs incurred by it on behalf of the third parties and do not constitute gross income and did not prevent First Industrial Realty Trust, Inc. from satisfying the gross income requirements of the REIT provisions (the “gross income tests”). First Industrial Realty Trust, Inc. has brought this matter to the attention of the Internal Revenue Service, or the IRS. The IRS has not challenged or expressed any interest in challenging First Industrial Realty Trust, Inc.’s view on this matter. If the IRS were to challenge such position and were successful, First Industrial Realty Trust Inc. might be found not to have satisfied the gross income tests in one or more of its taxable years. If First Industrial Realty Trust, Inc. were found not to have satisfied the gross income tests, it could be subject to a penalty tax. However, such noncompliance was due to reasonable cause and not to willful neglect, and certain other requirements are met. Although this cannot be assured, First Industrial Realty Trust, Inc. believes that the risk of losing its REIT status as a result of these development agreements is remote.
 
If First Industrial Realty Trust, Inc. were to fail to qualify as a REIT in any taxable year, it would be subject to federal income tax, including any applicable alternative minimum tax, on First its taxable income at corporate rates. This could result in a discontinuation or substantial reduction in dividends to stockholders and in cash to pay interest and principal on debt securities that First Industrial Realty Trust, Inc. issues. Unless entitled to relief under certain statutory provisions, First Industrial Realty Trust, Inc. also would be disqualified from electing treatment as a REIT for the four taxable years following the year during which it failed to qualify as a REIT.
 
Certain property transfers may generate prohibited transaction income, resulting in a penalty tax on the gain attributable to the transaction.
 
As part of its business, the Consolidated Operating Partnership sells properties to third parties or sells properties to the Consolidated Operating Partnership’s joint ventures as opportunities arise. Under the Code, a 100% penalty tax could be assessed on the gain resulting from sales of properties that are deemed to be prohibited transactions. The question of what constitutes a prohibited transaction is based on the facts and circumstances surrounding each transaction. The Internal Revenue Service could contend that certain sales of properties by the Company are prohibited transactions. While the Consolidated Operating Partnership’s management does not believe that the Internal Revenue Service, would prevail in such a dispute, if the matter was successfully argued by the Internal Revenue Service, the 100% penalty tax could be assessed against the profits from these transactions. In addition, any income from a prohibited transaction may adversely affect the Company’s ability to satisfy the income tests for qualification as a REIT.


12

Table of Contents

The REIT distribution requirements may require the Company to turn to external financing sources.
 
First Industrial Realty Trust, Inc. could, in certain instances, have taxable income without sufficient cash to enable First Industrial Realty Trust, Inc. to meet the distribution requirements of the REIT provisions of the Code. In that situation, the Company could be required to borrow funds or sell properties on adverse terms in order to meet those distribution requirements. In addition, because First Industrial Realty Trust, Inc. must distribute to its stockholders at least 90% of the Company’s REIT taxable income each year, the Company’s ability to accumulate capital may be limited. Thus, in connection with future acquisitions, First Industrial Realty Trust, Inc. may be more dependent on outside sources of financing, such as debt financing or issuances of additional capital stock, which may or may not be available on favorable terms. Additional debt financings may substantially increase the Consolidated Operating Partnership’s leverage and additional equity offerings may result in substantial dilution of unitholders’ interests.
 
Debt financing, the degree of leverage and rising interest rates could reduce the Consolidated Operating Partnership’s cash flow.
 
Where possible, the Consolidated Operating Partnership intends to continue to use leverage to increase the rate of return on the Consolidated Operating Partnership’s investments and to allow the Consolidated Operating Partnership to make more investments than it otherwise could. The Consolidated Operating Partnership’s use of leverage presents an additional element of risk in the event that the cash flow from the Consolidated Operating Partnership’s properties is insufficient to meet both debt payment obligations and the Company’s distribution requirements of the REIT provisions of the Code. In addition, rising interest rates would reduce the Consolidated Operating Partnership’s cash flow by increasing the amount of interest due on its floating rate debt and on its fixed rate debt as it matures and is refinanced.
 
Cross-collateralization of mortgage loans could result in foreclosure on substantially all of the Consolidated Operating Partnership’s properties if the Consolidated Operating Partnership is unable to service its indebtedness.
 
If the Operating Partnership decides to obtain additional debt financing in the future, it may do so through mortgages on some or all of its properties. These mortgages may be issued on a recourse, non-recourse or cross-collateralized basis. Cross-collateralization makes all of the subject properties available to the lender in order to satisfy the Consolidated Operating Partnership’s debt. Holders of indebtedness that is so secured will have a claim against these properties. To the extent indebtedness is cross collateralized, lenders may seek to foreclose upon properties that are not the primary collateral for their loan, which may, in turn, result in acceleration of other indebtedness secured by properties. Foreclosure of properties would result in a loss of income and asset value to the Consolidated Operating Partnership, making it difficult for it to meet both debt payment obligations and the Company’s distribution requirements of the REIT provisions of the Code. As of December 31, 2005, none of the Consolidated Operating Partnership’s current indebtedness was cross-collateralized.
 
The Consolidated Operating Partnership may have to make lump-sum payments on its existing indebtedness.
 
The Consolidated Operating Partnership is required to make the following lump-sum or “balloon” payments under the terms of some of its indebtedness, including:
 
  •  $50 million aggregate principal amount of 7.75% Notes due 2032 (the “2032 Notes”)
 
  •  $200 million aggregate principal amount of 7.60% Notes due 2028 (the “2028 Notes”)
 
  •  approximately $15 million aggregate principal amount of 7.15% Notes due 2027 (the “2027 Notes”)
 
  •  $100 million aggregate principal amount of 7.50% Notes due 2017 (the “2017 Notes”)
 
  •  $200 million aggregate principal amount of 5.75% Notes due 2016 (the “2016 Notes”)
 
  •  $125 million aggregate principal amount of 6.42% Notes due 2014 (the “2014 Notes”)


13

Table of Contents

 
  •  $200 million aggregate principal amount of 6.875% Notes due 2012 (the “2012 Notes”)
 
  •  $200 million aggregate principal amount of 7.375% Notes due 2011(the “2011 Notes”)
 
  •  $125 million aggregate principal amount of 5.25% Notes due 2009 (the “2009 Notes”)
 
  •  $150 million aggregate principal amount of 7.60% Notes due 2007 (the “2007 Notes”)
 
  •  $150 million aggregate principal amount of 7.00% Notes due 2006 (the “2006 Notes”)
 
  •  a $500 million unsecured revolving credit facility (the “2005 Unsecured Line of Credit I”) under which the Consolidated Operating Partnership may borrow to finance the acquisition of additional properties and for other corporate purposes, including working capital.
 
  •  a $125 million unsecured non-revolving credit facility (the “2005 Unsecured Line of Credit II”, together with the 2005 Unsecured Line of Credit I, the “Unsecured Lines of Credit”) under which the Consolidated Operating Partnership may borrow to finance the acquisition of additional properties and for other corporate purposes, including working capital.
 
The 2005 Unsecured Line of Credit I and the 2005 Unsecured Line of Credit II provide for the repayment of principal in a lump-sum or “balloon” payment at maturity in 2008 and 2006, respectively. The Operating Partnership has the right, subject to certain conditions, to increase the aggregate commitment under the Unsecured Line of Credit I by up to $100 million. As of December 31, 2005, $457.5 million was outstanding under the 2005 Unsecured Lines of Credit at a weighted average interest rate of 4.886%.
 
The Consolidated Operating Partnership’s ability to make required payments of principal on outstanding indebtedness, whether at maturity or otherwise, may depend on its ability either to refinance the applicable indebtedness or to sell properties. The Consolidated Operating Partnership has no commitments to refinance the 2006 Notes, the 2007 Notes, the 2009 Notes, the 2011 Notes, the 2012 Notes, the 2014 Notes, the 2016 Notes, the 2017 Notes, the 2027 Notes, the 2028 Notes, the 2032 Notes or the Unsecured Lines of Credit. Some of the existing debt obligations, other than those discussed above, of the Consolidated Operating Partnership, are secured by the Consolidated Operating Partnership’s properties, and therefore such obligations will permit the lender to foreclose on those properties in the event of a default.
 
There is no limitation on debt in the Consolidated Operating Partnership’s organizational documents.
 
As of December 31, 2005, the Company’s ratio of debt to its total market capitalization was 44.3%. The organizational documents of First Industrial Realty Trust, Inc., however, do not contain any limitation on the amount or percentage of indebtedness the Company may incur. Accordingly, the Consolidated Operating Partnership could become more highly leveraged, resulting in an increase in debt service that could adversely affect the Consolidated Operating Partnership’s ability to make expected distributions to Unitholders and in an increased risk of default on the Consolidated Operating Partnership’s obligations.
 
The Company computes that percentage by calculating its total consolidated debt as a percentage of the aggregate market value of all outstanding shares of the Company’s common stock, assuming the exchange of all limited partnership units of the Operating Partnership for common stock, plus the aggregate stated value of all outstanding shares of preferred stock and total consolidated debt.
 
Rising interest rates on the Consolidated Operating Partnership’s Unsecured Line of Credit could decrease the Consolidated Operating Partnership’s available cash.
 
The Consolidated Operating Partnership’s Unsecured Line of Credit bears interest at a floating rate. As of December 31, 2005, the Company’s Unsecured Lines of Credit had an outstanding balance of $457.5 million at a weighted average interest rate of 4.886%. The Consolidated Operating Partnership’s Unsecured Lines of Credit bear interest at the Prime Rate or at the London Interbank Offered Rate plus .625%. Based on an outstanding balance on our Unsecured Lines of Credit as of December 31, 2005, a 10% increase in interest rates would increase interest expense by $2.3 million on an annual basis. Increases in the interest rate payable


14

Table of Contents

on balances outstanding under the Unsecured Lines of Credit would decrease the Consolidated Operating Partnership’s cash available for distribution to unitholders.
 
Earnings and cash dividends, asset value and market interest rates affect the price of the Company’s common stock.
 
As a real estate investment trust, the market value of the Company’s common stock, in general, is based primarily upon the market’s perception of the Company’s growth potential and its current and potential future earnings and cash dividends. The market value of the Company’s common stock is based secondarily upon the market value of the Company’s underlying real estate assets. For this reason, shares of the Company’s common stock may trade at prices that are higher or lower than the Company’s net asset value per share. To the extent that the Company retains operating cash flow for investment purposes, working capital reserves, or other purposes, these retained funds, while increasing the value of the Company’s underlying assets, may not correspondingly increase the market price of the Company’s common stock. The Company’s failure to meet the market’s expectations with regard to future earnings and cash dividends likely would adversely affect the market price of the Company’s common stock. Further, the distribution yield on the common stock (as a percentage of the price of the common stock) relative to market interest rates may also influence the price of the Company’s common stock. An increase in market interest rates might lead prospective purchasers of the Company’s common stock to expect a higher distribution yield, which would adversely affect the market price of the Company’s common stock. Additionally, if the market price of the Company’s common stock declines significantly, then the Company might breach certain covenants with respect to its debt obligations, which could adversely affect the Company’s liquidity and ability to make future acquisitions and the Company’s ability to pay dividends to its stockholders.
 
The Consolidated Operating Partnership may incur unanticipated costs and liabilities due to environmental problems.
 
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be liable for the costs of clean-up of certain conditions relating to the presence of hazardous or toxic materials on, in or emanating from a property, and any related damages to natural resources. Environmental laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous or toxic materials. The presence of such materials, or the failure to address those conditions properly, may adversely affect the ability to rent or sell the property or to borrow using the property as collateral. Persons who dispose of or arrange for the disposal or treatment of hazardous or toxic materials may also be liable for the costs of clean-up of such materials, or for related natural resource damages, at or from an off-site disposal or treatment facility, whether or not the facility is owned or operated by those persons. No assurance can be given that existing environmental assessments with respect to any of the Consolidated Operating Partnership’s properties reveal all environmental liabilities, that any prior owner or operator of any of the properties did not create any material environmental condition not known to the Consolidated Operating Partnership or that a material environmental condition does not otherwise exist as to any of the Consolidated Operating Partnership’s properties.
 
The Consolidated Operating Partnership’s insurance coverage does not include all potential losses.
 
The Consolidated Operating Partnership currently carries comprehensive insurance coverage including property, boiler & machinery, liability, fire, flood, terrorism, earthquake, extended coverage and rental loss as appropriate for the markets where each of the Consolidated Operating Partnership’s properties and their business operations are located. The insurance coverage contains policy specifications and insured limits customarily carried for similar properties and business activities. The Consolidated Operating Partnership believes its properties are adequately insured. However, there are certain losses, including losses from earthquakes, hurricanes, floods, pollution, acts of war, acts of terrorism or riots, that are not generally insured against or that are not generally fully insured against because it is not deemed to be economically feasible or prudent to do so. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of the Consolidated Operating Partnership’s properties, the Consolidated Operating Partnership could


15

Table of Contents

experience a significant loss of capital invested and potential revenues in these properties, and could potentially remain obligated under any recourse debt associated with the property.
 
The Consolidated Operating Partnership is subject to risks and liabilities in connection with its investments in properties through joint ventures.
 
As of December 31, 2005, the Consolidated Operating Partnership’s five joint ventures owned approximately 24.3 million square feet of properties. As of December 31, 2005, the Consolidated Operating Partnership ’s investment in joint ventures exceeded $44 million in the aggregate and for the year ended December 31, 2005 the Consolidated Operating Partnership’s equity in income of joint ventures exceeded $3.6 million. The Consolidated Operating Partnership’s organizational documents do not limit the amount of available funds that the Consolidated Operating Partnership may invest in joint ventures and the Consolidated Operating Partnership intends to continue to develop and acquire properties through joint ventures with other persons or entities when warranted by the circumstances. Joint venture investments, in general, involve certain risks, including:
 
  •  co-members or joint venturers may share certain approval rights over major decisions;
 
  •  if co-members or joint venturers fail to fund their share of any required capital commitments;
 
  •  co-members or joint venturers might have economic or other business interests or goals that are inconsistent with the Consolidated Operating Partnership’s business interests or goals that would affect its ability to operate the property;
 
  •  co-members or joint venturers may have the power to act contrary to the Consolidated Operating Partnership’s instructions, requests, policies, or objectives, including our current policy with respect to maintaining our qualification as a real estate investment trust;
 
  •  the joint venture agreements often restrict the transfer of a member’s or joint venturer’s interest or “buy-sell” or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms;
 
  •  disputes between the Consolidated Operating Partnership and our co-members or joint venturers may result in litigation or arbitration that would increase the Consolidated Operating Partnership’s expenses and prevent its officers and directors from focusing their time and effort on the Consolidated Operating Partnership’s business and result in subjecting the properties owned by the applicable joint venture to additional risk; and
 
  •  the Consolidated Operating Partnership may in certain circumstances be liable for the actions of our co-members or joint venturers.
 
The occurrence of one or more of the events described above could adversely affect the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock.
 
In addition, joint venture investments in real estate involve all of the risks related to the ownership, acquisition, development, sale and financing of real estate discussed in the risk factors above. To the extent the Company’s investments in joint ventures are adversely affected by such risks, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, its common stock could be adversely affected.
 
Item 1B.   Unresolved SEC Comments
 
None.


16

Table of Contents

 
Item 2.   Properties
 
General
 
At December 31, 2005, the Consolidated Operating Partnership and the Other Real Estate Partnerships owned 884 in-service industrial properties (786 of which were owned by the Consolidated Operating Partnership and 98 of which were owned by the Other Real Estate Partnerships) containing an aggregate of approximately 70.2 million square feet of GLA (61.7 million square feet of which comprised the properties owned by the Consolidated Operating Partnership and 8.5 million square feet of which comprised the properties owned by the Other Real Estate Partnerships) in 29 states and one province in Canada, with a diverse base of more than 2,600 tenants engaged in a wide variety of businesses, including manufacturing, retail, wholesale trade, distribution and professional services. The properties are generally located in business parks that have convenient access to interstate highways and/or rail and air transportation. The weighted average age of the Consolidated Operating Partnership’s and the Other Real Estate Partnerships’ properties on a combined basis as of December 31, 2005 was approximately 19 years. The Consolidated Operating Partnership and Other Real Estate Partnerships maintain insurance on their respective properties that the Consolidated Operating Partnership and Other Real Estate Partnerships believe is adequate.
 
The Consolidated Operating Partnership and the Other Real Estate Partnerships classify their properties into five industrial categories: light industrial, bulk warehouse, R&D/flex, regional warehouse and manufacturing. While some properties may have characteristics which fall under more than one property type, the Consolidated Operating Partnership and the Other Real Estate Partnerships have used what they believe is the most dominant characteristic to categorize the property.
 
The following describes the different industrial categories:
 
  •  Light industrial properties generally are of less than 100,000 square feet, have a ceiling height of 16 to 21 feet, are comprised of 5% — 50% of office space, contain less than 50% of manufacturing space and have a land use ratio of 4:1. The land use ratio is the ratio of the total property area to that which is occupied by the building.
 
  •  Bulk warehouse buildings generally are of more than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5% — 15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1.
 
  •  R&D/flex buildings generally are of less than 100,000 square feet, have a ceiling height of less than 16 feet, are comprised of 50% or more of office space, contain less than 25% of manufacturing space and have a land use ratio of 4:1.
 
  •  Regional warehouses generally are of less than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5% — 15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1.
 
  •  Manufacturing properties are a diverse category of buildings that generally have a ceiling height of 10 — 18 feet, are comprised of 5% — 15% of office space, contain at least 50% of manufacturing space and have a land use ratio of 4:1.


17

Table of Contents

 
The following tables summarize certain information as of December 31, 2005 with respect to the in-service properties owned by the Consolidated Operating Partnership, each of which is wholly-owned.
 
Consolidated Operating Partnership
Property Summary
 
                                                                                 
    Light Industrial     R&D/Flex     Bulk Warehouse     Regional Warehouse     Manufacturing  
          Number of
 		          Number of
 		          Number of
 		          Number of
 		          Number of
 		 
Metropolitan Area
  GLA     Properties     GLA     Properties     GLA     Properties     GLA     Properties     GLA     Properties  
 
                                         
Atlanta, GA(j)
    710,554       12       140,538       3       2,997,621       12       293,646       4       1,060,600       5  
                                         
Baltimore, MD((e)
    778,522       13       87,415       3       1,373,430       6       —       —       171,000       1  
                                         
Central Pennsylvania (f)
    146,990       2       —       —       701,000       3       —       —       —       —  
                                         
Chicago, IL
    1,004,748       17       247,447       4       2,163,175       11       159,252       3       589,000       3  
                                         
Cincinnati, OH
    443,039       5       —       —       2,042,555       10       450,797       7       —       —  
                                         
Cleveland, OH
    —       —       —       —       —       —       —       —       462,000       1  
                                         
Columbus, OH
    217,612       2       —       —       2,235,140       6       —       —       —       —  
                                         
Dallas, TX
    1,925,213       49       492,503       20       2,406,171       18       843,232       13       224,984       2  
                                         
Denver, CO
    1,551,926       30       1,414,101       35       1,201,573       7       526,723       8       126,384       1  
                                         
Des Moines, IA
    —       —       —       —       150,444       1       —       —       —       —  
                                         
Detroit, MI
    2,062,870       82       464,026       15       370,808       4       747,978       17       —       —  
                                         
Grand Rapids, MI
    61,250       1       —       —       —       —       —       —       —       —  
                                         
Houston, TX
    741,042       8       201,363       3       2,233,064       13       437,088       6       —       —  
                                         
Indianapolis, IN (c,h,l)
    1,064,808       21       118,200       5       2,346,653       11       303,610       8       71,600       2  
                                         
Los Angeles, CA(b)
    153,353       5       —       —       846,004       4       43,676       1       —       —  
                                         
Louisville, KY
    —       —       —       —       443,500       2       —       —       —       —  
                                         
Milwaukee, WI
    274,223       5                       1,579,569       8       80,682       1       —       —  
                                         
Minneapolis/St. Paul, MN (d,i)
    1,152,387       18       738,099       10       1,902,386       9       201,813       2       525,005       8  
                                         
Nashville, TN
    273,843       5       —       —       1,047,265       6       —       —       330,458       2  
                                         
N. New Jersey
    1,007,039       18       413,167       7       555,205       4       150,985       2       —       —  
                                         
Philadelphia, PA
    —       —       —       —       —       —       21,512       1       —       —  
                                         
Phoenix, AZ
    135,415       6       —       —       631,000       2       469,923       6       —       —  
                                         
Portland, OR
    —       —       —       —       —       —       —       —       36,000       1  
                                         
Raleigh, NC
    —       —       —       —       —       —       —       —       160,120       1  
                                         
Salt Lake City, UT
    478,782       32       146,937       6       324,568       2       —       —       —       —  
                                         
San Diego, CA
    65,755       1       —       —       397,760       2       318,106       9       —       —  
                                         
S. New Jersey(k)
    1,317,055       21       23,050       1       —       —       118,496       2       22,738       1  
                                         
St. Louis, MO
    355,535       5       —       —       866,072       6       96,392       1       —       —  
                                         
Tampa, FL(h)
    493,029       12       608,921       23       209,500       1       —       —       —       —  
                                         
Totonto, ON
    57,540       1       —       —       279,000       1       —       —       —       —  
                                         
Other(a)
    60,000       2       —       —       1,648,866       9       50,000       1       —       —  
                                                                                 
                                         
Total
    16,532,530       373       5,095,767       135       30,952,329       158       5,313,911       92       3,779,889       28  
                                                                                 
 
 
(a) Properties are located in Wichita, KS, McAllen, TX, Malvern, AK, Kansas City, MO, San Antonio, TX, Byhalia, MS, Birmingham, AL, Shreveport, LA and Greenville, SC.
 
(b) One property collateralizes a $5.3 million mortgage loan which matures on December 1, 2019.
 
(c) Twelve properties collateralize a $2.3 million mortgage loan which matures on September 1, 2009.
 
(d) One property collateralizes a $5.5 million mortgage loan which matures on December 1, 2019.
 
(e) One property collateralizes a $1.9 million mortgage loan which matures on October 1, 2006.
 
(f) One property collateralizes a $15.7 million mortgage loan which matures on December 1, 2010.
 
(g) Six properties collateralize a $6.4 million mortgage loan which matures on July 1, 2009.
 
(h) One property collateralizes a $1.8 million mortgage loan which matures on January 1, 2013.
 
(i) One property collateralizes a $2.0 million mortgage loan which matures on September 30, 2024.
 
(j) One property collateralizes a $3.2 million mortgage loan which matures on May 1, 2016.
 
(k) One property collateralizes a $7.1 million mortgage loan which matures on March 1, 2011.
 
(l) One property collateralizes a $2.5 million mortgage loan which matures on January 1, 2012.


18

Table of Contents

In addition to the above mortgage loans, the Consolidated Operating Partnership has a $1.2 million mortgage loan collateralized by one land parcel (not shown above) in Nashville, TN which matured on January 12, 2006 which the Consolidated Operating Partnership paid off and retired on the maturity date.
 
Consolidated Operating Partnership
Property Summary Totals
 
                                 
    Totals  
                Average
 		    GLA as a %
 		 
          Number of
 		    Occupancy at
 		    of Total
 		 
Metropolitan Area
  GLA     Properties(b)     12/31/05(b)     Portfolio(b)  
 
Atlanta, GA
    5,202,959       36       86 %     8.4 %
Baltimore, MD
    2,410,367       23       96 %     3.9 %
Central Pennsylvania
    847,990       5       100 %     1.37 %
Chicago, IL
    4,163,622       38       85 %     6.8 %
Cincinnati, OH
    2,936,391       22       94 %     4.8 %
Cleveland, OH
    462,000       1       100 %     0.7 %
Columbus, OH
    2,452,752       8       95 %     4.0 %
Dallas, TX
    5,892,103       102       89 %     9.6 %
Denver, CO
    4,820,707       81       93 %     7.8 %
Des Moines, IA
    150,444       1       100 %     0.2 %
Detroit, MI
    3,645,682       118       90 %     5.9 %
Grand Rapids, MI
    61,250       1       100 %     0.1 %
Houston, TX
    3,612,557       30       94 %     5.9 %
Indianapolis, IN
    3,904,871       47       93 %     6.3 %
Los Angeles, CA
    1,043,033       10       99 %     1.7 %
Louisville, KY
    443,500       2       89 %     0.7 %
Milwaukee, WI
    1,934,474       14       98 %     3.1 %
Minneapolis/St. Paul, MN
    4,519,690       47       91 %     7.3 %
Nashville, TN
    1,651,566       13       91 %     2.7 %
N. New Jersey
    2,126,396       31       92 %     3.4 %
Philadelphia, PA
    21,512       1       100 %     0.0 %
Phoenix, AZ
    1,236,338       14       90 %     2.0 %
Portland, OR
    36,000       1       100 %     0.1 %
Raleigh, NC
    397,120       2       100 %     0.6 %
Salt Lake City, UT
    950,287       40       94 %     1.5 %
San Diego, CA
    781,621       12       80 %     1.3 %
S. New Jersey
    1,481,339       25       100 %     2.4 %
St. Louis, MO
    1,317,999       12       95 %     2.1 %
Tampa, FL
    1,311,450       36       88 %     2.1 %
Toronto, ON
    336,540       2       100 %     0.5 %
Other(a)
    1,521,866       11       100 %     2.5 %
                                 
Total or Average
    61,674,426       786       92 %     100.0 %
                                 
 
 
(a) Properties are located in Wichita, KS, McAllen, TX, Malvern, AK, Kansas City, MO, San Antonio, TX, Byhalia, MS, Birmingham, AL, Shreveport, LA and Greenville, SC.
 
(b) Includes only in-service properties.


19

Table of Contents

Other Real Estate Partnerships
Property Summary
 
The following tables summarize certain information as of December 31, 2005 with respect to the in-service properties owned by the Other Real Estate Partnerships, each of which is wholly-owned.
 
Property Summary
 
                                                                                 
    Light Industrial     R&D/Flex     Bulk Warehouse     Regional Warehouse     Manufacturing  
          Number of
 		          Number of
 		          Number of
 		          Number of
 		          Number of
 		 
Metropolitan Area
  GLA     Properties     GLA     Properties     GLA     Properties     GLA     Properties     GLA     Properties  
 
                                         
Atlanta, GA
    —       —       109,294       3       237,338       2       90,289       1       —       —  
                                         
Baltimore, MD
    152,904       2       82,245       2       —       —       —       —       —       —  
                                         
Central Pennsylvania
    715,240       5       —       —       300,000       1       117,599       3       —       —  
                                         
Chicago, IL
    265,313       3       —       —       390,432       2       50,009       1       —       —  
                                         
Denver, CO
    —       —       —       —       110,400       1       —       —       —       —  
                                         
Des Moines, IA
    —       —       —       —       —       —       88,000       1       —       —  
                                         
Detroit, MI
    340,347       6       23,392       1       160,035       1       —       —       —       —  
                                         
Indianapolis, IN
    —       —       —       —       1,527,127       5       60,000       1       —       —  
                                         
Los Angeles, CA
    86,084       3       18,921       4       —       —       —               —       —  
                                         
Milwaukee, WI
    —       —       93,705       2       100,520       1       39,468       1       —       —  
                                         
Minneapolis/St. Paul, MN
    —       —       —       —       —       —       —       —       532,119       3  
                                         
Nashville, TN
    —       —       —       —       160,661       1       —       —       —       —  
                                         
N. New Jersey
    194,157       3       —       —       —       —       —       —       —       —  
                                         
Philadelphia, PA
    1,030,494       21       126,692       5       221,937       2       139,316       2       30,000       1  
                                         
S. New Jersey
    45,770       1       —       —       —       —       —       —       —       —  
                                         
St. Louis, MO
    —       —       —       —       245,000       2       —       —       —       —  
                                         
Tampa, FL
    —       —       44,427       1       —       —       —       —       —       —  
                                         
Other(a)
    99,000       3       —       —       490,500       1       —       —       —       —  
                                                                                 
                                         
Total
    2,929,309       47       498,676       18       3,943,950       19       584,681       10       562,119       4  
                                                                                 
 
 
(a) Properties are located in Austin, TX and Sparks, NV.


20

Table of Contents

Other Real Estate Partnerships
Property Summary Totals
 
                                 
    Totals  
                Average
 		    GLA as a %
 		 
          Number of
 		    Occupancy at
 		    of Total
 		 
Metropolitan Area
  GLA     Properties(b)     12/31/05(b)     Portfolio(b)  
 
Atlanta, GA
    436,921       6       94 %     5.1 %
Baltimore, MD
    235,149       4       94 %     2.8 %
Central Pennsylvania
    1,132,839       9       99 %     13.3 %
Chicago, IL
    705,754       6       87 %     8.3 %
Denver, CO
    110,400       1       93 %     1.3 %
Des Moines, IA
    88,000       1       87 %     1.0 %
Detroit, MI
    523,774       8       91 %     6.1 %
Indianapolis, IN
    1,587,127       6       92 %     18.6 %
Los Angeles, CA
    105,005       7       99 %     1.2 %
Milwaukee, WI
    233,693       4       98 %     2.7 %
Minneapolis/St. Paul, MN
    532,119       3       92 %     6.2 %
Nashville, TN
    160,661       1       92 %     1.9 %
N. New Jersey
    194,157       3       92 %     2.3 %
Philadelphia, PA
    1,548,439       31       98 %     18.2 %
S. New Jersey
    45,770       1       100 %     0.5 %
St. Louis, MO
    245,000       2       96 %     2.9 %
Tampa, FL
    44,427       1       88 %     0.5 %
Other(a)
    589,500       4       100 %     6.9 %
                                 
Total or Average
    8,518,735       98       92 %     100.0 %
                                 
 
 
(a) Properties are located in Austin, TX and Sparks, NV.
 
(b) Includes only in-service properties.
 
Property Acquisition Activity
 
During 2005, the Consolidated Operating Partnership acquired 149 industrial properties totaling approximately 18.4 million square feet of GLA at a total purchase price of approximately $661.3 million, or approximately $35.94 per square foot. The Consolidated Operating Partnership also purchased several land parcels for an aggregate purchase price of approximately $29.3 million. The 149 industrial properties acquired have the following characteristics
 
                             
                    Average
 		 
    Number
 		              Occupancy
 		 
Metropolitan Area
  of Properties     GLA    
Property Type
  at 12/31/05(c)  
 
Indianapolis, IN(a)
    1       286,555     Bulk Warehouse     N/A  
San Diego, CA
    1       111,920     Bulk Warehouse     N/A  
Nashville, TN
    1       177,004     Bulk Warehouse     100 %
Cincinnati, OH
    1       176,000     Bulk Warehouse     N/A  
Dallas, TX
    1       99,831     Light Industrial     N/A  
Central PA(a)
    1       249,600     Bulk Warehouse     N/A  
Chicago, IL
    1       97,450     Light Industrial     N/A  
Dallas, TX(a)
    1       73,986     Light Industrial     N/A  
Houston, TX(a)
    1       74,716     Light Industrial     N/A  
Milwaukee, WI
    4       368,462     Light Industrial & Bulk Warehouse     89 %
Minneapolis, MN
    1       83,285     R&D/Flex     100 %
Des Moines(a)
    1       90,000     Regional Warehouse     N/A  


21

Table of Contents

                             
                    Average
 		 
    Number
 		              Occupancy
 		 
Metropolitan Area
  of Properties     GLA    
Property Type
  at 12/31/05(c)  
 
Des Moines(a)
    1       200,000     Bulk Warehouse     N/A  
Des Moines(a)
    1       131,169     Manufacturing     N/A  
Indianapolis
    1       260,400     Bulk Warehouse     100 %
Houston
    1       200,000     Bulk Warehouse     100 %
Phoenix, Chicago
    3       371,000     Regional & Bulk Warehouse     100 %
Des Moines(a)
    1       400,000     Bulk Warehouse     N/A  
Phoenix, AZ(a)
    1       56,801     Light Industrial     N/A  
Milwaukee, WI(a)
    1       160,000     Bulk Warehouse     N/A  
Dallas, TX(a)
    1       395,970     Bulk Warehouse     N/A  
Denver, CO
    1       36,828     Light Industrial     100 %
Dallas, TX
    1       41,019     Light Industrial     100 %
Baltimore, MD
    4       115,985     R&D/Flex     87 %
Minneapolis, MN
    1       413,239     Light Industrial     N/A  
Phoenix, AZ
    3       384,683     Bulk Warehouse     N/A  
Detroit, MI
    1       55,000     Light Industrial     N/A  
Atlanta, GA & Columbus, OH
    3       720,953     Bulk Warehouse     100 %
Atlanta, GA
    1       90,000     Light Industrial     100 %
Chicago, IL(a)
    1       74,960     Manufacturing     N/A  
Detroit, MI
    1       53,550     Light Industrial     100 %
Milwaukee, WI
    1       44,342     Light Industrial     100 %
S. New Jersey
    1       355,000     R&D/Flex/Light Industrial     100 %
Cincinnati, OH
    1       175,250     Light Industrial     N/A  
Los Angeles, CA
    2       119,104     Light Industrial     N/A  
Dallas/ Chicago/ Minneapolis
    18       2,432,884     Light Industrial, R&D/Flex, Regional & Bulk Warehouse     99 %
Los Angeles, CA(a)
    1       33,145     Light Industrial     N/A  
Atlanta, GA
    1       152,819     Bulk Warehouse     100 %
Orlando, FL
    1       78,997     Light Industrial     N/A  
Chicago, IL
    2       303,760     Bulk Warehouse     100 %
Chicago, IL
    1       35,000     Regional Warehouse     100 %
Detroit, MI
    3       138,103     Light Industrial     100 %
Detroit, MI
    1       116,937     Bulk Warehouse     N/A  
Nashville, TN
    1       535,000     Bulk Warehouse     100 %
Detroit, MI
    1       18,550     R&D/Flex     N/A  
Milwaukee/Cincinnati
    13       1,556,659     Light Industrial/Regional & Bulk Warehouse     100 %
Atlanta, GA
    2       110,529     Light Industrial     90 %
Central PA
    1       81,600     Light Industrial     100 %
Dallas, TX
    1       48,118     Regional Warehouse     N/A  
Central PA
    1       106,637     Bulk Warehouse     N/A  
Various
    20       3,591,433     Lt Ind/R&D Flex/Mfg/Reg & Bulk Whse     100 %
Milwaukee, WI
    1       36,608     Light Industrial     N/A  
Nashville, TN
    1       51,528     Regional Warehouse     N/A  
Detroit, MI
    1       40,000     Light Industrial     100 %
Indianapolis, IN
    5       325,379     Light Industrial/R&D Flex/Regional Warehouse     100 %
Houston, TX
    1       38,950     R&D/Flex     N/A  
Houston, TX
    1       31,540     R&D/Flex     N/A  
Los Angeles, CA
    1       70,000     Light Industrial     95 %
Atlanta, GA
    2       287,600     Light Industrial/Bulk Warehouse     100 %
Denver, CO
    1       126,384     Manufacturing     100 %
Tampa, FL
    1       209,500     Bulk Warehouse     100 %
Detroit, MI
    1       88,700     Light Industrial     N/A  
Baltimore, MD(b)
    16       951,820     Light Industrial/R&D Flex     95 %
San Diego, CA
    1       65,755     Light Industrial     100 %
                             
      149       18,407,997              
                             
 
 
(a) Property was sold in 2005.

22

Table of Contents

(b) Property acquired through foreclosure.
 
(c) Includes only in-service properties.
 
During 2005, the Other Real Estate Partnerships acquired 12 industrial properties totaling approximately 1.7 million square feet of GLA at a total purchase price of approximately $62.1 million, or $36.47 per square foot. The twelve industrial properties acquired have the following characteristics:
 
                             
    Number
 		              Occupancy
 		 
Metropolitan Area
  of Properties     GLA    
Property Type
  at 12/31/05(a)  
 
Philadelphia, PA
    1       178,537     Bulk Warehouse     100 %
Denver, CO
    1       110,400     Bulk Warehouse     100 %
N. New Jersey
    1       49,707     Light Industrial     100 %
Central PA
    1       243,380     Light Industrial     N/A  
Central PA
    1       332,170     Light Industrial     100 %
Milwaukee, WI
    1       100,520     Bulk Warehouse     100 %
Atlanta, GA
    1       296,059     Bulk Warehouse     N/A  
Various
    4       235,149     Lt Ind/R&D Flex/Mfg/Reg & Bulk Whse     100 %
Chicago, IL
    1       156,621     Light Industrial     100 %
                             
      12       1,702,543              
                             
 
 
(a) Includes only in-service properties.
 
Property Development Activity
 
During 2005, the Consolidated Operating Partnership placed in-service 12 developments totaling approximately 2.6 million square feet of GLA at a total cost of approximately $141.9 million, or approximately $55.65 per square foot. The placed in-service developments have the following characteristics:
 
                     
              Average
 		 
              Occupancy
 		 
Metropolitan Area
  GLA    
Property Type
  at 12/31/05  
 
Cedar Rapids, IA(a)
    750,000     Bulk Warehouse     N/A  
Tampa, FL(a)
    27,980     R&D/Flex     N/A  
St. Louis, MO(a)
    144,400     Bulk Warehouse     N/A  
Cincinnati, OH
    180,000     Bulk Warehouse     100 %
Cincinnati, OH
    236,250     Bulk Warehouse     100 %
Columbus, OH(a)
    128,537     Bulk Warehouse     N/A  
Detroit, MI
    63,000     Regional Warehouse     100 %
Denver, CO
    16,120     R&D/Flex     100 %
Tampa, FL
    38,780     R&D/Flex     N/A  
Phoenix, AZ
    500,000     Bulk Warehouse     100 %
Nashville, TN(a)
    325,000     Bulk Warehouse     N/A  
Malvern, AK
    140,000     Bulk Warehouse     100 %
                     
      2,550,067              
                     
 
 
(a) Property was sold in 2005.
 
At December 31, 2005, the Consolidated Operating Partnership had 20 development projects not placed in service, totaling an estimated 4.8 million square feet and with an estimated completion cost of approximately $210.6 million. The Consolidated Operating Partnership estimates it will place in service 19 of


23

Table of Contents

the 20 projects in fiscal year 2006. There can be no assurance that the Consolidated Operating Partnership will place these projects in service in 2006 or that the actual completion cost will not exceed the estimated completion cost stated above.
 
Property Sales
 
During 2005, the Consolidated Operating Partnership sold 82 industrial properties totaling approximately 10.7 million square feet of GLA and several land parcels. Total gross sales proceeds approximated $561.6 million. The 82 industrial properties sold have the following characteristics:
 
                     
    Number of
 		           
Metropolitan Area
  Properties     GLA    
Property Type
 
St. Louis, MO
    1       248,635     Bulk Warehouse
Cedar Rapids, IA
    1       750,000     Bulk Warehouse
Indianapolis
    1       286,555     Bulk Warehouse
Detroit, MI
    1       127,800     Bulk Warehouse
Milwaukee, WI
    1       104,190     Bulk Warehouse
Cincinnati, OH
    1       143,438     Bulk Warehouse
Miami, FL
    1       268,539     Bulk Warehouse
Minneapolis, MN
    1       49,190     R&D/Flex
Minneapolis, MN
    1       81,927     Light Industrial
Nashville, TN
    1       518,400     Bulk Warehouse
Northern New Jersey
    1       194,258     Bulk Warehouse
Houston, TX
    1       48,000     Light Industrial
Northern New Jersey
    2       29,000     R&D Flex/Light Industrial
Tampa, FL
    1       27,980     R&D/Flex
Phoenix, AZ
    2       99,436     Light Industrial
Cincinnati, OH
    1       345,000     Bulk Warehouse
Northern New Jersey
    1       208,000     Bulk Warehouse
Los Angeles, CA
    2       30,157     Light Industrial
Houston, TX
    1       74,716     Light Industrial
Minneapolis, MN
    1       47,263     Light Industrial
Baltimore, MD
    3       190,456     Light Industrial
Central PA
    1       249,640     Bulk Warehouse
Tampa, FL
    1       41,377     Regional Warehouse
Chicago, IL
    1       288,000     Bulk Warehouse
Los Angeles, CA
    3       245,302     Regional & Bulk Warehouse
Baltimore, MD
    2       125,000     Light Industrial
Milwaukee, WI
    1       160,000     Bulk Warehouse
Central PA
    1       252,000     Bulk Warehouse
Atlanta, GA
    1       239,435     Manufacturing
Phoenix, AZ
    3       407,205     Bulk Warehouse
Des Moines, IA
    1       90,000     Regional Warehouse
Los Angeles, CA
    1       68,446     Regional Warehouse
St. Louis, MO
    2       318,200     Bulk Warehouse
Southern New Jersey
    —       25,779     Light Industrial
Tampa, FL
    1       38,780     R&D/Flex
Dallas, TX
    3       262,686     Lt Industrial/Regional & Bulk Warehouse
Denver, CO
    1       34,740     Light Industrial
Chicago, IL
    1       31,175     Light Industrial
Chicago, IL
    1       74,960     Manufacturing


24

Table of Contents

                     
    Number of
 		           
Metropolitan Area
  Properties     GLA    
Property Type
 
Columbus, OH
    1       128,537     Bulk Warehouse
Northern New Jersey
    1       266,338     Bulk Warehouse
Denver, CO
    1       14,822     R&D/Flex
Southern New Jersey
    1       14,400     R&D/Flex
Atlanta, GA
    1       36,000     Light Industrial
Los Angeles, CA
    2       73,000     Light Industrial
Los Angeles, CA
    1       33,145     Light Industrial
Salt Lake City, UT
    4       100,072     Light Industrial
Phoenix, AZ
    1       56,801     Light Industrial
Tampa, FL
    6       179,494     R&D/Flex
Des Moines, IA
    3       731,169     Manufacturing/Bulk Warehouse
Other, NH
    1       107,908     R&D/Flex
Nashville, TN
    1       325,000     Bulk Warehouse
Northern New Jersey
    1       158,242     Bulk Warehouse
Northern New Jersey
    1       87,500     Regional Warehouse
Tampa, FL
    3       73,723     R&D Flex/Light Industrial
Dallas, TX
    1       395,970     Bulk Warehouse
Atlanta, GA
    1       1,054,500     Bulk Warehouse
                     
      82       10,662,286      
                     
 
During 2005, the Other Real Estate Partnerships sold fourteen industrial properties totaling approximately 2.1 million square feet of GLA. Total gross sales proceeds approximated $94.5 million. The fourteen properties sold have the following characteristics:
 
                     
    Number of
 		           
Metropolitan Area
  Properties     GLA    
Property Type
 
Central PA
    1       112,500     Bulk Warehouse
Philadelphia, PA
    1       61,157     Light Industrial
Philadelphia, PA
    1       72,000     Regional Warehouse
Baltimore, MD
    1       65,860     Light Industrial
Indianapolis
    1       192,000     Bulk Warehouse
Atlanta, GA
    1       59,959     Light Industrial
Philadelphia, PA
    1       26,827     Manufacturing
Atlanta, GA
    1       44,242     R&D/Flex
Atlanta, GA
    1       800,000     Bulk Warehouse
Central PA
    1       100,000     Bulk Warehouse
Central PA
    1       198,386     Bulk Warehouse
Philadelphia, PA
    1       40,000     Light Industrial
Chicago, IL
    1       49,730     R&D/Flex
Central PA
    1       300,000     Bulk Warehouse
                     
      14       2,122,661      
                     
 
Property Acquisitions, Developments and Sales Subsequent to Year End
 
From January 1, 2006 to March 6, 2006, the Consolidated Operating Partnership acquired 21 industrial properties and several land parcels for a total estimated investment of approximately $142.4 million (approximately $.9 million of which was made through the issuance of limited partnership interests in the Operating

25

Table of Contents

Partnership (“Units”)). The Consolidated Operating Partnership also sold 16 industrial properties for approximately $240.1 million of gross proceeds during this period.
 
During the period January 1, 2006 through March 6, 2006, the Other Real Estate Partnerships acquired two industrial properties for a total estimated investment of approximately $7.3 million.
 
Tenant and Lease Information
 
The Consolidated Operating Partnership has a diverse base of over 2,400 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and six years and provide for periodic rent 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 December 31, 2005, approximately 92% of the GLA of the Consolidated Operating Partnership’s in-service properties was leased, and no single tenant or group of related tenants accounted for more than 4.5% of the Consolidated Operating Partnership’s and Other Real Estate Partnership’s combined rent revenues, nor did any single tenant or group of related tenants occupy more than 5.8% of the Consolidated Operating Partnership’s and Other Real Estate Partnership’s Combined total GLA as of December 31, 2005.
 
The following table shows scheduled lease expirations for all leases for the Consolidated Operating Partnership’s in service properties as of December 31, 2005.
 
                                         
                      Annual Base Rent
 		       
    Number of
 		          Percentage of
 		    Under Expiring
 		    Percentage of Total
 		 
    Leases
 		    GLA
 		    GLA
 		    Leases
 		    Annual Base Rent
 		 
Year of Expiration(1)
  Expiring     Expiring(2)     Expiring     (In thousands)     Expiring(2)  
 
2006
    713       12,732,193       22 %     52,856       24 %
2007
    487       9,558,856       17 %     39,933       18 %
2008
    468       8,754,317       15 %     36,707       16 %
2009
    269       5,086,545       9 %     22,181       10 %
2010
    240       5,317,872       9 %     21,668       10 %
2011
    85       2,189,336       4 %     7,619       3 %
2012
    31       1,085,093       2 %     3,404       2 %
2013
    30       2,177,011       4 %     7,263       3 %
2014
    19       1,022,704       2 %     3,682       2 %
2015
    35       3,216,067       6 %     11,055       5 %
Thereafter
    34       5,498,145       10 %     15,104       7 %
                                         
Total
    2,411       56,638,139       100.0 %   $ 221,472       100.0 %
                                         
 
 
(1) Lease expirations as of December 31, 2005 assume tenants do not exercise existing renewal, termination, or purchase options.
 
(2) Does not include existing vacancies of 5,036,287 aggregate square feet.
 
The Other Real Estate Partnerships have a diverse base of more than 250 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and six years and provide for periodic rent 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 December 31, 2005, approximately 92% of the GLA of the Other Real Estate Partnerships’ in-service properties was leased.


26

Table of Contents

The following table shows scheduled lease expirations for all leases for the Other Real Estate Partnerships’ properties in — service as of December 31, 2005.
 
                                         
                      Annual Base Rent
 		       
    Number of
 		          Percentage of
 		    Under Expiring
 		    Percentage of Total
 		 
    Leases
 		    GLA
 		    GLA
 		    Leases
 		    Annual Base Rent
 
Year of Expiration(1)
  Expiring     Expiring(2)     Expiring     (In thousands)     Expiring(2)  
 
2006
    72       1,411,048       17.2 %     6,794       19 %
2007
    47       1,054,689       12.9 %     5,061       15 %
2008
    41       1,925,609       23.5 %     7,784       22 %
2009
    35       880,319       10.8 %     4,113       12 %
2010
    34       953,549       11.6 %     4,176       12 %
2011
    16       955,757       11.7 %     3,868       11 %
2012
    6       242,826       3.0 %     1,033       3 %
2013
    7       371,684       4.5 %     1,145       3 %
2014
    2       109,697       1.3 %     279       1 %
2015
    3       244,803       3.0 %     812       2 %
Thereafter
    1       37,765       0.5 %     —       — %
                                         
Total
    264       8,187,746       100.0 %   $ 35,065       100.0 %
                                         
 
 
(1) Lease expirations as of December 31, 2005 assume tenants do not exercise existing renewal, termination, or purchase options.
 
(2) Does not include existing vacancies of 330,989 aggregate square feet.
 
Item 3.   Legal Proceedings
 
The Consolidated Operating Partnership is involved in legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material impact on the results of operations, financial position or liquidity of the Consolidated Operating Partnership.
 
Item 4.   Submission of Matters to a Vote of Security Holders
 
None
 
PART II
 
Item 5.   Market for Registrant’s Partners’ Capital, Related Partner Matters and Issuer Purchases of Equity Securities
 
There is no established public trading market for the general partner and limited partner units. As of March 6, 2006, there were 251 holders of record of general partner and limited partner units (“Unit”).
 
Beginning with the third quarter of 1994, the Operating Partnership has made consecutive quarterly distributions to its partners with respect to general partner and limited partner units since the initial public offering of the Company in June 1994. The current indicated annual distribution rate with respect to general partner and limited partner units is $2.80 per unit ($.7000 per Unit per quarter). The Operating Partnership’s ability to make distributions depends on a number of factors, including its net cash provided by operating activities, capital commitments and debt repayment schedules. Holders of general partner and limited partner units are entitled to receive distributions when, as and if declared by the Board of Directors of the Company, its general partner, after the priority distributions required under the Operating Partnership’s partnership agreement have been made with respect to Preferred Units out of any funds legally available for that purpose.


27

Table of Contents

The following table sets forth the distributions per Unit paid or declared by the Operating Partnership during the periods noted:
 
         
    Distribution
 		 
Quarter Ended
  Declared  
 
December 31, 2005
  $ 0.7000  
September 30, 2005
  $ 0.6950  
June 30, 2005
  $ 0.6950  
March 31, 2005
  $ 0.6950  
December 31, 2004
  $ 0.6950  
September 30, 2004
  $ 0.6850  
June 30, 2004
  $ 0.6850  
March 31,2004
  $ 0.6850  
 
For the year ended December 31, 2005, the Operating Partnership issued 366,472 Units valued, in the aggregate, at $14.7 million in exchange for interests in certain properties.
 
All of the above Units were issued in private placements in reliance on Section 4(2) of the Securities Act of 1933, as amended, including Regulation D promulgated thereunder, to individuals or entities holding real property or interests therein. No underwriters were used in connection with such issuances.
 
Subject to lock-up periods and certain adjustments, Units are convertible into common stock, par value $0.01 per share, of the Company on a one-for-one basis or cash at the option of the Company.


28

Table of Contents

 
Item 6.   Selected Financial Data
 
The following sets forth selected financial and operating data for the Consolidated Operating Partnership on a historical consolidated basis. The following data should be read in conjunction with the financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Form 10-K. The historical statements of operations for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 include the results of operations of the Consolidated Operating Partnership as derived from the Consolidated Operating Partnership’s audited financial statements. The results of operations of properties sold are presented in discontinued operations if such properties met both of the following criteria: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Consolidated Operating Partnership as a result of the disposition and (b) the Consolidated Operating Partnership will not have any significant involvement in the operations of the property after the disposal transaction. The historical balance sheet data and other data as of December 31, 2005, 2004, 2003, 2002 and 2001 include the balances of the Consolidated Operating Partnership as derived from the Consolidated Operating Partnership’s audited financial statements.
 
                                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    12/31/05     12/31/04     12/31/03     12/31/02     12/31/01  
    (In thousands, except per unit and property data)  
 
Statement of Operations Data:
                                       
Total Revenues
  $ 323,357     $ 258,768     $ 236,165     $ 220,847     $ 233,685  
Interest Income
    1,075       2,025       1,698       121       265  
Market-to-Market/Gain on Settlement of Interest Rate Protection Agreement
    811       1,583       —       —       —  
Property Expenses
    (108,519 )     (87,461 )     (80,562 )     (73,062 )     (72,153 )
Expenses from Build to Suit Development for Sale
    (15,574 )     —       —       —       —  
General and Administrative Expense
    (54,846 )     (38,912 )     (25,607 )     (19,230 )     (17,990 )
Interest Expense
    (108,164 )     (98,458 )     (94,637 )     (87,069 )     (78,841 )
Amortization of Deferred Financing Costs
    (2,122 )     (1,928 )     (1,761 )     (1,858 )     (1,742 )
Depreciation and Other Amortization
    (105,714 )     (77,404 )     (60,046 )     (49,387 )     (45,775 )
Gain (Loss) from Early Retirement of Debt (b)
    82       (515 )     —       (888 )     (10,309 )
Valuation Provision on Real Estate (a)
    —       —       —       —       (6,490 )
Equity in Income of Other Real Estate Partnerships
    48,212       29,203       43,332       53,038       47,949  
Equity in Income (Loss) of Joint Ventures
    3,698       35,840       539       463       (791 )
Income Tax Benefit
    12,033       7,673       5,147       2,193       197  
                                         
(Loss) Income from Continuing Operations
    (5,671 )     30,414       24,268       45,168       48,005  
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $102,742, $81,806, $74,797 and $37,106 for the Year Ended December 31, 2005, 2004, 2003 and 2002), (c)
    108,482       95,740       102,943       80,701       48,307  
Provision for Income Taxes Allocable to Discontinued Operations (Including $19,719, $8,267, $1,988 and $1,435 allocable to Gain on Sale of Real Estate for the years ended December 31, 2005, 2004, 2003 and 2002, respectively)
    (21,754 )     (10,800 )     (3,427 )     (2,465 )     (1,248 )
Gain on Sale of Real Estate
    28,870       15,112       9,594       16,408       42,942  
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
    (10,711 )     (5,312 )     (2,322 )     (3,394 )     (43 )
                                         
Net Income
    99,216       125,154       131,056       136,418       137,963  
Redemption of Preferred Units
    —       (7,959 )     —       (3,707 )     —  
Preferred Unit Distributions
    (10,688 )     (14,488 )     (20,176 )     (23,432 )     (28,924 )
                                         
Net Income Available to Unitholders
  $ 88,528     $ 102,707     $ 110,880     $ 109,279     $ 109,039  
                                         


29

Table of Contents

                                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    12/31/05     12/31/04     12/31/03     12/31/02     12/31/01  
    (In thousands, except per unit and property data)  
 
Income from Continuing Operations Available to Unitholders Per Weighted Average Unit Outstanding:
                                       
Basic
  $ 0.04     $ 0.38     $ 0.25     $ 0.68     $ 1.35  
                                         
Diluted
  $ 0.04     $ 0.37     $ 0.25     $ 0.67     $ 1.34  
                                         
Net Income Available to Unitholders Per Weighted Average Unit Outstanding:
                                       
Basic
  $ 1.81     $ 2.18     $ 2.45     $ 2.38     $ 2.37  
                                         
Diluted
  $ 1.80     $ 2.16     $ 2.44     $ 2.37     $ 2.36  
                                         
Distributions Per Unit
  $ 2.7850     $ 2.7500     $ 2.7400     $ 2.7250     $ 2.6525  
                                         
Weighted Average Number of Units Outstanding:
                                       
Basic
    48,968       47,136       45,322       45,841       45,949  
                                         
Diluted
    49,193       47,467       45,443       46,079       46,258  
                                         
Net Income
  $ 99,216     $ 125,154     $ 131,056     $ 136,418     $ 137,963  
Other Comprehensive (Loss) Income:
                                       
Cumulative Transition Adjustment
    —       —       —       —       (14,920 )
Settlement of Interest Rate Protection Agreements
    —       6,816       —       1,772       (191 )
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
    (159 )     —       —       —       —  
Mark-to-Market of Interest Rate Protection Agreements and Interest Rate Swap Agreements
    (1,414 )     106       251       (126 )     (231 )
Write-off of Unamortized Interest Rate Protection Agreements Due to Early Retirement of Debt
    —       —       —       —       2,156  
Amortization of Interest Rate Protection Agreements
    (1,085 )     (512 )     198       176       805  
                                         
Comprehensive Income
  $ 96,558     $ 131,564     $ 131,505     $ 138,240     $ 125,582  
                                         
Balance Sheet Data (End of Period):                                        
Real Estate, Before Accumulated Depreciation
    2,896,937     $ 2,486,414     $ 2,352,026     $ 2,316,970     $ 2,311,883  
Real Estate, After Accumulated Depreciation
    2,541,182       2,165,411       2,056,338       2,055,595       2,082,590  
Real Estate Held for Sale, Net
    16,840       50,286       —       7,040       28,702  
Investment in and Advances to Other Real Estate Partnerships
    378,864       339,967       374,906       377,776       378,350  
Total Assets
    3,230,465       2,721,151       2,633,262       2,585,805       2,580,652  
Mortgage Loans Payable, Net, Unsecured Lines of Credit and Senior Unsecured Debt, Net
    1,811,322       1,572,473       1,451,269       1,402,069       1,277,722  
Total Liabilities
    2,016,827       1,711,429       1,570,195       1,525,587       1,400,727  
Partners’ Capital
    1,213,638       1,009,722       1,063,067       1,060,218       1,179,925  
Other Data:                                        
Cash Flow From Operating Activities
  $ 82,831     $ 81,015     $ 91,266     $ 138,453     $ 145,986  
Cash Flow From Investing Activities
    (404,742 )     5,570       18,115       11,007       (80,236 )
Cash Flow From Financing Activities
    325,653       (83,516 )     (109,381 )     (149,460 )     (69,394 )
Total In-Service Properties
    786       726       729       798       812  
Total In-Service GLA, in Square Feet
    61,674,426       52,330,335       48,527,601       49,867,755       52,214,832  
In-Service Occupancy Percentage
    92 %     91 %     90 %     89 %     91 %
 
 
(a) Represents a valuation provision on real estate relating to certain properties located in Columbus, Ohio, Des Moines, Iowa and Grand Rapids, Michigan.
 
(b) In 2005, the Consolidated Operating Partnership wrote off $.05 million of financing fees related to the Consolidated Operating Partnership’s previous line of credit agreement which was amended and restated

30

Table of Contents

on August  23, 2005. In addition, the Consolidated Operating Partnership paid $.3 million of finance fees and wrote off a loan premium of $.4 million on a mortgage loan payable which was assumed by the buyers of the related properties on July 13, 2005. In 2004, the Consolidated Operating Partnership paid off and retired a mortgage loan. The Consolidated Operating Partnership recorded a loss from the early retirement of debt of approximately $.5 million which is comprised of the write-off of unamortized deferred financing costs and a prepayment penalty. In 2002, the Consolidated Operating Partnership paid off and retired certain senior unsecured debt. The Consolidated Operating Partnership recorded a loss from the early retirement of debt of approximately $.9 million which is comprised of the amount paid above the carrying amount of the senior unsecured debt, the write-off of pro rata unamortized deferred financing costs and legal costs. In 2001, the Consolidated Operating Partnership, paid off and retired certain mortgage loans and senior unsecured debt. The Consolidated Operating Partnership recorded a loss from the early retirement of debt of approximately $10.3 million, which is comprised of the amount paid above the carrying amount of the senior unsecured debt, the write-off of unamortized deferred financing costs, the write-off of the unamortized portion of an interest rate protection agreement which was used to fix the interest rate on the senior unsecured debt prior to issuance, the settlement of an interest rate protection agreement used to fix the retirement price of the senior unsecured debt, prepayment fees, legal costs and other expenses.
 
(c) On January 1, 2002, the Consolidated Operating Partnership adopted the Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”). FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Consolidated Operating Partnership as a result of the disposal transaction and (b) the Consolidated Operating Partnership will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be restated and presented in discontinued operations in prior consolidated statements of operations.
 
Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
The following discussion should be read in conjunction with “Selected Financial Data” and the historical Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K.
 
This report contains certain 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. First Industrial, L.P. (the “Operating Partnership”) intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Operating Partnership, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. The Operating Partnership’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Operating Partnership on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rates, competition, supply and demand for industrial properties in the Operating Partnership’s current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Operating Partnership and its business, including additional factors that could materially affect the Operating Partnership’s financial results, is included herein in Item 1A, “Risk Factors” and in the Operating Partnership’s other filings with the Securities and Exchange Commission.


31

Table of Contents

First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 86.8% ownership interest at December 31, 2005. The Company also owns a preferred general partnership interest in the Operating Partnership (“Preferred Units”) with an aggregate liquidation priority of $312.5 million. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code. The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 13.2% interest in the Operating Partnership at December 31, 2005.
 
The Operating Partnership or First Industrial Development Services, Inc. is the sole member of several limited liability companies (the “L.L.C.s”) and the sole stockholder of First Industrial Development Services, Inc., (together with the Operating Partnership and the L.L.C.’s, the “Consolidated Operating Partnership”), the operating data of which is consolidated with that of the Operating Partnership. The Operating Partnership also holds at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, L.P (the “Mortgage Partnership”), First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), TK-SV, LTD., and FI Development Services, L.P. (together, the “Other Real Estate Partnerships”). The Other Real Estate Partnerships’ operating data is presented on a combined basis, separate from that of the Consolidated Operating Partnership. The Operating Partnership or First Industrial Development Services, Inc., through separate wholly-owned limited liability companies in which it is the sole member, also owns minority equity interests in, and provides asset and property management services to, four joint ventures which invest in industrial properties (the “September 1998 Joint Venture” , the “May 2003 Joint Venture”, the “March 2005 Joint Venture” and the “September 2005 Joint Venture”). The Operating Partnership, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in, and provided property management services to, a fifth joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 joint Venture and the September 2005 Joint venture; the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. The operating data of the Joint Ventures is not consolidated with that of the Consolidated Operating Partnership as presented herein.
 
The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.
 
The financial statements of the Operating Partnership report the L.L.C.s and First Industrial Development Services, Inc. on a consolidated basis and the Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting. Profits, losses and distributions of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships are allocated to the general partner and the limited partners, or members, as applicable, in accordance with the provisions contained within the partnership agreements or operating agreements, as applicable, of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships.
 
As of December 31, 2005, the Consolidated Operating Partnership owned 786 in-service industrial properties, containing an aggregate of approximately 61.7 million square feet of gross leasable area (“GLA”). On a combined basis, as of December 31, 2005, the Other Real Estate Partnerships owned 98 in-service industrial properties, containing an aggregate of approximately 8.5 million square feet of GLA. Of the 98 industrial properties owned by the Other Real Estate Partnerships at December 31, 2005, 21 are held by the Financing Partnership, 14 are held by the Securities Partnership, 11 are held by the Mortgage Partnership, 37 are held by the Pennsylvania Partnership, 10 are held by the Harrisburg Partnership, four are held by the Indianapolis Partnership and one is held by TK-SV, LTD.
 
Management believes the Consolidated Operating Partnership’s financial condition and results of operations are, primarily, a function of the Consolidated Operating Partnership’s and its joint ventures’


32

Table of Contents

performance in four key areas: leasing of industrial properties, acquisition and development of additional industrial properties, redeployment of internal capital and access to external capital.
 
The Consolidated Operating Partnership generates revenue primarily from rental income and tenant recoveries from long-term (generally three to six years) operating leases of its and its joint ventures’ industrial properties. Such revenue is offset by certain property specific operating expenses, such as real estate taxes, repairs and maintenance, property management, utilities and insurance expenses, along with certain other costs and expenses, such as depreciation and amortization costs and general and administrative and interest expenses. The Consolidated Operating Partnership’s revenue growth is dependent, in part, on its ability to (i) increase rental income, through increasing, either or both, occupancy rates and rental rates at the Consolidated Operating Partnership’s and its joint ventures’ properties, (ii) maximize tenant recoveries and (iii) minimize operating and certain other expenses. Revenues generated from rental income and tenant recoveries are a significant source of funds, in addition to income generated from gains/losses on the sale of the Consolidated Operating Partnership’s and its joint ventures’ properties (as discussed below), for the Consolidated Operating Partnership’s distributions. The leasing of property, in general, and occupancy rates, rental rates, operating expenses and certain non-operating expenses, in particular, are impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Consolidated Operating Partnership. The leasing of property also entails various risks, including the risk of tenant default. If the Consolidated Operating Partnership were unable to maintain or increase occupancy rates and rental rates at the Consolidated Operating Partnership’s and its joint ventures’ properties or to maintain tenant recoveries and operating and certain other expenses consistent with historical levels and proportions, the Consolidated Operating Partnership’s revenue growth would be limited. Further, if a significant number of the Consolidated Operating Partnership’s or its joint ventures’ tenants were unable to pay rent (including tenant recoveries) or if the Consolidated Operating Partnership or its joint ventures were unable to rent their properties on favorable terms, the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
 
The Consolidated Operating Partnership’s revenue growth is also dependent, in part, on its and its joint ventures’ ability to acquire existing, and acquire and develop new, additional industrial properties on favorable terms. The Consolidated Operating Partnership itself, and through its various joint ventures, continually seeks to acquire existing industrial properties on favorable terms, and, when conditions permit, also seeks to acquire and develop new industrial properties on favorable terms. Existing properties, as they are acquired, and acquired and developed properties, as they lease-up, generate revenue from rental income, tenant recoveries and fees, income from which, as discussed above, is a source of funds for the Consolidated Operating Partnership’s distributions. The acquisition and development of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Consolidated Operating Partnership. The acquisition and development of properties also entails various risks, including the risk that the Consolidated Operating Partnership’s and its joint ventures’ investments may not perform as expected. For example, acquired existing and acquired and developed new properties may not sustain and/or achieve anticipated occupancy and rental rate levels. With respect to acquired and developed new properties, the Consolidated Operating Partnership may not be able to complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties. Also, the Consolidated Operating Partnership and its joint ventures face significant competition for attractive acquisition and development opportunities from other well-capitalized real estate investors, including both publicly-traded real estate investment trusts and private investors. Further, as discussed below, the Consolidated Operating Partnership and its joint ventures may not be able to finance the acquisition and development opportunities they identify. If the Company and its joint ventures were unable to acquire and develop sufficient additional properties on favorable terms or if such investments did not perform as expected, the Consolidated Operating Partnership’s revenue growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.


33

Table of Contents

The Consolidated Operating Partnership also generates income from the sale of its and its joint ventures’ properties (including existing buildings, buildings which the Consolidated Operating Partnership or joint ventures have developed or re-developed on a merchant basis and land). The Consolidated Operating Partnership itself, and through its various joint ventures, is continually engaged in, and its income growth is dependent, in part, on systematically redeploying capital from properties and other assets with lower yield potential into properties and other assets with higher yield potential. As part of that process, the Consolidated Operating Partnership and its joint ventures sell, on an ongoing basis, select stabilized properties or land or properties offering lower potential returns relative to their market value. The gain/loss on, and fees from, the sale of such properties are included in the Consolidated Operating Partnership’s income and are a significant source of funds, in addition to revenues generated from rental income and tenant recoveries, for the Consolidated Operating Partnership’s distributions. Also, a significant portion of the Consolidated Operating Partnership’s proceeds from such sales is used to fund the Consolidated Operating Partnership’s acquisition of existing, and the acquisition and development of new, industrial properties. The sale of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Consolidated Operating Partnership. The sale of properties also entails various risks, including competition from other sellers and the availability of attractive financing for potential buyers of the Consolidated Operating Partnership’s properties. Further, the Consolidated Operating Partnership’s ability to sell properties is limited by safe harbor rules applying to REITs under the Code which relate to the number of properties that may be disposed of in a year, their tax bases and the cost of improvements made to the properties, along with other tests which enable a REIT to avoid punitive taxation on the sale of assets. If the Consolidated Operating Partnership and its joint ventures were unable to sell properties on favorable terms, the Consolidated Operating Partnership’s income growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
 
Currently, the Consolidated Operating Partnership utilizes a portion of the net sales proceeds from property sales, borrowings under its unsecured lines of credit and proceeds from the issuance, when and as warranted, of additional equity securities to finance future acquisitions and developments, and to fund its equity commitments to its joint ventures. Access to external capital on favorable terms plays a key role in the Consolidated Operating Partnership’s financial condition and results of operations, as it impacts the Consolidated Operating Partnership’s cost of capital and its ability and cost to refinance existing indebtedness as it matures and to fund acquisitions, developments and contributions to its joint ventures or through the issuance, when and as warranted, of additional equity securities. The Company’s ability to access external capital on favorable terms is dependent on various factors, including general market conditions, interest rates, credit ratings on the Company’s capital stock and debt, the market’s perception of the Company’s growth potential, the Company’s current and potential future earnings and cash distributions and the market price of the Company’s capital stock. If the Company were unable to access external capital on favorable terms, the Company’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Company’s common stock would be adversely affected.
 
CRITICAL ACCOUNTING POLICIES
 
The Consolidated Operating Partnership’s significant accounting policies are described in more detail in Note 3 to the Consolidated Financial Statements. The Consolidated Operating Partnership believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
 
  •  The Consolidated Operating Partnership maintains an allowance for doubtful accounts which is based on estimates of potential losses which could result from the inability of the Consolidated Operating Partnership’s tenants to satisfy outstanding billings with the Consolidated Operating Partnership. The allowance for doubtful accounts is an estimate based on the Consolidated Operating Partnership’s assessment of the creditworthiness of its tenants.
 
  •  Properties are classified as held for sale when the Consolidated Operating Partnership has entered into a binding contract to sell such properties. When properties are classified as held for sale, the Consolidated


34

Table of Contents

  Operating Partnership ceases depreciating the properties and estimates the values of such properties and measures them at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, the Consolidated Operating Partnership decides not to sell a property previously classified as held for sale, the Consolidated Operating Partnership will reclassify such property as held and used. The Consolidated Operating Partnership estimates the value of such property and measures it at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. Fair value is determined by deducting from the contract price of the property the estimated costs to close the sale.
 
  •  The Consolidated Operating Partnership reviews its properties on a quarterly basis for possible impairment and provides a provision if impairments are determined. The Consolidated Operating Partnership utilizes the guidelines established under Financial Accounting Standards Board’s Statement of Financial Accounting Standards (“FAS”) No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”) to determine if impairment conditions exist. The Consolidated Operating Partnership reviews the expected undiscounted cash flows of each property to determine if there are any indications of impairment. If the expected undiscounted cash flows of a particular property are less than the net book basis of the property, the Consolidated Operating Partnership will recognize an impairment charge equal to the amount of carrying value of the property that exceeds the fair value of the property. Fair value is determined by discounting the future expected cash flows of the property. The calculation of the fair value involves subjective assumptions such as estimated occupancy, rental rates, ultimate residual value and the discount rate used to present value the cash flows.
 
  •  The Consolidated Operating Partnership is engaged in the acquisition of individual properties as well as multi-property portfolios. In accordance with FAS No. 141, “Business Combinations” (“FAS 141”), the Consolidated Operating Partnership is required to allocate purchase price between land, building, tenant improvements, leasing commissions, intangible assets and above and below market leases. Above-market and below-market lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rents for each corresponding in-place lease. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental income. The Consolidated Operating Partnership also must allocate purchase price on multi-property portfolios to individual properties. The allocation of purchase price is based on the Consolidated Operating Partnership’s assessment of various characteristics of the markets where the property is located and the expected cash flows of the property.
 
RESULTS OF OPERATIONS
 
Comparison of Year Ended December 31, 2005 to Year Ended December 31, 2004
 
The Consolidated Operating Partnership’s net income available to unitholders was $88.5 million and $102.7 million for the years ended December 31, 2005 and December 31, 2004, respectively. Basic and diluted net income available to unitholders was $1.81 and $1.80 per unit, respectively, for the year ended December 31, 2005, and $2.18 and $2.16 per unit, respectively, for the year ended December 31, 2004.
 
The tables below summarize the Consolidated Operating Partnership’s revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2005 and December 31, 2004. Same store properties are in service properties owned prior to January 1, 2004. Acquired properties are properties that were acquired subsequent to December 31, 2003. Sold properties are properties that were sold subsequent to December 31, 2003. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after December 31, 2003 or acquisitions acquired prior to January 1, 2004 that were not placed in service as of December 31,


35

Table of Contents

2003. These properties are placed in service as they reach stabilized occupancy (generally defined as properties that are 90% leased). Other revenues are derived from the operations of the Consolidated Operating Partnership’s maintenance company, fees earned from the Consolidated Operating Partnership’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Consolidated Operating Partnership’s maintenance company and other miscellaneous regional expenses.
 
The Consolidated Operating Partnership’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The future revenues and expenses may vary materially from historical rates.
 
At December 31, 2005 and 2004, the occupancy rates of the Consolidated Operating Partnership’s same store properties were 89.1% and 90.1%, respectively.
 
                                 
    2005     2004     $ Change     % Change  
    ($ in 000’s)  
 
REVENUES
                               
Same Store Properties
  $ 212,949     $ 213,742     $ (793 )     (0.4 )%
Acquired Properties
    50,864       11,613       39,251       338.0 %
Sold Properties
    19,273       40,725       (21,452 )     (52.7 )%
Properties Not Placed in-service
    40,779       22,159       18,620       84.0 %
Other
    19,389       8,768       10,621       121.1 %
                                 
      343,254       297,007       46,247       15.6 %
Discontinued Operations
    (19,897 )     (38,239 )     18,342       (48.0 )%
                                 
Total Revenues
  $ 323,357     $ 258,768     $ 64,589       25.0 %
                                 
 
Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $39.3 million due to properties acquired subsequent to December 31, 2003. Revenues from sold properties decreased $21.5 million due to properties sold subsequent to December 31, 2003. Revenues from properties not in service increased by approximately $18.6 million due primarily to build-to-suit-for-sale revenues of $16.2 million. Other revenues increased by approximately $10.6 million due primarily to an increase in joint venture fees due to new joint ventures (as discussed further) and assignment fees.
 
                                 
    2005     2004     $ Change     % Change  
    ($ in 000’s)  
 
PROPERTY EXPENSES
                               
Same Store Properties
  $ 71,972     $ 68,842     $ 3,130       4.5 %
Acquired Properties
    15,079       3,668       11,411       311.1 %
Sold Properties
    7,051       13,812       (6,761 )     (49.0 )%
Properties Not Placed in-service
    25,252       8,018       17,234       214.9 %
Other
    11,841       6,355       5,486       86.3 %
                                 
      131,195       100,695       30,500       30.3 %
Discontinued Operations
    (7,102 )     (13,234 )     6,132       (46.3 )%
                                 
Total Property Expenses
  $ 124,093     $ 87,461     $ 36,632       41.9 %
                                 
 
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance, other property related expenses and expenses from build to suit development for sale. Property expenses from same store properties increased $3.1 million or 4.5% primarily due to an increase of $.8 million in utility expense attributable to increases in water, gas and electric costs, an increase of $1.1 million in repair and maintenance attributable to increases in snow removal expense and an increase of $.6 million in real estate tax expense. Property expenses from acquired properties increased by $11.4 million due to properties acquired subsequent to December 31, 2003. Property expenses from sold properties decreased by $6.8 million due to


36

Table of Contents

properties sold subsequent to December 31, 2003. Property expenses from properties not in service increased $17.2 million due primarily to build-to-suit-for-sale costs of $15.6 million. Other expense increased by $5.5 million due primarily to increases in employee compensation.
 
General and administrative expense increased by approximately $15.9 million, or 41.0%, due primarily to increases in employee compensation related to compensation for new employees as well as an increase in incentive compensation.
 
Amortization of deferred financing costs remained relatively unchanged.
 
                                 
    2005     2004     $ Change     % Change  
    ($ in 000’s)  
 
DEPRECIATION AND OTHER AMORTIZATION
                               
Same Store Properties
  $ 66,785     $ 62,897     $ 3,888       6.2 %
Acquried Properties
    27,011       3,759       23,252       618.6 %
Sold Properties
    6,075       11,510       (5,435 )     (47.2 )%
Properties Not in-service and Other
    11,154       8,421       2,733       32.5 %
Corporate Furniture, Fixtures & Equipment
    1,371       1,279       92       7.2 %
                                 
      112,396       87,866       24,530       27.9 %
Discontinued Operations
    (6,682 )     (10,462 )     3,780       (36.1 )%
                                 
Total Depreciation and Other Amortization
  $ 105,714     $ 77,404     $ 28,310       36.6 %
                                 
 
The increase in depreciation and other amortization for same store properties is due to an acceleration of depreciation and amortization on tenant improvements and leasing commissions for tenants who terminated leases early, an acceleration of amortization on in-place lease values related to leases for which the tenants did not renew and a net increase in leasing commissions and tenant improvements paid in 2005 and 2004. Depreciation and other amortization from acquired properties increased by $23.3 million due to properties acquired subsequent to December 31, 2003. Depreciation and other amortization from sold properties decreased by $5.4 million due to properties sold subsequent to December 31, 2003. Depreciation and other amortization for properties not in service and other increased by $2.7 million due primarily to depreciation expense being recognized in 2005 for developments that were substantially completed. Amortization of corporate furniture, fixtures and equipment remained relatively unchanged.
 
Interest income remained relatively unchanged.
 
Interest expense increased by $9.7 million due primarily to an increase in the weighted average debt balance outstanding for the year ended December 31, 2005 ($1,687.8 million), as compared to the year ended December 31, 2004 ($1,520.4 million) and an increase in the weighted average interest rate for the year ended December 31, 2005 (6.62%), as compared to the year ended December 31, 2004 (6.60%). This was partially offset by an increase in capitalized interest for the year ended December 31, 2005 due to an increase in development activities.
 
The Consolidated Operating Partnership recognized a $.08 million gain on the early retirement of debt for the year ended December 31, 2005. This includes $.05 million write-off of financing fees associated with the Consolidated Operating Partnership’s previous line of credit agreement which was amended and restated on August 23, 2005. The gain on early retirement of debt also includes a payment of $.3 million of fees and a write-off of loan premium of $.4 million on a $13.7 million mortgage loan which was assumed by the buyers of the related properties on July 13, 2005. The loss on early retirement of debt of approximately $.5 million for the year ended December 31, 2004 is comprised of the write-off of unamortized deferred financing costs, a loan premium and a prepayment penalty related to the early pay off and retirement of a $4.8 million mortgage loan (the “Acquisition Mortgage Loan XI.”)
 
The Consolidated Operating Partnership recognized a $.6 million gain related to the settlement/mark-to-market of two interest rate protection agreements that the Consolidated Operating Partnership entered into


37

Table of Contents

during 2005 in order to hedge the change in value of a build to suit development project as well as $.2 million in deferred gain that was re-classed out of other comprehensive income relating to a settled interest rate protection agreement that no longer qualified for hedge accounting.
 
In March 2004, the Consolidated Operating Partnership entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73.5 million. In May 2004, the Consolidated Operating Partnership reduced the projected amount of the future debt offering and settled $24.5 million of this interest rate protection agreement for proceeds in the amount of $1.5 million which is recognized in net income for the year ended December 31, 2004. In November 2004, the Consolidated Operating Partnership settled an interest rate protection agreement for $.3 million that had been designated as a cash flow hedge of $50.0 million of a forecasted debt issuance. Hedge ineffectiveness in the amount of $.1 million, due to a mismatch in the forecasted debt issuance dates, was recognized in net income. The remaining $.2 million is included in other comprehensive income and was reclassed into net income for the year ended December 31, 2005 as the hedge no longer qualified for hedge accounting.
 
Income tax benefit increased by $4.4 million due primarily to an increase in general and administrative expense (“G&A”) due to additional G&A costs, which increases the loss from continuing operations, incurred in the year ended December 31, 2005 compared to the year ended December 31, 2004 associated with additional investment activity in the Company’s taxable REIT subsidiary. The increase in the income tax benefit is partially offset by an increase in state tax expense.
 
Equity in income of Other Real Estate Partnerships increased by $19.0 million primarily due to an increase in gain on sale of real estate.
 
Equity in income of joint ventures decreased by $32.1 million due primarily to the Company’s allocation of gain from the sale of all the properties in December 2001 joint venture and the Company’s recognition of the deferred gain on its initial sale of certain properties to the December 2001 joint venture recognized in the year ended December 31, 2004.
 
The $28.9 million gain on sale of real estate for the year ended December 31, 2005 resulted from the sale of nine industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $15.1 million gain on sale of real estate for the year ended December 31, 2004 resulted from the sale of four industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.
 
The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Consolidated Operating Partnership for the year ended December 31, 2005 and December 31, 2004.
 
                 
    Year Ended
 		 
    December 31,  
    2005     2004  
 
Total Revenues
  $ 19,897     $ 38,239  
Operating Expenses
    (7,102 )     (13,234 )
Interest Expense
    (373 )     (609 )
Depreciation and Amortization
    (6,682 )     (10,462 )
Provision for Income Taxes Allocable to Operations
    (2,035 )     (2,533 )
Gain on Sale of Real Estate
    102,742       81,806  
Provision for Income Taxes Allocable to Gain on Sale
    (19,719 )     (8,267 )
                 
Income from Discontinued Operations
  $ 86,728     $ 84,940  
                 
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2005 reflects the results of operations and gain on sale of real estate of $102.7 million relating to 73 industrial properties


38

Table of Contents

that were sold during the year ended December 31, 2005 and the results of operations from five properties identified as held for sale at December 31, 2005.
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2004 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2005, five properties identified as held for sale at December 31, 2005, industrial properties that were sold during the year ended December 31, 2004 as well as the gain on sale of real estate of $81.8 million from the 86 industrial properties which were sold during the year ended December 31, 2004.
 
Comparison of Year Ended December 31, 2004 to Year Ended December 31, 2003
 
The Consolidated Operating Partnership’s net income available to unitholders was $102.7 million and $110.9 million for the years ended December 31, 2004 and December 31, 2003, respectively. Basic and diluted net income available to unitholders was $2.18 and $2.16 per unit, respectively, for the year ended December 31, 2004, and $2.45 and $2.44 per unit, respectively, for the year ended December 31, 2003.
 
The tables below summarize the Consolidated Operating Partnership’s revenues, property expenses and depreciation and other amortization by various categories for the years ended December 31, 2004 and December 31, 2003. Same store properties are in service properties owned prior to January 1, 2003. Acquired properties are properties that were acquired subsequent to December 31, 2002. Sold properties are properties that were sold subsequent to December 31, 2002. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after December 31, 2002 or acquisitions acquired prior to January 1, 2003 that were not placed in service as of December 31, 2002. These properties are placed in service as they reach stabilized occupancy (generally defined as properties that are 90% leased). Other revenues are derived from the operations of the Consolidated Operating Partnership’s maintenance company, fees earned from the Consolidated Operating Partnership’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Consolidated Operating Partnership’s maintenance company and other miscellaneous regional expenses.
 
The Consolidated Operating Partnership’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The future revenues and expenses may vary materially from historical rates.
 
At December 31, 2004 and 2003, the occupancy rates of the Consolidated Operating Partnership’s same store properties were 89.4% and 89.4%, respectively.
 
                                 
    2004     2003     $ Change     % Change  
    ($ in 000’s)  
 
REVENUES
                               
Same Store Properties
  $ 212,298     $ 215,026     $ (2,728 )     (1.3 )%
Acquired Properties
    41,935       9,895       32,040       323.8 %
Sold Properties
    18,440       50,982       (32,542 )     (63.8 )%
Properties Not Placed in-service
    15,593       15,915       (322 )     (2.0 )%
Other
    8,741       7,641       1,100       14.4 %
                                 
      297,007       299,459       (2,452 )     (0.8 )%
Discontinued Operations
    (38,239 )     (63,294 )     25,055       (39.6 )%
                                 
Total Revenues
  $ 258,768     $ 236,165     $ 22,603       9.6 %
                                 


39

Table of Contents

Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $32.0 million due to properties acquired subsequent to December 31, 2002. Revenues from sold properties decreased $32.5 million due to properties sold subsequent to December 31, 2002. Other revenues increased by approximately $1.1 million due primarily to an increase in third party development and joint venture fees, partially offset by a decrease in assignment fees.
 
                                 
    2004     2003     $ Change     % Change  
    ($ in 000’s)  
 
PROPERTY EXPENSES
                               
Same Store Properties
  $ 69,071     $ 71,946     $ (2,875 )     (4.0 )%
Acquired Properties
    12,443       3,008       9,435       313.7 %
Sold Properties
    5,917       16,177       (10,260 )     (63.4 )%
Properties Not Placed in-service
    7,156       5,373       1,783       33.2 %
Other
    6,108       4,375       1,733       39.6 %
                                 
      100,695       100,879       (184 )     (0.2 )%
Discontinued Operations
    (13,234 )     (20,317 )     7,083       (34.9 )%
                                 
Total Property Expenses
  $ 87,461     $ 80,562     $ 6,899       8.6 %
                                 
 
Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses. Property expenses from same store properties decreased by approximately $2.9 million primarily due to a decrease in bad debt expense. Property expenses from acquired properties increased by $9.4 million due to properties acquired subsequent to December 31, 2002. Property expenses from sold properties decreased by $10.3 million due to properties sold subsequent to December 31, 2002. Property expenses from properties not in service increased $1.8 million due primarily to an increase in bad debt expense. Other expense increased by $1.7 million due primarily to increases in employee compensation.
 
General and administrative expense increased by approximately $13.3 million, or 52.0%, due primarily to increases in employee incentive compensation and outside professional service fees.
 
Amortization of deferred financing costs remained relatively unchanged.
 
                                 
    2004     2003     $ Change     % Change  
    ($ in 000’s)  
 
DEPRECIATION AND OTHER AMORTIZATION
                       
Same Store Properties
  $ 59,775     $ 54,756     $ 5,019       9.2 %
Acquried Properties
    15,796       3,710       12,086       325.8 %
Sold Properties
    4,107       10,438       (6,331 )     (60.7 )%
Properties Not in-service and Other
    6,909       4,190       2,719       64.9 %
Corporate Furniture, Fixtures & Equipment
    1,279       1,222       57       4.7 %
                                 
      87,866       74,316       13,550       18.2 %
Discontinued Operations
    (10,462 )     (14,270 )     3,808       (26.7 )%
                                 
Total Depreciation and Other Amortization
  $ 77,404     $ 60,046     $ 17,358       28.9 %
                                 
 
The increase in depreciation and other amortization for the same store properties is primarily due to a net increase in leasing commissions and, building and tenant improvements paid in 2004 and 2003. Depreciation and other amortization from acquired properties increased by $12.1 million due to properties acquired subsequent to December 31, 2002. Depreciation and other amortization from sold properties decreased by $6.3 million due to properties sold subsequent to December 31, 2002. Depreciation and other amortization for properties not in service and other increased by $2.7 million due primarily to depreciation expense being recognized in 2004 for developments that were substantially completed.
 
Interest income remained relatively unchanged.


40

Table of Contents

In March 2004, the Consolidated Operating Partnership entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73.5 million. In May 2004, the Consolidated Operating Partnership reduced the projected amount of the future debt offering and settled $24.5 million of this interest rate protection agreement for proceeds in the amount of $1.5 million which is recognized in net income for the year ended December 31, 2004. In November 2004, the Consolidated Operating Partnership settled an interest rate protection agreement for $.3 million that had been designated as a cash flow hedge of $50.0 million of a forecasted debt issuance. Hedge ineffectiveness in the amount of $.1 million, due to a mismatch in the forecasted debt issuance dates, was recognized in net income. The remaining $.2 million was included in other comprehensive income and was reclassed into net income for the year ended December 31, 2005 as the hedge no longer qualified for hedge accounting.
 
Interest expense increased by $3.8 million due primarily to an increase in the weighted average debt balance outstanding for the year ended December 31, 2004 ($1,520.4 million), as compared to the year ended December 31, 2003 ($1,452.0 million). This was partially offset by a decrease in the weighted average interest rate for the year ended December 31, 2004 (6.60%), as compared to the year ended December 31, 2003 (6.61%), and an increase in capitalized interest for the year ended December 31, 2004 due to an increase in development activities.
 
The $.5 million loss on early retirement of debt for the year ended December 31, 2004 is comprised of the write-off of unamortized deferred financing costs and a prepayment penalty related to the early payoff and retirement of the Acquisition Mortgage Loan XI.
 
Income tax benefit increased by $2.5 million due primarily to an increase in general and administrative expense (“G&A”), which increases the loss from continuing operations, due to additional G&A costs incurred in 2004 compared to 2003 associated with additional investment activity in the Company’s taxable REIT subsidiary.
 
Equity in income of Other Real Estate Partnerships decreased by $14.1 million primarily due to the decrease in net operating income as a result of property sales subsequent to December 31, 2003 .
 
Equity in income of joint ventures increased by $35.3 million due primarily to the Consolidated Operating Partnership’s allocation of gain from the sale of all of the properties in the December 2001 Joint Venture and the Consolidated Operating Partnership’s recognition of the deferred gain on it’s initial sale of properties to the December 2001 Joint Venture in the year ended December 31, 2004.
 
The $15.1 million gain on sale of real estate for the year ended December 31, 2004 resulted from the sale of four industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $9.6 million gain on sale of real estate for the year ended December 31, 2003 resulted from the sale of eight industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.


41

Table of Contents

The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Consolidated Operating Partnership for the year ended December 31, 2004 and December 31, 2003.
 
                 
    Year Ended
 		 
    December 31,  
    2004     2003  
 
Total Revenues
  $ 38,239     $ 63,294  
Operating Expenses
    (13,234 )     (20,317 )
Interest Expense
    (609 )     (561 )
Depreciation and Amortization
    (10,462 )     (14,270 )
Provision for Income Taxes Allocable to Operations
    (2,533 )     (1,439 )
Gain on Sale of Real Estate
    81,806       74,797  
Provision for Income Taxes Allocable to Gain on Sale
    (8,267 )     (1,988 )
                 
Income from Discontinued Operations
  $ 84,940     $ 99,516  
                 
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2004 reflects the results of operations and gain on sale of real estate of $81.8 million relating to 86 industrial properties that were sold during the year ended December 31, 2004 and the results of operations from eight properties identified as held for sale at December 31, 2004.
 
Income from discontinued operations, net of income taxes, for the year ended December 31, 2003 reflects the results of operations of industrial properties that were sold during the year ended December 31, 2004, eight properties identified as held for sale at December 31, 2004, industrial properties that were sold during the twelve months ended December 31, 2003 as well as the gain on sale of real estate of $74.8 million from the 113 industrial properties which were sold during the year ended December 31, 2003.
 
LIQUIDITY AND CAPITAL RESOURCES
 
At December 31, 2005, the Consolidated Operating Partnership’s cash and cash equivalents, as well as restricted cash, was approximately $21.8 million. Restricted cash is comprised of gross proceeds from the sales of certain industrial properties. These sales proceeds will be disbursed as the Consolidated Operating Partnership exchanges industrial properties under Section 1031 of the Internal Revenue Code.
 
The Consolidated Operating Partnership has considered its short-term (one year or less) liquidity needs and the adequacy of its estimated cash flow from operations and other expected liquidity sources to meet these needs. The Consolidated Operating Partnership’s 7.0% Notes due in 2006, in the aggregate principal amount of $150 million are due on December 1, 2006 (the “2006 Notes”). The Company expects to satisfy the maturity of the 2006 Notes with the issuance of additional debt. With the exception of the 2006 Notes, the Consolidated Operating Partnership believes that its principal short-term liquidity needs are to fund normal recurring expenses, debt service requirements and the minimum distribution required by the Company to maintain the Company’s REIT qualification under the Internal Revenue Code. The Consolidated Operating Partnership anticipates that these needs will be met with cash flows provided by operating activities.
 
The Consolidated Operating Partnership expects to meet long-term (greater than one year) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through the disposition of select assets, the issuance of long-term unsecured indebtedness and additional Units and preferred Units. As of December 31, 2005, approximately $500.0 million of debt securities were registered and unissued under the Securities Act of 1933, as amended. As of March 6, 2006, approximately $300.0 million of debt securities were registered and unissued under the Securities Act of 1933, as amended. As of March 6, 2006, the Consolidated Operating Partnership, through the Operating Partnership, had approximately $212.4 million available in additional borrowings under the 2005 Unsecured Line of Credit I. The 2005 Unsecured Line of Credit I bears interest at a floating rate of LIBOR plus .625% or the Prime Rate, at the Company’s election. The Unsecured Lines of


42

Table of Contents

Credit contain certain financial covenants relating to debt service coverage, market value net worth, dividend payout ratio and total funded indebtedness. The Consolidated Operating Partnership’s access to borrowings may be limited if it fails to meet any of these covenants. Also, the Consolidated Operating Partnership’s borrowing rate on its 2005 Unsecured Line of Credit I may increase in the event of a downgrade on the Consolidated Operating Partnership’s unsecured notes by the rating agencies.
 
The Consolidated Operating Partnership currently has credit ratings from Standard & Poor’s, Moody’s and Fitch Ratings of BBB/Baa2/BBB, respectively. The Consolidated Operating Partnership’s goal is to maintain its existing credit ratings. In the event of a downgrade, management believes the Consolidating Operating Partnership would continue to have access to sufficient capital; however, the Consolidated Operating Partnership’s cost of borrowing would increase and its ability to access certain financial markets may be limited.
 
Year Ended December 31, 2005
 
Net cash provided by operating activities of approximately $82.8 million for the year ended December 31, 2005 was comprised primarily of net income of approximately $99.2 million, the net change in operating assets and liabilities of approximately $1.4 million, and net distributions from joint ventures of $.1 million, offset by adjustments for non-cash items of approximately $17.9 million. The adjustments for the non-cash items of approximately $17.9 million are primarily comprised of the gain on sale of real estate of approximately $131.6 million, the effect of the straight-lining of rental income of approximately $7.5 million, and other of $.2 offset by an increase of the bad debt provision of approximately $1.7 million and depreciation and amortization of approximately $119.7 million.
 
Net cash used in investing activities of approximately $404.7 million for the year ended December 31, 2005 was comprised primarily of the acquisition of real estate, development of real estate, capital expenditures related to the expansion and improvement of existing real estate, an increase in restricted cash that is held by an intermediary for Section 1031 exchange purposes, investments in and advances to the Other Real Estate Partnerships and contributions and investments in the Consolidated Operating Partnership’s joint ventures partially offset by the net proceeds from the sale of real estate, the repayment of mortgage loans receivable, distributions from the Other Real Estate Partnerships and distributions from the Consolidated Operating Partnership’s industrial real estate joint ventures.
 
During the year ended December 31, 2005, the Consolidated Operating Partnership sold 82 industrial properties comprising approximately 10.7 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 82 industrial properties and several land parcels were approximately $561.6 million.
 
During the year ended December 31, 2005, the Consolidated Operating Partnership acquired 149 industrial properties comprising approximately 18.4 million square feet of GLA and several land parcels. The purchase price for these acquisitions totaled approximately $690.6 million, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. The Consolidated Operating Partnership also substantially completed the development of five industrial properties comprising approximately 1.8 million square feet of GLA at an estimated cost of approximately $97.5 million.
 
The Consolidated Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, contributed approximately $43.3 million to, and received distributions of approximately $6.8 million from, the Operating Partnership’s industrial real estate joint ventures. As of December 31, 2005, the Operating Partnership’s industrial real estate joint ventures owned 316 industrial properties comprising approximately 24.3 million square feet of GLA.
 
Net cash provided by financing activities of approximately $325.7 million for the year ended December 31, 2005 was comprised primarily from the net proceeds from the exercise of stock options and issuance of common and preferred units, net borrowings under the Consolidated Operating Partnership’s Unsecured Lines of Credit partially offset by the payoff and retirement of senior unsecured debt, general partnership and limited partnership units (“Unit”) and preferred general partnership unit distributions, the repurchase of restricted units and net repayments on mortgage loans payable.


43

Table of Contents

On August 23, 2005, the Consolidated Operating Partnership, through the Operating Partnership, amended and restated its $300.0 million unsecured line of credit (the “Unsecured Line of Credit”), which was due September 28, 2007, and bore interest at a floating rate of LIBOR plus .7%, or the Prime Rate, at the Consolidated Operating Partnership’s election. The amended and restated unsecured line of credit (the “2005 Unsecured Line of Credit”) will mature on September 28, 2008, has a borrowing capacity of $500.0 million, with the right, subject to certain conditions, to increase the borrowing capacity up to $600.0 million and bears interest at a floating rate of LIBOR plus .625%, or the Prime Rate, at the Consolidated Operating Partnership’s election.
 
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Shares, respectively, each representing $.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock, (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187.5 million. Net of offering costs, the Company received net proceeds of $181.5 from the issuance of the Series I Preferred Stock which were contributed to the Operating Partnership in exchange for Series I Cumulative Preferred Units (the “Series I Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series I Depositary Shares are payable monthly in arrears commencing December 31, 2005 at an initial dividend rate of One-Month LIBOR plus 1.25%, subject to reset on the four-month, six-month and one year anniversary of the date of issuance. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series I Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series G Preferred Stock. Refer to the Subsequent Events Section (hereinafter) for the redemption of the Series I Preferred Stock and Series I Preferred Units.
 
On November 20, 1997, the Consolidated Operating Partnership, issued $50 million of senior unsecured debt which matured on November 21, 2005 and bore a coupon interest rate of 6.90%, which was the effective interest rate (the “2005 Notes”). On November 21, 2005 the Consolidated Operating Partnership, paid off and retired the 2005 Notes for $50 million plus accrued interest.
 
On December 9, 2005, the Company issued 1,250,000 shares of $.01 par value common stock (the “December 2005 Equity Offering”). The net proceeds of $48.8 million received from the December 2005 Equity Offering were contributed to the Operating Partnership in exchange for 1,250,000 Units and are reflected in the Operating Partnership’s financial statements as a general partner contribution.
 
For the year ended December 31, 2005, the Operating Partnership issued 366,472 Units valued, in the aggregate, at $14.7 million in exchange for interests in certain properties. These contributions are reflected in the Consolidated Operating Partnership’s financial statements as limited partner contributions.
 
During the year ended December 31, 2005, the Company awarded 189,878 shares of restricted common stock to certain employees and 10,164 shares of restricted common stock to certain Directors. The Consolidated Operating Partnership, through the Operating Partnership, issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $8.4 million on the date of grant. The restricted common stock vests over periods from one to ten years. Compensation expense will be charged to earnings over the respective vesting periods.
 
For the year ended December 31, 2005, certain employees of the Company exercised 248,881 non-qualified employee stock options. Net proceeds to the Company were approximately $6.7 million. The Consolidated Operating Partnership, through the Operating Partnership, issued 248,881 Units to the Company.


44

Table of Contents

Contractual Obligations and Commitments
 
The following table lists our contractual obligations and commitments as of December 31, 2005 (In thousands):
 
                                         
          Payments Due by Period  
          Less Than
 		                   
    Total     1 Year     1-3 Years     3-5 Years     Over 5 Years  
 
Operating and Ground Leases*
  $ 40,660     $ 1,678     $ 3,185     $ 3,167     $ 32,630  
Real Estate Development*
    93,784       93,784       —       —       —  
Long-term Debt
    1,823,975       280,026       486,986       147,435       909,528  
Interest Expense on Long Term Debt*
    858,708       95,641       152,739       137,137       473,191  
                                         
Total
  $ 2,817,127     $ 471,129     $ 642,910     $ 287,739     $ 1,415,349  
                                         
 
 
* Not on balance sheet.
 
Off-Balance Sheet Arrangements
 
Letters of credit are issued in most cases as pledges to governmental entities for development purposes or to support purchase obligations. At December 31, 2005 the Consolidated Operating Partnership has $7.6 million in outstanding letters of credit, none of which are reflected as liabilities on the Consolidated Operating Partnership’s balance sheet. The Consolidated Operating Partnership has no other off-balance sheet arrangements other than those disclosed on the previous Contractual Obligations and Commitments table.
 
Environmental
 
The Consolidated Operating Partnership incurred environmental costs of approximately $.3 million and $.5 million in 2005 and 2004, respectively. The Consolidated Operating Partnership estimates 2006 costs of approximately $.7 million. The Consolidated Operating Partnership estimates that the aggregate cost which needs to be expended in 2006 and beyond with regard to currently identified environmental issues will not exceed approximately $1.2 million, a substantial amount of which will be the primary responsibility of the tenant, the seller to the Consolidated Operating Partnership or another responsible party. This estimate was determined by a third party evaluation.
 
Inflation
 
For the last several years, inflation has not had a significant impact on the Consolidated Operating Partnership because of the relatively low inflation rates in the Consolidated Operating Partnership’s markets of operation. Most of the Consolidated Operating Partnership’s leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing the Consolidated Operating Partnership’s exposure to increases in costs and operating expenses resulting from inflation. In addition, many of the outstanding leases expire within six years which may enable the Consolidated Operating Partnership to replace existing leases with new leases at higher base rentals if rents of existing leases are below the then-existing market rate.
 
Ratio of Earnings to Fixed Charges
 
The ratio of earnings to fixed charges was 1.08, 1.38 and 1.32 for the years ended December 31, 2005, 2004 and 2003, respectively. The decrease in earnings to fixed charges between fiscal years 2005 and 2004 is primarily due to a decrease in income from continuing operations in fiscal year 2005 due to a decrease in equity in income from joint ventures and an increase in depreciation and amortization expense for fiscal year 2005 as compared to fiscal year 2004 as discussed in “Results of Operations” above. The increase in earnings to fixed charges between fiscal years 2004 and 2003 is primarily due to an increase in income from continuing


45

Table of Contents

operations in fiscal year 2004 due to an increase in the equity in income of joint ventures, as discussed in “Results of Operations” above.
 
Market Risk
 
The following discussion about the Consolidated Operating Partnership’s risk-management activities includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements.
 
This analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments which are held by the Consolidated Operating Partnership at December 31, 2005 that are sensitive to changes in the interest rates. While this analysis may have some use as a benchmark, it should not be viewed as a forecast.
 
In the normal course of business, the Consolidated Operating Partnership also faces risks that are either non-financial or non-quantifiable. Such risks principally include credit risk and legal risk and are not represented in the following analysis.
 
At December 31, 2005, $1,353.8 million (approximately 74.7% of total debt at December 31, 2005) of the Consolidated Operating Partnership’s debt was fixed rate debt and $457.5 million (approximately 25.3% of total debt at December 31, 2005) of the Consolidated Operating Partnership’s debt was variable rate debt. Currently, the Consolidated Operating Partnership does not enter into financial instruments for trading or other speculative purposes.
 
For fixed rate debt, changes in interest rates generally affect the fair value of the debt, but not earnings or cash flows of the Consolidated Operating Partnership. Conversely, for variable rate debt, changes in the interest rate generally do not impact the fair value of the debt, but would affect the Consolidated Operating Partnership’s future earnings and cash flows. The interest rate risk and changes in fair market value of fixed rate debt generally do not have a significant impact on the Consolidated Operating Partnership until the Consolidated Operating Partnership is required to refinance such debt. See Note 6 to the consolidated financial statements for a discussion of the maturity dates of the Consolidated Operating Partnership’s various fixed rate debt.
 
Based upon the amount of variable rate debt outstanding at December 31, 2005, a 10% increase or decrease in the interest rate on the Consolidated Operating Partnership’s variable rate debt would decrease or increase, respectively, future net income and cash flows by approximately $2.3 million per year. A 10% increase in interest rates would decrease the fair value of the fixed rate debt at December 31, 2005 by approximately $47.3 million, to $1,424.5 million. A 10% decrease in interest rates would increase the fair value of the fixed rate debt at December 31, 2005 by approximately $56.2 million, to $1,528.0 million.
 
Subsequent Events
 
On January 3, 2006, the Operating Partnership paid fourth quarter 2005 distributions of $53.906 per Unit Series C Preferred Units, totaling, in the aggregate, approximately $1.1 million; and a monthly distribution of $1,930.243 per Unit on its Series I Preferred Units, totaling, in the aggregate, approximately $1.5 million.
 
On January 5, 2006, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., settled the interest rate protection agreement entered into in October 2005 with a notional value of $50 million for a payment of $.2 million.
 
The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $.4 million. The Series I Preferred Units were redeemed on January 13, 2006 as well. In accordance with EITF D-42, due to the redemption of the Series I Preferred Units, the initial offering costs associated with the issuance of the Series I Preferred Units of approximately $.7 million will be reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per Unit for the three months ended March 31, 2006.


46

Table of Contents

On January 10, 2006, the Operating Partnership, issued $200 million of senior unsecured debt which matures on January 15, 2016 and bears a coupon interest rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. Interest is paid semi-annually in arrears on January 15 and July 15. In December 2005, the Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. On January 9, 2006 the Operating Partnership settled the interest rate protection agreements for a payment of approximately $1.7 million, which will be included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements will be amortized over the life of the 2016 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreements, the Operating Partnership’s effective interest rate on the 2016 Notes is 5.91%. The 2016 Notes contain certain covenants, including limitations on incurrence of debt and debt service coverage.
 
On January 23, 2006, the Operating Partnership paid a fourth quarter 2005 distribution of $.7000 per Unit, totaling approximately $35.8 million.
 
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series J Flexible Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds from the issuance of the Series J Preferred Stock was contributed to the Operating Partnership in exchange for Series J Cumulative Preferred Units (the “Series J Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series J Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. However, during any period that both (i) the depositary shares are not listed on the NYSE or AMEX, or quoted on NASDAQ, and (ii) the Company is not subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, the Company will increase the dividend on the preferred shares to a rate of 8.25% of the liquidation preference per year. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series G Preferred Stock. The Series J Preferred Stock is not redeemable prior to January 15, 2011. However, if at any time both (i) the depositary shares cease to be listed on the NYSE or the AMEX, or quoted on NASDAQ, and (ii) the Company ceases to be subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, then the preferred shares will be redeemable, in whole but not in part at the Company’s option, within 90 days of the date upon which the depositary shares cease to be listed and the Company ceases to be subject to such reporting requirements, at a redemption price equivalent to $25.00 per Depositary Share, plus all accrued and unpaid dividends to the date of redemption. On or after January 15, 2011, the Series J Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On March 8, 2006, the Consolidated Operating Partnership declared a first quarter 2006 distribution of $.70 per Unit which is payable on April 17, 2006. The Consolidated Operating Partnership also declared first quarter 2006 preferred unit distributions of $53.906 per Unit on its 85/8% Series C Cumulative Preferred Units, totaling, in the aggregate, approximately $1.1 million, which is payable on March 31, 2006; semi-annual dividends of $3,118.00 per Unit on its Series F Preferred Unit, totaling, in the aggregate, approximately $1.6 million, which is payable on March 31, 2006; and semi-annual dividends of $3,618.00 per Unit on its Series G Preferred Unit, totaling, in the aggregate, approximately $.9 million, which is payable on March 31, 2006; and prorated quarterly dividends of $3,927.08 per Unit on its Series J Preferred Unit, totaling, in the aggregate, approximately $2.4 million, which is payable on March 31, 2006.
 
From January 1, 2006 to March 8, 2006, the Company awarded 303,142 shares of restricted common stock to certain employees and 1,169 shares of restricted common stock to certain Directors. The Operating Partnership issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $12.0 million on the date of grant. The restricted common stock vests over periods from one to ten years. Compensation expense will be charged to earnings over the respective vesting period.


47

Table of Contents

From January 1, 2006 to March 6, 2006, the Consolidated Operating Partnership acquired 21 industrial properties and several land parcels for a total estimated investment of approximately $142.4 million (approximately $.9 million of Units). The Consolidated Operating Partnership also sold 16 industrial properties including the industrial property that is accounted for as a build to suit development for sale, for approximately $240.1 million of gross proceeds during this period.
 
Related Party Transactions
 
The Consolidated Operating Partnership periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of Michael W. Brennan, the President and Chief Executive Officer and a director of the Company, is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2005 and 2004, this relative received approximately $.3 and $.03 million in brokerage commissions.
 
Other
 
In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29” (“FAS 153”). The amendments made by FAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” FAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of FAS 153 did not have a material effect on the Operating Partnership’s consolidated financial statements.
 
In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”). SFAS 123(R) is an amendment of SFAS 123 and requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is required to be measured based on the fair value of the equity of liability instruments issued. SFAS 123(R) also contains additional minimum disclosure requirements that including, but not limited to, the valuation method and assumptions used, amounts of compensation capitalized and modifications made. The effective date of SFAS 123(R) was subsequently amended by the SEC to be as of the beginning of the first interim or annual reporting period of the first fiscal year that begins on or after June 15, 2005, and allows several different methods of transition. The Consolidated Operating Partnership expects to adopt the pronouncement as required on January 1, 2006 using the prospective method and does not believe that the adoption of SFAS 123(R) will have a material impact on its financial position, results of operations or cash flows.
 
In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, Accounting for Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143. A conditional asset retirement obligation refers to a legal obligation to retire assets where the timing and/or method of settlement are conditioned on future events. FIN No. 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The Consolidated Operating Partnership adopted the provisions of FIN 47 in 2005. The adoption of this Interpretation did not have a material impact on the Operating Partnerships’ consolidated financial position, results of operations or cash flows.
 
In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections” (“FAS 154”) which supersedes APB Opinion No. 20, “Accounting Changes” and Statement of Financial Accounting Standards No. 3, “Reporting Accounting Changes in Interim Financial Statements.” FAS 154 changes the requirements for the accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. FAS 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.
 
In June 2005, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regarding EITF 04-05, “Investor’s Accounting for an Investment in a Limited Partnership When the Investor is


48

Table of Contents

the Sole General Partner and the Limited Partners Have Certain Rights.” The conclusion provides a framework for addressing the question of when a sole general partner, as defined in EITF 04-05, should consolidate a limited partnership. The EITF has concluded that the general partner of a limited partnership should consolidate a limited partnership unless (1) the limited partners possess substantive kick-out rights as defined in paragraph B20 of FIN 46R, or (2) the limited partners possess substantive participating rights similar to the rights described in Issue 96-16, “Investor’s Accounting for an Investee When the Investor has a Majority of the Voting Interest by the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights.” In addition, the EITF concluded that the guidance should be expanded to include all limited partnerships, including those with multiple general partners. The Operating Partnership adopted EITF 04-05 as of December 31, 2005. The adoption of the EITF had no impact on the Operating partnerships’ results of operations, financial position or liquidity.
 
In June 2005, the FASB ratified the consensus reached by the EITF regarding EITF 05-6, “Determining the Amortization Period for Leasehold Improvements.” The guidance requires that leasehold improvements acquired in a business combination, or purchased subsequent to the inception of a lease, be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination or purchase. The guidance is effective for periods beginning after June 29, 2005. EITF 05-6 does not impact the Operating Partnership’s results of operations, financial position, or liquidity.
 
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk
 
Response to this item is included in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” above.
 
Item 8.   Financial Statements and Supplementary Data
 
See Index to Financial Statements and Financial Statement Schedule on page F-1 included in Item 15.
 
Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
None.
 
Item 9A.   Controls and Procedures
 
Disclosure Controls and Procedures
 
The Consolidated Operating Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Consolidated Operating Partnership’s periodic reports pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Consolidated Operating Partnership’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosure.
 
The Consolidated Operating Partnership carried out an evaluation, under the supervision and with the participation of the Consolidated Operating Partnership’s management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Consolidated Operating Partnership’s disclosure controls and procedures pursuant to Exchange Act Rule 15d-15(b) as of the end of the period covered by this report. Based upon this evaluation, the Consolidated Operating Partnership’s principal executive officer and principal financial officer concluded that the Consolidated Operating Partnership’s disclosure controls and procedures were effective as of the end of the period covered by this report.
 
Management’s Report on Internal Control Over Financial Reporting
 
Management of the Consolidated Operating Partnership is responsible for establishing and maintaining adequate internal control over financial reporting. The Consolidated Operating Partnership’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of


49

Table of Contents

financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
 
Management of the Consolidated Operating Partnership has assessed the effectiveness of the Consolidated Operating Partnership’s internal control over financial reporting as of December 31, 2005. In making its assessment of internal control over financial reporting, management used the criteria described in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
 
Management of the Consolidated Operating Partnership has concluded that, as of December 31, 2005, the Consolidated Operating Partnership’s internal control over financial reporting was effective.
 
Management’s assessment of the effectiveness of the Consolidated Operating Partnership’s internal control over financial reporting as of December 31, 2005 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein within Item 15. See Report of Independent Registered Public Accounting Firm on page F-2 of this Form 10-K.
 
Changes in Internal Control Over Financial Reporting
 
On December 22, 2005, the Consolidated Operating Partnership filed a Form 8-K disclosing that, on December 19, 2005, management and the audit committee of the Consolidated Operating Partnership determined that the Consolidated Operating Partnership’s consolidated balance sheet as of December 31, 2004 and consolidated statement of changes in partners’ capital for the year then ended contained in its annual report on Form 10-K for the year then ended and its consolidated balance sheets as of March 31, 2005, June 30, 2005 and September 30, 2005 contained in its quarterly reports on Form 10-Q for the periods ended on such dates (such financial statements being herein collectively referred to as the “Affected Financial Statements”) should no longer be relied upon and should be restated because of errors in such financial statements. These errors did not impact the Consolidated Operating Partnership’s consolidated statements of operations and comprehensive income or its consolidated statements of cash flows and, consequently, did not impact earnings per unit (basic and diluted).
 
The errors had no impact on the consolidated financial statements of First Industrial Realty Trust, Inc. (the “REIT”), which is the general partner of the Consolidated Operating Partnership, and did not constitute a material weakness in the internal control over financial reporting of the REIT.
 
The errors related to how the Consolidated Operating Partnership recorded the redemption of its Series D, Series E and Series H General Partner Preferred Units and the issuance of its Series F, Series G and Series H General Partner Preferred Units. In its consolidated statement of changes in partners’ capital for the year ended December 31, 2004, the Consolidated Operating Partnership incorrectly recorded the redemption of its Series D, Series E and Series H General Partner Preferred Units as a reduction to the General Partner Unit account dollar balance instead of as a reduction to the General Partner Preferred Unit account dollar balance and the issuance of its Series F, Series G and Series H General Partner Preferred Units as an increase to the General Partner Unit account dollar balance instead of as an increase to the General Partner Preferred Unit account dollar balance. Additionally, the redemption of its Series D, Series E and Series H General Partner Preferred Units that was reflected in the General Partner Unit account dollar balance was effected at par, which was in excess of the related carrying amounts. Such excess should have been treated as a preferred unit distribution in accordance with Emerging Issues Task Force Topic D-42, “The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock” (“EITF Topic D-42”). EITF Topic D-42 requires the difference between the cost of redeeming preferred stock and the carrying value of such preferred stock on the date of the redemption to be treated as a preferred distribution. Due to the determination to restate the Affected Financial Statements as described above, management concluded that, as of December 31, 2004, March 31, 2005, June 30, 2005 and September 30, 2005, a material weakness in the Consolidated Operating Partnership’s internal control over financial reporting existed.
 
A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be


50

Table of Contents

prevented or detected. As of December 31, 2004, March 31, 2005, June 30, 2005 and September 30, 2005, the Consolidated Operating Partnership did not maintain effective controls over the accuracy, presentation, monitoring and review of its General Partner Unit and General Partner Preferred Unit account dollar balances. Specifically, the Consolidated Operating Partnership did not maintain effective controls over the accuracy, presentation, monitoring and review of data related to preferred unit issuances and redemptions as reflected on a supporting spreadsheet schedule used by management to prepare the Consolidated Operating Partnership’s financial statements. This control deficiency resulted in the restatement of the Consolidated Operating Partnership’s 2004 consolidated financial statements and the Consolidated Operating Partnership’s first, second and third quarter consolidated financial statements in 2005. Accordingly, management concluded that this control deficiency constituted a material weakness. Management took immediate action upon identification of this material weakness and reviewed the Consolidated Operating Partnership’s partners’ capital accounts and corrected the General Partner Preferred Unit and General Partner Unit account dollar balances. Additionally, management implemented additional controls to remediate this control deficiency. Specifically, such additional controls involved the completion of a schedule which reconciles the equity accounts of the Consolidated Operating Partnership to the equity accounts of the Company.
 
Item 9B.   Other Information
 
None.
 
PART III
 
Item 10, 11, 12, 13 and 14.   Directors and Executive Officers of the Registrant, Executive Compensation, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships and Related Transactions and Principal Accountant Fees and Services
 
The Operating Partnership has no directors or executive officers; instead it is managed by its sole general partner, the Company. The information with respect to the sole general partner of the Operating Partnership required by Item 10, Item 11, Item 12, Item 13 and Item 14 is incorporated herein by reference to the Company’s definitive proxy statement expected to be filed with the Securities and Exchange Commission no later than 120 days after the Company’s fiscal year (which will be filed no later than 120 days after the end of the Company’s fiscal year end). Information contained in the parts of such proxy statement captioned “Stock Performance Graph”, “Report of the Compensation Committee”, “Report of the Audit Committee” and in statements with respect to the independence of the Audit Committee, (except as such statements specifically relate to the independence of such committee’s financial expert) and regarding the Audit Committee Charter, are specifically not incorporated herein by reference.
 
PART IV
 
Item 15.   Exhibits and Financial Statement Schedules
 
(a) Financial Statements, Financial Statement Schedule and Exhibits (1 & 2) See Index to Financial Statements and Financial Statement Schedule on page F-1.
 
(3) Exhibits:
 
         
Exhibit No.
 
Description
 
  3 .1   Tenth Amended and Restated Limited Partnership Agreement of First Industrial, L.P. (the “LP Agreement”) dated January 13, 2006 (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company filed January 17, 2006, File No. 1-13102)
  3 .2   Amendment No. 1 dated January 20, 2006 to the LP Agreement (incorporated by reference to Exhibit 10.20 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, File No. 1-13102)


51

Table of Contents

         
Exhibit No.
 
Description
 
  4 .1   Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
  4 .2   Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
  4 .3   Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011 (incorporated by reference to Exhibit 4.4 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873)
  4 .4   Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 of Form 8-K of the Operating Partnership, dated November 3, 1997, as filed November 3, 1997, File No. 333-21873)
  4 .5   7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102)
  4 .6   7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102)
  4 .7   Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873)
  4 .8   7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of the Operating Partnership dated July 15, 1998, File No. 333-21873)
  4 .9   Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2028 (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Operating Partnership dated July 15, 1998, File No. 333-21873)
  4 .10   7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
  4 .11   Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011(incorporated by reference to Exhibit 4.16 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
  4 .12   Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
  4 .13   Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and the U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of the Operating Partnership’s Form 8-K, dated April 4, 2002, File No. 333-21873)

52

Table of Contents

         
Exhibit No.
 
Description
 
  4 .14   Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. and 7.75% Notes due in 2032 in the principal amount of $50 million issued by First Industrial L.P. (incorporated by reference to Exhibit 4.2 of the Operating Partnership’s Form 8-K of First Industrial, L.P. dated April 4, 2002, File No. 333-21873)
  4 .15   Form of 7.75% Notes due 2032 in the principal amount of $50 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of the Operating Partnership’s Form 8-K, dated April 4, 2002, File No. 333-21873)
  4 .16   Supplemental Indenture No. 8, dated as of May 17,relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P., dated May 27, 2004, File No. 333-21873)
  4 .17   Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P., dated June 17, 2004, File No. 333-21873)
  4 .18   Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company, filed January 11, 2006, File No. 1-13102)
  10 .1   Sales Agreement by and among the Company and First Industrial, L.P., and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of the Form 8-K of First Industrial, L.P., dated September 16, 2004, File No. 333-21873)
  10 .2   Fourth Amended and Restated Unsecured Revolving Credit Agreement, dated as of August 23, 2005, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase, NA and certain other banks (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company, filed August 25, 2005, File No. 1-13102)
  12 .1*   Computation of ratios of earnings to fixed charges of First Industrial, L.P.
  21 .1   Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, File No. 1-13102)
  23*     Consent of PricewaterhouseCoopers LLP
  31 .1*   Certification of Principal Executive Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
  31 .2*   Certification of Principal Financial Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
  32 .1**   Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes — Oxley Act of 2002.
 
 
 * Filed herewith.
 
** Furnished herewith

53

Table of Contents

EXHIBIT INDEX
 
         
Exhibit No.
 
Description
 
  3 .1   Tenth Amended and Restated Limited Partnership Agreement of First Industrial, L.P. (the “LP Agreement”) dated January 13, 2006 (incorporated by reference to Exhibit 10.2 of the Form 8-K of the Company filed January 17, 2006, File No. 1-13102)
  3 .2   Amendment No. 1 dated January 20, 2006 to the LP Agreement (incorporated by reference to Exhibit 10.20 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, File No. 1-13102)
  4 .1   Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
  4 .2   Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102)
  4 .3   Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 73/8% Notes due 2011 (incorporated by reference to Exhibit 4.4 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873)
  4 .4   Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 of Form 8-K of the Operating Partnership, dated November 3, 1997, as filed November 3, 1997, File No. 333-21873)
  4 .5   7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102)
  4 .6   7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102)
  4 .7   Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873)
  4 .8   7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of the Operating Partnership dated July 15, 1998, File No. 333-21873)
  4 .9   Supplemental Indenture No. 5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.60% Notes due July 15, 2028 (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Operating Partnership dated July 15, 1998, File No. 333-21873)
  4 .10   7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.15 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
  4 .11   Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.’s 7.375% Notes due March 15, 2011(incorporated by reference to Exhibit 4.16 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)


54

Table of Contents

         
Exhibit No.
 
Description
 
  4 .12   Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC (incorporated by reference to Exhibit 4.17 of the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2000, File No. 333-21873)
  4 .13   Supplemental Indenture No. 7 dated as of April 15, 2002, between First Industrial, L.P. and the U.S. Bank National Association, relating to First Industrial, L.P.’s 6.875% Notes due 2012 and 7.75% Notes due 2032 (incorporated by reference to Exhibit 4.1 of the Operating Partnership’s Form 8-K, dated April 4, 2002, File No. 333-21873)
  4 .14   Form of 6.875% Notes due in 2012 in the principal amount of $200 million issued by First Industrial, L.P. and 7.75% Notes due in 2032 in the principal amount of $50 million issued by First Industrial L.P. (incorporated by reference to Exhibit 4.2 of the Operating Partnership’s Form 8-K of First Industrial, L.P. dated April 4, 2002, File No. 333-21873)
  4 .15   Form of 7.75% Notes due 2032 in the principal amount of $50 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.3 of the Operating Partnership’s Form 8-K, dated April 4, 2002, File No. 333-21873)
  4 .16   Supplemental Indenture No. 8, dated as of May 17,relating to 6.42% Senior Notes due June 1, 2014, by and between First Industrial, L.P. and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P., dated May 27, 2004, File No. 333-21873)
  4 .17   Supplemental Indenture No. 9, dated as of June 14, 2004, relating to 5.25% Senior Notes due 2009, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P., dated June 17, 2004, File No. 333-21873)
  4 .18   Supplemental Indenture No. 10, dated as of January 10, 2006, relating to 5.75% Senior Notes due 2016, by and between the Operating Partnership and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 of the Form 8-K of the Company, filed January 11, 2006, File No. 1-13102)
  10 .1   Sales Agreement by and among the Company and First Industrial, L.P., and Cantor Fitzgerald & Co. dated September 16, 2004 (incorporated by reference to Exhibit 1.1 of the Form 8-K of First Industrial, L.P., dated September 16, 2004, File No. 333-21873)
  10 .2   Fourth Amended and Restated Unsecured Revolving Credit Agreement, dated as of August 23, 2005, among First Industrial, L.P., First Industrial Realty Trust, Inc., JP Morgan Chase, NA and certain other banks (incorporated by reference to Exhibit 10.1 of the Form 8-K of the Company, filed August 25, 2005, File No. 1-13102)
  12 .1*   Computation of ratios of earnings to fixed charges of First Industrial, L.P.
  21 .1   Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, File No. 1-13102)
  23*     Consent of PricewaterhouseCoopers LLP
  31 .1*   Certification of Principal Executive Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
  31 .2*   Certification of Principal Financial Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended
  32 .1**   Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes — Oxley Act of 2002
 
 
 * Filed herewith.
 
** Furnished herewith


55

Table of Contents

FIRST INDUSTRIAL, L.P.
 
INDEX TO FINANCIAL STATEMENTS
 
         
    Page
 
FINANCIAL STATEMENTS
   
  F-2
  F-4
  F-5
  F-6
  F-7
  F-8
  F-9
 
OTHER REAL ESTATE PARTNERSHIPS
 
INDEX TO FINANCIAL STATEMENTS
 
         
    Page
 
FINANCIAL STATEMENTS
   
  F-50
  F-51
  F-52
  F-53
  F-54
  F-55
 
FIRST INDUSTRIAL, L.P.
 
FINANCIAL STATEMENT SCHEDULE
 
         
    Page
 
FINANCIAL STATEMENT SCHEDULE
   
  S-1


F-1

Table of Contents

 
Report of Independent Registered Public Accounting Firm
 
To the Partners of
First Industrial, L.P.:
 
We have completed integrated audits of First Industrial, L.P.’s 2005 and 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2005 and an audit of its 2003 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.
 
Consolidated financial statements and financial statement schedule
 
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of First Industrial, L.P. and its subsidiaries (“the Consolidated Operating Partnership”) at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Consolidated Operating Partnership’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
Internal control over financial reporting
 
Also, in our opinion, management’s assessment, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A, that the Consolidated Operating Partnership maintained effective internal control over financial reporting as of December 31, 2005 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Consolidated Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005 based on criteria established in Internal Control — Integrated Framework issued by the COSO. The Consolidated Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Consolidated Operating Partnership’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.


F-2

Table of Contents

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
PricewaterhouseCoopers LLP
 
Chicago, Illinois
March 16, 2006


F-3

Table of Contents

FIRST INDUSTRIAL, L.P.
 
 
                 
    December 31,
 		    December 31,
 		 
    2005     2004  
    (Dollars in thousands, except share and per share data)  
 
ASSETS
Assets:
               
Investment in Real Estate:
               
Land
  $ 490,359     $ 423,836  
Buildings and Improvements
    2,340,504       2,039,486  
Construction in Progress
    66,074       23,092  
Less: Accumulated Depreciation
    (355,755 )     (321,003 )
                 
Net Investment in Real Estate
    2,541,182       2,165,411  
                 
Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $1,622 and $2,908 at December 31, 2005 and December 31, 2004
    16,840       50,286  
Investments in and Advances to Other Real Estate Partnerships
    378,864       339,967  
Cash and Cash Equivalents
    6,811       3,069  
Restricted Cash
    14,945       25  
Tenant Accounts Receivable, Net
    7,627       6,509  
Investments in Joint Ventures
    44,330       5,489  
Deferred Rent Receivable, Net
    21,520       15,928  
Deferred Financing Costs, Net
    10,907       11,569  
Deferred Leasing Intangibles, Net
    70,879       38,200  
Prepaid Expenses and Other Assets, Net
    116,560       84,698  
                 
Total Assets
  $ 3,230,465     $ 2,721,151  
                 
 
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
               
Mortgage Loans Payable, Net
  $ 54,929     $ 57,449  
Senior Unsecured Debt, Net
    1,298,893       1,347,524  
Unsecured Lines of Credit
    457,500       167,500  
Accounts Payable and Accrued Expenses
    116,249       68,577  
Deferred Leasing Intangibles, Net
    22,169       8,451  
Rents Received in Advance and Security Deposits
    27,578       26,441  
Dividends Payable
    39,509       35,487  
                 
Total Liabilities
    2,016,827       1,711,429  
                 
Commitments and Contingencies
    —       —  
Partners’ Capital:
               
General Partner Preferred Units (21,500 and 20,750 units issued and outstanding at December 31, 2005 and 2004, respectively), with a liquidation preference of $312,500 and $125,000, respectively
    303,068       121,584  
General Partner Units (44,444,710 and 42,834,091 units issued and outstanding at December 31, 2005 and 2004, respectively)
    773,921       757,840  
Unamortized Value of General Partnership Restricted Units
    (16,825 )     (19,611 )
Limited Partners’ Units (6,740,742 and 6,455,914 units issued and outstanding at December 31, 2005 and 2004, respectively)
    159,832       153,609  
Accumulated Other Comprehensive Loss
    (6,358 )     (3,700 )
                 
Total Partners’ Capital
    1,213,638       1,009,722  
                 
Total Liabilities and Partners’ Capital
  $ 3,230,465     $ 2,721,151  
                 
 
The accompanying notes are an integral part of the financial statements.
 


F-4

Table of Contents

FIRST INDUSTRIAL, L.P.
 
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
    (In thousands except per unit data)  
 
Revenues:
                       
Rental Income
  $ 222,997     $ 193,156     $ 176,720  
Tenant Recoveries and Other Income
    84,119       65,612       59,445  
Build to Suit Development for Sale Revenues
    16,241       —          
                         
Total Revenues
    323,357       258,768       236,165  
                         
Expenses:
                       
Real Estate Taxes
    47,003       40,026       37,121  
Repairs and Maintenance
    24,677       20,862       19,053  
Property Management
    17,042       11,699       8,955  
Utilities
    10,721       8,695       7,299  
Insurance
    2,317       2,882       2,469  
Other
    6,759       3,297       5,665  
General and Administrative
    54,846       38,912       25,607  
Amortization of Deferred Financing Costs
    2,122       1,928       1,761  
Depreciation and Other Amortization
    105,714       77,404       60,046  
Expenses from Build to Suit Development for Sale
    15,574       —       —  
                         
Total Expenses
    286,775       205,705       167,976  
                         
Other Income/Expense:
                       
Interest Income
    1,075       2,025       1,698  
Mark-to-Market/Gain on Settlement of Interest Rate Protection Agreements
    811       1,583       —  
Interest Expense
    (108,164 )     (98,458 )     (94,637 )
Gain (Loss) From Early Retirement of Debt
    82       (515 )     —  
                         
Total Other Income/Expense
    (106,196 )     (95,365 )     (92,939 )
Loss from Continuing Operations Before Equity in Income of Other Real Estate Partnerships, Equity in Income of Joint Ventures and Income Tax Benefit
    (69,614 )     (42,302 )     (24,750 )
Equity in Income of Other Real Estate Partnerships
    48,212       29,203       43,332  
Equity in Income of Joint Ventures
    3,698       35,840       539  
Income Tax Benefit
    12,033       7,673       5,147  
                         
(Loss) Income from Continuing Operations
    (5,671 )     30,414       24,268  
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $102,742, $81,806 and $74,797 for the Years Ended December 31, 2005, 2004 and 2003 respectively)
    108,482       95,740       102,943  
Provision for Income Taxes Allocable to Discontinued Operations (Including $19,719, $8,267 and $1,988 allocable to Gain on Sale of Real Estate for the Year Ended December 31, 2005, 2004 and 2003, respectively)
    (21,754 )     (10,800 )     (3,427 )
                         
Income Before Gain on Sale of Real Estate
    81,057       115,354       123,784  
Gain on Sale of Real Estate
    28,870       15,112       9,594  
Provision for Income Taxes Allocable to Gain on Sale of Real Estate
    (10,711 )     (5,312 )     (2,322 )
                         
Net Income
    99,216       125,154       131,056  
Less: Preferred Unit Distributions
    (10,688 )     (14,488 )     (20,176 )
Less: Redemption of Preferred Units
    —       (7,959 )     —  
                         
Net Income Available to Unitholders
  $ 88,528     $ 102,707     $ 110,880  
                         
Basic Earnings Per Unit:
                       
Income from Continuing Operations Available to Unitholders
  $ 0.04     $ 0.38     $ 0.25  
                         
Income from Discontinued Operations
  $ 1.77     $ 1.80     $ 2.20  
                         
Net Income Available to Unitholders
  $ 1.81     $ 2.18     $ 2.45  
                         
Weighted Average Units Outstanding
    48,968       47,136       45,322  
                         
Diluted Earnings Per Unit:
                       
Income from Continuing Operations Available to Unitholders
  $ 0.04     $ 0.37     $ 0.25  
                         
Income from Discontinued Operations
  $ 1.76     $ 1.79     $ 2.19  
                         
Net Income Available to Unitholders
  $ 1.80     $ 2.16     $ 2.44  
                         
Weighted Average Units Outstanding
    49,193       47,467       45,443  
                         
Distributions Per Unit
  $ 2.7850     $ 2.7500     $ 2.7400  
                         
 
The accompanying notes are an integral part of the financial statements.
 


F-5

Table of Contents

FIRST INDUSTRIAL , LP.
 
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
    (Dollars in thousands)  
 
Net Income
  $ 99,216     $ 125,154     $ 131,056  
Other Comprehensive (Loss) Income:
                       
Settlement of Interest Rate Protection Agreements
    —       6,816       —  
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
    (159 )     —       —  
Mark-to-Market of Interest Rate Protection Agreements
    (1,414 )     106       251  
Amortization of Interest Rate Protection Agreements
    (1,085 )     (512 )     198  
                         
Comprehensive Income
  $ 96,558     $ 131,564     $ 131,505  
                         
 
The accompanying notes are an integral part of the financial statements.


F-6

Table of Contents

FIRST INDUSTRIAL, L.P.
 
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
    (Dollars in thousands)  
 
General Partner Preferred Units — Beginning of Year
  $ 121,584     $ 240,697     $ 240,697  
Distributions
    (10,688 )     (22,447 )     (20,176 )
Issuance of Preferred Units
    181,484       194,424       —  
Redemption of Preferred Units
    —       (313,537 )     —  
Net Income
    10,688       22,447       20,176  
                         
General Partner Preferred Units — End of Year
  $ 303,068     $ 121,584     $ 240,697  
                         
General Partner Units — Beginning of Year
  $ 757,840     $ 687,721     $ 665,647  
Contributions and Issuance of General Partner Units
    56,122       99,280       15,117  
Issuance of General Partner Restricted Units
    8,381       8,379       20,641  
Purchase of General Partnership Units
    —       —       (997 )
Repurchase and Retirement of Restricted Units/Units
    (3,285 )     (3,751 )     (1,865 )
Restricted Unit Forfeitures
    (2,972 )     (14,095 )     —  
Amortization of Stock Based Compensation
    —       —       54  
Distributions
    (120,995 )     (114,569 )     (108,171 )
Unit Conversions
    1,951       6,195       2,750  
Net Income
    76,879       88,680       94,545  
                         
General Partner Units — End of Year
  $ 773,921     $ 757,840     $ 687,721  
                         
Unamort. Value of Gen. Partner Restricted Units — Beg. of Year
  $ (19,611 )   $ (19,035 )   $ (4,307 )
Issuance of General Partner Restricted Units
    (8,381 )     (8,379 )     (20,641 )
Amortization of General Partner Restricted Units
    8,845       6,866       5,913  
Restricted Unit Forfeitures
    2,322       937       —  
                         
Unamort. Value of Gen. Partner Restricted Units — End of Year
  $ (16,825 )   $ (19,611 )   $ (19,035 )
                         
Limited Partners Units — Beginning of Year
  $ 153,609     $ 163,794     $ 168,740  
Contributions and Issuance of Limited Partner Units
    14,698       —       —  
Distributions
    (18,173 )     (18,017 )     (18,531 )
Unit Conversions
    (1,951 )     (6,195 )     (2,750 )
Net Income
    11,649       14,027       16,335  
                         
Limited Partners Units — End of Year
  $ 159,832     $ 153,609     $ 163,794  
                         
Accum. Other Comprehensive Loss — Beginning of Year
  $ (3,700 )   $ (10,110 )   $ (10,559 )
Settlement of Interest Rate Protection Agreements
    —       6,816       —  
Reclassification of Settlement of Interest Rate Protection Agreements to Net Income
    (159 )     —       —  
Mark to Market of Interest Rate Protection Agreements
    (1,414 )     106       251  
Amortization of Interest Rate Protection Agreements
    (1,085 )     (512 )     198  
                         
Accum. Other Comprehensive Loss — End of Year
  $ (6,358 )   $ (3,700 )   $ (10,110 )
                         
Total Partners’ Capital at End of Year
  $ 1,213,638     $ 1,009,722     $ 1,063,067  
                         
 
The accompanying notes are an integral part of the financial statements.


F-7

Table of Contents

FIRST INDUSTRIAL, LP.
 
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
    (Dollars in thousands)  
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                       
Net Income
  $ 99,216     $ 125,154     $ 131,056  
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
                       
Depreciation
    86,588       71,785       63,281  
Amortization of Deferred Financing Costs
    2,122       1,928       1,761  
Other Amortization
    31,031       20,661       16,174  
Provision for Bad Debt
    1,689       (1,474 )     (160 )
Mark-to-Market of /Loss on Settlement of Interest Rate Protection Agreements
    (143 )     —       —  
Equity in Income of Joint Ventures
    (3,698 )     (34,990 )     (539 )
Distributions from Joint Ventures
    3,866       34,990       539  
Gain on Sale of Real Estate
    (131,612 )     (83,160 )     (80,193 )
(Gain) Loss on Early Retirement of Debt
    (82 )     515       —  
Equity in Income of Other Real Estate Partnerships
    (48,212 )     (29,203 )     (43,332 )
Distributions from Investment in Other Real Estate Partnerships
    48,212       29,203       43,332  
Increase in Build to Suit Development for Sale Costs Receivable
    (16,241 )     —       —  
Increase in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net
    (13,835 )     (53,510 )     (23,076 )
Increase in Deferred Rent Receivable
    (7,485 )     (5,254 )     (2,629 )
Increase (Decrease) in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits
    31,415       4,370       (14,948 )
                         
Net Cash Provided by Operating Activities
    82,831       81,015       91,266  
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
Purchase of and Additions to Investment in Real Estate
    (846,033 )     (469,668 )     (280,049 )
Net Proceeds from Sales of Investments in Real Estate
    478,937       324,919       303,171  
Investments in and Advances to Other Real Estate Partnerships
    (122,606 )     (68,134 )     (59,430 )
Distributions/Repayments from Other Real Estate Partnerships
    83,709       103,073       62,300  
Contributions to and Investments in Joint Ventures
    (45,175 )     (5,422 )     (5,711 )
Distributions from Joint Ventures
    2,971       15,535       2,859  
Repayment and Sale of Mortgage Loans Receivable
    58,375       44,418       27,500  
(Increase) Decrease in Restricted Cash
    (14,920 )     60,849       (32,525 )
                         
Net Cash (Used in) Provided by Investing Activities
    (404,742 )     5,570       18,115  
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Unit Contributions
    55,754       86,121       14,799  
Proceeds from the Issuance of Preferred Units
    187,500       200,000       —  
Preferred Unit Offering Costs
    (5,906 )     (5,576 )     —  
Unit Distributions
    (137,672 )     (130,220 )     (125,916 )
Purchase of General Partner Units
    —       —       (997 )
Repurchase of Restricted Units
    (3,285 )     (3,751 )     (1,865 )
Redemption of Preferred Units
    —       (321,438 )     —  
Preferred Unit Distributions
    (8,162 )     (13,256 )     (20,176 )
Repayments of Mortgage Loans Payable
    (1,951 )     (5,931 )     (1,018 )
Proceeds from Mortgage Loan Payable
    1,167       1,400       —  
Proceeds from Senior Unsecured Debt
    —       134,496       —  
Other Proceeds from Senior Unsecured Debt
    —       6,816       —  
Repayment of Senior Unsecured Debt
    (50,000 )     —       —  
Proceeds from Unsecured Lines of Credit
    647,500       581,000       264,300  
Repayments on Unsecured Lines of Credit
    (357,500 )     (609,400 )     (238,700 )
Book Overdraft. 
    —       —       312  
Cost of Debt Issuance and Prepayment Fees
    (1,792 )     (3,777 )     (120 )
                         
Net Cash Provided by (Used in) Financing Activities
    325,653       (83,516 )     (109,381 )
                         
Net Increase in Cash and Cash Equivalents
    3,742       3,069       —  
Cash and Cash Equivalents, Beginning of Period
    3,069       —       —  
                         
Cash and Cash Equivalents, End of Period
  $ 6,811     $ 3,069     $ —  
                         
 
The accompanying notes are an integral part of the financial statements.


F-8

Table of Contents

FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
 
1.   Organization and Formation of Partnership
 
First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 86.8% and 86.9% ownership interest at December 31, 2005 and 2004, respectively. The Company also owns a preferred general partnership interest in the Operating Partnership (“Preferred Units”) with an aggregate liquidation priority of $312,500. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code. The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership owned, in the aggregate, approximately a 13.2% and 13.1% interest in the Operating Partnership at December 31, 2005 and 2004, respectively.
 
The Operating Partnership is the sole member of several limited liability companies (the “L.L.C.s”) and the sole stockholder of First Industrial Development Services, Inc. (together with the Operating Partnership and the L.L.C.’s, the “Consolidated Operating Partnership”), the operating data of which is consolidated with that of the Operating Partnership. The Other Real Estate Partnerships’ operating data is presented on a combined basis, separate from that of the Consolidated Operating Partnership. The Operating Partnership or First Industrial Development Services, Inc. also holds at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P. (the “Financing Partnership”), First Industrial Securities, L.P. (the “Securities Partnership”), First Industrial Mortgage Partnership, L.P, (the “Mortgage Partnership”), First Industrial Pennsylvania, L.P. (the “Pennsylvania Partnership”), First Industrial Harrisburg, L.P. (the “Harrisburg Partnership”), First Industrial Indianapolis, L.P. (the “Indianapolis Partnership”), TK-SV, LTD. and FI Development Services, L.P. (together, the “Other Real Estate Partnerships”). The Other Real Estate Partnership’s operating data is presented on a combined basis, separate from that of the Consolidated Operating Partnership. The Operating Partnership or First Industrial Development Services, Inc., through separate wholly-owned limited liability companies in which it is also the sole member, also owns minority equity interests in, and provides various services to, four joint ventures which invest in industrial properties (the “September 1998 Joint Venture”, the “May 2003 Joint Venture”, the “March 2005 Joint Venture” and the “September 2005 Joint Venture”). The Operating Partnership, through a separate, wholly-owned limited liability company of which the Operating Partnership is also the sole member, also owned a minority interest in, and provides various services to, a fifth joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the September 1998 Joint Venture, the May 2003 Joint Venture, the March 2005 Joint Venture and the September 2005 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties. The operating data of the Joint Ventures is not consolidated with that of the Consolidated Operating Partnership as presented herein. The Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting.
 
The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.
 
As of December 31, 2005, the Consolidated Operating Partnership owned 859 industrial properties (inclusive of developments in progress), containing an aggregate of approximately 72.5 million square feet (unaudited) of gross leasable area (“GLA”). On a combined basis, as of December 31, 2005, the Other Real Estate Partnerships owned 100 industrial properties, containing an aggregate of approximately 9.1 million square feet (unaudited) of GLA.
 
Profits, losses and distributions of the Operating Partnership, the L.L.C.s and Other Real Estate Partnerships are allocated to the general partner and the limited partners, or the members, as applicable, in


F-9

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

accordance with the provisions contained within the partnership agreements or ownership agreements, as applicable, of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships.
 
2.   Basis of Presentation
 
The consolidated financial statements of the Consolidated Operating Partnership at December 31, 2005 and 2004 and for each of the years ended December 31, 2005, 2004 and 2003 include the accounts and operating results of the Operating Partnership, the L.L.C.s and First Industrial Development Services, Inc. on a consolidated basis. Such financial statements present the Operating Partnership’s limited partnership interests in each of the Other Real Estate Partnerships and the Consolidated Operating Partnership’s minority equity interests in the Joint Ventures under the equity method of accounting. All intercompany transactions have been eliminated in consolidation.
 
3.   Summary of Significant Accounting Policies
 
In order to conform with generally accepted accounting principles, management, in preparation of the Consolidated Operating Partnership’s financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2005 and 2004, and the reported amounts of revenues and expenses for each of the years ended December 31, 2005, 2004 and 2003. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short maturity of these investments.
 
Restricted Cash
 
At December 31, 2005 and 2004, restricted cash includes gross proceeds from the sales of certain properties. These sales proceeds will be disbursed as the Company exchanges into properties under Section 1031 of the Internal Revenue Code. The carrying amount approximates fair value due to the short term maturity of these investments.
 
Investment in Real Estate and Depreciation
 
Investment in Real Estate is carried at cost. The Consolidated Operating Partnership reviews its properties on a quarterly basis for impairment and provides a provision if impairments are found. To determine if an impairment may exist, the Consolidated Operating Partnership reviews its properties and identifies those that have had either an event of change or event of circumstances warranting further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, the Consolidated Operating Partnership estimates the future net cash flows expected to result from the use of the property and its eventual disposition, on an individual property basis. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property, on an individual property basis, the Consolidated Operating Partnership will recognize an impairment loss based upon the estimated fair value of such property. For properties management considers held for sale, the Consolidated Operating Partnership ceases depreciating the properties and values the properties at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and, as a result, the Consolidated Operating Partnership decides not to sell a property previously classified as held for sale, the Consolidated Operating Partnership will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. To calculate the fair value of properties held for sale, the


F-10

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Consolidated Operating Partnership deducts from the contract price of the property the estimated costs to close the sale.
 
Interest costs, real estate taxes, compensation costs of development personnel and other directly related costs incurred during construction periods are capitalized and depreciated commencing with the date the property is substantially completed. Upon substantial completion, the Consolidated Operating Partnership reclassifies construction in progress to building, tenant improvement and leasing commissions. Such costs begin to be capitalized to the development projects from the point the Consolidated Operating Partnership is undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held available for occupancy. Depreciation expense is computed using the straight-line method based on the following useful lives:
 
     
    Years
 
Buildings and Improvements
  20 to 50
Land Improvements
  15
Furniture, Fixtures and Equipment
  5 to 10
 
Construction expenditures for tenant improvements, leasehold improvements and leasing commissions (inclusive of compensation costs of personnel attributable to leasing) are capitalized and amortized over the terms of each specific lease. Capitalized compensation costs of personnel attributable to leasing relate to time directly attributable to originating leases with independent third parties that result directly from and are essential to originating those leases and would not have been incurred had these leasing transactions not occurred. Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized.
 
The Consolidated Operating Partnership accounts for all acquisitions entered into subsequent to June 30, 2001 in accordance with Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standard No. 141, “Business Combinations” (“FAS 141”). Upon acquisition of a property, the Consolidated Operating Partnership allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, buildings, tenant improvements, leasing commissions and intangible assets including in-place leases and above market and below market leases. The Consolidated Operating Partnership allocates the purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. Acquired above and below market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates over the remaining lease term.
 
The purchase price is further allocated to in-place lease values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Consolidated Operating Partnership’s overall relationship with the respective tenant. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental revenue on the Consolidated Operating Partnership’s consolidated statements of operations. The value of in-place lease intangibles, which is included as a component of Deferred Leasing Intangibles, Net, is amortized over the remaining lease term and expected renewal periods of the respective lease as an adjustment to depreciation and other amortization expense. If a tenant terminates its lease early, the unamortized portion of leasing commissions, tenant improvements, above and below market leases and the in-place lease value is immediately written off.


F-11

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Deferred Leasing Intangibles included in the Consolidated Operating Partnership’s total assets consist of the following:
 
                 
    December 31,
 		    December 31,
 		 
    2005     2004  
 
In-Place Leases
  $ 71,818     $ 37,047  
Less: Accumulated Amortization
    (5,829 )     (2,315 )
                 
    $ 65,989     $ 34,732  
                 
Above Market Leases
  $ 6,524     $ 4,348  
Less: Accumulated Amortization
    (1,634 )     (880 )
                 
    $ 4,890     $ 3,468  
                 
 
Deferred Leasing Intangibles included in the Consolidated Operating Partnership’s total liabilities consist of the following:
 
                 
    December 31,
 		    December 31,
 		 
    2005     2004  
 
Below Market Leases
  $ 25,058     $ 10,222  
Less: Accumulated Amortization
    (2,889 )     (1,771 )
                 
    $ 22,169     $ 8,451  
                 
 
Amortization expense related to deferred leasing intangibles, was $6,624 and $1,620 for the years ended December 31, 2005 and 2004, respectively. The Consolidated Operating Partnership will recognize net amortization expense related to the deferred leasing intangibles over the next five years as follows:
 
         
2006
  $ 5,208  
2007
    5,385  
2008
    5,544  
2009
    5,703  
2010
    5,493  
         
Total
  $ 27,333  
         
 
Build to Suit for Sale Revenues and Expenses
 
During 2005, First Industrial Development Services, Inc. entered into a contract with a third party to construct an industrial property. This build-to-suit for sale contract requires the purchase price to be paid at closing. The Consolidated Operating Partnership uses the percentage-of-completion contract method of accounting in accordance with SOP 81-1 “Accounting for Performance of Construction-Type and Certain Production-Type Contracts”. During the period of performance, costs are accumulated on the balance sheet in Prepaid Expenses and Other Assets ($15,574 at December 31, 2005) and revenues and expenses are recognized in continuing operations.
 
Deferred Financing Costs
 
Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred financing costs was $12,517 and $10,853 at December 31, 2005 and 2004, respectively. Unamortized deferred financing costs are written-off when debt is retired before the maturity date.


F-12

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Investment in and Advances to Other Real Estate Partnerships
 
Investment in and Advances to Other Real Estate Partnerships represents the Consolidated Operating Partnership’s limited partnership interests in and advances to, through the Operating Partnership, the Other Real Estate Partnerships. The Operating Partnership accounts for its Investment in and Advances to Other Real Estate Partnerships under the equity method of accounting. Under the equity method of accounting, the Operating Partnership’s share of earnings or losses of the Other Real Estate Partnerships is reflected in income as earned and contributions or distributions increase or decrease, respectively, the Operating Partnership’s Investment in and Advances to Other Real Estate Partnerships as paid or received, respectively.
 
Investments in Joint Ventures
 
Investments in Joint Ventures represent the Operating Partnership’s limited partnership interests in the Joint Ventures. The Operating Partnership accounts for its investments in Joint Ventures under the equity method of accounting, as the Operating Partnership does not have operational control or a majority voting interest. Under the equity method of accounting, the Operating Partnership’s share of earnings or losses of the Joint Ventures is reflected in income as earned and contributions or distributions increase or decrease, respectively, the Operating Partnership’s Investments in Joint Ventures as paid or received, respectively. Differences between the Operating Partnership’s carrying value of its investments in joint ventures and the Operating Partnership’s underlying equity of such joint ventures are amortized over the respective lives of the underlying assets, as applicable.
 
Stock Based Compensation
 
At December 31, 2005, the Company has three stock incentive employee compensation plans, which are described more fully in Note 14. Prior to January 1, 2003, the Consolidated Operating Partnership accounted for its stock incentive plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Under APB 25, compensation expense is not recognized for options issued in which the strike price is equal to the fair value of the Company’s stock on the date of grant. Certain options issued in 2000 were issued with a strike price less than the fair value of the Company’s stock on the date of grant. Compensation expense is being recognized for the intrinsic value of these options determined at the date of grant over the vesting period. On January 1, 2003, the Consolidated Operating Partnership adopted the fair value recognition provisions of the Financial Accounting Standards Board’s (“FASB”) Financial Accounting Standards No. 123, “Accounting for Stock Based Compensation” (“FAS 123”), as amended by Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure”. Beginning on January 1, 2003, the Consolidated Operating Partnership has applied the fair value recognition provisions of FAS 123 prospectively to all employee option awards granted after December 31, 2002. The Consolidated Operating Partnership has not awarded options to employees or directors of the Company during the years ended December 31, 2005, 2004 and 2003, and therefore no stock-based employee compensation expense, except for expense related to restricted stock, is included in net income available to common unitholders related to the fair value recognition provisions of FAS 123.
 
Had compensation expense for the Company’s Stock Incentive Plans been determined based upon the fair value at the grant date for awards under the stock incentive plans consistent with the methodology prescribed under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation”, as


F-13

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

amended by FAS 148, net income and earnings per unit would have been the pro forma amounts indicated in the table below:
 
                         
    For the Year Ended  
    2005     2004     2003  
 
Net Income Available to Unitholders — as reported
  $ 88,528     $ 102,707     $ 110,880  
Add: Stock-Based Employee Compensation Expense Included in Net Income Available to Unitholders — as reported
    —       —       54  
Less: Total Stock-Based Employee Compensation Expense - Determined Under the Fair Value Method
    (100 )     (420 )     (1,350 )
                         
Net Income Available to Unitholders — pro forma
  $ 88,428     $ 102,287     $ 109,584  
                         
Net Income Available to Unitholders per Unit — as reported — Basic
  $ 1.81     $ 2.18     $ 2.45  
Net Income Available to Unitholders per Unit — pro forma — Basic
  $ 1.81     $ 2.17     $ 2.42  
Net Income Available to Unitholders per Unit — as reported — Diluted
  $ 1.80     $ 2.16     $ 2.44  
Net Income Available to Unitholders per Unit — pro forma — Diluted
  $ 1.80     $ 2.15     $ 2.41  
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:
                       
Expected dividend yield
    N/A       N/A       N/A  
Expected stock price volatility
    N/A       N/A       N/A  
Risk-free interest rate
    N/A       N/A       N/A  
Expected life of options
    N/A       N/A       N/A  
No options were granted during 2005, 2004 and 2003.
                       
 
Revenue Recognition
 
Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as revenue in the same period the related expenses are incurred by the Consolidated Operating Partnership.
 
Revenue is recognized on payments received from tenants for early lease terminations after the Consolidated Operating Partnership determines that all the necessary criteria have been met in accordance with FASB Statement of Financial Accounting Standards No. 13 “Accounting for Leases” (“FAS 13”).
 
Interest income on mortgage loans receivable is recognized based on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected.
 
The Consolidated Operating Partnership provides an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the consolidated balance sheets are shown net of an allowance for doubtful accounts of $111 and $73 as of December 31, 2005 and 2004, respectively. For accounts receivable the Consolidated Operating Partnership deems uncollectible, the Consolidated Operating Partnership uses the direct write-off method.


F-14

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Gain on Sale of Real Estate
 
Gain on sale of real estate is recognized using the full accrual method, when appropriate. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are written off with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Consolidated Operating Partnership after completion of each sale are included in the determination of the gain on sales.
 
Income Taxes
 
In accordance with partnership taxation, each of the partners are responsible for reporting their share of taxable income or loss. Accordingly, no provision has been made for state or federal income taxes in the accompanying consolidated financial statements except for activities conducted in its taxable REIT subsidiary, First Industrial Development Services, Inc. which has been accounted for under FASB Statement of Financial Standards No. 109, “Accounting for Income Taxes” (“FAS 109”). In accordance with the FAS 109, the total benefit/expense has been separately allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
 
The Consolidated Operating Partnership is subject to certain state and local income, excise and franchise taxes. The provision for local, excise and franchise taxes has been reflected in general and administrative expense in the consolidated statements of operations and has not been separately stated due to its insignificance. State income taxes are included in the provision/benefit for income taxes which is allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.
 
Earnings Per Unit (“EPU”)
 
Net income per weighted average general partnership and limited partnership unit (the “Units”) — basic is based on the weighted average Units outstanding (excluding restricted units that have not yet vested). Net income per weighted average Unit — diluted is based on the weighted average Units outstanding (excluding restricted units that have not yet vested) plus the dilutive effect of the Company’s in-the-money employee stock options and restricted stock that result in the issuance of general partnership units. See Note 11 for further disclosure about earnings per unit.
 
Fair Value of Financial Instruments
 
The Consolidated Operating Partnership’s financial instruments include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses, mortgage loans payable, unsecured lines of credit and senior unsecured debt.
 
The fair values of the short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable and other accrued expenses approximates their carrying or contract values. See Note 6 for the fair values of the mortgage loans payable, unsecured lines of credit and senior unsecured debt.
 
Derivative Financial Instruments
 
Historically, the Consolidated Operating Partnership, through the Operating Partnership, has used interest rate protection agreements (the “Agreements”) to fix the interest rate on anticipated offerings of senior unsecured debt or convert floating rate debt to fixed rate debt. Receipts or payments that result from the settlement of Agreements used to fix the interest rate on anticipated offerings of senior unsecured debt are amortized over the life of the senior unsecured debt and included in interest expense. Receipts or payments resulting from Agreements used to convert floating rate debt to fixed rate debt are recognized as a component


F-15

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of interest expense. Agreements which qualify for hedge accounting are marked-to-market and any gain or loss is recognized in other comprehensive income (partners’ capital). Any agreements which no longer qualify for hedge accounting are marked-to-market and any gain or loss is recognized in net income immediately. The credit risks associated with the Agreements are controlled through the evaluation and monitoring of the creditworthiness of the counterparty. In the event that the counterparty fails to meet the terms of the Agreements, the Consolidated Operating Partnership’s exposure is limited to the current value of the interest rate differential, not the notional amount, and the Consolidated Operating Partnership’s carrying value of the Agreements on the balance sheet. See Note 6 for more information on the Agreements.
 
Discontinued Operations
 
On January 1, 2002, the Consolidated Operating Partnership adopted the FASB Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“FAS 144”). FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Consolidated Operating Partnership as a result of the disposal transaction and (b) the Consolidated Operating Partnership will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be reclassified and presented in discontinued operations in prior consolidated statements of operations.
 
Segment Reporting
 
Management views the Consolidated Operating Partnership as a single segment.
 
Recent Accounting Pronouncements
 
In December, 2004, the FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29” (“FAS 153”). The amendments made by FAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” FAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of FAS 153 did not have a material effect on the Operating Partnership’s consolidated financial statements.
 
In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”. SFAS 123(R) is an amendment of SFAS 123 and requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is required to be measured based on the fair value of the equity of liability instruments issued. SFAS 123(R) also contains additional minimum disclosure requirements that including, but not limited to, the valuation method and assumptions used, amounts of compensation capitalized and modifications made. The effective date of SFAS 123(R) was subsequently amended by the SEC to be as of the beginning of the first interim or annual reporting period of the first fiscal year that begins on or after June 15, 2005, and allows several different methods of transition. The Consolidated Operating Partnership expects to adopt the pronouncement as required on January 1, 2006 using the prospective method and does not believe that the adoption of SFAS 123(R) will have a material impact on its financial position, results of operations or cash flows.
 
In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, Accounting for Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143. A conditional asset retirement obligation refers to a legal obligation to retire assets where the timing and/or method of settlement are


F-16

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

conditioned on future events. FIN No. 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The Consolidated Operating Partnership adopted the provisions of FIN 47 in 2005. The adoption of this Interpretation did not have a material impact on the Operating Partnership’s consolidated financial position, results of operations or cash flows.
 
In May, 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections” (“FAS 154”) which supersedes APB Opinion No. 20, “Accounting Changes” and Statement of Financial Accounting Standards No. 3, “Reporting Accounting Changes in Interim Financial Statements”. FAS 154 changes the requirements for the accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. FAS 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.
 
In June, 2005, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regarding EITF 04-05, “Investor’s Accounting for an Investment in a Limited Partnership When the Investor is the Sole General Partner and the Limited Partners Have Certain Rights.” The conclusion provides a framework for addressing the question of when a sole general partner, as defined in EITF 04-05, should consolidate a limited partnership. The EITF has concluded that the general partner of a limited partnership should consolidate a limited partnership unless (1) the limited partners possess substantive kick-out rights as defined in paragraph B20 of FIN 46R, or (2) the limited partners possess substantive participating rights similar to the rights described in Issue 96-16, “Investor’s Accounting for an Investee When the Investor has a Majority of the Voting Interest by the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights.” In addition, the EITF concluded that the guidance should be expanded to include all limited partnerships, including those with multiple general partners. The Company will adopt EITF 04-05 as of January 1, 2006. The Operating Partnership’s adoption of the EITF will have no impact on the Operating Partnership’s results of operations, financial position or liquidity.
 
In June 2005, the FASB ratified the consensus reached by the EITF regarding EITF No. 05-6, “Determining the Amortization Period for Leasehold Improvements.” The guidance requires that leasehold improvements acquired in a business combination, or purchased subsequent to the inception of a lease, be amortized over the lesser of the useful life of the assets or a term that includes renewals that are reasonably assured at the date of the business combination of purchase. The guidance is effective for periods beginning after June 29, 2005. EITF 05-6 does not impact the Consolidated Operating Partnership’s results of operations, financial position, or liquidity.
 
Reclassification
 
Certain 2004 and 2003 items have been reclassified to conform to the 2005 presentation.
 
4.   Investments in and Advances to Other Real Estate Partnerships
 
The investments in and advances to Other Real Estate Partnerships reflects the Operating Partnership’s limited partnership equity interests in the entities referred to in Note 1 to these financial statements.


F-17

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Summarized condensed financial information as derived from the financial statements of the Other Real Estate Partnerships is presented below:
 
Condensed Combined Balance Sheets:
 
                 
    December 31,
 		    December 31,
 		 
    2005     2004  
 
ASSETS
Assets:
               
Investment in Real Estate, Net
  $ 309,013     $ 312,679  
Other Assets, Net
    87,866       39,829  
                 
Total Assets
    396,879       352,508  
                 
 
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
               
Mortgage Loans Payable
  $ 2,380     $ 2,456  
Other Liabilities
    12,492       7,136  
                 
Total Liabilities
    14,872       9,592  
Partners’ Capital
    382,007       342,916  
                 
Total Liabilities and Partners’ Capital
  $ 396,879     $ 352,508  
                 
 
Condensed Combined Statements of Operations:
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
 
Total Revenues (including Interest Income)
  $ 44,093     $ 39,537     $ 42,068  
Property Expenses
    (13,387 )     (12,317 )     (12,166 )
Interest Expense
    (175 )     (178 )     (256 )
Amortization of Deferred Financing Costs
    (4 )     (3 )     (3 )
Depreciation and Other Amortization
    (13,894 )     (10,533 )     (9,662 )
Loss on Early Retirement of Debt
    —       —       (1,466 )
Equity in Income of Joint Ventures
    —       1,461       —  
                         
Income from Continuing Operations
    16,663       17,967       18,515  
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $29,213, $6,439 and $4,689 for the years ended December 31, 2005, 2004 and 2003
    31,004       9,853       18,932  
Gain on Sale of Real Estate
    863       1,643       6,198  
                         
Net Income
  $ 48,500     $ 29,463     $ 43,645  
                         
 
5.   Investments in Joint Ventures
 
On September 28, 1998, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is its sole member, entered into a joint venture arrangement (the “September 1998 Joint Venture”) with an institutional investor to invest in industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies in which the Operating Partnership is the sole member, owns a ten percent equity interest in the September 1998 Joint Venture and


F-18

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

provides property and asset management services to the September 1998 Joint Venture. On or after October 2000, under certain circumstances, the Consolidated Operating Partnership has the right to purchase all of the properties owned by the September 1998 Joint Venture at a price to be determined in the future. The Consolidated Operating Partnership has not exercised this right.
 
On December 28, 2001, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “December 2001 Joint Venture”) with an institutional investor to invest in industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies of the Operating Partnership, owned a 15% equity interest in the December 2001 Joint Venture and provided property management services to the December 2001 Joint Venture. On August 27, 2004, the December 2001 Joint Venture sold its investment of 36 industrial properties, containing approximately 6.2 million square feet (unaudited) of GLA, to a third party for gross proceeds of approximately $349,750. Due to certain provisions in the operating agreement, the Consolidated Operating Partnership received distributions in excess of it’s 15% equity interest in the December 2001 Joint Venture. Due to the sale of all industrial properties, the Consolidated Operating Partnership recognized, in aggregate, approximately $34,767 from the Consolidated Operating Partnership’s 15% share of gain from the sale of the December 2001 Joint Venture’s properties and distributions received from the December 2001 Joint Venture in excess of the Consolidated Operating Partnership’s 15% equity interest. This amount is included in Equity in Income of Joint Ventures.
 
As a result of the sale on August 27, 2004 to a third party, the Consolidated Operating Partnership recognized the unamortized portion of the previously deferred gain from the original sales to the December 2001 Joint Venture, of approximately $4,375. These deferred gains are included in Equity in Income of Joint Ventures.
 
On May 16, 2003, the Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the “May 2003 Joint Venture”) with an institutional investor to invest in industrial properties. The Operating Partnership, through wholly-owned limited liability companies of the Operating Partnership, owns a 15% equity interest in the May 2003 Joint Venture and provides property management services to the May 2003 Joint Venture.
 
On March 18, 2005, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., entered into a joint venture arrangement (the “March 2005 Joint Venture”) with an institutional investor to invest in, own, develop, redevelop and operate certain industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Development Services, Inc., owns a 10% equity interest in the March 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the March 2005 Joint Venture.
 
On September 7, 2005, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., entered into a joint venture arrangement (the “September 2005 Joint Venture”) with an institutional investor to invest in, own and operate certain industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies of the Operating Partnership or First Industrial Development Services, Inc., owns a 10% equity interest in the September 2005 Joint Venture and provides property management, asset management, development management and leasing management services to the September 2005 Joint Venture.
 
As of December 31, 2005, the September 1998 Joint Venture owned 41 industrial properties comprising approximately 1.3 million square feet (unaudited) of GLA, the May 2003 Joint Venture owned 11 industrial properties comprising approximately 4.7 million square feet (unaudited) of GLA, the March 2005 Joint Venture owned 47 industrial properties comprising approximately 4.2 million square feet (unaudited) of GLA


F-19

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and several land parcels and the September 2005 Joint Venture owned 217 industrial properties comprising approximately 14.0 million square feet (unaudited) of GLA and several land parcels.
 
During the year ended December 31, 2005, the Consolidated Operating Partnership sold seven properties and several land parcels to the March 2005 Joint Venture comprising approximately 1.5 million square feet (unaudited) of GLA for a sales price of $89.0 million. The Consolidated Operating Partnership deferred 10% of the gain from the sale, which is equal to the Consolidated Operating Partnership’s economic interest in the March 2005 Joint Venture. In December 2005, the March 2005 Joint Venture sold a portion of a parcel of land to a third party. As a result of the sale, the Consolidated Operating Partnership recognized the unamortized portion of the previously deferred gain, net of tax, from the original sale to the March 2005 Joint Venture in Equity in Income of Joint Ventures. If the Consolidated Operating Partnership repurchases any of the seven properties or land parcels, the 10% deferral will be netted against the basis of the property purchased (which reduces the basis of the property).
 
During the year ended December 31, 2005, the Consolidated Operating Partnership earned acquisition fees from the May 2003 Joint Venture and the September 2005 Joint Venture. The Consolidated Operating Partnership deferred 15% of the acquisition fees earned from the May 2003 Joint Venture activity and 10% of the acquisition earned fees from the September 2005 Joint Venture activity. The deferrals reduced the Consolidated Operating Partnership’s investment in the joint ventures and are amortized into income over the life of the properties, generally 25 to 40 years.
 
At December 31, 2005 and 2004, the Consolidated Operating Partnership has a receivable from the Joint Ventures of $3,354 and $1,261, respectively, which mainly relate to development, property management and asset management fees due to the Consolidated Operating Partnership from the Joint Ventures and from borrowings made to the September 1998 Joint Venture.
 
During the years ended December 31, 2005, 2004 and 2003, the Consolidated Operating Partnership invested the following amounts in its Joint Ventures as well as received distributions and recognized fees from acquisition, disposition, property management, leasing, development and asset management services in the following amounts:
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
 
Contributions
  $ 43,311     $ 3,676     $ 5,558  
Distributions
  $ 6,837     $ 50,525     $ 3,398  
Fees
  $ 8,301     $ 2,689     $ 2,173  


F-20

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
The combined summarized financial information of the investments in joint ventures is as follows
 
                 
    December 31,
 		    December 31,
 		 
    2005     2004  
 
Condensed Combined Balance Sheets
               
Gross Real Estate Investment
  $ 1,410,389     $ 120,633  
Less: Accumulated Depreciation
    (30,497 )     (9,308 )
                 
Net Real Estate
    1,379,892       111,325  
Other Assets
    256,233       16,637  
                 
Total Assets
  $ 1,636,125     $ 127,962  
                 
Debt
  $ 1,174,296     $ 88,398  
Other Liabilities
    46,962       5,711  
Equity
    414,867       33,853  
                 
Total Liabilities and Equity
  $ 1,636,125     $ 127,962  
                 
Consolidated Operating Partnership’s share of Equity
  $ 44,772     $ 4,580  
Basis Differentials(1)
    (442 )     909  
                 
Carrying Value of the Consolidated Operating Partnership’s investments in joint ventures
  $ 44,330     $ 5,489  
                 
 
 
(1) This amount represents the aggregate difference between the Consolidated Operating Partnership’s historical cost basis and the basis reflected at the joint venture level. Basis differentials are primarily comprised of gain deferrals related to properties the Consolidated Operating Partnership sold to the Joint Ventures and certain acquisition costs which are not reflected at the joint venture level.
 
                         
    Year Ended December 31,  
    2005     2004     2003  
 
Condensed Combined Statements of Operations
                       
Total Revenues
  $ 59,411     $ 32,353     $ 35,603  
Expenses
                       
Operating and Other
    16,128       11,593       9,725  
Interest
    20,995       7,712       7,353  
Depreciation and Amortization
    32,150       12,540       17,585  
                         
Total Expenses
    69,273       31,845       34,663  
                         
Gain (Loss) on Sale of Real Estate
    10,761       81,431       (2,069 )
                         
Net Income (Loss)
    899       81,939       (1,129 )
                         
Consolidated Operating Partnership’s share of Net Income
  $ 3,698     $ 35,840     $ 539  
                         
 
6.  Mortgage Loans Payable, Net, Senior Unsecured Debt, Net and Unsecured Lines of Credit
 
Mortgage Loans Payable, Net
 
On March 20, 1996, the Consolidated Operating Partnership, through the Operating Partnership, assumed a $6,424 mortgage loan (the “Assumed Loan I”) and a $2,993 mortgage loan (the “Assumed Loan II”) (together, the “Assumed Loans”) that are collateralized by 12 properties in Indianapolis, Indiana and one


F-21

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

property in Indianapolis, Indiana, respectively. The Assumed Loans bear interest at a fixed rate of 9.25% and provide for monthly principal and interest payments based on a 16.75-year amortization schedule. The Assumed Loan I matures on September 1, 2009. The Assumed Loan II matures on January 1, 2013. The Assumed Loans may be prepaid only after December 1999 in exchange for the greater of a 1% prepayment fee or a yield maintenance premium.
 
On April 16, 1998, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $2,525 (the “Acquisition Mortgage Loan IV”). The Acquisition Mortgage Loan IV is collateralized by one property in Baltimore, Maryland, bears interest at a fixed rate of 8.95% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan IV matures on October 1, 2006. The Acquisition Mortgage Loan IV may be prepaid only after October 2001 in exchange for the greater of a 1% prepayment fee or a yield maintenance premium.
 
On April 1, 2002, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $5,814 (the “Acquisition Mortgage Loan VIII”). The Acquisition Mortgage Loan VIII is collateralized by one property in Rancho Dominguez, California, bears interest at a fixed rate of 8.26% and provides for monthly principal and interest payments based on a 22-year amortization schedule. The Acquisition Mortgage Loan VIII matures on December 1, 2019. The Acquisition Mortgage Loan VIII may be prepaid only after November 2004 in exchange for the greater of a 1% prepayment fee or yield maintenance premium.
 
On April 1, 2002, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $6,030 (the “Acquisition Mortgage Loan IX”). The Acquisition Mortgage Loan IX is collateralized by one property in Bloomington, Minnesota, bears interest at a fixed rate of 8.26% and provides for monthly principal and interest payments based on a 22-year amortization schedule. The Acquisition Mortgage Loan IX matures on December 1, 2019. The Acquisition Mortgage Loan IX may be prepaid only after November 2004 in exchange for the greater of a 1% prepayment fee or yield maintenance premium.
 
On May 1, 2003, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $14,157 (the “Acquisition Mortgage Loan X”). The Acquisition Mortgage Loan X is collateralized by one property in Hagerstown, Maryland, bears interest at a fixed rate of 8.25% and provides for monthly principal and interest payments based on a 30-year amortization schedule. The Acquisition Mortgage Loan X matures on December 1, 2010. In conjunction with the assumption of the Acquisition Mortgage Loan X, the Consolidated Operating Partnership recorded a premium in the amount of $2,927 which will be amortized over the remaining life of the Acquisition Mortgage Loan X as an adjustment to interest expense. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan X is 5.00%. The Acquisition Mortgage Loan X may be prepaid only after November 2004 in exchange for the greater of a 3% prepayment fee or yield maintenance premium.
 
On September 12, 2003, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $4,269 (the “Acquisition Mortgage Loan XI”). The Acquisition Mortgage Loan XI was collateralized by one property in Downers Grove, Illinois, bore interest at a fixed rate of 7.61% and provided for monthly principal and interest payments based on a 30-year amortization schedule. In conjunction with the assumption of the Acquisition Mortgage Loan XI, the Consolidated Operating Partnership recorded a premium in the amount of $621 which was being amortized over the remaining life of the Acquisition Mortgage Loan XI as an adjustment to interest expense. The Acquisition Mortgage Loan XI may be prepaid only after June 2004 in exchange for the greater of a 1% prepayment fee or yield maintenance premium. On December 3, 2004, the Consolidated Operating Partnership paid off and retired the Acquisition Mortgage Loan XI. As this pay off and retirement was prior to the stated maturity date of the Acquisition


F-22

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Mortgage Loan XI, the Consolidated Operating Partnership wrote off unamortized deferred financing costs, a loan premium and paid a prepayment penalty in the aggregate amount of approximately $515.
 
On September 12, 2003, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $2,325 (the “Acquisition Mortgage Loan XII”). The Acquisition Mortgage Loan XII is collateralized by one property in Indianapolis, Indiana, bears interest at a fixed rate of 7.54% and provides for monthly principal and interest payments based on a 30 — year amortization schedule. The Acquisition Mortgage Loan XII matures on January 1, 2012. In conjunction with the assumption of the Acquisition Mortgage Loan XII, the Consolidated Operating Partnership recorded a premium in the amount of $317 which will be amortized over the remaining life of the Acquisition Mortgage Loan XII as an adjustment to interest expense. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XII is 5.51%. The Acquisition Mortgage Loan XII may be prepaid only after February 2004 in exchange for the greater of a 1% prepayment fee or yield maintenance premium.
 
On September 30, 2004, the Consolidated Operating Partnership assumed a mortgage loan in the amount of $12,057 and borrowed an additional $1,400 (collectively referred to as the “Acquisition Mortgage Loan XIII”). The Acquisition Mortgage Loan XIII is collateralized by three properties in Phoenix, Arizona, bears interest at a fixed rate of 5.60% and provides for monthly principal and interest payments based on a 30-year amortization schedule. The Acquisition Mortgage Loan XIII matures on November 10, 2012. In conjunction with the assumption of the Acquisition Mortgage Loan XIII, the Consolidated Operating Partnership recorded a premium in the amount of $467 which will be amortized over the remaining life of the Acquisition Mortgage Loan XIII as an adjustment to interest expense. On July 13, 2005, the Consolidated Operating Partnership sold the properties that collateralized the Acquisition Mortgage Loan XIII. In conjunction with the sale, the buyer assumed the Acquisition Mortgage Loan XIII and the Consolidated Operating Partnership paid $291 in fees related to the assignment of the Acquisition Mortgage Loan XIII. Consequently, the Consolidated Operating Partnership wrote-off the remaining premium on the note of $424. Both the $291 of fees and $424 premium write-off are included in the Gain on Early Retirement of Debt on the Consolidated Operating Partnership Statement of Operations.
 
On December 21, 2004, the Consolidated Operating Partnership assumed a mortgage loan in the amount of $6,187 (the “Acquisition Mortgage Loan XIV”). The Acquisition Mortgage Loan XIV is collateralized by six properties in Tampa, Florida, bears interest at a fixed rate of 6.94% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan XIV matures on July 1, 2009. In conjunction with the assumption of the Acquisition Mortgage Loan XIV, the Consolidated Operating Partnership recorded a premium in the amount of $553 which will be amortized over the remaining life of the Acquisition Mortgage Loan XIV as an adjustment to interest expense. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XIV is 4.58%. The Acquisition Mortgage Loan XIV may be prepaid in exchange for the greater of a 1% prepayment fee or yield maintenance premium.
 
On January 12, 2005, in conjunction with the acquisition of a parcel of land, the seller provided the Operating Partnership a mortgage loan in the amount of $1,167 (the “Acquisition Mortgage Loan XV”). The Acquisition Mortgage Loan XV is collateralized by a land parcel in Lebanon, TN, does not require principal payments prior to maturity on January 12, 2006 and has a 0% interest rate. Since the Acquisition Mortgage XV is non-interest bearing, a discount should be applied with an offsetting amount allocated to the basis of the land. The Consolidated Operating Partnership has concluded that the discount is not material and has not accounted for the discount or the land basis adjustment. The Acquisition Mortgage Loan XV was paid off and retired January 12, 2006 (See Note 17).
 
On March 31, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $1,977 (the “Acquisition Mortgage Loan XVI”). The Acquisition Mortgage


F-23

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Loan XVI is collateralized by one property in New Hope, MN, bears interest at a fixed rate of 5.50% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan XVI matures on September 30, 2024. In conjunction with the assumption of the Acquisition Mortgage Loan XVI, the Consolidated Operating Partnership recorded a premium in the amount of $32 which will be amortized as an adjustment to interest expense through March 31, 2009. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVI is 5.30%. The Acquisition Mortgage Loan XVI may be prepaid on April 1, 2009 without incurring a prepayment fee.
 
On June 27, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $3,056 (the “Acquisition Mortgage Loan XVII”). The Acquisition Mortgage Loan XVII is collateralized by one property in Villa Rica, GA, bears interest at a fixed rate of 7.38% and provides for monthly principal and interest payments based on a 15-year amortization schedule. The Acquisition Mortgage Loan XVII matures on May 1, 2016. In conjunction with the assumption of the Acquisition Mortgage Loan XVII, the Consolidated Operating Partnership recorded a premium in the amount of $258 which will be amortized as an adjustment to interest expense through May 1, 2016. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVII is 5.70%. The Acquisition Mortgage Loan XVII may not be prepaid until maturity without incurring a prepayment fee.
 
On June 30, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $6,513 (the “Acquisition Mortgage Loan XVIII”). The Acquisition Mortgage Loan XVIII is collateralized by one property in Hammonton, NJ, bears interest at a fixed rate of 7.58% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan XVIII matures on March 1, 2011. In conjunction with the assumption of the Acquisition Mortgage Loan XVIII, the Consolidated Operating Partnership recorded a premium in the amount of $749 which will be amortized as an adjustment to interest expense through November 30, 2010. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVIII is 4.93%. The Acquisition Mortgage Loan XVIII may be prepaid on December 1, 2010 without incurring a prepayment fee.
 
Senior Unsecured Debt, Net
 
On May 13, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $150,000 of senior unsecured debt which matures on May 15, 2007 and bears a coupon interest rate of 7.60% (the “2007 Notes”). The issue price of the 2007 Notes was 99.965%. Interest is paid semi-annually in arrears on May 15 and November 15. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2007 Notes prior to issuance. The Consolidated Operating Partnership, through, the Operating Partnership, settled the interest rate protection agreement for a payment of approximately $41, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2007 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2007 Notes is 7.61%.
 
On May 13, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of senior unsecured debt which matures on May 15, 2027, and bears a coupon interest rate of 7.15% (the “2027 Notes”). The issue price of the 2027 Notes was 99.854%. The 2027 Notes were redeemable, at the option of the holders thereof, on May 15, 2002. The Operating Partnership received redemption notices from holders representing $84,930 of the 2027 Notes outstanding. On May 15, 2002, the Consolidated Operating Partnership, through the Operating Partnership, paid off and retired $84,930 of the 2027 Notes. Interest is paid


F-24

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

semi-annually in arrears on May 15 and November 15. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2027 Notes prior to issuance. The Consolidated Operating Partnership, through the Operating Partnership, settled the interest rate protection agreement for approximately $597 of proceeds, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2027 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2027 Notes is 7.11%.
 
On May 22, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of senior unsecured debt which matured on May 15, 2011 and bore a coupon interest rate of 7.375% (the “2011 PATS”). The issue price of the 2011 PATS was 99.348%. The Consolidated Operating Partnership received approximately $1,781 from the holder of the 2011 PATS as consideration for the put option. The Consolidated Operating Partnership amortized the put option proceeds over the life of the put option as an adjustment to interest expense. The Consolidated Operating Partnership also entered into an interest rate protection agreement which was used to fix the interest rate on the 2011 PATS. The Consolidated Operating Partnership amortized the settlement amount of the interest rate protection agreement over the life of the 2011 PATS. Including the impact of the offering discount, the proceeds from the put option and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2011 PATS was 7.26%. On May 17, 2004, the Consolidated Operating Partnership exchanged the 2014 Notes (hereinafter defined) for the 2011 PATS and net cash in the amount of $8,877. The Consolidated Operating Partnership retired the 2011 PATS.
 
On November 20, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $50,000 of senior unsecured debt which matured on November 21, 2005 and bore a coupon interest rate of 6.90%, which is the effective interest rate (the “2005 Notes”). The issue price of the 2005 Notes was 100%. Interest was paid semi-annually in arrears on May 21 and November 21. The 2005 Notes contained certain covenants including limitation on incurrence of debt and debt service coverage. On November 21, 2005 the Consolidated Operating Partnership paid off and retired the 2005 Notes.
 
On December 8, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $150,000 of senior unsecured debt which matures on December 1, 2006 and bears a coupon interest rate of 7.00% (the “2006 Notes”). The issue price of the 2006 Notes was 100%. Interest is paid semi-annually in arrears on June 1 and December 1. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2006 Notes prior to issuance. The Consolidated Operating Partnership, through the Operating Partnership, settled the interest rate protection agreement for a payment of approximately $2,162, which is included in other comprehensive income. The settlement amount of the interest rate protection agreement is being amortized over the life of the 2006 Notes as an adjustment to interest expense. Including the impact of the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2006 Notes is 7.22%.
 
On December 8, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of senior unsecured debt which matures on December 1, 2017 and bears a coupon interest rate of 7.50% (the “2017 Notes”). The issue price of the 2017 Notes was 99.808%. Interest is paid semi-annually in arrears on June 1 and December 1. The Consolidated Operating Partnership is amortizing the debt issue discount over the life of the 2017 Notes as an adjustment to interest expense. Including the impact of the offering discount, the Consolidated Operating Partnership’s effective interest rate on the 2017 Notes is 7.52%.
 
On July 14, 1998, the Consolidated Operating Partnership, through the Operating Partnership, issued $200,000 of senior unsecured debt which matures on July 15, 2028 and bears a coupon interest rate of 7.60% (the “2028 Notes”). The issue price of the 2028 Notes was 99.882%. Interest is paid semi-annually in arrears on January 15 and July 15. The Consolidated Operating Partnership, through the Operating Partnership, also


F-25

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

entered into interest rate protection agreements which were used to fix the interest rate on the 2028 Notes prior to issuance. The Consolidated Operating Partnership, through the Operating Partnership, settled the interest rate protection agreements for a payment of approximately $11,504, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2028 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2028 Notes is 8.13%. Approximately $50,000 of the 2028 Notes was purchased, through a broker/dealer, by an entity in which a Director of the Company owns less than a two percent interest.
 
On March 19, 2001, the Consolidated Operating Partnership, through the Operating Partnership, issued $200,000 of senior unsecured debt which matures on March 15, 2011 and bears a coupon interest rate of 7.375% (the “2011 Notes”). The issue price of the 2011 Notes was 99.695%. Interest is paid semi-annually in arrears on September 15 and March 15. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2011 Notes prior to issuance. The Consolidated Operating Partnership, through the Operating Partnership, settled the interest rate protection agreement for approximately $371 of proceeds which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2011 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2011 Notes is 7.39%.
 
On April 15, 2002, the Consolidated Operating Partnership, through the Operating Partnership, issued $200,000 of senior unsecured debt which matures on April 15, 2012 and bears a coupon interest rate of 6.875% (the “2012 Notes”). The issue price of the 2012 Notes was 99.310%. Interest is paid semi-annually in arrears on April 15 and October 15. The Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2012 Notes prior to issuance. The Operating Partnership settled the interest rate protection agreements for approximately $1,772 of proceeds, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2012 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2012 Notes is 6.85%.
 
On April 15, 2002, the Consolidated Operating Partnership, through the Operating Partnership, issued $50,000 of senior unsecured debt which matures on April 15, 2032 and bears a coupon interest rate of 7.75% (the “2032 Notes”). The issue price of the 2032 Notes was 98.660%. Interest is paid semi-annually in arrears on April 15 and October 15. The debt issue discount is being amortized over the life of the 2032 Notes as an adjustment to interest expense. Including the impact of the offering discount, the Consolidated Operating Partnership’s effective interest rate on the 2032 Notes is 7.87%.
 
On May 17, 2004, the Consolidated Operating Partnership, through the Operating Partnership, exchanged $125,000 of senior unsecured debt which matures on June 1, 2014 and bears a coupon interest rate of 6.42% (the “2014 Notes”) the 2011 PATS and net cash in the amount of $8,877. The issue price of the 2014 Notes was 99.123%. Interest is paid semi-annually in arrears on June 1 and December 1. The debt issue discount of the Notes is being amortized over the life of the 2014 Notes as an adjustment to interest expense. This exchange is being accounted for under EITF 96-19, “Debtor’s Accounting for a Modification or Exchange of Debt Instruments” (“EITF 96-19”). Under EITF 96-19, if the 2011 PATS and the 2014 Notes are not substantially different, the difference between the fair value of the 2011 PATS and the carrying value of the 2011 PATS, as well as the unamortized deferred financing costs of the 2011 PATS on the date of the exchange, is deferred and amortized over the life of the 2014 Notes. The Consolidated Operating Partnership is


F-26

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

amortizing this amount over the life of the 2014 Notes. Including the impact of the offering discount, the Consolidated Operating Partnership’s effective interest rate on the 2014 Notes is 6.54%.
 
On June 14, 2004, the Consolidated Operating Partnership, through the Operating Partnership, issued $125,000 of senior unsecured debt which matures on June 15, 2009 and bears a coupon interest rate of 5.25% (the “2009 Notes”). The issue price of the 2009 Notes was 99.826%. Interest is paid semi-annually in arrears on June 15 and December 15. The Consolidated Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2009 Notes prior to issuance. The Consolidated Operating Partnership settled the interest rate protection agreements for approximately $6,657 of proceeds, which is included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2009 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreement, the Consolidated Operating Partnership’s effective interest rate on the 2009 Notes is 4.10%.
 
All of the Senior Unsecured Debt contains certain covenants, including limitations on incurrence of debt and debt service coverage.
 
Unsecured Lines of Credit
 
The Consolidated Operating Partnership has maintained an unsecured revolving line of credit facility since 1997 (the “Unsecured Line of Credit”). On August 23, 2005, the Operating Partnership amended and restated the 2004 Unsecured Line of Credit. The amended and restated unsecured line of credit (the “2005 Unsecured Line of Credit I”) matures on September 28, 2008, has a borrowing capacity of $500,000, with the right, subject to certain conditions, to increase the borrowing capacity up to $600,000 and bears interest at a floating rate of LIBOR plus .625%, or the Prime Rate, at the Operating Partnership’s election. The net unamortized deferred financing fees related to the Unsecured Line of Credit and any additional deferred financing fees incurred related to the 2005 Unsecured Line of Credit I are being amortized over the life of the 2005 Unsecured Line of Credit I in accordance with Emerging Issues Task Force Issue 98-14, “Debtor’s Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements”, except for $51, which represents the write off of deferred financing costs and is included in the gain from early retirement of debt. The 2005 Unsecured Line of Credit I contains certain financial covenants relating to debt service coverage, market value net worth, dividend payout ratio and total funded indebtedness.
 
In December 2005, the Operating Partnership, entered into another unsecured line of credit (the “2005 Unsecured Line of Credit II”; together with the 2005 Unsecured Line of Credit I, the “Unsecured Lines of Credit”). The 2005 Unsecured Line of Credit II has a borrowing capacity of $125,000 and matures on March 15, 2006. The 2005 Unsecured Line of Credit II provides for interest only payments at LIBOR plus .625% or at Prime, at the Operating Partnership’s election. The Operating Partnership, paid off and retired the 2005 Unsecured Line of Credit II in January 2006 (See Note 17).


F-27

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
The following table discloses certain information regarding the Consolidated Operating Partnership’s mortgage loans, senior unsecured debt and unsecured line of credit:
 
                                                 
    Outstanding Balance at     Accrued Interest Payable at     Interest Rate at        
    December 31,
 		    December 31,
 		    December 31,
 		    December 31,
 		    December 31,
 		    Maturity
 		 
    2005     2004     2005     2004     2005     Date  
 
Mortgage Loans Payable, Net
                                               
Assumed Loan I
  $ 2,320     $ 2,874     $ —     $ 22       9.250 %     09/01/09  
Assumed Loan II
    1,805       1,995       —       15       9.250 %     01/01/13  
Acquisition Mortgage Loan IV
    1,936       2,037       14       15       8.950 %     10/01/06  
Acquisition Mortgage Loan VIII
    5,308       5,461       37       38       8.260 %     12/01/19  
Acquisition Mortgage Loan IX
    5,505       5,664       38       39       8.260 %     12/01/19  
Acquisition Mortgage Loan X
    15,733 (1)     16,251 (1)     98       99       8.250 %     12/01/10  
Acquisition Mortgage Loan XII
    2,503 (1)     2,565 (1)     15       15       7.540 %     01/01/12  
Acquisition Mortgage Loan XIII
    — (3)     13,862 (1)     —       42       5.600 %     11/10/12  
Acquisition Mortgage Loan XIV
    6,392 (1)     6,740 (1)     34       13       6.940 %     07/01/09  
Acquisition Mortgage Loan XV
    1,167       —       —       —       0.000 %     01/12/06  
Acquisition Mortgage Loan XVI
    1,960 (1)     —       9       —       5.500 %     09/30/24  
Acquisition Mortgage Loan XVII
    3,209 (1)     —       18       —       7.375 %     05/01/16  
Acquisition Mortgage Loan XVIII
    7,091 (1)     —       42       —       7.580 %     03/01/11  
                                                 
Total
  $ 54,929     $ 57,449     $ 305     $ 298                  
                                                 
Senior Unsecured Debt, Net
                                               
2005 Notes
  $ — (4)   $ 50,000     $ —     $ 383       6.900 %     11/21/05  
2006 Notes
    150,000       150,000       875       875       7.000 %     12/01/06  
2007 Notes
    149,992 (2)     149,988 (2)     1,456       1,456       7.600 %     05/15/07  
2017 Notes
    99,886 (2)     99,876 (2)     625       625       7.500 %     12/01/17  
2027 Notes
    15,054 (2)     15,053 (2)     138       138       7.150 %     05/15/27  
2028 Notes
    199,823 (2)     199,815 (2)     7,009       7,009       7.600 %     07/15/28  
2011 Notes
    199,685 (2)     199,624 (2)     4,343       4,343       7.375 %     03/15/11  
2012 Notes
    199,132 (2)     198,994 (2)     2,903       2,903       6.875 %     04/15/12  
2032 Notes
    49,413 (2)     49,390 (2)     818       818       7.750 %     04/15/32  
2009 Notes
    124,849 (2)     124,806 (2)     292       292       5.250 %     06/15/09  
2014 Notes
    111,059 (2)     109,978 (2)     669       669       6.420 %     06/01/14  
                                                 
Total
  $ 1,298,893     $ 1,347,524     $ 19,128     $ 19,511                  
                                                 
Unsecured Lines of Credit
                                               
2005 Unsecured Line of Credit I
  $ 332,500     $ 167,500     $ 1,833     $ 549       4.845 %     09/28/08  
2005 Unsecured Line of Credit II
    125,000       —       232       —       4.995 %     03/15/06  
                                                 
Total
  $ 457,500     $ 167,500     $ 2,065     $ 549                  
                                                 
 
 
(1) At December 31, 2005, the Acquisition Mortgage Loan X, the Acquisition Mortgage Loan XII, the Acquisition Mortgage Loan XIV, the Acquisition Mortgage Loan XVI, the Acquisition Mortgage Loan XVII, the Acquisition Mortgage Loan XVIII, includes unamortized premiums of $1,909, $228, $432, $26, $246, and $681, respectively. At December 31, 2004, the Acquisition Mortgage Loan X, the Acquisition Mortgage Loan XII,the Acquisition Mortgage Loan XIII, and the Acquisition Mortgage Loan XIV include unamortized premiums of $2,291, $267, $453 and $553, respectively.


F-28

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
(2) At December 31, 2005, the 2007 Notes, 2017 Notes, 2027 Notes, 2028 Notes, 2011 Notes, 2012 Notes, 2032 Notes, 2009 Notes and the 2014 Notes are net of unamortized discounts of $8, $114, $16, $177, $315, $868, $587, $151, and $13,941, respectively. At December 31, 2004, the 2007 Notes, 2017 Notes, 2027 Notes, 2028 Notes, the 2011 Notes, 2012 Notes, 2032 Notes, 2009 Notes and the 2014 Notes are net of unamortized discounts of $12, $124, $17, $185, $376, $1,006, $610, $194 and $15,022, respectively.
 
(3) On July 13, 2005, the Acquisition Mortgage Loan XIII was assumed by a third party in connection with the sale of the properties that collateralized the loan.
 
(4) On November 21, 2005, the 2005 Notes were paid off and retired.
 
The following is a schedule of the stated maturities and scheduled principal payments of the mortgage loans, senior unsecured debt and unsecured lines of credit, exclusive of premiums and discounts, for the next five years ending December 31, and thereafter:
 
         
    Amount  
 
2006
  $ 280,028  
2007
    152,153  
2008
    334,833  
2009
    132,195  
2010
    15,240  
Thereafter
    909,528  
         
Total
  $ 1,823,977  
         
 
Fair Value
 
At December 31, 2005 and 2004, the fair value of the Consolidated Operating Partnership’s mortgage loans payable, senior unsecured debt and unsecured lines of credit were as follows:
 
                                 
    December 31, 2005     December 31, 2004  
    Carrying
 		    Fair
 		    Carrying
 		    Fair
 		 
    Amount     Value     Amount     Value  
 
Mortgage Loans Payable
  $ 54,929     $ 56,455     $ 57,449     $ 60,286  
Senior Unsecured Debt
    1,298,893       1,415,268       1,347,524       1,503,012  
Unsecured Lines of Credit
    457,500       457,500       167,500       167,500  
                                 
Total
  $ 1,811,322     $ 1,929,223     $ 1,572,473     $ 1,730,798  
                                 
 
The fair value of the senior unsecured debt was determined by quoted market prices, if available. The fair values of the Consolidated Operating Partnership’s senior unsecured debt not valued by quoted market prices and mortgage loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value of the Unsecured Lines of Credit was equal to its carrying value due to the variable interest rate nature of the loans.
 
Other Comprehensive Income
 
In conjunction with the prior issuances of senior unsecured debt, the Consolidated Operating Partnership, through the Operating Partnership, entered into interest rate protection agreements to fix the interest rate on anticipated offerings of senior unsecured debt (the “Interest Rate Protection Agreements”). In the next


F-29

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12 months, the Consolidated Operating Partnership will amortize approximately $1,077 of the Interest Rate Protection Agreements into net income as a decrease to interest expense.
 
In March 2004, the Consolidated Operating Partnership, through the Operating Partnership, entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73,500, was effective from July 1, 2004 through July 1, 2009 and fixed the LIBOR rate at 3.354%. In conjunction with the offering of the 2009 Notes, the Consolidated Operating Partnership settled this interest rate protection agreement and received proceeds in the amount of $3,817, which is recognized in other comprehensive income. The Consolidated Operating Partnership is amortizing this settlement amount into net income over the life of the 2009 Notes as an adjustment to interest expense.
 
In March 2004, the Consolidated Operating Partnership, through the Operating Partnership, entered into another interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $73,500, was effective from August 15, 2004 through August 15, 2009 and fixed the LIBOR rate at 3.326%. In May 2004, the Consolidated Operating Partnership reduced the projected amount of the future debt offering and settled $24,500 of this interest rate protection agreement for proceeds in the amount of $1,450 which is recognized in net income as mark-to-market/gain on settlement of interest rate protection agreements. In conjunction with the offering of the 2009 Notes, the Consolidated Operating Partnership settled the remaining $49,000 of this interest rate protection agreement and received proceeds in the amount of $2,840, which is recognized in other comprehensive income. The Consolidated Operating Partnership is amortizing this settlement amount into net income over the life of the 2009 Notes as an adjustment to interest expense.
 
In October 2004, the Consolidated Operating Partnership, through the Operating Partnership, entered into an interest rate protection agreement which fixed the interest rate on a forecasted offering of unsecured debt which it designated as a cash flow hedge. This interest rate protection agreement had a notional value of $48,980, was effective from January 5, 2005 through January  5, 2010 and fixed the LIBOR rate at 3.909%. In November 2004, the Consolidated Operating Partnership settled the interest rate protection agreement for proceeds of $310 due to a delay in the forecasted debt issuance date. Hedge ineffectiveness in the amount of $133, due to a mismatch in forecasted debt issuance dates, was recognized in net income. The remaining $159 was included in other comprehensive income and was reclassified into net income for the year ended December 31, 2005 as the hedge no longer qualified for hedge accounting.
 
In January 2005, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., entered into an interest rate protection agreement which hedged the change in value of a build to suit development project the Consolidated Operating Partnership is in the process of constructing. This interest rate protection agreement has a notional value of $50,000, is based on the five year treasury, has a strike rate of 3.936% and settles on October 4, 2005. Per FASB Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”), fair value and cash flow hedge accounting for hedges of non-financial assets and liabilities is limited to hedges of the risk of changes in the market price of the entire hedged item because changes in the price of an ingredient or component of a non-financial item generally do not have a predictable, separately measurable effect on the price of the item. Since the interest rate protection agreement is hedging a component of the change in value of the build to suit development, the interest rate protection agreement did not qualify for hedge accounting and the change in value of the interest rate protection agreement was recognized immediately in net income as opposed to other comprehensive income. On October 4, 2005 the Consolidated Operating Partnership settled the interest rate protection agreement for proceeds of $675. The settlement was recognized in mark-to-market/gain on settlement of interest rate protection agreements for the year ended December 31, 2005.
 
In October 2005, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., entered into an interest rate protection agreement which hedged the change in value of a build to suit


F-30

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

development project the Consolidated Operating Partnership is in the process of constructing. This interest rate protection agreement has a notional value of $50,000, is based on the three Month LIBOR rate, has a strike rate of 4.8675%, and has an effective date of December 30, 2005 and a termination date of December 30, 2010. Per FAS 133, fair value and cash flow hedge accounting for hedges of non-financial assets and liabilities is limited to hedges of the risk of changes in the market price of the entire hedged item because changes in the price of an ingredient or component of a non-financial item generally do not have a predictable, separately measurable effect on the price of the item. Since the interest rate protection agreement is hedging a component of the change in value of the build to suit development, the interest rate protection agreement does not qualify for hedge accounting and the change in value of the interest rate protection agreement will be recognized immediately in net income as opposed to other comprehensive income. The Consolidated Operating Partnership recognized $16 in net loss from the mark-to-market of the interest rate protection agreement for the year ended December 31, 2005. See Note 17 for further disclosure on the settlement of the interest rate protection agreement.
 
In December 2005, the Consolidated Operating Partnership entered into three interest rate protection agreements which fixed the interest rate on a forecasted offering of unsecured debt which it designated as cash flow hedges. Two of the interest rate protection agreements each had a notional value of $48,700 and were effective from December 30, 2005 through December 30, 2015. The interest rate protection agreements fixed the LIBOR rate at 5.066% and 5.067%. The third interest rate protection agreement had a notional value of $48,700, is effective from January 19, 2006 through January 19, 2016, and fixed the LIBOR rate at 4.992%. The Consolidated Operating Partnership recognized a loss of $1,414 in other comprehensive income related to the mark-to-market of these interest rate protection agreements at December 31, 2005 as the interest rate protection agreements are highly effective based on the hypothetical derivative method. See Note 17 for further disclosure on the settlement of these interest rate protection agreements in January 2006 in conjunction with the issuance of senior unsecured debt.
 
7.   Partners’ Capital
 
The Operating Partnership has issued general partnership units and limited partnership units (together, the “Units”) and preferred general partnership units. The general partnership units resulted from capital contributions from the Company. The limited partnership units are issued in conjunction with the acquisition of certain properties (see discussion below). Subject to lock-up periods and certain adjustments, limited partnership units are convertible into common stock, $.01 par value, of the Company on a one-for-one basis or cash at the option of the Company. The preferred general partnership units result from preferred capital contributions from the Company. The preferred general partnership units had an aggregate liquidation priority of $312,500 and $125,000 as of December 31, 2005 and 2004, respectively. The Operating Partnership is required to make all required distributions on the preferred general partnership units prior to any distribution of cash or assets to the holders of the Units. The consent of the holder of the limited partnership units is required to alter such holder’s rights as to allocations and distributions, to alter or modify such holder’s rights with respect to redemption, to cause the early termination of the Consolidated Operating Partnership, or to amend the provisions of the partnership agreement which requires such consent.
 
Unit Contributions:
 
On December 9, 2005, the Company issued 1,250,000 shares of $.01 par value common stock (the “December 2005 Equity Offering”). The net proceeds of $48,775 received from the December 2005 Equity Offering were contributed to the Operating Partnership in exchange for 1,250,000 Units and are reflected in the Operating Partnership’s financial statements as a general partner contribution.
 
On September 16, 2004, the Company and the Operating Partnership entered into a sales agreement to sell up to 3,900,000 shares of the Company’s common stock from time to time with Cantor Fitzgerald & Co.,


F-31

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

as sales agent, in a controlled equity offering program. During the year ended December 31, 2004, the Company issued 1,333,600 shares of common stock under the controlled equity offering program and received net proceeds of $48,820. The Company contributed the net proceeds to the Consolidated Operating Partnership and the Consolidated Operating Partnership, through the Operating Partnership, issued Units to the Company in the same amount.
 
For the year ended December 31, 2005, the Operating Partnership issued 366,472 Units valued, in the aggregate, at $14,698 in exchange for interests in certain properties. These contributions are reflected in the Consolidated Operating Partnership’s financial statements as limited partner contributions.
 
For the year ended December 31, 2003, certain employees of the Company exercised 531,473 non-qualified employee stock options. Net proceeds to the Company approximated $14,799. The gross proceeds from the option exercises were contributed to the Operating Partnership in exchange for Units and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner contribution.
 
For the year ended December 31, 2004, certain employees of the Company exercised 1,663,652 non-qualified employee stock options. Net proceeds to the Company approximated $37,301. The gross proceeds from the option exercises were contributed to the Operating Partnership in exchange for Units and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner contribution.
 
For the year ended December 31, 2005, certain employees of the Company exercised 248,881 non-qualified employee stock options. Net proceeds to the Company approximated $6,698. The gross proceeds from the option exercises were contributed to the Operating Partnership in exchange for Units and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner contribution.
 
The following table is a roll-forward of the General Partnership and Limited Partnership units outstanding, including unvested restricted units, for the three years ended December 31, 2005:
 
         
    General Partnership and
    Limited Partnership
    Units Outstanding
 
Balance at December 31, 2002
    45,410,277  
Issuance of General Partner Units
    542,744  
Issuance of General Partner Restricted Units
    704,844  
Repurchase and Retirement of Restricted Units
    (66,183 )
Purchase of General Partnership Units
    (37,300 )
         
Balance at December 31, 2003
    46,554,382  
         
Issuance of General Partner Units
    2,621,082  
Issuance of General Partner Restricted Units
    216,617  
Repurchase and Retirement of Restricted Units
    (102,076 )
         
Balance at December 31, 2004
    49,290,005  
         
Issuance of General Partner Units
    1,480,942  
Issuance of General Partner Restricted Units
    200,042  
Repurchase and Retirement of Restricted Units
    (152,009 )
Issuance of Limited Partner Units
    366,472  
         
Balance at December 31, 2005
    51,185,452  
         


F-32

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Preferred Contributions:
 
On June 6, 1997, the Company issued 2,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 85/8%, $.01 par value, Series C Cumulative Preferred Stock (the “Series C Preferred Stock”), at an initial offering price of $25 per Depositary Share. The net proceeds of $47,997 received from the Series C Preferred Stock were contributed to the Consolidated Operating Partnership in exchange for 85/8% Series C Cumulative Preferred Units (the “Series C Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner preferred unit contribution.
 
On February 4, 1998, the Company issued 5,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.95%, $.01 par value, Series D Cumulative Preferred Stock (the “Series D Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds of $120,562 received from the Series D Preferred Stock were contributed to the Operating Partnership in exchange for 7.95% Series D Cumulative Preferred Units (the “Series D Preferred Units”). On or after February 4, 2003, the Series D Preferred Stock became redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $125,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Company redeemed the Series D Preferred Stock on June  7, 2004 at a redemption price of $25.00 per Depositary Share and paid a prorated second quarter dividend of $.36990 per Depositary Share, totaling approximately $1,850. The Series D Preferred Units were redeemed on June 7, 2004 as well. In accordance with EITF D-42, due to the redemption of the Series D Preferred Units, the initial offering costs associated with the issuance of the Series D Preferred Units of $4,467 were reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per unit for the year ended December 31, 2004.
 
On March 18, 1998, the Company issued 3,000,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.90%, $.01 par value, Series E Cumulative Preferred Stock (the “Series E Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds of $72,138 received from the Series E Preferred Stock were contributed to the Operating Partnership in exchange for 7.90% Series E Cumulative Preferred Units (the “Series E Preferred Units”). On or after March 18, 2003, the Series E Preferred Stock became redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $75,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Company redeemed the Series E Preferred Stock on June  7, 2004 at a redemption price of $25.00 per Depositary Share and paid a prorated second quarter dividend of $.36757 per Depositary Share, totaling approximately $1,103. The Series E Preferred Units were redeemed on June 7, 2004 as well. In accordance with EITF D-42, due to the redemption of the Series E Preferred Units, the initial offering costs associated with the issuance of the Series E Preferred Units of $2,892 were reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per unit for the year ended December 31, 2004.
 
On May 27, 2004, the Company issued 50,000 Depositary Shares, each representing 1/100th of a share of the Company’s 6.236%, $.01 par value, Series F Flexible Cumulative Redeemable Preferred Stock (the “Series F Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share for gross proceeds of $50,000. Net of offering costs, the Company received net proceeds of $49,075 from the issuance of the Series F Preferred Stock which were contributed to the Operating Partnership in exchange for 6.236% Series F Cumulative Preferred Units (the “Series F Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series F Preferred Stock are cumulative from the date of initial issuance and are payable semi-annually in arrears for the period from the date of original issuance through March 31, 2009 (the “Series F Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 6.236% per annum of the liquidation preference (the “Series F Initial Distribution Rate”) (equivalent to $62.36 per Depositary Share). On or after March 31, 2009, the Series F Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain


F-33

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.375% (the initial credit spread), plus the greater of (i) the 3-month LIBOR Rate, (ii) the 10-year Treasury CMT Rate (as defined in the Articles Supplementary), and (iii) the 30-year Treasury CMT Rate (the adjustable rate)(as defined in the Articles Supplementary), reset quarterly. Dividends on the Series F Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series F Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series F Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series G Preferred Stock (hereinafter defined) and Series I Preferred Stock (hereinafter defined). On or after March 31, 2009, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series F Initial Fixed Rate Period, the Series F Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $50,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series F Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On May 27, 2004, the Company issued 25,000 Depositary Shares, each representing 1/100th of a share of the Company’s 7.236%, $.01 par value, Series G Flexible Cumulative Redeemable Preferred Stock (the “Series G Preferred Stock”), at an initial offering price of $1,000.00 per Depositary Share for gross proceeds of $25,000. Net of offering costs, the Company received net proceeds of $24,512 from the issuance of the Series G Preferred Stock which were contributed to the Operating Partnership in exchange for 7.236% Series G Cumulative Preferred Units (the “Series G Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series G Preferred Stock are cumulative from the date of initial issuance and are payable semi-annually in arrears for the period from the date of original issuance of the Series G Preferred Stock through March 31, 2014 (the “Series G Initial Fixed Rate Period”), commencing on September 30, 2004, at a rate of 7.236% per annum of the liquidation preference (the “Series G Initial Distribution Rate”) (equivalent to $72.36 per Depositary Share). On or after March 31, 2014, the Series G Initial Distribution Rate is subject to reset, at the Company’s option, subject to certain conditions and parameters, at fixed or floating rates and periods. Fixed rates and periods will be determined through a remarketing procedure. Floating rates during floating rate periods will equal 2.500% (the initial credit spread), plus the greater of (i) the 3-month LIBOR Rate, (ii) the 10-year Treasury CMT Rate (as defined in the Articles Supplementary), and (iii) the 30-year Treasury CMT Rate (the adjustable rate)(as defined in the Articles Supplementary), reset quarterly. Dividends on the Series G Preferred Stock are payable semi-annually in arrears for fixed rate periods subsequent to the Series G Initial Fixed Rate Period and quarterly in arrears for floating rate periods. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series G Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series I Preferred Stock (hereinafter defined). On or after March 31, 2014, subject to any conditions on redemption applicable in any fixed rate period subsequent to the Series G Initial Fixed Rate Period, the Series G Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $1,000.00 per Depositary Share, or $25,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series G Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On June 2, 2004, the Company issued 500 shares of 2.965% $.01 par value, Series H Flexible Cumulative Redeemable Preferred Stock (the “Series H Preferred Stock”), at an initial offering price of $250,000 per share for gross proceeds of $125,000. Net of offering costs, the Company received net proceeds of $120,837 from the issuance of the Series H Preferred Stock which were contributed to the Consolidated Operating Partnership in exchange for Series H Cumulative Preferred Units (the “Series H Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as a general partner preferred unit contribution. On


F-34

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

or after July 2, 2004, the Series H Preferred Stock became redeemable for cash at the option of the Company, in whole but not in part, at a redemption price equivalent, initially, to $242,875 per share plus accrued and unpaid dividends. The Company redeemed the Series H Preferred Stock on July 2, 2004 and paid a prorated second and third quarter dividend of $629.555 per share, totaling approximately $315. The Series H Preferred Units were redeemed on July 2, 2004 as well. In accordance with EITF D-42, due to the redemption of the Series H Preferred Units, the initial offering costs associated with the issuance of the Series H Preferred Units of $600 is reflected as a deduction from net income to arrive at net income available to unitholders in determining earnings per Unit for the year ended December 31, 2004.
 
On November 8, 2005 and November 18, 2005, the Company issued 600 and 150 Shares, respectively, of $.01 par value, Series I Flexible Cumulative Redeemable Preferred Stock, (the “Series I Preferred Stock”), in a private placement at an initial offering price of $250,000 per share for an aggregate initial offering price of $187,500. Net of offering costs, the Company received net proceeds of $181,484 million from the issuance of the Series I Preferred Stock which were contributed to the Operating Partnership in exchange for Series I Cumulative Preferred Units (the “Series I Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series I Depositary Shares are payable monthly in arrears commencing December 31, 2005 at an initial dividend rate of One-Month LIBOR plus 1.25%, subject to reset on the four-month, six-month and one year anniversary of the date of issuance. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series I Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock and Series G Preferred Stock. See Note 17 for further disclosure on the redemption of the Series I Preferred Units in January 2006.
 
Distributions:
 
On January 24, 2005, the Operating Partnership paid a fourth quarter 2004 distribution of $0.6950 per Unit, totaling approximately $34,255. On April 18, 2005, the Operating Partnership paid a first quarter 2005 distribution of $0.6950 per Unit, totaling approximately $34,339. On July 18, 2005, the Operating Partnership paid a second quarter 2005 distribution of $0.6950 per Unit, totaling approximately $34,485. On October 17, 2005, the Operating Partnership paid a third quarter 2005 distribution of $0.6950 per Unit, totaling approximately $34,593.
 
On March 31, 2005, the Operating Partnership paid first quarter 2005 distributions of $53.906 per Unit on its 8.625% Series C Preferred Units, a semi-annual distribution of $3,118.00 per Unit on its Series F Preferred Units and a semi-annual distribution of $3,618.00 per Unit on its Series G Preferred Units. The preferred unit distributions paid on March 31, 2005, totaled approximately $3,542. On June 30, 2005, the Operating Partnership paid second quarter 2005 distributions of $53.906 per Unit Series C Preferred Units, totaling approximately $1,078 and accrued dividends of $780 on its Series F Preferred Units and $452 on its Series G Preferred Units. On September 30, 2005, the Operating Partnership paid third quarter 2005 distributions of $53.906 per Unit on its 8.625% Series C Cumulative preferred Units, a semi-annual distribution of $3,118.00 per Unit on its Series F Preferred Units and a semi-annual distribution of $3,618.00 per Unit on its Series G Preferred Units. The preferred unit distributions paid on September 30, 2005, total approximately $3,542.
 
On January 19, 2004, the Operating Partnership paid a fourth quarter 2003 distribution of $.6850 per Unit, totaling approximately $31,889. On April 19, 2004, the Operating Partnership paid a first quarter 2004 distribution of $.6850 per Unit, totaling approximately $32,724. On July 19, 2004, the Operating Partnership paid a second quarter 2003 distribution of $.6850 per Unit, totaling approximately $32,737. On October 18, 2004, the Operating Partnership paid a third quarter 2004 distribution of $.6850 per Unit, totaling approximately $32,872.


F-35

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
On March 31, 2004, the Operating Partnership paid first quarter 2004 distributions of $53.906 per Unit on its 8.625% Series C Preferred Units, $49.688 per Unit on its Series D Preferred Units and $49.375 per Unit on its Series E Preferred Units. The preferred unit distributions paid on March 31, 2004, totaled approximately $5,044. On June 30, 2004 the Operating Partnership paid a second quarter 2004 distribution of $53.906 per Unit on its Series C Preferred Units, totaling approximately $1,078. On September 30, 2004, the Operating Partnership paid a third quarter 2004 distribution of $53.906 per Unit on its Series C Preferred Units, a pro rata distribution for the period May 27, 2004 through September 30, 2004 of $2,165.28 per Unit on its Series F Preferred Units and a pro rata distribution for the period May 27, 2004 through September 30, 2004 of $2,512.50 per Unit on its Series G Preferred Units. The preferred unit distribution paid on September 30, 2004, totaled approximately, $2,788. On December 31, 2004 the Operating Partnership paid a fourth quarter 2004 distribution of $53.906 per Unit on its Series C Preferred Units, totaling approximately $1,078 and accrued dividends of $780 on its Series F Preferred Units and $452 on its Series G Preferred Units.
 
Repurchase of Units:
 
In March 2000, the Company’s Board of Directors approved the repurchase of up to $100,000 of the Company’s common stock. The Company may make purchases from time to time, if price levels warrant, in the open market or in privately negotiated transactions. During the year ended December 31, 2003, the Company repurchased 37,300 shares of its common stock at a weighted average price of approximately $26.73 per share. The Operating Partnership repurchased general partnership units from the Company in the same amount.
 
8.   Acquisition and Development of Real Estate
 
In 2003, the Consolidated Operating Partnership acquired 62 industrial properties comprising, in the aggregate, approximately 6.3 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $219,091, excluding costs incurred in conjunction with the acquisition of properties. The Consolidated Operating Partnership also substantially completed development of 33 properties comprising approximately 3.2 million square feet (unaudited) of GLA at a cost of approximately $156,268. The Consolidated Operating Partnership reclassed the costs of substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
In 2004, the Consolidated Operating Partnership acquired 77 industrial properties comprising, in the aggregate, approximately 8.9 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $393,098, excluding costs incurred in conjunction with the acquisition of properties. The Consolidated Operating Partnership also substantially completed development of 11 properties comprising approximately 2.3 million square feet (unaudited) of GLA at a cost of approximately $80,241. The Consolidated Operating Partnership reduced the costs of substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.
 
In 2005, the Consolidated Operating Partnership acquired 149 industrial properties comprising, in the aggregate, approximately 18.4 million square feet (unaudited) of GLA and several land parcels. The gross purchase price for 148 industrial properties and several land parcels totaled approximately $690,560, excluding costs incurred in conjunction with the acquisition of properties. Additionally, one industrial property was acquired through foreclosure due to a default on a mortgage loan receivable. The Consolidated Operating Partnership also substantially completed development of five properties comprising approximately 1.8 million square feet (unaudited) of GLA at a cost of approximately $97,466. The Consolidated Operating Partnership reduced the costs of substantially completed developments from construction in progress to building, tenant improvements and leasing commissions.


F-36

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Intangible Assets Subject To Amortization in the Period of Acquisition
 
The fair value of in-place leases, above market leases, and below market leases recorded as a result of the above acquisitions is $54,084, $4,997, and ($21,254), respectively. The weighted average life in months of in-place leases, above market leases, and below market leases recorded as a result of 2005 acquisitions was 142, 78, and 126 months, respectively.
 
9.   Sale of Real Estate, Real Estate Held for Sale and Discontinued Operations
 
In 2003, the Consolidated Operating Partnership, through the Operating Partnership, sold 121 industrial properties comprising approximately 6.3 million square feet (unaudited) of GLA and several land parcels. Eight of the 121 industrial sold properties comprising approximately .7 million square feet (unaudited) of GLA were sold to the December 2001 Joint Venture. Gross proceeds from the sales of the 121 industrial properties and several land parcels were approximately $357,503. The gain on sale of real estate was approximately $84,391, of which $74,797 is shown in discontinued operations. In accordance with FAS 144, the results of operations and gain on sale of real estate for the 113 of the 121 sold properties are included in discontinued operations.
 
In 2004, the Consolidated Operating Partnership, through the Operating Partnership, sold 90 industrial properties comprising approximately 6.8 million square feet (unaudited) of GLA and several land parcels. Gross proceeds from the sales of the 90 industrial properties and several land parcels were approximately $393,029. The gain on sale of real estate was approximately $96,918, of which $81,806 is shown in discontinued operations. Eighty-six of the 90 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 86 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the four industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
In 2005, the Consolidated Operating Partnership, through the Operating Partnership, sold 82 industrial properties comprising approximately 10.7 million square feet (unaudited) of GLA and several land parcels. Of the 82 industrial properties sold, seven industrial property sales were made to the March 2005 Joint Venture (see Note 5). Gross proceeds from the sales of the 82 industrial properties and several land parcels were approximately $561,622. The gain on sale of real estate was approximately $131,612, of which $102,742 is shown in discontinued operations. Seventy-three of the 82 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 73 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the nine industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
At December 31, 2005, the Consolidated Operating Partnership had five industrial properties comprising approximately .2 million square feet (unaudited) of GLA and certain land parcels held for sale. In accordance with FAS 144, the results of operations of the five industrial properties held for sale at December 31, 2005 are included in discontinued operations. There can be no assurance that such industrial properties held for sale will be sold.


F-37

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
The following table discloses certain information regarding the industrial properties included in discontinued operations by the Consolidated Operating Partnership for the years ended December 31, 2005, 2004 and 2003.
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
 
Total Revenues
  $ 19,897     $ 38,239     $ 63,294  
Operating Expenses
    (7,102 )     (13,234 )     (20,317 )
Interest Expense
    (373 )     (609 )     (561 )
Depreciation and Amortization
    (6,682 )     (10,462 )     (14,270 )
Provision for Income Taxes Allocable to Operations
    (2,035 )     (2,533 )     (1,439 )
Gain on Sale of Real Estate
    102,742       81,806       74,797  
Provision for Income Taxes Allocable Gain on Sale of Real Estate
    (19,719 )     (8,267 )     (1,988 )
                         
Income from Discontinued Operations
  $ 86,728     $ 84,940     $ 99,516  
                         
 
In conjunction with certain property sales, the Consolidated Operating Partnership provided seller financing. At December 31, 2005, 2004 and 2003, the Consolidated Operating Partnership had mortgage notes receivable and accrued interest outstanding of approximately $0, $19,739 and $29,336 respectively, which is included as a component of prepaid expenses and other assets. Also, in December 2004, the Consolidated Operating Partnership sold $15,170 of its notes receivable to a third party for par.


F-38

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
10.   Supplemental Information to Statements of Cash Flows
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
 
Interest paid, net of capitalized interest
  $ 107,397     $ 98,733     $ 95,180  
                         
Interest capitalized
  $ 3,271     $ 1,304     $ 761  
                         
Income Taxes Paid
  $ 36,080     $ 7,936     $ 1,367  
                         
Supplemental schedule of noncash investing and financing activities:
                       
Distribution payable on general and limited units
  $ 35,752     $ 34,255     $ 31,889  
                         
Distribution payable on preferred units
  $ 3,757     $ 1,232     $ —  
                         
Exchange of Limited partnership units for General partnership units:
                       
Limited partnership units
  $ (1,951 )   $ (6,195 )   $ (2,750 )
General partnership units
    1,951       6,195       2,750  
                         
    $ —     $ —     $ —  
                         
In conjunction with the property and land acquisitions, the following assets and liabilities were assumed:
                       
Deferred purchase price
  $ —     $ —     $ (10,425 )
                         
Accounts payable and accrued expenses
  $ (4,248 )   $ (3,181 )   $ (1,897 )
                         
Issuance of Operating Partnership Units
  $ (14,698 )   $ —     $ —  
                         
Mortgage debt
  $ (11,545 )   $ (18,244 )   $ (20,751 )
                         
Foreclosed property acquisition and write-off of a mortgage loan receivable
  $ 3,870     $ —     $ —  
                         
Write off of fully depreciated assets
  $ 59,920     $ 21,487     $ —  
                         
In conjunction with certain property sales, the Company provided seller financing or assigned a mortgage loan payable:
                       
Notes receivable
  $ 42,543     $ 30,250     $ 29,203  
                         
Mortgage note payable
  $ 13,242     $ —     $ —  
                         


F-39

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
11.   Earnings Per Unit (“EPU”)
 
The computation of basic and diluted EPU is presented below:
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
 
Numerator:
                       
(Loss) Income from Continuing Operations
  $ (5,671 )   $ 30,414     $ 24,268  
Gain on Sale of Real Estate
    28,870       15,112       9,594  
Less: Provision for Income Taxes Allocable to Gain on Sale of Real Estate
    (10,711 )     (5,312 )     (2,322 )
Less: Preferred Unit Distributions
    (10,688 )     (14,488 )     (20,176 )
Less: Redemption of Preferred Units
    —       (7,959 )     —  
                         
Income from Continuing Operations Available to Unitholders — For Basic and Diluted EPU
    1,800       17,767       11,364  
Income from Discontinued Operations
    108,482       95,740       102,943  
Less: Provision for Income Taxes Allocable to Discontinued Operations
    (21,754 )     (10,800 )     (3,427 )
                         
Net Income Available to Unitholders — For Basic and Diluted EPU
  $ 88,528     $ 102,707     $ 110,880  
                         
Denominator:
                       
Weighted Average Units Outstanding — Basic
    48,968,191       47,136,296       45,321,775  
Effect of Dilutive Securities of the Company that Result in the Issuance of General Partner Units:
                       
Employee and Director Common Stock Options
    141,625       227,423       91,599  
Employee and Director Shares of Restricted Stock
    82,888       103,551       29,561  
                         
Weighted Average Units Outstanding — Diluted
    49,192,704       47,467,270       45,442,935  
                         
Basic EPU:
                       
Income from Continuing Operations Available to Unitholders
  $ 0.04     $ 0.38     $ 0.25  
                         
Discontinued Operations, Net of Income Tax
  $ 1.77     $ 1.80     $ 2.20  
                         
Net Income Available to Unitholders
  $ 1.81     $ 2.18     $ 2.45  
                         
Diluted EPU:
                       
Income from Continuing Operations Available to Unitholders
  $ 0.04     $ 0.37     $ 0.25  
                         
Discontinued Operations, Net of Income Tax
  $ 1.76     $ 1.79     $ 2.19  
                         
Net Income Available to Unitholders
  $ 1.80     $ 2.16     $ 2.44  
                         
 
Unvested restricted units of 700,149, 823,836, and 847,103 were outstanding as of December 31, 2005, 2004, and 2003, respectively. Unvested restricted units aggregating 182,651, 211,924, and 210,667 were anti-dilutive at December 31, 2005, 2004, and 2003, respectively, and accordingly, were excluded from dilution computations.
 
Additionally, options to purchase common stock of 546,723, 823,421, and 2,504,013 were outstanding as of December 31, 2005, 2004, and 2003, respectively. None of the options outstanding at December 31, 2005


F-40

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and 2004 were antidilutive and options aggregating 1,858,191 were antidilutive at December 31, 2003, and accordingly, were excluded from dilution computations.
 
12.   Income Taxes
 
The components of income tax benefit (expense) for the Consolidated Operating Partnerships taxable REIT subsidiary (the “TRS”) for the years ended December 31, 2005, 2004 and 2003 are comprised of the following:
 
                         
    2005     2004     2003  
 
Current:
                       
Federal
  $ (19,265 )   $ (8,074 )   $ (873 )
State
    (4,519 )     (1,654 )     (218 )
Deferred:
                       
Federal
    4,299       1,070       391  
State
    1,009       219       98  
                         
    $ (18,476 )   $ (8,439 )   $ (602 )
                         
 
In addition to the income tax expense/benefit recognized by the TRS, $1,956 of state income taxes was recognized by the Consolidated Operating Partnership and is included in income tax expense (benefit) on the Consolidated Operating Partnership’s consolidated statement of operations for the year ended December 31, 2005.
 
Deferred income taxes represent the tax effect of the temporary differences between the book and tax basis of assets and liabilities. Deferred tax assets (liabilities) of the TRS include the following as of December 31, 2005, 2004 and 2003:
                         
    2005     2004     2003  
 
Bad debt expense
  $ 118     $ —     $ —  
Investment in partnerships
    648       —       —  
Fixed assets
    4,363       2,012       310  
Prepaid rent
    461       323       149  
Capitalized general and administrative expense under 263(A)
    2,696       818       576  
Deferred losses/gains
    878       334       1,054  
Mark-to-market of interest rate protection agreements
    6       —       —  
Capitalized interest under 263(A)
    184       —       117  
                         
Total deferred tax asset
  $ 9,354     $ 3,487     $ 2,206  
                         
 
                         
    2005     2004     2003  
 
Straight Line Rent
    (923 )     (430 )     (438 )
Build to suit development
    (66 )     —       —  
                         
Total deferred tax liabilities
  $ (989 )   $ (430 )   $ (438 )
                         
Total net deferred tax asset
  $ 8,365     $ 3,057     $ 1,768  
                         
 
The TRS does not have any net operating loss carryforwards or tax credit carryforwards.


F-41

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
The TRS’s components of income tax (expense) benefit for the years ended December 31, 2005, 2004 and 2003 are as follows:
 
                         
    2005     2004     2003  
 
Tax expense associated with income from operations on sold properties which is included in discontinued operations
  $ (2,035 )   $ (2,533 )   $ (1,439 )
Tax expense associated with gains and losses on the sale of real estate which is included in discontinued operations
    (19,719 )     (8,267 )     (1,988 )
Tax expense associated with gains and losses on the sale of real estate
    (10,711 )     (5,312 )     (2,322 )
Income tax benefit
    13,989       7,673       5,147  
                         
Income tax expense
  $ (18,476 )   $ (8,439 )   $ (602 )
                         
 
In addition to the TRS’s income tax expense, the Consolidated Operating Partnership recognized $1,956 in state income taxes which are included in income tax benefit on the Consolidated Operating Partnership’s consolidated statement of operation for the year ended December 31, 2005.
 
The income tax benefit (expense) pertaining to income from continuing operations and gain on sale of real estate for the TRS differs from the amounts computed by applying the applicable federal statutory tax rate to income as follows:
 
                         
    2005     2004     2003  
 
Tax benefit at Federal rate related to continuing operations
  $ 1,479     $ 2,099     $ 2,008  
State tax benefit, net of Federal benefit expense
    213       418       295  
Meals and entertainment
    (19 )     (16 )     (12 )
Prior year provision to return adjustments
    1,577       (112 )     518  
State tax rate differential
    43       12       (27 )
Other
    (15 )     (40 )     43  
                         
Net income tax benefit
  $ 3,278     $ 2,361     $ 2,825  
                         
 
In addition to the income tax benefit pertaining to income from continuing operations and gain on sale of real estate for the TRS, income tax benefit from continuing operations on the Consolidated Statement of Operations for the year ended December 31, 2005 includes $1,956 of state income taxes recognized by the Consolidated Operating Partnership.
 
13.   Future Rental Revenues
 
The Consolidated Operating Partnership’s properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under non-cancelable operating leases in effect as of December 31, 2005 are approximately as follows:
 
         
2006
  $ 238,907  
2007
    202,901  
2008
    162,903  
2009
    128,505  
2010
    98,532  
Thereafter
    392,062  
         
Total
  $ 1,223,810  
         


F-42

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
14.   Employee Benefit Plans
 
The Company maintains three stock incentive plans, (the “Stock Incentive Plans”) which are administered by the Compensation Committee of the Board of Directors of the Company. There are approximately 10.0 million shares reserved under the Stock Incentive Plans. Only officers, other employees of the Company, its Independent Directors and its affiliates generally are eligible to participate in the Stock Incentive Plans.
 
The Stock Incentive Plans authorize (i) the grant of stock options that qualify as incentive stock options under Section 422 of the Code, (ii) the grant of stock options that do not so qualify, (iii) restricted stock awards, (iv) performance share awards and (v) dividend equivalent rights. The exercise price of stock options is determined by the Compensation Committee. Special provisions apply to awards granted under the Stock Incentive Plans in the event of a change in control in the Company. As of December 31, 2005, stock options and restricted stock covering 1.2 million shares were outstanding and 2.6 million shares were available under the Stock Incentive Plans. The outstanding stock options generally vest over one to three year periods and have lives of ten years. Stock option transactions are summarized as follows:
 
                         
        Weighted
 		   
        Average
 		  Exercise Price
    Shares   Exercise Price   per Share
 
Outstanding at December 31, 2002
    3,142,635     $ 30.06     $ 18.25 - $33.15  
Exercised
    (531,473 )   $ 27.99     $ 20.25 - $33.13  
Expired or Terminated
    (107,149 )   $ 31.34     $ 25.13 - $33.13  
                         
Outstanding at December 31, 2003
    2,504,013     $ 30.45     $ 18.25 - $33.15  
Exercised
    (1,663,652 )   $ 30.33     $ 18.25 - $33.15  
Expired or Terminated
    (16,940 )   $ 30.17     $ 22.75 - $33.13  
                         
Outstanding at December 31, 2004
    823,421     $ 30.74     $ 18.25 - $33.15  
Exercised
    (248,881 )   $ 29.57     $ 18.25 - $33.13  
Expired or Terminated
    (27,817 )   $ 30.71     $ 25.13 - $33.13  
                         
Outstanding at December 31, 2005
    546,723     $ 31.27     $ 22.75 - $33.15  
                         
 
The following table summarizes currently outstanding and exercisable options as of December 31, 2005:
 
                         
        Weighted
 		  Weighted
    Number
 		  Average
 		  Average
    Outstanding
 		  Remaining
 		  Exercise
Range of Exercise Price
  and Exercisable   Contractual Life   Price
 
$22.75 - $27.69
    49,070       2.74     $ 26.25  
$30.00 - $33.15
    497,653       4.8     $ 31.76  
 
In September 1994, the Board of Directors approved and the Company adopted a 401(k)/Profit Sharing Plan. Under the Company’s 401(k)/Profit Sharing Plan, all eligible employees may participate by making voluntary contributions. The Company may make, but is not required to make, matching contributions. For the years ended December 31, 2005, 2004 and 2003, the Company, through the Operating Partnership, made matching contributions of approximately $358, $305, and $109, respectively.
 
During 2003, the Company awarded 692,888 shares of restricted Common Stock to certain employees and 11,956 shares of restricted Common Stock to certain Directors. These restricted shares of Common Stock had a fair value of approximately $20,640 on the date of grant. The restricted Common Stock vests over a period from one to ten years. Compensation expense will be charged to earnings in the Operating Partnership’s consolidated statements of operations over the vesting period.


F-43

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
During 2004, the Company awarded 206,117 shares of restricted Common Stock to certain employees and 10,500 shares of restricted Common Stock to certain Directors. These restricted shares of Common Stock had a fair value of approximately $8,379 on the date of grant. The restricted Common Stock vests over a period from one to ten years. Compensation expense will be charged to earnings in the Operating Partnership’s consolidated statements of operations over the vesting period.
 
During 2005, the Company awarded 189,878 shares of restricted Common Stock to certain employees and 10,164 shares of restricted Common Stock to certain Directors. These restricted shares of Common Stock had a fair value of approximately $8,381 on the date of grant. The restricted Common Stock vests over a period from one to ten years. Compensation expense will be charged to earnings in the Operating Partnership’s consolidated statements of operations over the vesting period.
 
15.   Related Party Transactions
 
The Consolidated Operating Partnership periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of one of the Company’s officers/Directors is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2005, 2004 and 2003, this relative received brokerage commissions in the amount of $285, $29 and $111, respectively.
 
At December 31, 2005 the Consolidated Operating Partnership has a payable balance of $12,166 from wholly owned entities of the Company. At December 31, 2004, the Consolidated Operating Partnership has a receivable balance of $9,650 from wholly owned entities of the Company.
 
16.   Commitments and Contingencies
 
In the normal course of business, the Consolidated Operating Partnership is involved in legal actions arising from the ownership of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the consolidated financial position, operations or liquidity of the Consolidated Operating Partnership.
 
Nine properties have leases granting the tenants options to purchase the property. Such options are exercisable at various times and at appraised fair market value or at a fixed purchase price in excess of the Consolidated Operating Partnership’s depreciated cost of the asset. The Consolidated Operating Partnership has no notice of any exercise of any tenant purchase option.
 
The Consolidated Operating Partnership has committed to the construction of certain industrial properties totaling approximately 4.5 million square feet (unaudited) of GLA. The estimated total construction costs are approximately $182.0 million (unaudited). Of this amount, approximately $93.8 million remains to be funded. There can be no assurance that the actual completion cost will not exceed the estimated completion cost stated above.
 
At December 31, 2005, the Consolidated Operating Partnership, through the Operating Partnership had 17 other letters of credit outstanding in the aggregate amount of $7,596. These letters of credit expire between March 31, 2006 and December 31, 2007.


F-44

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
Ground and Operating Lease Agreements
 
Future minimum rental payments under the terms of all non-cancelable ground and operating leases under which the Consolidated Operating Partnership is the lessee, as of December 31, 2005, are as follows:
 
         
2006
  $ 1,678  
2007
    1,171  
2008
    2,014  
2009
    1,657  
2010
    1,510  
Thereafter
    32,630  
         
Total
  $ 40,660  
         
 
17.   Subsequent Events
 
On January 3, 2006, the Operating Partnership paid fourth quarter 2005 distributions of $53.906 per Unit on its Series C Preferred Units, totaling, in the aggregate, approximately $1,078; and a distribution of $1,930.243 per Unit on its Series I Preferred Units, totaling, in the aggregate, approximately $1,448.
 
On January 5, 2006, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., settled the interest rate protection agreement entered into in October 2005 with a notional value of $50,000 for a payment of $186.
 
The Company redeemed the Series I Preferred Stock on January 13, 2006 for $242,875.00 per share, and paid a prorated first quarter dividend of $470.667 per share, totaling approximately $353. The Operating Partnership redeemed the Series I Preferred Units as well. In accordance with EITF D-42, due to the redemption of the Series I Preferred Units, the initial offering costs associated with the issuance of the Series I Preferred Units of approximately $.7 million will be reflected as a deduction from net income to arrive at net income available to Unitholders in determining earnings per unit for the three months ended March 31, 2006.
 
On January 23, 2006, the Operating Partnership paid a fourth quarter 2005 distribution of $.70000 per Unit, totaling approximately $35,752.
 
On March 8, 2006, the Operating Partnership declared a first quarter 2006 distribution of $.7000 per Unit which is payable on April 17, 2006. The Operating Partnership also declared a first quarter 2006 preferred unit distributions of $53.906 per Unit on its 85/8% Series C Preferred Units totaling, in the aggregate, approximately $1,078, which is payable on March 31, 2006; a semi-annual distribution of $3,118.00 per Unit on its Series F Preferred Units, totaling, in the aggregate, approximately $1,559 which is payable on March 31, 2006; a semi-annual distribution of $3,618.00 per Unit on its Series G Preferred Units, totaling, in the aggregate, approximately $904, which is payable on March 31, 2006; and a quarterly distribution of $3,927.08 per Unit on its Series J Preferred Units, totaling, in the aggregate, approximately $2,356 which is payable on March 31, 2006.
 
From January 1, 2006 to March 8, 2006, the Company awarded 303,142 shares of restricted common stock to certain employees and 1,169 shares of restricted common stock to certain Directors. The Operating Partnership issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $11,957 on the date of grant. The restricted common stock vests over periods from one to ten years. Compensation expense will be charged to earnings over the respective vesting period.
 
From January 1, 2006 to March 6, 2006, the Consolidated Operating Partnership acquired 21 industrial properties and several land parcels for a total estimated investment of approximately $142,438 (approximately $867 of which was made through the issuance of limited partnership interests in the Operating Partnership


F-45

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(“Units”)). The Consolidated Operating Partnership also sold 16 industrial properties and several land parcels including the industrial property that is accounted for as a build to suit development for sale, for approximately $240,095 of gross proceeds during this period.
 
On January 10, 2006, the Operating Partnership, issued $200,000 of senior unsecured debt which matures on January 15, 2016 and bears a coupon interest rate of 5.75% (the “2016 Notes”). The issue price of the 2016 Notes was 99.653%. Interest is paid semi-annually in arrears on January 15 and July 15. In December 2005, the Operating Partnership also entered into interest rate protection agreements which were used to fix the interest rate on the 2016 Notes prior to issuance. The Operating Partnership settled the interest rate protection agreements on January 9, 2006 for a payment of approximately $1,729, which will be included in other comprehensive income. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2016 Notes as an adjustment to interest expense. Including the impact of the offering discount and the settlement amount of the interest rate protection agreements, the Operating Partnership’s effective interest rate on the 2016 Notes is 5.91%. The 2016 Notes contain certain covenants, including limitations on incurrence of debt and debt service coverage.
 
On January 13, 2006, the Company issued 6,000,000 Depositary Shares, each representing 1/10,000th of a share of the Company’s 7.25%, $.01 par value, Series J Cumulative Redeemable Preferred Stock (the “Series J Preferred Stock”), at an initial offering price of $25.00 per Depositary Share. The net proceeds from the issuance of the Series J Preferred Stock were contributed to the Operating Partnership in exchange for Series J Cumulative Preferred Units (the “Series J Preferred Units”) and are reflected in the Consolidated Operating Partnership’s financial statements as general partner preferred unit contribution. Dividends on the Series J Preferred Stock, represented by the Depositary Shares, are cumulative from the date of initial issuance and are payable quarterly in arrears. However, during any period that both (i) the depositary shares are not listed on the NYSE or AMEX, or quoted on NASDAQ, and (ii) the Company is not subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, the Company will increase the dividend on the preferred shares to a rate of 8.25% of the liquidation preference per year. With respect to the payment of dividends and amounts upon liquidation, dissolution or winding up, the Series J Preferred Stock ranks senior to payments on the Company’s Common Stock and pari passu with the Company’s Series C Preferred Stock, Series F Preferred Stock, Series G Preferred Stock and Series I Preferred Stock. The Series J Preferred Stock is not redeemable prior to January 15, 2011. However, if at any time both (i) the depositary shares cease to be listed on the NYSE or the AMEX, or quoted on NASDAQ, and (ii) the Company ceases to be subject to the reporting requirements of the Exchange Act, but the preferred shares are outstanding, then the preferred shares will be redeemable, in whole but not in part at the Company’s option, within 90 days of the date upon which the depositary shares cease to be listed and the Company ceases to be subject to such reporting requirements, at a redemption price equivalent to $25.00 per Depositary Share, plus all accrued and unpaid dividends to the date of redemption. On or after January 15, 2011, the Series I Preferred Stock is redeemable for cash at the option of the Company, in whole or in part, at a redemption price equivalent to $25.00 per Depositary Share, or $150,000 in the aggregate, plus dividends accrued and unpaid to the redemption date. The Series J Preferred Stock has no stated maturity and is not convertible into any other securities of the Company.
 
On January 10, 2006, the Consolidated Operating Partnership paid off the 2005 Unsecured Line of Credit II.
 
On January 12, 2006, the Consolidated Operating Partnership paid off and retired the Acquisition Mortgage Loan XV.


F-46

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
18.   Quarterly Financial Information (unaudited)
 
The following table summarizes quarterly financial information of the Consolidated Operating Partnership. The first, second and third fiscal quarters of 2005 and all fiscal quarters in 2004 have been reclassified in accordance with FAS 144.
 
                                 
    Year Ended December 31, 2005  
    First
 		    Second
 		    Third
 		    Fourth
 		 
    Quarter     Quarter     Quarter     Quarter  
 
Total Revenues
  $ 71,745     $ 70,910     $ 76,664     $ 104,038  
Equity in Income (Loss) of Joint Ventures
    (122 )     (98 )     3,977       (59 )
Equity in Income Other Real Estate Partnerships
    6,743       9,786       20,490       11,193  
Income (Loss) from Continuing Operations, Net of Income Tax
    (3,748 )     (4,419 )     7,368       (4,953 )
Income from Discontinued Operations, Net of Income Tax
    9,286       27,490       17,754       32,279  
Gain on Sale of Real Estate, Net of Income Tax
    13,137       1,734       1,661       1,627  
Net Income
    18,675       24,805       26,783       28,953  
Preferred Unit Distributions
    (2,310 )     (2,310 )     (2,310 )     (3,758 )
                                 
Net Income Available to Unitholders
  $ 16,365     $ 22,495     $ 24,473     $ 25,195  
                                 
Basic Earnings Per Unit:
                               
Income (Loss) From Continuing Operations Available to Unitholders
  $ 0.15     $ (0.10 )   $ 0.14     $ (0.14 )
                                 
Income From Discontinued Operations
  $ 0.19     $ 0.56     $ 0.36     $ 0.65  
                                 
Net Income Available to Unitholders
  $ 0.34     $ 0.46     $ 0.50     $ 0.51  
                                 
Weighted Average Units Outstanding
    48,625       48,759       49,042       49,436  
                                 
Diluted Earnings Per Unit:
                               
Income (Loss) From Continuing Operations Available to Unitholders
  $ 0.14     $ (0.10 )   $ 0.14     $ (0.14 )
                                 
Income From Discontinued Operations
  $ 0.19     $ 0.56     $ 0.36     $ 0.65  
                                 
Net Income Available to Unitholders
  $ 0.33     $ 0.46     $ 0.50     $ 0.51  
                                 
Weighted Average Units Outstanding
    48,934       48,759       49,248       49,436  
                                 
 


F-47

Table of Contents

FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

                                 
    Year Ended December 31, 2004  
    First
 		    Second
 		    Third
 		    Fourth
 		 
    Quarter     Quarter     Quarter     Quarter  
 
Total Revenues
  $ 63,628     $ 61,823     $ 63,854     $ 69,463  
Equity in Income (Loss) of Joint Ventures
    245       300       35,303       (8 )
Equity in Income Other Real Estate Partnerships
    7,381       7,191       6,173       8,458  
Income (Loss) from Continuing Operations, Net of Income Tax
    2,833       (69 )     29,260       (1,272 )
Income from Discontinued Operations, Net of Income Tax
    26,754       27,315       10,903       19,624  
Gain on Sale of Real Estate, Net of Income Tax
    2,385       1,183       1,973       4,265  
Net Income
    31,972       28,429       42,136       22,617  
Preferred Unit Distributions
    (5,044 )     (4,790 )     (2,344 )     (2,310 )
Redemption of Preferred Units
    —       (7,359 )     (600 )     —  
                                 
Net Income Available to Unitholders
  $ 26,928     $ 16,280     $ 39,192     $ 20,307  
                                 
Basic Earnings Per Unit:
                               
Income (Loss) From Continuing Operations Available to Unitholders
  $ 0.00     $ (0.24 )   $ 0.60     $ 0.01  
                                 
Income From Discontinued Operations
  $ 0.58     $ 0.58     $ 0.23     $ 0.42  
                                 
Net Income Available to Unitholders
  $ 0.58     $ 0.35     $ 0.83     $ 0.43  
                                 
Weighted Average Units Outstanding
    46,229       46,909       46,996       47,136  
                                 
Diluted Earnings Per Unit:
                               
Income (Loss) From Continuing Operations Available to Unitholders
  $ 0.00     $ (0.24 )   $ 0.60     $ 0.01  
                                 
Income From Discontinued Operations
  $ 0.57     $ 0.58     $ 0.23     $ 0.41  
                                 
Net Income Available to Unitholders
  $ 0.58     $ 0.35     $ 0.83     $ 0.43  
                                 
Weighted Average Units Outstanding
    46,694       46,909       47,310       47,467  
                                 

F-48

Table of Contents

 
FIRST INDUSTRIAL, L.P.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 
19.   Pro Forma Financial Information (unaudited)
 
The following Pro Forma Condensed Statements of Operations for the years ended December 31, 2005 and 2004 (the “Pro Forma Statements”) are presented as if the acquisition of 62 operating industrial properties between January 1, 2005 and December 31, 2005 had occurred at the beginning of each year. The Pro Forma Statements do not include acquisitions between January 1, 2005 and December 31, 2005 for industrial properties that were vacant upon purchase, were leased back to the sellers upon purchase or were subsequently sold before December 31, 2005. The Pro Forma Condensed Statements of Operations include all necessary adjustments to reflect the occurrence of purchases and sales of properties during 2005 as of January 1, 2005 and 2004.
 
The Pro Forma Statements are not necessarily indicative of what the Consolidated Operating Partnership’s results of operations would have been for the years ended December 31, 2005 and 2004, nor do they purport to present the future results of operations of the Consolidated Operating Partnership.
 
Pro Forma Condensed Statements of Operations
 
                 
    Year Ended     Year Ended  
    December 31,
 		    December 31,
 		 
    2005     2004  
 
Total Revenues
  $ 341,238     $ 285,473  
Income from Continuing Operations Available to Unitholders
    7,634       28,089  
Income from Discontinued Operations, Net of Income Taxes
    85,745       86,049  
Net Income
    104,067       136,585  
Less: Preferred Dividends
    (10,688 )     (14,488 )
Less: Redemption of Preferred Stock
    —       (7,959 )
                 
Net Income Available to Unitholders
  $ 93,379     $ 114,138  
         
Income from Continuing Operations Available to Unitholders, Net of Minority Interest Per Weighted Average Unit Outstanding:
               
Basic
  $ 0.16     $ 0.60  
                 
Diluted
  $ 0.16     $ 0.59  
                 
         
Income from Discontinued Operations, Net of Minority Interest and Income Taxes Per Weighted Average Unit Outstanding:
               
Basic
  $ 1.75     $ 1.83  
                 
Diluted
  $ 1.74     $ 1.81  
                 
         
Net Income Available to Unitholders Per Weighted Average Unit Outstanding:
               
Basic
  $ 1.91     $ 2.42  
                 
Diluted
  $ 1.90     $ 2.40  
                 


F-49

Table of Contents

 
Report of Independent Auditors
 
To the Partners of
the Other Real Estate Partnerships:
 
In our opinion, the accompanying combined balance sheets and the related combined statements of operations, of changes in partners’ capital and of cash flows present fairly, in all material respects, the financial position of the Other Real Estate Partnerships at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Other Real Estate Partnerships’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
PricewaterhouseCoopers LLP
 
Chicago, Illinois
March 16, 2006


F-50

Table of Contents

OTHER REAL ESTATE PARTNERSHIPS
 
 
                 
    December 31,
 		    December 31,
 		 
    2005     2004  
    (Dollars in thousands)  
 
ASSETS
Assets:
               
Investment in Real Estate:
               
Land
  $ 51,047     $ 48,290  
Buildings and Improvements
    312,777       321,770  
Less: Accumulated Depreciation
    (54,811 )     (57,381 )
                 
Net Investment in Real Estate
    309,013       312,679  
                 
Real Estate Held For Sale, Net of Accumulated Depreciation and Amortization of $466 at December 31, 2004
    —       2,504  
Cash and Cash Equivalents
    1,388       1,847  
Restricted Cash
    14,636       —  
Tenant Accounts Receivable, Net
    1,270       478  
Deferred Rent Receivable
    3,390       2,386  
Deferred Financing Costs, Net
    2       6  
Deferred Leasing Intangibles, Net
    7,659       757  
Mortgage Loans Receivable
    24,118       16,336  
Prepaid Expenses and Other Assets, Net
    35,403       15,515  
                 
Total Assets
  $ 396,879     $ 352,508  
                 
 
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
               
Mortgage Loans Payable, Net
  $ 2,380     $ 2,456  
Accounts Payable and Accrued Expenses
    5,649       2,704  
Deferred Leasing Intangibles, Net
    2,138       248  
Rents Received in Advance and Security Deposits
    4,705       4,184  
                 
Total Liabilities
    14,872       9,592  
                 
Commitments and Contingencies
    —       —  
Partners’ Capital
    382,007       342,916  
                 
Total Liabilities and Partners’ Capital
  $ 396,879     $ 352,508  
                 
 
The accompanying notes are an integral part of the financial statements.


F-51

Table of Contents

OTHER REAL ESTATE PARTNERSHIPS
 
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
    (Dollars in thousands)  
 
Revenues:
                       
Rental Income
  $ 34,935     $ 30,358     $ 35,204  
Tenant Recoveries and Other Income
    8,816       7,575       6,152  
                         
Total Revenues
    43,751       37,933       41,356  
                         
Expenses:
                       
Real Estate Taxes
    5,912       5,291       5,333  
Repairs and Maintenance
    2,887       2,573       2,511  
Property Management
    1,440       1,297       1,367  
Utilities
    2,006       1,890       1,622  
Insurance
    340       361       320  
Other
    802       905       1,013  
Amortization of Deferred Financing Costs
    4       3       3  
Depreciation and Other Amortization
    13,894       10,533       9,662  
                         
Total Expenses
    27,285       22,853       21,831  
                         
Other Income/Expense:
                       
Interest Income
    342       1,604       712  
Interest Expense
    (175 )     (178 )     (256 )
Loss from Early Retirement of Debt
    —       —       (1,466 )
                         
Total Other Income/Expense
    167       1,426       (1,010 )
Equity in Income of Joint Ventures
    —       1,461       —  
                         
Income from Continuing Operations
    16,633       17,967       18,515  
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $29,213, $6,439, and $4,689 for the Years Ended December 31, 2005, 2004 and 2003)
    31,004       9,853       18,932  
                         
Income Before Gain on Sale of Real Estate
    47,637       27,820       37,447  
Gain on Sale of Real Estate
    863       1,643       6,198  
                         
Net Income
  $ 48,500     $ 29,463     $ 43,645  
                         
 
The accompanying notes are an integral part of the financial statements.


F-52

Table of Contents

OTHER REAL ESTATE PARTNERSHIPS
 
 
         
    Total  
    (Dollars in thousands)  
 
Balance at December 31, 2002
  $ 381,130  
Contributions
    59,857  
Distributions
    (106,459 )
Net Income
    43,645  
         
Balance at December 31, 2003
  $ 378,173  
Contributions
    68,770  
Distributions
    (133,490 )
Net Income
    29,463  
         
Balance at December 31, 2004
  $ 342,916  
Contributions
    123,344  
Distributions
    (132,753 )
Net Income
    48,500  
         
Balance at December 31, 2005
  $ 382,007  
         
 
The accompanying notes are an integral part of the financial statements.


F-53

Table of Contents

OTHER REAL ESTATE PARTNERSHIPS
 
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31, 2005     December 31, 2004     December 31, 2003  
    (Dollars in thousands)  
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                       
Net Income
  $ 48,500     $ 29,463     $ 43,645  
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
                       
Depreciation
    12,749       10,963       10,621  
Amortization of Deferred Financing Costs
    4       3       3  
Loss from Early Retirement of Debt
    —       —       1,466  
Other Amortization
    2,697       1,872       1,672  
Gain on Sale of Real Estate
    (30,076 )     (8,082 )     (10,887 )
Equity in Net Income of Joint Ventures
    —       (1,461 )     —  
Distributions from Joint Ventures
    —               —  
Provision for Bad Debt
    128       —       —  
Change in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net
    (20,007 )     8,645       (3,054 )
Change in Deferred Rent Receivable
    (1,974 )     (1,517 )     32  
Change in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits
    2,838       (14,963 )     8,185  
Change in Restricted Cash
    —       —       2,742  
                         
Net Cash Provided by Operating Activities
    14,859       24,923       54,425  
                         
CASH FLOWS FROM INVESTING ACTIVITIES:
                       
Purchase of and Additions to Investment in Real Estate
    (74,734 )     (15,799 )     (33,415 )
Net Proceeds from Sales of Investment in Real Estate
    81,249       26,017       18,818  
Repayment and Sale of Mortgage Loans Receivable
    25,185       66,631       48,386  
Funding of Mortgage Loan Receivable
    (22,936 )     (57,446 )     —  
Change in Restricted Cash
    (14,636 )     21,132       (21,106 )
                         
Net Cash (Used in) Provided by Investing Activities
    (5,872 )     40,535       12,683  
                         
CASH FLOWS FROM FINANCING ACTIVITIES:
                       
Contributions
    123,344       68,770       59,857  
Distributions
    (132,753 )     (133,490 )     (106,459 )
Repayments on Mortgage Loans Payable
    (37 )     (34 )     (37,511 )
Proceeds From U.S. Government Securities
    —       —       15,832  
                         
Net Cash Used in Financing Activities
    (9,446 )     (64,754 )     (68,281 )
                         
Net (Decrease) Increase in Cash and Cash Equivalents
    (459 )     704       (1,173 )
Cash and Cash Equivalents, Beginning of Period
    1,847       1,143       2,316  
                         
Cash and Cash Equivalents, End of Period
  $ 1,388     $ 1,847     $ 1,143  
                         
 
The accompanying notes are an integral part of the financial statements.


F-54

Table of Contents

OTHER REAL ESTATE PARTNERSHIPS
 
(Dollars in thousands)
 
1.   Organization and Formation of Partnerships
 
First Industrial, L.P. (the “Operating Partnership”) was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 86.8% partnership interest at December 31, 2005. The Company is a real estate investment trust (“REIT”) as defined in the Internal Revenue Code. The Company’s operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 13.2% and 13.1% interest in the Operating Partnership at December 31, 2005 and 2004 respectively.
 
The Operating Partnership owns at least a 99% limited partnership interest in First Industrial Financing Partnership, L.P., First Industrial Securities, L.P., First Industrial Mortgage Partnership, L.P., First Industrial Pennsylvania, L.P., First Industrial Harrisburg, L.P., First Industrial Indianapolis, L.P., TK-SV, LTD. and FI Development Services, L.P. (together, the “Other Real Estate Partnerships”).
 
The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company.
 
On a combined basis, as of December 31, 2005, the Other Real Estate Partnerships owned 100 industrial properties, containing an aggregate of approximately 9.1 million square feet (unaudited) of GLA.
 
Profits, losses and distributions of the Other Real Estate Partnerships are allocated to the general partner and the limited partners in accordance with the provisions contained within its restated and amended partnership agreement.
 
2.   Basis of Presentation
 
The combined financial statements of the Other Real Estate Partnerships at December 31, 2005 and 2004 and for each of the years ended December 31, 2005, 2004 and 2003 include the accounts and operating results of the Other Real Estate Partnerships on a combined basis.
 
3.   Summary of Significant Accounting Policies
 
In order to conform with generally accepted accounting principles, management, in preparation of the Other Real Estate Partnerships’ financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2005 and 2004, and the reported amounts of revenues and expenses for each of the years ended December 31, 2005, 2004 and 2003. Actual results could differ from those estimates.
 
Cash and Cash Equivalents
 
Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short maturity of these investments.
 
Restricted Cash
 
At December 31, 2005, restricted cash includes gross proceeds from the sales of certain properties. These sales proceeds will be disbursed as the Other Real Estate Partnerships exchanges into properties under Section 1031 of the Internal Revenue Code. The carrying amount approximates fair value due to the short term maturity of these investments.


F-55

Table of Contents

 
OTHER REAL ESTATE PARTNERSHIPS
 
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

 
Investment in Real Estate and Depreciation
 
Investment in Real Estate is carried at cost. The Other Real Estate Partnerships reviews its properties on a quarterly basis for impairment and provides a provision if impairments are found. To determine if an impairment may exist, the Other Real Estate Partnerships reviews its properties and identifies those that have had either an event of change or event of circumstances warranting further assessment of recoverability (such as a decrease in occupancy). If further assessment of recoverability is needed, the Other Real Estate Partnerships estimates the future net cash flows expected to result from the use of the property and its eventual disposition, on an individual property basis. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property, on an individual property basis, the Other Real Estate Partnerships will recognize an impairment loss based upon the estimated fair value of such property. For properties management considers held for sale, the Other Real Estate Partnerships ceases depreciating the properties and values the properties at the lower of depreciated cost or fair value, less costs to dispose. If circumstances arise that were previously considered unlikely, and as a result, the Other Real Estate Partnerships decides not to sell a property previously classified as held for sale, the Other Real Estate Partnerships will reclassify such property as held and used. Such property is measured at the lower of its carrying amount (adjusted for any depreciation and amortization expense that would have been recognized had the property been continuously classified as held and used) or fair value at the date of the subsequent decision not to sell. The Other Real Estate Partnerships determines fair value of properties that are held for use by discounting the future expected cash flows of the properties. To calculate the fair value of properties held for sale, the Other Real Estate Partnerships deduct from the contract price of the property the estimated costs to close the sale.
 
Interest costs, real estate taxes, compensation costs of development personnel and other directly related expenses incurred during construction periods are capitalized and depreciated commencing with the date the property is substantially completed. Upon substantial completion, the Other Real Estate Partnerships reclassifies construction in progress to building, tenant improvement and leasing commissions. Such costs begin to be capitalized to the development projects from the point the Other Real Estate Partnerships is undergoing necessary activities to get the development ready for its intended use and ceases when the development projects are substantially completed and held available for occupancy. Depreciation expense is computed using the straight-line method based on the following useful lives:
 
     
    Years
 
Buildings and Improvements
  20 to 50
Land Improvements
  15
Furniture, Fixtures and Equipment
  5 to 10
 
The Other Real Estate Partnerships account for all acquisitions entered into subsequent to June 30, 2001 in accordance with FAS 141. Upon acquisition of a property, the Other Real Estate Partnerships allocate the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, buildings, tenant improvements, leasing commissions and intangible assets including in-place leases and above market and below market leases. The Other Real Estate Partnerships allocate the purchase price to the fair value of the tangible assets of an acquired property determined by valuing the property as if it were vacant. Acquired above and below market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates over the remaining lease term.
 
The purchase price is further allocated to in-place lease values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Other Real Estate Partnership’s overall relationship with the respective tenant. Acquired above and below market leases are amortized over the remaining non-cancelable terms of the respective leases as an adjustment to rental revenue on the Other Real Estate Partnerships’ consolidated statements of operations and comprehensive income. The value of in-place lease


F-56

Table of Contents

 
OTHER REAL ESTATE PARTNERSHIPS
 
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

intangibles which is included as a component of Deferred Leasing Intangibles included in total assets, is amortized over the remaining lease term and expected renewal periods in the respective lease as an adjustment to depreciation and other amortization expense and is included in other assets. If a tenant terminates its lease early, the unamortized portion of leasing commissions, tenant improvements, above and below market leases and the in-place lease value is immediately charged to expense.
 
Deferred Leasing Intangibles included in total assets consist of the following:
 
                 
    December 31,
 		    December 31,
 		 
    2005     2004  
In-Place Leases
  $ 6,856     $ 584  
Less: Accumulated Amortization
    (407 )     (16 )
                 
    $ 6,449     $ 568  
                 
Above Market Leases
  $ 1,434     $ 262  
Less: Accumulated Amortization
    (224 )     (73 )
                 
    $ 1,210     $ 189  
                 
 
Deferred Leasing Intangibles included in total liabilities consist of the following:
 
                 
    December 31,
 		    December 31,
 		 
    2005     2004  
Below Market Leases
  $ 2,652     $ 315  
Less: Accumulated Amortization
    (514 )     (67 )
                 
    $ 2,138     $ 248  
                 
 
Deferred Financing Costs
 
Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred financing costs was $24 and $20 at December 31, 2005 and 2004, respectively. Unamortized deferred financing costs are written-off when debt is retired before the maturity date.
 
Revenue Recognition
 
Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as revenues in the same period the related expenses are incurred by the Other Real Estate Partnerships.
 
Revenue is recognized on payments received from tenants for early lease terminations after the Other Real Estate Partnerships determine that all the necessary criteria have been met in accordance with FAS 13 “Accounting for Leases”.
 
Interest income on mortgage loans receivable is recognized based on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected.
 
The Other Real Estate Partnerships provide an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the combined balance sheets are shown net of an allowance for doubtful accounts of $0 and $343 as of December 31, 2005 and 2004, respectively. For accounts receivable the Other Real Estate Partnerships deem uncollectible, the Other Real Estate Partnerships uses the direct write-off method.


F-57

Table of Contents

 
OTHER REAL ESTATE PARTNERSHIPS
 
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

 
Gain on Sale of Real Estate
 
Gain on sale of real estate is recognized using the full accrual method. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are written off with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Other Real Estate Partnerships after completion of each sale are included in the determination of the gain on sales.
 
Income Taxes
 
In accordance with partnership taxation, each of the partners are responsible for reporting their share of taxable income or loss. The Other Real Estate Partnerships are subject to certain state and local income, excise and franchise taxes. The provision for such state and local taxes has been reflected in general and administrative expense in the combined statement of operations and has not been separately stated due to its insignificance.
 
Fair Value of Financial Instruments
 
The Other Real Estate Partnerships’ financial instruments include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses and mortgage loans payable. The fair values of the short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable and other accrued expenses were not materially different from their carrying or contract values. See Note 4 for the fair value of the mortgage loan payable.
 
Discontinued Operations
 
On January 1, 2002, the Other Real Estate Partnerships adopted FAS 144. FAS 144 addresses financial accounting and reporting for the disposal of long lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property sold be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Other Real Estate Partnerships as a result of the disposal transaction and (b) the Other Real Estate Partnerships will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be restated and presented in discontinued operations in prior consolidated statements of operations.
 
Reclassifications
 
Certain 2004 and 2003 items have been reclassified to conform to the 2005 presentation.
 
Recent Accounting Pronouncements
 
In December, 2004, the FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29” (“FAS 153”). The amendments made by FAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” FAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of FAS 153 did not have a material effect on the Other Real Estate Partnerships ’s financial statements.


F-58

Table of Contents

 
OTHER REAL ESTATE PARTNERSHIPS
 
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

 
In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, Accounting for Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143. A conditional asset retirement obligation refers to a legal obligation to retire assets where the timing and/or method of settlement are conditioned on future events. FIN No. 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The Other Real Estate Partnerships adopted the provisions of FIN 47 in 2005. The adoption of this Interpretation did not have a material impact on the Other Real Estate Partnership’s combined financial position, results of operations or cash flows.
 
In May, 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections” (“FAS 154”) which supersedes APB Opinion No. 20, “Accounting Changes” and Statement of Financial Accounting Standards No. 3, “Reporting Accounting Changes in Interim Financial Statements”. FAS 154 changes the requirements for the accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. FAS 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.
 
In June, 2005, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regarding EITF 04-05, “Investor’s Accounting for an Investment in a Limited Partnership When the Investor is the Sole General Partner and the Limited Partners Have Certain Rights.” The conclusion provides a framework for addressing the question of when a sole general partner, as defined in EITF 04-05, should consolidate a limited partnership. The EITF has concluded that the general partner of a limited partnership should consolidate a limited partnership unless (1) the limited partners possess substantive kick-out rights as defined in paragraph B20 of FIN 46R, or (2) the limited partners possess substantive participating rights similar to the rights described in Issue 96-16, “Investor’s Accounting for an Investee When the Investor has a Majority of the Voting Interest by the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights.” In addition, the EITF concluded that the guidance should be expanded to include all limited partnerships, including those with multiple general partners. The Other Real Estate Partnerships adopted EITF 04-05 as of December 31, 2005. The adoption of this EITF did not have a material impact on the Other Real Estate Partnership’s combined financial position, results of operations or cash flows.
 
4.   Mortgage Loans Payable, Net
 
On July 16, 1998, the Other Real Estate Partnerships, through TK-SV, LTD., assumed a mortgage loan in the principal amount of $2,566 (the “Acquisition Mortgage Loan V”). The Acquisition Mortgage Loan V is collateralized by one property in Tampa, Florida, bears interest at a fixed rate of 9.01% and provides for monthly principal and interest payments based on a 30-year amortization schedule. The Acquisition Mortgage Loan V matures on September 1, 2006. In conjunction with the assumption of the Acquisition Mortgage Loan V, the Other Real Estate Partnerships recorded a premium in the amount of $315 which will be amortized over the remaining life of the Acquisition Mortgage Loan V as an adjustment to interest expense. Including the impact of the premium recorded, the Other Real Estate Partnerships’ effective interest rate on the Acquisition Mortgage Loan V is 6.96%. The Acquisition Mortgage Loan V was paid off and retired on March 1, 2006 (See Note 11).


F-59

Table of Contents

 
OTHER REAL ESTATE PARTNERSHIPS
 
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

 
The following table discloses certain information regarding the Other Real Estate Partnerships’ mortgage loans:
 
                                             
    Outstanding Balance at   Accrued Interest Payable at   Interest Rate at    
    December 31,
 		  December 31,
 		  December 31,
 		  December 31,
 		  December 31,
 		  Maturity
Mortgage Loans Payable
  2005   2004   2005   2004   2005   Date
 
Acquisition Mortgage Loan V
  $ 2,380 (1)   $ 2,456 (1)   $ 18     $ 18       9.010 %   09/01/06
 
 
(1) At December 31, 2005 and 2004, the Acquisition Mortgage Loan V is net of an unamortized premium of $24 and $63, respectively.
 
The following is a schedule of maturities of the mortgage loan, exclusive of the related premium for the next year ending December 31,:
 
         
    Amount  
 
2006
    2,356  
         
Total
  $ 2,356  
         
 
Fair Value:
 
At December 31, 2005 and 2004, the fair value of the Other Real Estate Partnerships’ mortgage loan payable were as follows:
 
                                 
    December 31, 2005   December 31, 2004
    Carrying
 		  Fair
 		  Carrying
 		  Fair
    Amount   Value   Amount   Value
 
Mortgage Loan Payable
  $ 2,380     $ 2,409     $ 2,456     $ 2,590  
 
The fair value of the Other Real Estate Partnerships’ mortgage loan payable was determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
 
5.   Acquisition and Development of Real Estate
 
In 2003, the Other Real Estate Partnerships acquired two industrial property comprising approximately .3 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $11,300, excluding costs incurred in conjunction with the acquisition of the properties.
 
In 2004, the Other Real Estate Partnerships acquired two industrial properties comprising approximately .3 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $9,290, excluding costs incurred in conjunction with the acquisition of the properties.
 
In 2005, the Other Real Estate Partnerships acquired twelve industrial properties comprising approximately 1.7 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $62,114, excluding costs incurred in conjunction with the acquisition of the properties.
 
   Intangible Assets Subject to Amortization in the Period of Acquisition
 
The fair value of in-place leases, above market leases, and below market leases recorded as a result of the above acquisitions was $4,272, $1,106, and $2,033, respectively at December 31, 2005. The weighted average life in months of in-place leases, above market leases, and below market leases recorded as a result of 2005 acquisitions was 99, 65 and 13 months, respectively.


F-60

Table of Contents

 
OTHER REAL ESTATE PARTNERSHIPS
 
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

 
6.   Sale of Real Estate, Real Estate Held For Sale and Discontinued Operations
 
In 2003, the Other Real Estate Partnerships sold nine industrial properties comprising approximately 1.1 million square feet (unaudited) of GLA and several parcels of land. Two of the nine sold industrial properties comprising approximately .7 million square feet of GLA were sold to the December 2001 Joint Venture. Gross proceeds from the sales of the nine industrial properties and several land parcels totaled approximately $36,879. The gain on sale of real estate was approximately $10,887, of which $4,689 is shown in discontinued operations. In accordance with FAS 144, the results of operations and gain on sale of real estate for the seven of the nine sold industrial properties that were not identified as held for sale at December 31, 2001, are included in discontinued operations.
 
In 2004, the Other Real Estate Partnerships sold seven industrial properties comprising approximately .6 million square feet (unaudited) of GLA and several parcels of land. Gross proceeds from the sales of the seven industrial properties and several land parcels totaled approximately $31,849. The gain on sale of real estate was approximately $8,082, of which $6,439 is shown in discontinued operations. Six of the seven sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the six sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the industrial property and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
In 2005, the Other Real Estate Partnerships sold 14 industrial properties comprising approximately 2.1 million square feet (unaudited) of GLA. Of the 14 industrial properties sold, one industrial property sale was made to a joint venture in which the Operating Partnership owns a 10% equity interest. Gross proceeds from the sales of the 14 industrial properties totaled approximately $94,472. The gain on sale of real estate was approximately $30,076, of which $29,213 is shown in discontinued operations. One of the 14 sold industrial properties did not meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate for the 13 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate for the industrial property and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.
 
The following table discloses certain information regarding the industrial properties included in discontinued operations by the Other Real Estate Partnerships for the years ended December 31, 2005, 2004 and 2003.
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
 
Total Revenues
  $ 5,234     $ 8,173     $ 20,742  
Operating Expenses
    (1,733 )     (2,626 )     (3,895 )
Depreciation and Amortization
    (1,710 )     (2,133 )     (2,604 )
Gain on Sale of Real Estate
    29,213       6,439       4,689  
                         
Income from Discontinued Operations
  $ 31,004     $ 9,853     $ 18,932  
                         
 
In conjunction with certain property sales, the Other Real Estate Partnerships provide seller financing on behalf of certain buyers. At December 31, 2005 and 2004, the Other Real Estate Partnerships had mortgage notes receivable outstanding and accrued interest of approximately $24,118 and $16,336, respectively which is included as a component of prepaid expenses and other assets. Also, in December 2004, the Other Real Estate Partnerships sold $3,249 of its note receivables for par.


F-61

Table of Contents

 
OTHER REAL ESTATE PARTNERSHIPS
 
NOTES TO COMBINED FINANCIAL STATEMENTS — (Continued)

 
7.   Supplemental Information to Statements of Cash Flows
 
Supplemental disclosure of cash flow information:
 
                         
    Year Ended
 		    Year Ended
 		    Year Ended
 		 
    December 31,
 		    December 31,
 		    December 31,
 		 
    2005     2004     2003  
 
Interest paid
  $ 175     $ 178     $ 415  
                         
 
In conjunction with certain property sales, the Other Real Estate Partnerships provided seller financing on behalf of certain buyers:
             
Notes Receivable
  $ 11,265     $ 4,450     $ 17,170  
                         
 
8.   Future Rental Revenues
 
The Other Real Estate Partnerships’ properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under noncancelable operating leases in effect as of December 31, 2005 are approximately as follows:
 
         
2006
  $ 36,295  
2007
    31,996  
2009
    25,100  
2009
    19,163  
2010
    13,860  
Thereafter
    26,358  
         
Total
  $ 152,772  
         
 
9.   Related Party Transactions
 
Periodically, the Other Real Estate Partnerships utilize real estate brokerage services from CB Richard Ellis, Inc., for which a relative of one of the Company’s officers/Directors is an employee. For the year ended December 31, 2003, this relative received brokerage commissions in the amount of $5.
 
At December 31, 2005 and 2004 the Other Real Estate Partnerships have a receivable balance of $27,055 and $5,506 from wholly owned entities of the Company.
 
10.   Commitments and Contingencies
 
In the normal course of business, the Other Real Estate Partnerships are involved in legal actions arising from the ownership of its properties. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the combined financial position, operations or liquidity of the Other Real Estate Partnerships.
 
Three properties have a lease granting the tenant an option to purchase the property. Such options are exercisable at various times and at appraised fair market value or at a fixed purchase price generally in excess of the Other Real Estate Partnerships’ depreciated cost of the asset. The Other Real Estate Partnerships have no notice of any exercise of these tenant purchase options.
 
11.   Subsequent Events
 
During the period January 1, 2006 through March 6, 2006, the Other Real Estate Partnerships acquired two industrial properties for a total estimated investment of approximately $7,267.
 
On March 1, 2006, the Acquisition Mortgage Loan V was paid off and retired.


F-62

Table of Contents

FIRST INDUSTRIAL LP
 
 
REAL ESTATE AND ACCUMULATED DEPRECIATION
As of December 31, 2005
 
                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
Atlanta
                                                                       
1650 GA Highway 155
  McDonough, GA         788       4,544       204       788       4,748       5,536       1,331     1991   (n)
14101 Industrial Park Boulevard
  Covington, GA         285       1,658       703       285       2,361       2,646       581     1984   (n)
801-804 Blacklawn Road
  Conyers, GA         361       2,095       842       361       2,937       3,298       807     1982   (n)
1665 Dogwood Drive
  Conyers, GA         635       3,662       78       635       3,739       4,374       1,072     1973   (n)
1715 Dogwood Drive
  Conyers, GA         288       1,675       80       288       1,755       2,043       493     1973   (n)
11235 Harland Drive
  Covington, GA         125       739       88       125       827       952       226     1988   (n)
4050 Southmeadow Parkway
  Atlanta, GA         401       2,813       311       425       3,100       3,525       889     1991   (n)
4051 Southmeadow Parkway
  Atlanta, GA         726       4,130       1,084       726       5,214       5,940       1,594     1989   (n)
4071 Southmeadow Parkway
  Atlanta, GA         750       4,460       974       828       5,356       6,184       1,518     1991   (n)
4081 Southmeadow Parkway
  Atlanta, GA         1,012       5,918       1,586       1,157       7,359       8,516       1,842     1989   (n)
370 Great Southwest Parkway(j)
  Atlanta, GA         527       2,984       579       546       3,544       4,089       847     1986   (n)
955 Cobb Place
  Kennesaw, GA         780       4,420       417       804       4,813       5,617       1,000     1991   (n)
220 Greenwood Court
  McDonough, GA         1,700       —       9,402       1,700       9,402       11,102       943     2000   (n)
1256 Oakbrook Drive
  Norcross, GA         336       1,907       310       339       2,215       2,553       286     1984   (n)
1265 Oakbrook Drive
  Norcross, GA         307       1,742       185       309       1,926       2,235       209     1984   (n)
1266 Oakbrook Drive
  Norcross, GA         234       1,326       54       235       1,378       1,613       152     1984   (n)
1275 Oakbrook Drive
  Norcross, GA         400       2,269       99       403       2,365       2,768       260     1986   (n)
1280 Oakbrook Drive
  Norcross, GA         281       1,592       235       283       1,826       2,108       225     1986   (n)
1300 Oakbrook Drive
  Norcross, GA         420       2,381       185       423       2,563       2,986       274     1986   (n)
1325 Oakbrook Drive
  Norcross, GA         332       1,879       207       334       2,084       2,417       238     1986   (n)
1351 Oakbrook Drive
  Norcross, GA         370       2,099       118       373       2,215       2,588       252     1984   (n)
1346 Oakbrook Drive
  Norcross, GA         740       4,192       128       744       4,315       5,059       484     1985   (n)
1412 Oakbrook Drive
  Norcross, GA         313       1,776       206       315       1,980       2,296       227     1985   (n)
7800 The Bluffs
  Austell, GA         490       2,415       447       496       2,856       3,352       247     1995   (n)
Greenwood Industrial Park
  McDonough, GA         1,550       —       7,485       1,550       7,485       9,035       252     2003   (n)


S-1

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
3060 South Park Blvd
  Ellenwood, GA         1,600       12,464       961       1,603       13,422       15,025       1,120     1992   (n)
46 Kent Drive
  Cartersville, GA         875       2,476       13       879       2,485       3,364       55     2001   (n)
100 Dorris Williams Industrial — King
  Atlanta, GA   (i)     401       3,754       42       406       3,791       4,197       127     2000   (n)
605 Stonehill Diver
  Atlanta, GA         485       1,979       24       490       1,998       2,488       93     1970   (n)
6514 Warren Drive
  Norcross, GA         510       1,250       9       513       1,256       1,769       58     1999   (n)
6544 Warren Drive(q)
  Norcross, GA         711       2,310       16       715       2,322       3,037       58     1999   (n)
720 Industrial Boulevard
  Dublin, GA         250       2,632       18       252       2,648       2,900       56     1973/2000   (n)
5356 East Ponce DeLeon
  One Mountain, GA         604       3,888       20       607       3,905       4,512       25     1982   (n)
5390 East Ponce DeLeon
  One Mountain, GA         397       1,791       11       399       1,800       2,199       11     1982   (n)
195 & 197 Collins Boulevard
  Athens, GA         1,410       5,344       37       1,419       5,372       6,791       107     1969/1984   (n)
4349 Avery Drive
  Gainsville, GA         1,862       4,322       34       1,873       4,344       6,218       75     1977   (n)
Baltimore
                                                                       
3431 Benson
  Baltimore, MD         553       3,062       317       562       3,370       3,932       667     1988   (n)
1820 Portal
  Baltimore, MD   (f)     884       4,891       455       899       5,330       6,230       1,018     1982   (n)
8900 Yellow Brick Road
  Baltimore, MD         447       2,473       372       475       2,817       3,292       550     1982   (n)
7476 New Ridge
  Hanover, MD         394       2,182       385       401       2,560       2,961       471     1987   (n)
504 Advantage Way
  Aberdeen, MD         2,799       15,864       813       2,802       16,674       19,476       1,154     1987/92   (n)
9700 Martin Luther King Hwy
  Lanham, MD         700       1,920       720       700       2,640       3,340       276     1980   (n)
9730 Martin Luther King Hwy
  Lanham, MD         500       955       678       500       1,633       2,133       146     1980   (n)
4600 Boston Way
  Lanham, MD         1,400       2,482       217       1,400       2,699       4,099       242     1980   (n)
4621 Boston Way
  Lanham, MD         1,100       3,070       369       1,100       3,439       4,539       286     1980   (n)
4720 Boston Way
  Lanham, MD         1,200       2,174       930       1,200       3,104       4,304       321     1979   (n)
2250 Randolph Drive
  Dulles, VA         3,200       8,187       36       3,208       8,215       11,423       363     1999   (n)
22630 Dulles Summit Court
  Dulles, VA         2,200       9,346       127       2,206       9,467       11,673       397     1998   (n)
4201 Forbes Boulevard(q)
  Lanham, MD         356       1,823       191       375       1,995       2,370       49     1989   (n)
4370-4383 Lottsford Vista Road
  Lanham, MD         279       1,358       68       296       1,408       1,705       45     1989   (n)
4400 Lottsford Vista Road
  Lanham, MD         351       1,955       108       372       2,042       2,414       54     1989   (n)
4420 Lottsford Vista Road
  Lanham, MD         539       2,196       118       568       2,285       2,853       66     1989   (n)
11204 McCormick Road
  Hunt Valley, MD         1,017       3,132       81       1,038       3,192       4,230       18     1962   (n)
11110 Pepper Road(q)
  Hunt Valley, MD         918       2,529       68       938       2,577       3,515       12     1964   (n)
11100 Gilroy Road
  Hunt Valley, MD         901       1,455       43       919       1,480       2,399       8     1972   (n)


S-2

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
336 Clubhouse(q)
  Hunt Valley, MD         982       3,158       82       1,004       3,218       4,222       18     1976   (n)
10709 Gilroy Road
  Hunt Valley, MD         907       2,884       (173 )     913       2,705       3,618       15     1978   (n)
10947 Golden West
  Hunt Valley, MD         1,134       3,436       64       1,135       3,499       4,634       13     1983   (n)
7120-7132 Ambassador Road
  Hunt Valley, MD         829       1,329       15       847       1,326       2,173       9     1970   (n)
7142 Ambassador Road(q)
  Hunt Valley, MD         924       2,876       71       942       2,929       3,871       9     1973   (n)
7144-7160 Ambassador Road
  Hunt Valley, MD         979       1,672       67       1,000       1,718       2,718       14     1974   (n)
7200 Rutherford(q)
  Hunt Valley, MD         1,032       2,150       62       1,054       2,190       3,244       17     1978   (n)
2700 Lord Baltimore(q)
  Hunt Valley, MD         875       1,826       (58 )     897       1,746       2,643       13     1978   (n)
9800 Martin Luther King Hwy
  Lanham, MD         1,200       2,457       543       1,200       3,000       4,200       258     1978   (n)
4501 Hollins Ferry Road
  Baltimore, MD         3,000       10,108       929       3,058       10,979       14,037       509     1982/92   (n)
11212 McCormick Road(q)
  Hunt Valley, MD         776       623       37       798       638       1,436       6     1961/1973   (n)
Central Pennsylvania
                                                                       
16522 Hunters Green Parkway
  Hagerstown, MD   (g)     1,390       13,104       3,902       1,863       16,534       18,396       1,088     2000   (n)
Golden Eagle Business Center
  Harrisburg, PA         585       3,176       83       600       3,245       3,844       57     2000   (n)
270 Old Silver Spring Road
  Mechanicsburg, PA         350       —       3,649       350       3,649       3,999       332     2001   (n)
37 Valleyview Business Park
  Jessup, PA         542       —       2,971       542       2,972       3,513       77     2004   (n)
170 Marcel Drive(q)
  Winchester, VA         1,544       5,463       266       1,544       5,730       7,273       —     1997   (n)
320 Museum Road
  Washington, PA         201       1,819       33       205       1,849       2,053       18     1967/75   (n)
Chicago
                                                                       
3600 West Pratt Avenue
  Lincolnwood, IL         1,050       5,767       1,238       1,050       7,005       8,055       2,021     1953/88   (n)
6750 South Sayre Avenue
  Bedford Park, IL         224       1,309       433       224       1,742       1,966       441     1975   (n)
585 Slawin Court
  Mount Prospect, IL         611       3,505       183       611       3,688       4,300       1,021     1992   (n)
2300 Windsor Court
  Addison, IL         688       3,943       504       696       4,439       5,135       1,344     1986   (n)
3505 Thayer Court
  Aurora, IL         430       2,472       35       430       2,507       2,938       717     1989   (n)
305-311 Era Drive
  Northbrook, IL         200       1,154       146       205       1,296       1,501       361     1978   (n)
4330 South Racine Avenue
  Chicago, IL         448       1,893       550       468       2,424       2,891       1,872     1978   (n)
12241 Melrose Street
  Franklin Park, IL         332       1,931       1,826       469       3,620       4,089       1,091     1969   (n)
11939 S Central Avenue
  Alsip, IL         1,208       6,843       2,155       1,305       8,900       10,205       1,829     1972   (n)
405 East Shawmut
  LaGrange, IL         368       2,083       365       387       2,428       2,815       486     1965   (n)
1010-50 Sesame Street
  Bensenville, IL         979       5,546       2,285       1,048       7,761       8,810       1,305     1976   (n)
7401 South Pulaski
  Chicago, IL         664       3,763       1,215       669       4,974       5,643       1,024     1975/86   (n)
7501 S. Pulaski
  Chicago, IL         318       2,038       738       318       2,777       3,094       514     1975/86   (n)
385 Fenton Lane
  West Chicago, IL         868       4,918       567       884       5,468       6,352       1,263     1990   (n)


S-3

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
905 Paramount
  Batavia, IL         243       1,375       391       252       1,757       2,009       355     1977   (n)
1005 Paramount
  Batavia, IL         282       1,600       454       293       2,043       2,336       401     1978   (n)
2120-24 Roberts
  Broadview, IL         220       1,248       369       231       1,607       1,838       391     1960   (n)
700 Business Center Drive
  Mount Prospect, IL         270       1,492       120       288       1,594       1,882       202     1980   (n)
800 Business Center Drive
  Mount Prospect, IL         631       3,493       233       666       3,691       4,358       468     1988/99   (n)
580 Slawin Court
  Mount Prospect, IL         233       1,292       234       254       1,505       1,760       180     1985   (n)
1150 Feehanville Drive
  Mount Prospect, IL         260       1,437       131       273       1,555       1,829       203     1983   (n)
1200 Business Center D rive
  Mount Prospect, IL         765       4,237       335       814       4,524       5,338       576     1988/2000   (n)
1331 Business Center Drive
  Mount Prospect, IL         235       1,303       136       255       1,419       1,674       181     1985   (n)
19W661 101st Street
  Lemont, IL         1,200       6,643       1,400       1,220       8,023       9,242       844     1988   (n)
175 Wall Street
  Glendale Heights, IL         427       2,363       191       433       2,548       2,981       236     1990   (n)
800-820 Thorndale Avenue
  Bensenville, IL         751       4,159       109       761       4,258       5,019       326     1985   (n)
830-890 Supreme Drive
  Bensenville, IL         671       3,714       247       679       3,953       4,632       406     1981   (n)
1661 Feehanville Drive
  Mount Prospect, IL         985       5,455       1,134       1,044       6,530       7,574       845     1986   (n)
2250 Arthur Avenue
  Elk Grove Village, IL         800       1,543       41       809       1,576       2,384       208     1973/86   (n)
1850 Touhy & 1158-60
McCage Ave
  Elk Grove Village, IL         1,500       4,842       57       1,514       4,885       6,399       351     1978   (n)
1088-1130 Thorndale Avenue(q)
  Bensenville, IL         2,103       3,674       12       2,108       3,681       5,789       93     1983   (n)
855-891 Busse(Route 83)
  Bensenville, IL         1,597       2,767       11       1,601       2,774       4,375       72     1983   (n)
1060-1074 W. Thorndale Ave.(q)
  Bensenville, IL         1,704       2,108       31       1,709       2,134       3,843       61     1982   (n)
400 Crossroads Parkway
  Bolingbrook, IL         1,178       9,453       26       1,181       9,476       10,657       159     1988   (n)
7609 West Industrial Drive(q)
  Forest Park, IL         1,207       2,343       161       1,213       2,497       3,711       69     1974   (n)
7801 West Industrial Drive
  Forest Park, IL         1,215       3,020       19       1,220       3,034       4,254       74     1976   (n)
501 Airport Road(q)
  Aurora, IL         694       —       5,256       694       5,256       5,950       415     2002   (n)
251 Airport Road(q)
  Aurora, IL         983       —       6,653       983       6,654       7,636       657     2002   (n)
1900-1960 Devon Avenue(q)
  Elk Grove Village, IL         1,154       2,552       195       1,167       2,734       3,901       124     1979   (n)
3686 South Central
  Rockford, IL         200       2,520       11       200       2,531       2,731       72     1998   (n)
749 Southrock
  Rockford, IL         379       2,814       13       380       2,825       3,206       105     1992   (n)
725 Kimberly Drive
  Carol Stream, IL         793       1,395       10       801       1,397       2,198       23     1987   (n)
2802 Bloomington Road
  Champaign, IL         1,002       7,544       45       1,007       7,583       8,591       47     1996   (n)
17001 S. Vincennes
  Thornton, IL         497       504       6       500       507       1,007       9     1974   (n)


S-4

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
Cincinnati
                                                                       
9900-9970 Princeton
  Cincinnati, OH         545       3,088       1,709       566       4,775       5,342       1,315     1970   (n)
2940 Highland Avenue
  Cincinnati, OH         1,717       9,730       2,258       1,772       11,933       13,705       3,151     1969/74   (n)
4700-4750 Creek Road
  Blue Ash, OH         1,080       6,118       772       1,109       6,860       7,970       1,788     1960   (n)
12072 Best Place
  Springboro, OH         426       —       3,177       443       3,160       3,604       610     1984   (n)
901 Pleasant Valley Drive
  Springboro, OH         304       1,721       166       316       1,875       2,191       370     1984/94   (n)
4440 Mulhauser Road
  Cincinnati, OH         655       39       5,741       655       5,780       6,435       1,197     1999   (n)
4434 Mulhauser Road
  Cincinnati, OH         444       16       4,684       463       4,681       5,144       764     1999   (n)
9449 Glades Drive
  Hamilton, OH         465       —       4,080       477       4,068       4,545       581     1999   (n)
420 Wards Corner Road
  Loveland, OH         600       1,083       1,010       606       2,087       2,693       324     1985   (n)
422 Wards Corner Road
  Loveland, OH         600       1,811       451       605       2,256       2,862       354     1985   (n)
4436 Muhlhauser Road
  Hamilton, OH         630       —       5,663       630       5,664       6,293       607     2001   (n)
4438 Muhlhauser Road
  Hamilton, OH         779       —       6,823       779       6,823       7,602       680     2000   (n)
9200 Brookfield Court(q)
  Florence, KY         578       3,551       72       582       3,619       4,201       120     1996   (n)
4663 Dues Drive(q)
  West Chester, OH         858       2,273       204       875       2,460       3,335       130     1972   (n)
7401 Fremont Pike #1
  Perrysburg, OH         291       1,130       26       296       1,151       1,447       7     1955/70   (n)
7401 Fremont Pike #2
  Perrysburg, OH         280       1,088       25       285       1,108       1,393       7     1980   (n)
7401 Fremont Pike #3
  Perrysburg, OH         334       1,300       30       340       1,324       1,664       8     1984   (n)
7401 Fremont Pike #4
  Perrysburg, OH         502       1,952       44       511       1,987       2,498       13     1985   (n)
7401 Fremont Pike #5
  Perrysburg, OH         340       1,323       31       346       1,347       1,694       8     1990   (n)
7401 Fremont Pike #6
  Perrysburg, OH         340       1,323       31       346       1,347       1,694       8     1990   (n)
7401 Fremont Pike #7
  Perrysburg, OH         357       1,389       33       364       1,415       1,779       9     1991   (n)
7401 Fremont Pike #8
  Perrysburg, OH         704       2,739       64       717       2,789       3,507       18     1993   (n)
7401 Fremont Pike #9
  Perrysburg, OH         18       68       2       18       70       88       0     1998   (n)
7401 Fremont Pike #10
  Perrysburg, OH         38       149       4       39       152       191       1     1951   (n)
Cleveland
                                                                       
1 Allen Bradley Drive
  Mayfield Heights, OH         3,034       48,475       269       3,051       48,726       51,778       276     1995   (n)
Columbus
                                                                       
3800 Lockbourne Industrial Pkwy
  Columbus, OH         1,045       6,421       14       1,045       6,435       7,480       1,529     1986   (n)
3880 Groveport Road
  Columbus, OH         1,955       12,154       600       1,955       12,755       14,709       3,087     1986   (n)
1819 North Walcutt Road
  Columbus, OH         637       4,590       (296 )     637       4,294       4,931       1,105     1973   (n)
4300 Cemetary Road(q)
  Hillard, OH         764       6,248       (1,424 )     764       4,823       5,588       1,133     1968/74   (n)


S-5

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
4115 Leap Road(j)
  Hillard, OH         756       4,297       495       756       4,781       5,537       892     1977   (n)
3300 Lockbourne
  Columbus, OH         708       3,920       1,241       710       5,159       5,869       1,075     1964   (n)
1076 Pittsburgh Drive
  Delaware, OH         2,497       5,103       22       2,505       5,117       7,622       157     1996   (n)
6150 Huntley Road
  Columbus, OH         986       5,162       16       989       5,175       6,164       101     2002   (n)
Dallas/Fort Worth
                                                                       
1275-1281 Roundtable Drive
  Dallas, TX         117       839       53       117       892       1,009       184     1966   (n)
2406-2416 Walnut Ridge
  Dallas, TX         178       1,006       290       183       1,291       1,474       278     1978   (n)
12750 Perimeter Drive
  Dallas, TX         638       3,618       635       660       4,232       4,892       805     1979   (n)
1324-1343 Roundtable Drive
  Dallas, TX         178       1,006       227       184       1,227       1,411       240     1972   (n)
2401-2419 Walnut Ridge
  Dallas, TX         148       839       119       153       953       1,106       201     1978   (n)
4248-4252 Simonton
  Farmers Ranch, TX         888       5,032       412       920       5,412       6,332       1,169     1973   (n)
900-906 Great Southwest Pkwy
  Arlington, TX         237       1,342       596       270       1,905       2,175       368     1972   (n)
2179 Shiloh Road
  Garland, TX         251       1,424       68       256       1,486       1,742       299     1982   (n)
2159 Shiloh Road
  Garland, TX         108       610       40       110       648       758       130     1982   (n)
2701 Shiloh Road
  Garland, TX         818       4,636       1,209       923       5,740       6,663       1,275     1981   (n)
12784 Perimeter Drive(k)
  Dallas, TX         350       1,986       461       396       2,401       2,797       494     1981   (n)
3000 West Commerce
  Dallas, TX         456       2,584       530       469       3,101       3,570       599     1980   (n)
3030 Hansboro
  Dallas, TX         266       1,510       385       276       1,885       2,161       382     1971   (n)
5222 Cockrell Hill
  Dallas, TX         296       1,677       389       306       2,056       2,363       390     1973   (n)
405-407 113th
  Arlington, TX         181       1,026       431       185       1,452       1,637       264     1969   (n)
816 111th Street
  Arlington, TX         251       1,421       224       258       1,638       1,896       330     1972   (n)
7341 Dogwood Park
  Richland Hills, TX         79       435       219       84       649       732       152     1973   (n)
7427 Dogwood Park
  Richland Hills, TX         96       532       556       102       1,083       1,185       142     1973   (n)
7348-54 Tower Street
  Richland Hills, TX         88       489       196       94       679       773       120     1978   (n)
7370 Dogwood Park
  Richland Hills, TX         91       503       97       96       594       691       122     1987   (n)
7339-41 Tower Street
  Richland Hills, TX         98       541       66       104       601       705       109     1980   (n)
7437-45 Tower Street
  Richland Hills, TX         102       563       79       108       635       743       124     1977   (n)
7331-59 Airport Freeway
  Richland Hills, TX         354       1,958       363       372       2,303       2,675       411     1987   (n)
7338-60 Dogwood Park
  Richland Hills, TX         106       587       102       112       683       796       127     1978   (n)
7450-70 Dogwood Park
  Richland Hills, TX         106       584       125       112       703       815       140     1985   (n)
7423-49 Airport Freeway
  Richland Hills, TX         293       1,621       334       308       1,940       2,248       421     1985   (n)
7400 Whitehall Street
  Richland Hills, TX         109       603       91       115       688       804       126     1994   (n)
1602-1654 Terre Colony
  Dallas, TX         458       2,596       230       468       2,816       3,284       467     1981   (n)


S-6

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
3330 Duncanville Road
  Dallas, TX         197       1,114       28       199       1,139       1,338       158     1987   (n)
6851-6909 Snowden Road
  Fort Worth, TX         1,025       5,810       483       1,038       6,280       7,318       905     1985/86   (n)
2351-2355 Merritt Drive
  Garland, TX         101       574       125       103       698       800       118     1986   (n)
10575 Vista Park
  Dallas, TX         366       2,074       214       371       2,283       2,654       322     1988   (n)
701-735 North Plano Road
  Richardson, TX         696       3,944       118       705       4,053       4,758       576     1972/94   (n)
2259 Merritt Drive
  Garland, TX         96       544       45       97       588       685       82     1986   (n)
2260 Merritt Drive
  Garland, TX         319       1,806       47       323       1,849       2,172       259     1986/99   (n)
2220 Merritt Drive
  Garland, TX         352       1,993       258       356       2,247       2,603       297     1986/2000   (n)
2010 Merritt Drive
  Garland, TX         350       1,981       112       354       2,088       2,442       304     1986   (n)
2363 Merritt Drive
  Garland, TX         73       412       117       74       529       602       67     1986   (n)
2447 Merritt Drive
  Garland, TX         70       395       81       71       475       546       57     1986   (n)
2465-2475 Merritt Drive
  Garland, TX         91       514       21       92       535       626       74     1986   (n)
2485-2505 Merritt Drive
  Garland, TX         431       2,440       415       436       2,849       3,285       356     1986   (n)
2081 Hutton Drive  —  Bldg 1(k)
  Carrolton, TX         448       2,540       480       453       3,016       3,468       459     1981   (n)
2150 Hutton Drive
  Carrolton, TX         192       1,089       315       194       1,402       1,596       231     1980   (n)
2110 Hutton Drive
  Carrolton, TX         374       2,117       172       377       2,285       2,662       310     1985   (n)
2025 McKenzie Drive
  Carrolton, TX         437       2,478       431       442       2,904       3,346       447     1985   (n)
2019 McKenzie Drive
  Carrolton, TX         502       2,843       174       507       3,012       3,519       418     1985   (n)
1420 Valwood Parkway — Bldg 1(j)
  Carrolton, TX         460       2,608       609       466       3,212       3,677       429     1986   (n)
1620 Valwood Parkway(k)
  Carrolton, TX         1,089       6,173       1,165       1,100       7,327       8,427       1,095     1986   (n)
1505 Luna Road — Bldg II
  Carrolton, TX         167       948       160       169       1,106       1,275       151     1988   (n)
1625 West Crosby Road
  Carrolton, TX         617       3,498       678       631       4,162       4,793       670     1988   (n)
2029-2035 McKenzie Drive
  Carrolton, TX         306       1,870       1,015       306       2,885       3,191       625     1985   (n)
1840 Hutton Drive(j)
  Carrolton, TX         811       4,597       521       819       5,111       5,930       656     1986   (n)
1420 Valwood Pkwy — Bldg II
  Carrolton, TX         373       2,116       422       377       2,534       2,912       376     1986   (n)
2015 McKenzie Drive
  Carrolton, TX         510       2,891       316       516       3,202       3,717       392     1986   (n)
2105 McDaniel Drive
  Carrolton, TX         502       2,844       735       507       3,573       4,080       448     1986   (n)
2009 McKenzie Drive
  Carrolton, TX         476       2,699       506       481       3,201       3,682       413     1987   (n)
1505 Luna Road — Bldg I
  Carrolton, TX         521       2,953       571       529       3,516       4,045       412     1988   (n)
900-1100 Avenue S
  Grand Prairie, TX         623       3,528       325       629       3,846       4,475       437     1985   (n)
15001 Trinity Blvd
  Ft. Worth, TX         529       2,998       50       534       3,043       3,578       253     1984   (n)


S-7

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
Plano Crossing(l)
  Plano, TX         1,961       11,112       171       1,981       11,263       13,243       943     1998   (n)
7413A-C Dogwood Park
  Richland Hills, TX         110       623       102       111       724       835       58     1990   (n)
7450 Tower Street
  Richland Hills, TX         36       204       160       36       363       399       23     1977   (n)
7436 Tower Street
  Richland Hills, TX         57       324       147       58       471       528       31     1979   (n)
7501 Airport Freeway
  Richland Hills, TX         113       638       50       115       686       800       67     1983   (n)
7426 Tower Street
  Richland Hills, TX         76       429       18       76       446       522       36     1978   (n)
7427-7429 Tower Street
  Richland Hills, TX         75       427       15       76       441       517       36     1981   (n)
2840-2842 Handley Ederville Rd
  Richland Hills, TX         112       635       34       113       668       781       56     1977   (n)
7451-7477 Airport Freeway
  Richland Hills, TX         256       1,453       211       259       1,661       1,920       189     1984   (n)
7415 Whitehall Street
  Richland Hills, TX         372       2,107       137       375       2,241       2,616       200     1986   (n)
7450 Whitehall Street
  Richland Hills, TX         104       591       10       105       600       705       49     1978   (n)
7430 Whitehall Street
  Richland Hills, TX         143       809       15       144       822       966       68     1985   (n)
7420 Whitehall Street
  Richland Hills, TX         110       621       28       111       648       759       60     1985   (n)
300 Wesley Way
  Richland Hills, TX         208       1,181       17       211       1,196       1,407       98     1995   (n)
825-827 Avenue H(j)
  Arlington, TX         600       3,006       193       604       3,195       3,799       210     1979   (n)
1013-31 Avenue M
  Grand Prairie, TX         300       1,504       52       302       1,554       1,856       101     1978   (n)
1172-84 113th Street(j)
  Grand Prairie, TX         700       3,509       30       704       3,534       4,239       199     1980   (n)
1200-16 Avenue H(j)
  Arlington, TX         600       2,846       (17 )     604       2,825       3,429       181     1981/82   (n)
1322-66 N. Carrier Parkway(k)
  Grand Prairie, TX         1,000       5,012       58       1,006       5,064       6,070       297     1979   (n)
2401-2407 Centennial Dr. 
  Arlington, TX         600       2,534       60       604       2,591       3,194       161     1977   (n)
3111 West Commerce Street
  Dallas, TX         1,000       3,364       45       1,011       3,398       4,409       202     1979   (n)
4201 Kellway
  Addison, TX         306       1,342       56       317       1,387       1,704       57     1980   (n)
9150 West Royal Lane(q)
  Irving, TX         818       3,767       18       820       3,783       4,603       74     1985   (n)
13800 Senlac Drive
  Farmers Ranch, TX         823       4,042       12       825       4,052       4,877       96     1988   (n)
801-831 S. Great Southwest Pkwy(q)
  Grand Prairie, TX         2,581       16,556       257       2,586       16,808       19,394       538     1975   (n)
801-842 Heinz Way(q)
  Grand Prairie, TX         599       3,327       34       601       3,359       3,960       73     1977   (n)
901-937 Heinz Way
  Grand Prairie, TX         493       2,823       7       494       2,829       3,323       70     1997   (n)
2104 Hutton Drive
  Carrolton, TX         246       1,393       172       249       1,563       1,811       199     1990   (n)
7451 Dogwood Park
  Richland Hills, TX         133       753       195       134       947       1,081       156     1977   (n)
2821 Cullen Street
  Fort Worth, TX         71       404       6       72       409       481       33     1961   (n)
2900 Avenue E(q)
  Arlington, TX         296       —       1,936       296       1,936       2,232       39     1968   (n)


S-8

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
14500 E. Beltwood(q)
  Dallas, TX         309       1,368       18       312       1,383       1,695       14     1980   (n)
Denver
                                                                       
7100 North Broadway — 1
  Denver, CO         201       1,141       405       215       1,532       1,748       360     1978   (n)
7100 North Broadway — 2
  Denver, CO         203       1,150       272       204       1,420       1,624       325     1978   (n)
7100 North Broadway — 3
  Denver, CO         139       787       152       140       938       1,078       217     1978   (n)
7100 North Broadway — 5
  Denver, CO         178       1,018       149       178       1,167       1,345       276     1978   (n)
7100 North Broadway — 6
  Denver, CO         269       1,526       372       271       1,896       2,167       484     1978   (n)
20100 East 32nd Avenue Parkway
  Aurora, CO         314       1,888       173       314       2,060       2,374       540     1997   (n)
700 West 48th Street
  Denver, CO         302       1,711       439       307       2,145       2,452       508     1984   (n)
702 West 48th Street
  Denver, CO         135       763       128       139       886       1,025       216     1984   (n)
6425 North Washington
  Denver, CO         374       2,118       318       385       2,424       2,809       543     1983   (n)
3370 North Peoria Street
  Aurora, CO         163       924       70       163       994       1,157       225     1978   (n)
3390 North Peoria Street
  Aurora, CO         145       822       85       147       906       1,052       200     1978   (n)
3508-3538 North Peoria Street
  Aurora, CO         260       1,472       485       264       1,953       2,217       482     1978   (n)
3568 North Peoria Street
  Aurora, CO         222       1,260       355       225       1,612       1,837       376     1978   (n)
4785 Elati
  Denver, CO         173       981       212       175       1,192       1,367       295     1972   (n)
4770 Fox Street
  Denver, CO         132       750       118       134       866       1,000       194     1972   (n)
1550 W. Evans
  Denver, CO         385       2,200       411       385       2,610       2,995       549     1975   (n)
3751-71 Revere Street
  Denver, CO         262       1,486       208       267       1,689       1,957       371     1980   (n)
3871 Revere
  Denver, CO         361       2,047       559       368       2,599       2,967       550     1980   (n)
4570 Ivy Street
  Denver, CO         219       1,239       174       220       1,411       1,632       324     1985   (n)
5855 Stapleton Drive North
  Denver, CO         288       1,630       282       290       1,911       2,201       428     1985   (n)
5885 Stapleton Drive North
  Denver, CO         376       2,129       175       380       2,300       2,680       458     1985   (n)
5977-5995 North Broadway
  Denver, CO         268       1,518       446       271       1,961       2,232       392     1978   (n)
2952-5978 North Broadway
  Denver, CO         414       2,346       728       422       3,067       3,489       682     1978   (n)
4721 Ironton Street
  Denver, CO         232       1,313       1,520       236       2,827       3,064       987     1969   (n)
7100 North Broadway — 7
  Denver, CO         215       1,221       227       217       1,445       1,663       361     1985   (n)
7100 North Broadway — 8
  Denver, CO         79       448       104       80       551       631       112     1985   (n)
6804 East 48th Avenue
  Denver, CO         253       1,435       403       256       1,835       2,092       369     1973   (n)
445 Bryant Street
  Denver, CO         1,829       10,219       1,719       1,829       11,938       13,767       2,458     1960   (n)
East 47th Drive — A
  Denver, CO         441       2,689       (6 )     441       2,683       3,124       576     1997   (n)
9500 West 49th Street — A
  Wheatridge, CO         283       1,625       328       286       1,951       2,236       459     1997   (n)


S-9

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
9500 West 49th Street — B
  Wheatridge, CO         225       1,272       70       226       1,341       1,567       270     1997   (n)
9500 West 49th Street — C
  Wheatridge, CO         600       3,409       126       600       3,536       4,136       738     1997   (n)
9500 West 49th Street — D
  Wheatridge, CO         246       1,537       179       246       1,716       1,962       555     1997   (n)
8100 South Park Way — A
  Littleton, CO         423       2,507       192       423       2,699       3,121       565     1997   (n)
8100 South Park Way — B
  Littleton, CO         103       582       162       104       743       847       177     1984   (n)
8100 South Park Way — C
  Littleton, CO         568       3,219       223       575       3,435       4,010       698     1984   (n)
451-591 East 124th Avenue
  Littleton, CO         383       2,145       805       383       2,950       3,333       665     1979   (n)
608 Garrison Street
  Lakewood, CO         265       1,501       395       267       1,894       2,161       396     1984   (n)
610 Garrison Street
  Lakewood, CO         264       1,494       438       266       1,931       2,196       439     1984   (n)
15000 West 6th Avenue
  Golden, CO         913       5,174       1,232       916       6,404       7,320       1,498     1985   (n)
14998 West 6th Avenue Bldg E
  Golden, CO         565       3,199       224       568       3,419       3,987       757     1995   (n)
14998 West 6th Avenue Bldg F
  Englewood, CO         269       1,525       86       271       1,610       1,881       360     1995   (n)
12503 East Euclid Drive
  Denver, CO         1,208       6,905       769       1,208       7,675       8,882       1,731     1986   (n)
6547 South Racine Circle
  Denver, CO         739       4,241       152       739       4,393       5,132       889     1996   (n)
7800 East Iliff Avenue
  Denver, CO         188       1,067       245       190       1,310       1,500       258     1983   (n)
2369 South Trenton Way
  Denver, CO         292       1,656       170       294       1,825       2,118       408     1983   (n)
2422 S. Trenton Way
  Denver, CO         241       1,364       243       243       1,605       1,848       348     1983   (n)
2452 South Trenton Way
  Denver, CO         421       2,386       201       426       2,582       3,008       532     1983   (n)
1600 South Abilene
  Aurora, CO         465       2,633       79       467       2,710       3,177       573     1986   (n)
1620 South Abilene
  Aurora, CO         268       1,520       101       270       1,619       1,890       340     1986   (n)
1640 South Abilene
  Aurora, CO         368       2,085       141       382       2,213       2,594       490     1986   (n)
13900 East Florida Ave
  Aurora, CO         189       1,071       79       190       1,149       1,339       244     1986   (n)
14401-14492 East 33rd Place
  Aurora, CO         440       2,519       298       440       2,817       3,257       583     1979   (n)
11701 East 53rd Avenue
  Denver, CO         416       2,355       194       422       2,542       2,964       528     1985   (n)
5401 Oswego Street
  Denver, CO         273       1,547       329       278       1,871       2,148       457     1985   (n)
3811 Joilet
  Denver, CO         735       4,166       448       752       4,597       5,349       859     1977   (n)
2630 West 2nd Avenue
  Denver, CO         51       286       5       51       291       342       61     1970   (n)
2650 West 2nd Avenue
  Denver, CO         221       1,252       191       223       1,441       1,664       306     1970   (n)
14818 West 6th Avenue Bldg A
  Golden, CO         468       2,799       389       468       3,188       3,656       801     1985   (n)
14828 West 6th Avenue Bldg B
  Golden, CO         503       2,942       541       503       3,482       3,985       815     1985   (n)
12055 E 49th Ave/4955 Peoria
  Denver, CO         298       1,688       562       305       2,243       2,547       518     1984   (n)
4940-4950 Paris
  Denver, CO         152       861       174       156       1,032       1,187       199     1984   (n)
4970 Paris
  Denver, CO         95       537       69       97       604       701       112     1984   (n)


S-10

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
7367 South Revere Parkway
  Englewood, CO         926       5,124       264       934       5,380       6,314       1,067     1997   (n)
8200 East Park Meadows Drive(j)
  Lone Tree, CO         1,297       7,348       983       1,304       8,324       9,628       1,192     1984   (n)
3250 Quentin(j)
  Aurora, CO         1,220       6,911       617       1,230       7,518       8,747       1,100     1984/2000   (n)
11585 E. 53rd Ave.(j)
  Denver, CO         1,770       10,030       1,090       1,780       11,110       12,890       1,286     1984   (n)
10500 East 54th Ave.(k)
  Denver, CO         1,253       7,098       937       1,260       8,027       9,287       1,045     1986   (n)
8835 W. 116th Street
  Broomfield, CO         1,151       6,523       870       1,304       7,240       8,544       520     2002   (n)
3101-3151 S. Platte River Dr. 
  Englewood, CO         2,500       8,549       172       2,504       8,717       11,221       508     1974   (n)
3155-3199 S. Platte River Dr. 
  Englewood, CO         1,700       7,787       64       1,702       7,849       9,551       428     1974   (n)
3201-3273 S. Platte River Dr. 
  Englewood, CO         1,600       6,592       161       1,602       6,750       8,353       433     1974   (n)
18150 E. 32nd Street
  Aurora, CO         563       3,188       1,168       572       4,347       4,919       718     2000   (n)
8820 W. 116th Street(q)
  Broomfield, CO         338       1,918       316       372       2,199       2,571       145     2001   (n)
7005 East 46th Avenue
  Denver, CO         512       2,025       22       517       2,042       2,559       49     1996   (n)
Hilltop Business Center I — Bldg. B(q)
  Littleton, CO         739       —       3,577       739       3,578       4,316       416     2001   (n)
Jeffco Business Center A
  Broomfield, CO         312       —       1,730       370       1,671       2,042       358     2001   (n)
Park Centre A(q)
  Westminister, CO         441       —       4,241       441       4,241       4,682       545     2001   (n)
Park Centre B(q)
  Westminister, CO         374       —       3,222       374       3,221       3,596       471     2001   (n)
Park Centre C(q)
  Westminister, CO         374       —       3,022       374       3,022       3,396       422     2001   (n)
Park Centre D(q)
  Westminister, CO         441       —       3,772       441       3,771       4,213       546     2001   (n)
9586 Interstate 25 East Frontage
  Longmont, CO         898       5,038       229       939       5,226       6,165       27     1997   (n)
Des Moines
                                                                       
1021 W. First Street, Hwy 93
  Sumner, IA         99       2,540       17       100       2,556       2,656       28     1990/1995   (n)
Detroit
                                                                       
238 Executive Drive
  Troy, MI         52       173       554       100       679       779       555     1973   (n)
256 Executive Drive
  Troy, MI         44       146       436       85       541       626       439     1974   (n)
301 Executive Drive
  Troy, MI         71       293       731       133       962       1,095       718     1974   (n)
449 Executive Drive
  Troy, MI         125       425       1,030       218       1,362       1,580       1,002     1975   (n)
501 Executive Drive
  Troy, MI         71       236       678       129       856       985       446     1984   (n)
451 Robbins Drive
  Troy, MI         96       448       961       192       1,313       1,505       923     1975   (n)
1095 Crooks Road
  Troy, MI         331       1,017       1,006       360       1,994       2,354       1,153     1986   (n)
1416 Meijer Drive
  Troy, MI         94       394       342       121       709       830       483     1980   (n)


S-11

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
1624 Meijer Drive
  Troy, MI         236       1,406       902       373       2,171       2,544       1,357     1984   (n)
1972 Meijer Drive
  Troy, MI         315       1,301       721       372       1,965       2,337       1,143     1985   (n)
1621 Northwood Drive
  Troy, MI         85       351       918       215       1,140       1,354       951     1977   (n)
1707 Northwood Drive
  Troy, MI         95       262       1,221       239       1,339       1,578       841     1983   (n)
1788 Northwood Drive
  Troy, MI         50       196       549       103       692       795       488     1977   (n)
1821 Northwood Drive
  Troy, MI         132       523       742       220       1,177       1,397       975     1977   (n)
1826 Northwood Drive
  Troy, MI         55       208       394       103       554       657       461     1977   (n)
1864 Northwood Drive
  Troy, MI         57       190       437       107       577       684       479     1977   (n)
2277 Elliott Avenue
  Troy, MI         48       188       501       104       633       737       479     1975   (n)
2451 Elliott Avenue
  Troy, MI         78       319       742       164       975       1,139       790     1974   (n)
2730 Research Drive
  Rochester Hills, MI         903       4,215       674       903       4,889       5,792       2,715     1988   (n)
2791 Research Drive
  Rochester Hills, MI         557       2,731       707       560       3,435       3,995       1,603     1991   (n)
2871 Research Drive
  Rochester Hills, MI         324       1,487       372       327       1,856       2,183       932     1991   (n)
2911 Research Drive
  Rochester Hills, MI         504       2,136       654       504       2,790       3,294       1,345     1992   (n)
3011 Research Drive
  Rochester Hills, MI         457       2,104       346       457       2,450       2,907       1,392     1988   (n)
2870 Technology Drive
  Rochester Hills, MI         275       1,262       228       279       1,486       1,765       840     1988   (n)
2900 Technology Drive
  Rochester Hills, MI         214       977       531       219       1,503       1,722       650     1992   (n)
2920 Technology Drive
  Rochester Hills, MI         153       671       196       153       868       1,020       420     1992   (n)
2930 Technology Drive
  Rochester Hills, MI         131       594       380       138       966       1,105       440     1991   (n)
2950 Technology Drive
  Rochester Hills, MI         178       819       223       185       1,035       1,220       524     1991   (n)
23014 Commerce Drive
  Farmington Hills, MI         39       203       169       56       355       411       209     1983   (n)
23028 Commerce Drive
  Farmington Hills, MI         98       507       247       125       727       852       436     1983   (n)
23035 Commerce Drive
  Farmington Hills, MI         71       355       262       93       596       688       344     1983   (n)
23042 Commerce Drive
  Farmintgon Hills, MI         67       277       306       89       561       650       330     1983   (n)
23065 Commerce Drive
  Farmington Hills, MI         71       408       213       93       599       692       352     1983   (n)
23070 Commerce Drive
  Farmington Hills, MI         112       442       759       125       1,188       1,313       777     1983   (n)
23079 Commerce Drive
  Farmington Hills, MI         68       301       316       79       605       685       309     1983   (n)
23093 Commerce Drive
  Farmington Hills, MI         211       1,024       844       295       1,784       2,079       1,053     1983   (n)
23135 Commerce Drive
  Farmington Hills, MI         146       701       256       158       945       1,103       521     1986   (n)
23163 Commerce Drive
  Farmington Hills, MI         111       513       313       138       799       937       438     1986   (n)
23177 Commerce Drive
  Farmington Hills, MI         175       1,007       612       254       1,540       1,794       852     1986   (n)
23206 Commerce Drive
  Farmington Hills, MI         125       531       324       137       842       980       477     1985   (n)
23370 Commerce Drive
  Farmington Hills, MI         59       233       308       66       534       600       304     1980   (n)


S-12

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
32450 N Avis Drive
  Madison Heights, MI         281       1,590       99       286       1,684       1,970       332     1974   (n)
12707 Eckles Road
  Plymouth Township, MI         255       1,445       109       267       1,543       1,809       363     1990   (n)
9300-9328 Harrison Rd
  Romulus, MI         147       834       393       154       1,219       1,374       300     1978   (n)
9330-9358 Harrison Rd
  Romulus, MI         81       456       302       85       754       839       194     1978   (n)
28420-28448 Highland Rd
  Romulus, MI         143       809       212       149       1,015       1,164       265     1979   (n)
28450-28478 Highland Rd
  Romulus, MI         81       461       272       85       730       815       196     1979   (n)
28421-28449 Highland Rd
  Romulus, MI         109       617       291       114       903       1,017       261     1980   (n)
28451-28479 Highland Rd
  Romulus, MI         107       608       177       112       780       892       210     1980   (n)
28825-28909 Highland Rd
  Romulus, MI         70       395       267       73       659       732       169     1981   (n)
28933-29017 Highland Rd
  Romulus, MI         112       634       150       117       779       896       198     1982   (n)
28824-28908 Highland Rd
  Romulus, MI         134       760       219       140       972       1,113       215     1982   (n)
28932-29016 Highland Rd
  Romulus, MI         123       694       322       128       1,011       1,139       230     1982   (n)
9710-9734 Harrison Rd
  Romulus, MI         125       706       149       130       850       980       205     1987   (n)
9740-9772 Harrison Rd
  Romulus, MI         132       749       130       138       872       1,011       208     1987   (n)
9840-9868 Harrison Rd
  Romulus, MI         144       815       168       151       977       1,127       243     1987   (n)
9800-9824 Harrison Rd
  Romulus, MI         117       664       94       123       753       876       172     1987   (n)
29265-29285 Airport Dr
  Romulus, MI         140       794       289       147       1,076       1,223       294     1983   (n)
29185-29225 Airport Dr
  Romulus, MI         140       792       258       146       1,044       1,191       246     1983   (n)
29149-29165 Airport Dr
  Romulus, MI         216       1,225       227       226       1,442       1,668       328     1984   (n)
29101-29115 Airport Dr
  Romulus, MI         130       738       249       136       981       1,117       237     1985   (n)
29031-29045 Airport Dr
  Romulus, MI         124       704       123       130       821       951       202     1985   (n)
29050-29062 Airport Dr
  Romulus, MI         127       718       156       133       868       1,001       234     1986   (n)
29120-29134 Airport Dr
  Romulus, MI         161       912       298       169       1,203       1,371       301     1986   (n)
29200-29214 Airport Dr
  Romulus, MI         170       963       337       178       1,292       1,469       347     1985   (n)
9301-9339 Middlebelt Rd
  Romulus, MI         124       703       195       130       892       1,022       216     1983   (n)
26980 Trolley Industrial Drive
  Taylor, MI         450       2,550       1,017       463       3,554       4,017       799     1997   (n)
32975 Capitol Avenue
  Livonia, MI         135       748       332       144       1,071       1,215       207     1978   (n)
2725 S. Industrial Highway
  Ann Arbor, MI         660       3,654       322       704       3,931       4,636       748     1997   (n)
32920 Capitol Avenue
  Livonia, MI         76       422       83       82       499       581       93     1973   (n)
11923 Brookfield Avenue
  Livonia, MI         120       665       460       128       1,116       1,245       378     1973   (n)
11965 Brookfield Avenue
  Livonia, MI         120       665       67       128       724       852       138     1973   (n)
13405 Stark Road
  Livonia, MI         46       254       136       49       387       436       75     1980   (n)
1170 Chicago Road
  Troy, MI         249       1,380       232       266       1,595       1,861       292     1983   (n)


S-13

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
1200 Chicago Road
  Troy, MI         268       1,483       226       286       1,691       1,977       307     1984   (n)
450 Robbins Drive
  Troy, MI         166       920       223       178       1,132       1,309       210     1976   (n)
1230 Chicago Road
  Troy, MI         271       1,498       142       289       1,622       1,911       308     1996   (n)
12886 Westmore Avenue
  Livonia, MI         190       1,050       186       202       1,224       1,426       227     1981   (n)
12898 Westmore Avenue
  Livonia, MI         190       1,050       235       202       1,273       1,475       241     1981   (n)
33025 Industrial Road
  Livonia, MI         80       442       130       85       567       652       108     1980   (n)
47711 Clipper Street
  Plymouth Township, MI         539       2,983       265       575       3,212       3,787       611     1996   (n)
32975 Industrial Road
  Livonia, MI         160       887       341       171       1,217       1,388       242     1984   (n)
32985 Industrial Road
  Livonia, MI         137       761       149       147       900       1,047       167     1985   (n)
32995 Industrial Road
  Livonia, MI         160       887       180       171       1,056       1,227       211     1983   (n)
12874 Westmore Avenue
  Livonia, MI         137       761       239       147       990       1,137       176     1984   (n)
33067 Industrial Road
  Livonia, MI         160       887       305       171       1,181       1,352       211     1984   (n)
1775 Bellingham
  Troy, MI         344       1,902       238       367       2,117       2,484       394     1987   (n)
1785 East Maple
  Troy, MI         92       507       86       98       587       685       111     1985   (n)
1807 East Maple
  Troy, MI         321       1,775       199       342       1,953       2,295       376     1984   (n)
980 Chicago
  Troy, MI         206       1,141       103       220       1,230       1,450       234     1985   (n)
1840 Enterprise Drive
  Rochester Hills, MI         573       3,170       328       611       3,460       4,071       653     1990   (n)
1885 Enterprise Drive
  Rochester Hills, MI         209       1,158       115       223       1,259       1,482       240     1990   (n)
1935-55 Enterprise Drive
  Rochester Hills, MI         1,285       7,144       701       1,371       7,759       9,130       1,474     1990   (n)
5500 Enterprise Court
  Warren, MI         675       3,737       447       721       4,138       4,859       783     1989   (n)
750 Chicago Road
  Troy, MI         323       1,790       337       345       2,105       2,450       400     1986   (n)
800 Chicago Road
  Troy, MI         283       1,567       525       302       2,073       2,375       494     1985   (n)
850 Chicago Road
  Troy, MI         183       1,016       232       196       1,235       1,431       221     1984   (n)
2805 S. Industrial Highway
  Ann Arbor, MI         318       1,762       264       340       2,004       2,344       424     1990   (n)
6833 Center Drive
  Sterling Heights, MI         467       2,583       206       493       2,763       3,256       541     1998   (n)
32201 North Avis Drive
  Madison Heights, MI         345       1,911       519       349       2,427       2,776       594     1974   (n)
1100 East Mandoline Road
  Madison Heights, MI         888       4,915       1,620       897       6,526       7,423       1,438     1967   (n)
30081 Stephenson Highway
  Madison Heights, MI         271       1,499       379       274       1,874       2,149       368     1967   (n)
1120 John A. Papalas Drive(k)
  Lincoln Park, MI         586       3,241       543       593       3,777       4,370       720     1985   (n)
4872 S. Lapeer Road
  Lake Orion Twsp, MI         1,342       5,441       1,921       1,412       7,292       8,704       1,570     1999   (n)
1400 Allen Drive
  Troy, MI         209       1,154       120       212       1,271       1,483       160     1979   (n)
1408 Allen Drive
  Troy, MI         151       834       171       153       1,003       1,156       182     1979   (n)
1305 Stephenson Hwy
  Troy, MI         345       1,907       154       350       2,055       2,406       270     1979   (n)


S-14

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
32505 Industrial Drive
  Madison Heights, MI         345       1,910       418       351       2,322       2,673       338     1979   (n)
1799-1813 Northfield Drive(j)
  Rochester Hills, MI         481       2,665       135       490       2,792       3,281       390     1980   (n)
32200 N. Avis(q)
  Madison Heights, MI         503       3,367       0       503       3,367       3,870       49     1973   (n)
100 Kay Industrial
  Orion, MI         677       2,018       380       685       2,390       3,075       80     1987   (n)
1849 West Maple Road
  Troy, MI         1,688       2,790       26       1,699       2,806       4,504       23     1986   (n)
28435 Automation Blvd. 
  Wixom, MI         621       —       3,663       621       3,663       4,284       99     2004   (n)
12163 Globe Street(q)
  Detroit, MI         595       979       154       596       1,132       1,728       49     1980   (n)
32500 Capitol Avenue
  Livonia, MI         258       1,032       11       260       1,041       1,301       9     1970   (n)
32650 Capitol Avenue
  Livonia, MI         282       1,128       50       284       1,176       1,460       10     1970   (n)
32700 Capitol Avenue(q)
  Livonia, MI         399       1,596       23       401       1,617       2,018       13     1970   (n)
11800 Sears Drive(q)
  Livonia, MI         693       1,507       30       703       1,527       2,230       60     1971   (n)
10675 Middlebelt Road(q)
  Romulus, MI         219       875       98       226       966       1,192       8     1966   (n)
1099 Church Road
  Troy, MI         702       1,332       45       721       1,358       2,079       21     1980   (n)
Grand Rapids
                                                                       
5050 Kendrick Court(q)
  Grand Rapids, MI         1,721       11,433       5,302       1,721       16,735       18,455       4,573     1988/94   (n)
5015 52nd Street SE
  Grand Rapids, MI         234       1,321       143       234       1,464       1,698       436     1987   (n)
Houston
                                                                       
2102-2314 Edwards Street
  Houston, TX         348       1,973       902       382       2,841       3,223       531     1961   (n)
4545 Eastpark Drive
  Houston, TX         235       1,331       715       240       2,041       2,281       437     1972   (n)
3351 Rauch St
  Houston, TX         272       1,541       189       278       1,724       2,002       338     1970   (n)
3851 Yale St
  Houston, TX         413       2,343       694       425       3,026       3,451       667     1971   (n)
3337-3347 Rauch Street
  Houston, TX         227       1,287       216       233       1,498       1,731       299     1970   (n)
8505 N Loop East
  Houston, TX         439       2,489       618       449       3,097       3,546       615     1981   (n)
4749-4799 Eastpark Dr
  Houston, TX         594       3,368       1,125       611       4,476       5,087       916     1979   (n)
4851 Homestead Road
  Houston, TX         491       2,782       900       504       3,669       4,174       725     1973   (n)
3365-3385 Rauch Street
  Houston, TX         284       1,611       163       290       1,768       2,058       386     1970   (n)
5050 Campbell Road
  Houston, TX         461       2,610       330       470       2,930       3,401       588     1970   (n)
4300 Pine Timbers
  Houston, TX         489       2,769       587       499       3,345       3,845       670     1980   (n)
2500-2530 Fairway Park Drive
  Houston, TX         766       4,342       695       792       5,010       5,802       997     1974   (n)
6550 Longpointe
  Houston, TX         362       2,050       519       370       2,560       2,930       499     1980   (n)
1815 Turning Basin Dr
  Houston, TX         487       2,761       521       531       3,238       3,769       643     1980   (n)
1819 Turning Basin Dr
  Houston, TX         231       1,308       550       251       1,837       2,088       355     1980   (n)
1805 Turning Basin Drive
  Houston, TX         564       3,197       686       616       3,831       4,447       779     1980   (n)


S-15

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
7000 Empire Drive
  Houston, TX         450       2,552       1,185       452       3,736       4,187       977     1980   (n)
9777 West Gulfbank Drive
  Houston, TX         1,216       6,899       1,398       1,216       8,297       9,513       1,900     1980   (n)
9835A Genard Road
  Houston, TX         1,505       8,333       3,301       1,581       11,558       13,139       1,841     1980   (n)
9835B Genard Road
  Houston, TX         245       1,357       463       256       1,809       2,065       257     1980   (n)
10161 Harwin Drive
  Houston, TX         505       2,861       792       511       3,648       4,158       628     1979/1981   (n)
10165 Harwin Drive
  Houston, TX         218       1,234       673       220       1,905       2,125       277     1979/1981   (n)
10175 Harwin Drive
  Houston, TX         267       1,515       344       270       1,856       2,126       364     1979/1981   (n)
10325-10415 Landsbury Drive(k)
  Houston, TX         696       3,854       439       704       4,284       4,989       411     1982   (n)
8705 City Park Loop
  Houston, TX         710       2,983       956       714       3,935       4,649       335     1982   (n)
11505 State Highway 225
  LaPorte City, TX         940       4,675       615       940       5,290       6,230       148     2003   (n)
6955 Portwest Drive(q)
  Houston, TX         314       1,686       19       318       1,701       2,019       6     1985   (n)
6925 Portwest Drive(q)
  Houston, TX         402       1,360       19       407       1,374       1,781       7     1985   (n)
600 Kenrick
  Houston, TX         900       1,791       156       913       1,934       2,847       156     1981   (n)
1500 E. Main
  LaPorte City, TX         201       1,328       9       202       1,336       1,538       17     1972/1982   (n)
Indianapolis
                                                                       
2400 North Shadeland
  Indianapolis, IN         142       802       198       149       993       1,142       217     1970   (n)
2402 North Shadeland
  Indianapolis, IN         466       2,640       612       489       3,229       3,718       730     1970   (n)
7901 West 21st St. 
  Indianapolis, IN         1,048       6,027       414       1,048       6,441       7,489       1,437     1985   (n)
1445 Brookville Way
  Indianapolis, IN         459       2,603       730       476       3,317       3,793       895     1989   (n)
1440 Brookville Way
  Indianapolis, IN         665       3,770       769       685       4,520       5,205       1,055     1990   (n)
1240 Brookville Way
  Indianapolis, IN         247       1,402       317       258       1,709       1,967       426     1990   (n)
1220 Brookville Way
  Indianapolis, IN         223       40       68       226       104       331       20     1990   (n)
1345 Brookville Way
  Indianapolis, IN   (s)     586       3,321       837       601       4,142       4,744       1,078     1992   (n)
1350 Brookville Way
  Indianapolis, IN         205       1,161       213       212       1,368       1,579       342     1994   (n)
1341 Sadlier Circle E Dr
  Indianapolis, IN   (c)     131       743       377       136       1,115       1,251       289     1971/1992   (n)
1322-1438 Sadlier Circle E Dr
  Indianapolis, IN   (c)     145       822       271       152       1,087       1,239       300     1971/1992   (n)
1327-1441 Sadlier Circle E Dr
  Indianapolis, IN   (c)     218       1,234       433       225       1,660       1,885       398     1992   (n)
1304 Sadlier Circle E Dr
  Indianapolis, IN   (c)     71       405       150       75       552       627       151     1971/1992   (n)
1402 Sadlier Circle E Dr
  Indianapolis, IN   (c)     165       934       434       171       1,363       1,533       351     1970/1992   (n)
1504 Sadlier Circle E Dr
  Indianapolis, IN   (c)     219       1,238       269       226       1,500       1,725       343     1971/1992   (n)
1311 Sadlier Circle E Dr
  Indianapolis, IN   (c)     54       304       98       57       399       455       90     1971/1992   (n)
1365 Sadlier Circle E Dr
  Indianapolis, IN   (c)     121       688       283       126       966       1,092       202     1971/1992   (n)


S-16

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
1352-1354 Sadlier Circle E Dr
  Indianapolis, IN   (c)     178       1,008       373       184       1,374       1,558       328     1970/1992   (n)
1335 Sadlier Circle E Dr
  Indianapolis, IN   (c)     81       460       172       85       628       712       177     1971/1992   (n)
1327 Sadlier Circle E Dr
  Indianapolis, IN   (c)     52       295       78       55       370       425       105     1971/1992   (n)
1425 Sadlier Circle E Dr
  Indianapolis, IN   (c)     21       117       39       23       154       177       36     1971/1992   (n)
1230 Brookville Way
  Indianapolis, IN         103       586       60       109       641       750       158     1995   (n)
6951 E 30th St
  Indianapolis, IN         256       1,449       234       265       1,674       1,939       413     1995   (n)
6701 E 30th St
  Indianapolis, IN         78       443       43       82       482       564       119     1995   (n)
6737 E 30th St
  Indianapolis, IN         385       2,181       285       398       2,452       2,851       632     1995   (n)
1225 Brookville Way
  Indianapolis, IN         60       —       416       68       408       476       91     1997   (n)
6555 E 30th St
  Indianapolis, IN         484       4,760       1,623       484       6,382       6,867       1,632     1969/1981   (n)
2432-2436 Shadeland
  Indianapolis, IN         212       1,199       465       230       1,645       1,875       419     1968   (n)
8402-8440 E 33rd St. 
  Indianapolis, IN         222       1,260       663       230       1,915       2,145       454     1977   (n)
8520-8630 E 33rd St. 
  Indianapolis, IN         326       1,848       741       336       2,580       2,916       625     1976   (n)
8710-8768 E 33rd St. 
  Indianapolis, IN         175       993       436       187       1,416       1,603       347     1979   (n)
3316-3346 N. Pagosa Court
  Indianapolis, IN         325       1,842       622       335       2,453       2,788       590     1977   (n)
3331 Raton Court
  Indianapolis, IN         138       802       241       138       1,043       1,181       300     1979   (n)
6751 E 30th St. 
  Indianapolis, IN         728       2,837       257       741       3,081       3,822       649     1997   (n)
8525 E. 33rd Street
  Indianapolis, IN         1,300       2,091       908       1,308       2,991       4,299       650     1978   (n)
5705-97 Park Plaza Ct
  Indianapolis, IN   (t)     600       2,194       890       609       3,075       3,684       472     1977   (n)
9319-9341 Castlegate Drive
  Indianapolis, IN         530       1,235       1,005       544       2,227       2,770       257     1983   (n)
9332-9350 Castlegate Drive
  Indianapolis, IN         420       646       683       429       1,320       1,749       197     1983   (n)
2855 Michigan Road
  Madison, IN         504       1,169       11       509       1,174       1,684       97     1962   (n)
9210 East 146th Street
  Noblesville, IN         66       684       799       66       1,483       1,549       443     1978   (n)
6101-6119 Guion Road
  Indianapolis, IN         400       661       440       405       1,096       1,501       165     1976   (n)
1380 Perry Road
  Plainfield, IN         781       5,156       31       781       5,187       5,968       160     1997   (n)
3300 Tenth Street
  Indianapolis, IN         301       3,428       21       303       3,447       3,750       55     1961/2002   (n)
4640 Martin Luther King Jr. Boulevard
  Anderson, IN         161       664       6       163       669       831       10     1999   (n)
7225 America Way(q)
  Anderson, IN         251       1,049       (41 )     253       1,006       1,259       11     1996   (n)
6512 Production Drive
  Anderson, IN         58       281       3       58       284       342       3     1995   (n)
6628 Production Drive
  Anderson, IN         150       680       7       151       686       837       7     1995   (n)
2902 Enterprise Drive
  Anderson, IN         230       4,573       44       232       4,615       4,847       32     1995   (n)
Los Angeles
                                                                       


S-17

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
19914 Via Baron Way
  Rancho Dominguez, CA   (d)     1,590       9,010       235       1,616       9,219       10,835       815     1973   (n)
14141 Alondra Blvd. 
  Santa Fe Springs, CA         2,570       14,565       4,295       2,598       18,833       21,430       1,425     1969   (n)
12616 Yukon Ave
  Hawthorne, CA         685       3,884       94       696       3,967       4,663       349     1987   (n)
3355 El Segundo Blvd(k)
  Hawthorne, CA         267       1,510       1,187       418       2,546       2,964       263     1959   (n)
12621 Cerise
  Hawthorne, CA         265       2,344       (773 )     265       1,572       1,837       158     1959   (n)
333 Turnbull Canyon Road
  City of Industry, CA         2,700       1,824       266       2,700       2,090       4,790       201     1968/1985   (n)
350-390 Manville St. 
  Compton, CA         2,300       3,768       103       2,313       3,857       6,171       196     1979   (n)
1944 Vista Bella Way(q)
  Rancho Dominguez, CA         1,746       3,148       586       1,821       3,659       5,480       79     1976   (n)
2000 Vista Bella Way(q)
  Rancho Dominguez, CA         817       1,673       291       852       1,929       2,781       40     1971   (n)
2835 East Ana Street Drive
  Rancho Dominguez, CA         1,682       2,750       13       1,770       2,675       4,445       13     1972/2000   (n)
Louisville
                                                                       
9001 Cane Run Road
  Louisville, KY         524       —       5,577       560       5,541       6,101       1,426     1998   (n)
9101 Cane Run Road
  Louisville, KY         608       —       6,114       608       6,113       6,722       749     2000   (n)
Milwaukee
                                                                       
6523 N Sydney Place
  Glendale, WI         172       976       197       176       1,170       1,346       293     1978   (n)
8800 W Bradley
  Milwaukee, WI         375       2,125       215       388       2,327       2,715       543     1982   (n)
4560 N 124th Street
  Wauwatosa, WI         118       667       85       129       741       870       159     1976   (n)
4410-80 North 132nd Street
  Butler, WI         355       —       4,023       359       4,019       4,378       570     1999   (n)
5355 South Westridge Drive
  New Berlin, WI         1,630       7,058       92       1,646       7,134       8,780       331     1997   (n)
320-34 W. Vogel
  Milwaukee, WI         506       3,199       14       508       3,211       3,719       171     1970   (n)
4950 S. 6th Avenue
  Milwaukee, WI         299       1,565       7       301       1,571       1,871       105     1970   (n)
1711 Paramount Court
  Waukesha, WI         308       1,762       19       311       1,778       2,089       45     1997   (n)
W 140 N9059 Lilly Road(q)
  Iomonee Falls, WI         343       1,153       93       366       1,223       1,589       12     1995   (n)
N120W18485 Freistadt Road
  Germantown, WI         700       3,183       49       704       3,228       3,932       223     1996   (n)
4921 S. 2nd Street(q)
  Milwaukee, WI         101       713       2       101       715       816       31     1970   (n)
200 W. Vogel Ave., Bldg B
  Milwaukee, WI         301       2,150       10       302       2,159       2,461       102     1970   (n)
187 Kohlman Road
  Fond du Lac, WI         547       2,125       47       556       2,163       2,719       14     1992/95   (n)
247 Kohlman Road
  Fond du Lac, WI         346       1,346       30       352       1,370       1,722       9     1992/95   (n)
122-342 Kohlman Road
  Fond du Lac, WI         2,624       10,205       221       2,669       10,381       13,050       65     1978/91   (n)
1500 Peebles Drive
  Richland Center, WI         1,577       1,018       15       1,588       1,022       2,610       51     1967/72   (n)
Minneapolis/St. Paul
                                                                       
6507-6545 Cecilia Circle
  Bloomington, MN         357       1,320       1,241       386       2,532       2,918       1,315     1980   (n)
6201 West 111th Street
  Bloomington, MN   (e)     1,358       8,622       3,794       1,499       12,276       13,774       5,803     1987   (n)


S-18

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
6403-6545 Cecilia Drive
  Bloomington, MN         366       1,363       1,135       395       2,469       2,864       1,349     1980   (n)
6925-6943 Washington Avenue
  Edina, MN         117       504       1,104       237       1,488       1,725       1,097     1972   (n)
6955-6973 Washington Avenue
  Edina, MN         117       486       529       207       926       1,132       791     1972   (n)
7251-7267 Washington Avenue
  Edina, MN         129       382       717       182       1,046       1,228       750     1972   (n)
7301-7325 Washington Avenue
  Edina, MN         174       391       122       193       494       687       97     1972   (n)
7101 Winnetka Avenue North
  Brooklyn Park, MN         2,195       6,084       3,364       2,228       9,416       11,643       4,900     1990   (n)
7600 Golden Triangle Drive
  Eden Prairie, MN         566       1,394       1,156       615       2,501       3,116       1,400     1989   (n)
9901 West 74th Street
  Eden Prairie, MN         621       3,289       2,991       639       6,262       6,901       3,102     1983/88   (n)
12220-12222 Nicollet Avenue
  Burnsville, MN         105       425       380       114       797       910       466     1989/90   (n)
12250-12268 Nicollet Avenue
  Burnsville, MN         260       1,054       474       296       1,492       1,788       675     1989/90   (n)
12224-12226 Nicollet Avenue
  Burnsville, MN         190       770       715       207       1,468       1,675       557     1989/90   (n)
1030 Lone Oak Road
  Eagan, MN         456       2,703       573       456       3,276       3,732       856     1988   (n)
1060 Lone Oak Road
  Eagan, MN         624       3,700       722       624       4,422       5,046       1,189     1988   (n)
5400 Nathan Lane
  Plymouth, MN         749       4,461       923       757       5,376       6,133       1,761     1990   (n)
10120 W 76th Street
  Eden Prairie, MN         315       1,804       1,361       315       3,164       3,480       1,272     1987   (n)
7615 Golden Triangle
  Eden Prairie, MN         268       1,532       686       268       2,218       2,486       514     1987   (n)
7625 Golden Triangle
  Eden Prairie, MN         415       2,375       1,106       415       3,481       3,896       954     1987   (n)
2605 Fernbrook Lane North
  Plymouth, MN         443       2,533       646       445       3,177       3,621       767     1987   (n)
12155 Nicollet Ave
  Burnsville, MN         286       —       1,725       288       1,723       2,011       437     1995   (n)
73rd Avenue North
  Brooklyn Park, MN         504       2,856       540       512       3,388       3,900       848     1995   (n)
2720 Arthur Street
  Roseville, MN         824       4,671       548       832       5,210       6,043       1,319     1995   (n)
4100 Peavey Road
  Chaska, MN         277       2,261       770       277       3,031       3,308       682     1988   (n)
11300 Hamshire Ave South
  Bloomington, MN         527       2,985       1,457       541       4,428       4,969       868     1983   (n)
375 Rivertown Drive
  Woodbury, MN         1,083       6,135       2,698       1,503       8,413       9,916       1,773     1996   (n)
5205 Highway 169
  Plymouth, MN         446       2,525       1,073       740       3,303       4,043       831     1960   (n)
6451-6595 Citywest Parkway
  Eden Prairie, MN         525       2,975       1,369       538       4,330       4,869       1,027     1984   (n)
7100-7198 Shady Oak Road
  Eden Prairie, MN         715       4,054       1,144       736       5,178       5,913       1,490     1982/2002   (n)
7500-7546 Washington Square
  Eden Prairie, MN         229       1,300       739       235       2,034       2,269       422     1975   (n)
7550-7558 Washington Square
  Eden Prairie, MN         153       867       176       157       1,039       1,196       219     1975   (n)
5240-5300 Valley Industrial Blvd S
  Shakopee, MN         362       2,049       973       371       3,012       3,383       669     1973   (n)
7125 Northland Terrace
  Brooklyn Park, MN         660       3,740       931       767       4,564       5,331       1,035     1996   (n)
6477-6525 City West Parkway
  Eden Prairie, MN         810       4,590       1,001       819       5,582       6,401       1,173     1984   (n)


S-19

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
1157 Valley Park Drive
  Shakopee, MN         760       —       6,144       888       6,016       6,904       983     1997   (n)
500-530 Kasota Avenue SE
  Minneapolis, MN         415       2,354       1,008       432       3,345       3,777       794     1976   (n)
770-786 Kasota Avenue SE
  Minneapolis, MN         333       1,888       531       347       2,405       2,752       478     1976   (n)
800 Kasota Avenue SE
  Minneapolis, MN         524       2,971       742       597       3,640       4,236       761     1976   (n)
2530-2570 Kasota Avenue
  St. Paul, MN         407       2,308       758       465       3,008       3,473       598     1976   (n)
1280 Energy Park Drive
  St. Paul, MN         700       2,779       23       705       2,797       3,502       155     1984   (n)
9600 West 76th Street
  Eden Prairie, MN         1,000       2,450       34       1,034       2,449       3,484       96     1997   (n)
9700 West 76th Street
  Eden Prairie, MN         1,000       2,709       133       1,038       2,804       3,842       128     1984/97   (n)
5017 Boone Avenue North
  New Hope, MN   (h)     1,000       1,599       58       1,009       1,648       2,657       120     1971/74   (n)
2300 West Highway 13(I-35 Dist Ctr)(q)
  Burnsville, MN         2,517       6,069       325       2,524       6,387       8,911       405     1970/76   (n)
1087 Park Place
  Shakopee, MN         1,195       4,891       15       1,198       4,903       6,101       110     1996/2000   (n)
5391 12th Avenue SE
  Shakopee, MN         1,392       8,149       22       1,395       8,168       9,563       167     1998   (n)
4701 Valley Industrial Boulevard
  Shakopee, MN         1,296       7,157       18       1,299       7,172       8,471       219     1997   (n)
7600 69th Avenue
  Greenfield, MN         1,500       8,328       1,808       1,510       10,126       11,636       579     2004   (n)
Park 2000 III(q)
  Shakopee, MN         590       —       4,953       590       4,953       5,543       445     2001   (n)
Nashville
                                                                       
3099 Barry Drive
  Portland, TN         418       2,368       148       421       2,512       2,933       602     1995   (n)
3150 Barry Drive
  Portland, TN         941       5,333       309       981       5,602       6,583       1,297     1993   (n)
5599 Highway 31 West
  Portland, TN         564       3,196       211       571       3,400       3,971       829     1995   (n)
1650 Elm Hill Pike
  Nashville, TN         329       1,867       110       332       1,975       2,306       424     1984   (n)
1931 Air Lane Drive
  Nashville, TN         489       2,785       245       493       3,026       3,519       644     1984   (n)
470 Metroplex Drive(j)
  Nashville, TN         619       3,507       1,195       626       4,695       5,321       1,214     1986   (n)
1150 Antiock Pike
  Nashville, TN         661       3,748       423       669       4,164       4,832       911     1987   (n)
4640 Cummings Park
  Nashville, TN         360       2,040       174       365       2,209       2,574       335     1986   (n)
556 Metroplex Drive
  Nashville, TN         227       1,285       111       231       1,392       1,623       188     1983   (n)
1740 River Hills Drive
  Nashville, TN         848       4,383       223       888       4,566       5,454       278     1978   (n)
375 Belvedere Drive
  Gallatin, TN         221       3,179       40       221       3,218       3,440       227     1979/85   (n)
575 Church Drive(q)
  Nashville, TN         485       1,411       174       499       1,571       2,070       12     1994   (n)
100 Rockwell Drive
  Nashville, TN         501       4,260       45       506       4,299       4,806       52     1975/80   (n)
Northern New Jersey
                                                                       
14 World’s Fair Drive
  Franklin, NJ         483       2,735       440       503       3,154       3,658       679     1980   (n)


S-20

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
12 World’s Fair Drive
  Franklin, NJ         572       3,240       552       593       3,770       4,363       796     1981   (n)
22 World’s Fair Drive
  Franklin, NJ         364       2,064       310       375       2,363       2,738       463     1983   (n)
26 World’s Fair Drive
  Franklin, NJ         361       2,048       201       377       2,233       2,611       485     1984   (n)
24 World’s Fair Drive
  Franklin, NJ         347       1,968       404       362       2,358       2,719       542     1984   (n)
20 World’s Fair Drive Lot 13
  Sumerset, NJ         9       —       2,641       691       1,959       2,650       280     1999   (n)
45 Route 46
  Pine Brook, NJ         969       5,491       444       978       5,925       6,904       900     1974/1987   (n)
43 Route 46
  Pine Brook, NJ         474       2,686       421       479       3,103       3,581       483     1974/1987   (n)
39 Route 46
  Pine Brook, NJ         260       1,471       163       262       1,631       1,893       230     1970   (n)
26 Chapin Road
  Pine Brook, NJ         956       5,415       516       965       5,922       6,886       798     1983   (n)
30 Chapin Road
  Pine Brook, NJ         960       5,440       376       969       5,807       6,776       794     1983   (n)
20 Hook Mountain Road
  Pine Brook, NJ         1,507       8,542       1,002       1,534       9,518       11,052       1,228     1972/1984   (n)
30 Hook Mountain Road
  Pine Brook, NJ         389       2,206       313       396       2,512       2,908       348     1972/1987   (n)
55 Route 46
  Pine Brook, NJ         396       2,244       161       403       2,398       2,801       313     1978/1994   (n)
16 Chapin Road
  Pine Brook, NJ         885       5,015       306       901       5,306       6,206       716     1987   (n)
20 Chapin Road
  Pine Brook, NJ         1,134       6,426       351       1,154       6,757       7,911       936     1987   (n)
Sayreville Lot 3
  Sayreville, NJ         996       —       5,301       996       5,301       6,297       182     2002   (n)
Sayreville Lot 4
  Sayreville, NJ         944       —       4,633       944       4,633       5,577       367     2001   (n)
400 Raritan Center Parkway
  Edison, NJ         829       4,722       481       836       5,197       6,033       565     1983   (n)
300 Columbus Circle
  Edison, NJ         1,257       7,122       913       1,269       8,023       9,292       903     1983   (n)
400 Apgar
  Franklin Township, NJ         780       4,420       580       796       4,985       5,780       480     1987   (n)
500 Apgar
  Franklin Township, NJ         361       2,044       257       368       2,294       2,662       285     1987   (n)
201 Circle Dr. North
  Piscataway, NJ         840       4,760       489       857       5,232       6,089       497     1987   (n)
1 Pearl Ct. 
  Allendale, NJ         623       3,528       625       649       4,127       4,775       324     1978   (n)
2 Pearl Ct. 
  Allendale, NJ         255       1,445       1,180       403       2,477       2,880       191     1979   (n)
3 Pearl Ct. 
  Allendale, NJ         440       2,491       201       458       2,673       3,131       247     1978   (n)
4 Pearl Ct. 
  Allendale, NJ         450       2,550       611       469       3,142       3,611       309     1979   (n)
5 Pearl Ct. 
  Allendale, NJ         505       2,860       530       526       3,370       3,895       321     1977   (n)
59 Route 17
  Allendale, NJ         518       2,933       1,059       539       3,970       4,509       414     1979   (n)
309-319 Pierce Street
  Somerset, NJ         1,300       4,628       67       1,309       4,685       5,995       263     1986   (n)
12 Thornton Road
  Oakland, NJ         1,300       3,652       55       1,316       3,691       5,007       185     1981   (n)
Orlando
                                                                       
Lake Point IV(q)
  Tampa, FL         909       4,613       53       920       4,654       5,575       87     1987   (n)


S-21

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
Philadelphia
                                                                       
3240 S.78th Street
  Philadelphia, PA         515       1,245       50       532       1,278       1,810       10     1980   (n)
Phoenix
                                                                       
1045 South Edward Drive
  Tempe, AZ         390       2,160       86       394       2,242       2,636       371     1976   (n)
46 N. 49th Ave. 
  Phoenix, AZ         283       1,704       718       283       2,422       2,706       341     1986   (n)
240 N. 48th Ave. 
  Phoenix, AZ         482       1,913       95       482       2,009       2,490       209     1977   (n)
220 N. 48th Ave. 
  Phoenix, AZ         530       1,726       143       531       1,868       2,399       179     1977   (n)
54 N. 48th Ave. 
  Phoenix, AZ         130       625       39       131       663       794       62     1977   (n)
64 N. 48th Ave. 
  Phoenix, AZ         180       458       55       181       512       693       57     1977   (n)
236 N. 48th Ave. 
  Phoenix, AZ         120       322       34       120       356       476       38     1977   (n)
10 S. 48th Ave. 
  Phoenix, AZ         510       1,687       166       512       1,851       2,363       179     1977   (n)
115 E. Watkins St. 
  Phoenix, AZ         170       816       112       171       928       1,098       81     1979   (n)
135 E. Watkins St. 
  Phoenix, AZ         380       1,962       127       382       2,087       2,469       202     1977   (n)
10220 S. 51st Street
  Phoenix, AZ         400       1,493       47       406       1,535       1,940       112     1985   (n)
50 South 56th Street
  Chandler, AZ         1,200       3,333       (49 )     1,207       3,277       4,484       118     1991/97   (n)
4701 W. Jefferson
  Phoenix, AZ         926       2,195       628       929       2,820       3,749       129     1984   (n)
725 No. 73rd Avenue(q)
  Phoenix, AZ         791       4,201       887       795       5,083       5,879       166     2005   (n)
825 No. 73rd Avenue(q)
  Phoenix, AZ         696       3,726       180       699       3,903       4,602       94     2005   (n)
7225 W. Roosevelt(q)
  Phoenix, AZ         704       3,376       534       707       3,907       4,614       105     2005   (n)
Portland
                                                                       
2315 NW 21st Place
  Portland, OR         301       1,247       10       303       1,255       1,558       8     1966/79   (n)
Raleigh
                                                                       
70 Reems Creek
  Asheville, NC         1,816       4,943       36       1,826       4,969       6,795       38     1979/81   (n)
101 Reliance Road
  Kings Mountain, NC         402       3,482       428       405       3,907       4,312       47     1981   (n)
Salt Lake City
                                                                       
512 Lawndale Drive(m)
  Salt Lake City, UT         2,705       15,749       2,636       2,705       18,385       21,089       4,142     1981   (n)
1270 West 2320 South
  West Valley, UT         138       784       167       143       947       1,090       217     1986/92   (n)
1275 West 2240 South
  West Valley, UT         395       2,241       473       408       2,702       3,109       548     1986/92   (n)
1288 West 2240 South
  West Valley, UT         119       672       170       123       838       960       208     1986/92   (n)
2235 South 1300 West
  West Valley, UT         198       1,120       265       204       1,379       1,583       330     1986/92   (n)
1293 West 2200 South
  West Valley, UT         158       896       192       163       1,084       1,247       263     1986/92   (n)
1279 West 2200 South
  West Valley, UT         198       1,120       68       204       1,182       1,386       248     1986/92   (n)
1272 West 2240 South
  West Valley, UT         336       1,905       471       347       2,365       2,712       626     1986/92   (n)


S-22

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
1149 West 2240 South
  West Valley, UT         217       1,232       77       225       1,302       1,526       258     1986/92   (n)
1142 West 2320 South
  West Valley, UT         217       1,232       190       225       1,415       1,640       354     1997   (n)
1152 West 2240 South
  West Valley, UT         2,067       —       3,295       2,114       3,249       5,363       441     1999   (n)
369 Orange Street
  Salt Lake City, UT         600       2,855       187       602       3,039       3,642       286     1980   (n)
1330 W. 3300 South Avenue
  Ogden, UT         1,100       2,353       611       1,100       2,964       4,064       280     1982   (n)
San Diego
                                                                       
9051 Siempre Viva Rd. 
  San Diego, CA         540       1,598       198       541       1,796       2,336       184     1989   (n)
9163 Siempre Viva Rd. 
  San Diego, CA         430       1,621       211       431       1,832       2,262       156     1989   (n)
9295 Siempre Viva Rd. 
  San Diego, CA         540       1,569       138       541       1,706       2,247       159     1989   (n)
9255 Customhouse Plaza
  San Diego, CA         3,230       11,030       822       3,234       11,848       15,082       1,041     1989   (n)
16275 Technology Drive
  San Diego, CA         2,848       8,641       42       2,859       8,672       11,531       29     1963/85   (n)
42374 Avenida Alvarado(k)
  Temecula, CA         797       4,514       334       812       4,832       5,644       368     1987   (n)
9375 Customhouse Plaza
  San Diego, CA         430       1,384       211       431       1,595       2,025       150     1989   (n)
9465 Customhouse Plaza
  San Diego, CA         430       1,437       180       431       1,616       2,047       156     1989   (n)
9485 Customhouse Plaza
  San Diego, CA         1,200       2,792       249       1,201       3,039       4,241       262     1989   (n)
2675 Customhouse Court
  San Diego, CA         590       2,082       139       591       2,220       2,811       205     1989   (n)
1725 Dornoch Court(q)
  San Diego, CA         1,896       5,435       557       1,899       5,989       7,888       145     1987   (n)
Southern New Jersey
                                                                       
5 North Olnev Ave
  Cherry Hill, NJ         157       1,524       (475 )     157       1,049       1,206       200     1963/1985   (n)
2 Springdale Road
  Cherry Hill, NJ         126       701       141       126       843       969       156     1968   (n)
4 Springdale Road(j)
  Cherry Hill, NJ         332       1,853       967       332       2,820       3,152       459     1963/85   (n)
8 Springdale Road
  Cherry Hill, NJ         258       1,436       704       258       2,140       2,398       412     1966   (n)
2050 Springdale Road
  Cherry Hill, NJ         277       1,545       1,165       277       2,709       2,986       542     1965   (n)
16 Springdale Road
  Cherry Hill, NJ         240       1,336       129       240       1,466       1,705       276     1967   (n)
5 Esterbrook Lane
  Cherry Hill, NJ         240       1,336       236       240       1,572       1,812       289     1966/88   (n)
2 Pin Oak Lane
  Cherry Hill, NJ         314       1,757       606       314       2,363       2,677       454     1968   (n)
28 Springdale Road
  Cherry Hill, NJ         190       1,060       208       190       1,269       1,459       235     1967   (n)
3 Esterbrook Lane
  Cherry Hill, NJ         198       1,102       486       198       1,588       1,786       286     1968   (n)
4 Esterbrook Lane
  Cherry Hill, NJ         232       1,294       43       232       1,336       1,569       257     1969   (n)
26 Springdale Road
  Cherry Hill, NJ         226       1,257       501       226       1,757       1,983       322     1968   (n)
1 Keystone Ave. 
  Cherry Hill, NJ         218       1,223       934       218       2,157       2,375       404     1969   (n)
21 Olnev Ave. 
  Cherry Hill, NJ         68       380       65       68       445       513       82     1969   (n)
19 Olnev Ave. 
  Cherry Hill, NJ         200       1,119       1,112       200       2,231       2,431       384     1971   (n)


S-23

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
2 Keystone Ave. 
  Cherry Hill, NJ         214       1,194       545       214       1,739       1,953       341     1970   (n)
18 Olnev Ave
  Cherry Hill, NJ         247       1,382       100       247       1,482       1,729       281     1974   (n)
2030 Springdale Rod
  Cherry Hill, NJ         523       2,914       1,499       523       4,413       4,936       878     1977   (n)
111 Whittendale Drive
  Morrestown, NJ         515       2,916       138       522       3,046       3,568       459     1991/96   (n)
9 Whittendale
  Morrestown, NJ         337       1,911       78       343       1,983       2,326       224     2000   (n)
7851 Airport
  Pennsauken, NJ         160       508       382       163       888       1,050       103     1966   (n)
103 Central
  Mt. Laurel, NJ         610       1,847       1,552       619       3,390       4,009       404     1970   (n)
999 Grand Avenue
  Hammonton, NJ   (u)     969       8,793       96       979       8,879       9,858       343     1980   (n)
7860-7870 Airport
  Pennsauken, NJ         120       366       278       122       642       764       82     1968   (n)
St. Louis
                                                                       
2121 Chapin Industrial Drive
  Vinita Park, MO         606       4,384       (4,136 )     614       240       854       87     1969/94   (n)
10431-10449 Midwest Industrial Blvd
  Olivette, MO         237       1,360       512       237       1,872       2,109       601     1967   (n)
10751 Midwest Industrial Boulevard
  Olivette, MO         193       1,119       355       194       1,474       1,667       450     1965   (n)
6951 N Hanley(j)
  Hazelwood, MO         405       2,295       1,305       419       3,586       4,005       809     1965   (n)
1037 Warson — Bldg A(q)
  St. Louis, MO         246       1,359       185       251       1,539       1,790       134     1968   (n)
1037 Warson — Bldg B(q)
  St. Louis, MO         380       2,103       885       388       2,980       3,368       213     1968   (n)
1037 Warson — Bldg C(q)
  St. Louis, MO         303       1,680       504       310       2,177       2,487       186     1968   (n)
1037 Warson — Bldg D(q)
  St. Louis, MO         353       1,952       151       360       2,095       2,455       189     1968   (n)
6821-6857 Hazelwood Ave
  Berkeley, MO         985       6,205       702       985       6,907       7,892       668     2001   (n)
13701 Rider Trail North
  Earth City, MO         800       2,099       484       804       2,579       3,383       363     1985   (n)
1908-2000 Innerbelt(j)
  Overland, MO         1,590       9,026       670       1,591       9,696       11,286       1,007     1987   (n)
8449-95 Mid-County Industrial
  Vinita Park, MO         520       1,590       178       520       1,768       2,288       183     1988   (n)
84104-76 Mid County Industrial
  Vinita Park, MO         540       2,109       (34 )     540       2,075       2,615       204     1989   (n)
2001 Innerbelt Business Center
  Overland, MO         1,050       4,451       169       1,050       4,620       5,670       438     1987   (n)
Tampa
                                                                       
6202 Benjamin Road
  Tampa, FL         203       1,151       456       211       1,598       1,810       372     1981   (n)
6204 Benjamin Road
  Tampa, FL         432       2,445       367       454       2,789       3,244       590     1982   (n)
6206 Benjamin Road
  Tampa, FL         397       2,251       463       416       2,695       3,111       564     1983   (n)
6302 Benjamin Road
  Tampa, FL         214       1,212       222       224       1,424       1,648       302     1983   (n)
6304 Benjamin Road
  Tampa, FL         201       1,138       183       209       1,312       1,522       286     1984   (n)


S-24

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
6306 Benjamin Road
  Tampa, FL         257       1,457       231       269       1,676       1,945       330     1984   (n)
6308 Benjamin Road
  Tampa, FL         345       1,958       336       362       2,278       2,639       473     1984   (n)
5313 Johns Road
  Tampa, FL         204       1,159       201       257       1,307       1,564       254     1991   (n)
5602 Thompson Center Court
  Tampa, FL         115       652       131       120       778       898       174     1972   (n)
5525 Johns Road
  Tampa, FL         192       1,086       76       200       1,155       1,354       232     1993   (n)
5709 Johns Road
  Tampa, FL         192       1,086       165       200       1,244       1,443       287     1990   (n)
5711 Johns Road
  Tampa, FL         243       1,376       120       255       1,483       1,738       300     1990   (n)
5453 W Waters Avenue
  Tampa, FL         71       402       105       82       496       578       105     1987   (n)
5455 W Waters Avenue
  Tampa, FL         307       1,742       269       326       1,993       2,318       403     1987   (n)
5553 W Waters Avenue
  Tampa, FL         307       1,742       195       326       1,918       2,244       385     1987   (n)
5501 W Waters Avenue
  Tampa, FL         154       871       192       162       1,055       1,217       223     1990   (n)
5503 W Waters Avenue
  Tampa, FL         71       402       50       75       448       523       94     1990   (n)
5555 W Waters Avenue
  Tampa, FL         213       1,206       138       221       1,336       1,557       280     1990   (n)
5557 W Waters Avenue
  Tampa, FL         59       335       35       62       366       429       73     1990   (n)
5461 W Waters
  Tampa, FL         261       —       1,197       265       1,193       1,458       209     1998   (n)
5481 W. Waters Avenue
  Tampa, FL         558       —       2,306       561       2,304       2,865       382     1999   (n)
4515-4519 George Road
  Tampa, FL         633       3,587       503       640       4,083       4,723       499     1985   (n)
6301 Benjamin Road
  Tampa, FL         292       1,657       84       295       1,739       2,033       206     1986   (n)
5723 Benjamin Road
  Tampa, FL         406       2,301       54       409       2,352       2,761       263     1986   (n)
6313 Benjamin Road
  Tampa, FL         229       1,296       134       231       1,428       1,659       191     1986   (n)
5801 Benjamin Road
  Tampa, FL         564       3,197       141       569       3,334       3,903       373     1986   (n)
5802 Benjamin Road
  Tampa, FL         686       3,889       471       692       4,355       5,047       521     1986   (n)
5925 Benjamin Road
  Tampa, FL         328       1,859       361       331       2,217       2,548       238     1986   (n)
6089 Johns Road
  Tampa, FL   (v)     180       987       40       186       1,022       1,207       48     1985   (n)
6091 Johns Road(q)
  Tampa, FL   (v)     140       730       22       144       748       892       38     1986   (n)
6103 Johns Road
  Tampa, FL   (v)     220       1,160       42       226       1,196       1,422       56     1986   (n)
6201 Johns Road(q)
  Tampa, FL   (v)     200       1,107       51       205       1,153       1,358       69     1981   (n)
6203 Johns Road(q)
  Tampa, FL   (v)     300       1,460       56       311       1,506       1,816       102     1987   (n)
6205 Johns Road(q)
  Tampa, FL   (v)     270       1,363       18       278       1,373       1,651       50     2000   (n)
6101 Johns Road(q)
  Tampa, FL         210       833       36       216       862       1,079       57     1981   (n)
4908 Tampa West Blvd
  Tampa, FL         2,622       8,643       31       2,630       8,666       11,296       44     1979/83   (n)


S-25

Table of Contents

                                                                         
                        (r)
 		                                 
                        Costs
 		                                 
                        Capitalized
 		                                 
                        Subsequent to
 		                                 
                        Acquisition or
 		    Gross Amount Carried
 		               
            (b)
 		    Completion
 		    at Close of Period 12/31/05     Accumulated
 		         
    Location
 		  (a)
 		  Initial Cost     and Valuation
 		          Building and
 		          Depreciation
 		    Year Built/
 		  Depreciable
Building Address
 
(City/State)
  Encumbrances   Land     Buildings     Provision     Land     Improvements     Total     12/31/05     Renovated   Lives (Years)
            (Dollars in thousands)    
 
Toronto
                                                                       
135 Dundas Street
  Cambridge Ontario, Canada         3,128       4,958       133       3,176       5,043       8,219       104     1953/59   (n)
678 Erie Street
  Stratford Ontario, Canada         786       557       43       800       586       1,386       37     1955/76   (n)
                                                                        (n)
Other
                                                                       
4200 West Harry Street(k)
  Wichita, KS         193       2,224       1,777       532       3,662       4,194       1,918     1972   (n)
6601 S. 33rd Street
  McAllen, TX         231       1,276       166       233       1,440       1,673       240     1975   (n)
3501 Maple Street(q)
  Abilene, TX         67       1,057       1,354       266       2,212       2,478       974     1980   (n)
6266 Hurt Road(q)
  Horn Lake, MS         427       —       2,250       427       2,250       2,677       239     1963   (n)
6266 Hurt Road Building B(q)
  Horn Lake, MS         —       —       867       99       767       867       4     1963   (n)
6266 Hurt Road Building C(q)
  Horn Lake, MS         —       —       292       278       14       292       1     1963   (n)
1105 Industrial Lane
  Malvern, AK         135       —       5,957       177       5,915       6,092       25     2005   (n)
7601 NW 107th Terrace
  Kansas City, MO         746       4,712       13       748       4,723       5,471       171     1982/87   (n)
12626 Silicon Drive
  San Antonio, TX         768       3,448       20       776       3,459       4,236       75     1981/95   (n)
100 Nemec Way
  Byhalia, MS         488       11,438       340       797       11,469       12,266       203     1988/92   (n)
3100 Pinson Valley Parkway
  Birmingham, AL         303       742       6       305       746       1,051       6     1970   (n)
1245 N. Hearne Avenue
  Shreveport, LA         99       1,263       11       100       1,272       1,373       13     1981/2004   (n)
5024 Pelham Road
  Greenville, SC         2,258       5,011       41       2,272       5,038       7,310       58     1977/1992   (n)
                                                                         
Redevelopments / Developments / Developable Land
            54,010       2,245       58,366       69,755       44,866       114,621       605          
                                                                         
              468,246     $ 1,887,021     $ 493,320     $ 496,880     $ 2,351,707     $ 2,848,587     $ 357,228 (p)        
                                                                         


S-26

Table of Contents

NOTES:
 
(a) See description of encumbrances in Note 6 to Notes to Consolidated Financial Statements.
 
(b) Initial cost for each respective property is tangible purchase price allocated in accordance with SFAS No. 141.
 
(c) These properties collateralize the Assumed Loan I.
 
(d) This property collateralizes the Acquisition Mortgage Loan VIII.
 
(e) This property collateralizes the Acquisition Mortgage Loan IX.
 
(f) This property collateralizes the Acquisition Mortgage Loan IV.
 
(g) This property collateralizes the Acquisition Mortgage Loan X.
 
(h) This property collateralizes the Acquisition Mortgage Loan XVI.
 
(i) This property collateralizes the Acquisition Mortgage Loan XVII.
 
(j) Comprised of two properties.
 
(k) Comprised of three properties.
 
(l) Comprised of four properties.
 
(m) Comprised of 28 properties.
 
(n) Depreciation is computed based upon the following estimated lives:
 
         
Buildings, Improvements
    20 to 50 years  
Tenant Improvements, Leasehold Improvements
    Life of lease  
Furniture, Fixtures and Equipment
    5 to 10 years  
 
(o) These properties represent developable land and redevelopments that have not been placed in service.
 
(p) Excludes $66,328 of Construction in Progress (including $254 of construction in progress included in held for sale), and includes real estate held for sale of $6,521 (Land), $11,203 (Buildings and Improvements), and $1,473 (Accumulated Depreciation).
 
(q) Property is not in-service as of 12/31/05.
 
(r) Improvements are net of write-off of fully depreciated assets.
 
(s) This property collateralizes the Assumed Loan II.
 
(t) This property collateralizes the Acquisition Mortgage Loan XII.
 
(u) This property collateralizes the Acquisition Mortgage Loan XVIII.
 
(v) These properties collateralize the Acquisition Mortgage Loan XIV.
 
At December 31, 2005, the aggregate cost of land and buildings and equipment for federal income tax purpose was approximately $2.6 billion (excluding construction in progress.)


S-27

Table of Contents

FIRST INDUSTRIAL LP

SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
As of December 31, 2005
(Dollars in thousands)
 
The changes in total real estate assets for the three years ended December 31, 2005 are as follows:
 
                         
    2005     2004     2003  
 
Balance, Beginning of Year
  $ 2,537,513     $ 2,352,026     $ 2,325,826  
Acquisition, Construction Costs and Improvements
    810,266       493,012       302,720  
Disposition of Assets
    (403,651 )     (288,433 )     (276,520 )
Write-off of Fully Depreciated Assets
    (29,212 )     (19,092 )     —  
                         
Balance, End of Year
  $ 2,914,916     $ 2,537,513     $ 2,352,026  
                         
 
The changes in accumulated depreciation for the three years ended December 31, 2005 are as follows:
 
                         
    2005     2004     2003  
 
Balance, Beginning of Year
  $ 323,493     $ 295,688     $ 263,404  
Depreciation for Year
    86,587       71,779       63,281  
Disposition of Assets
    (24,088 )     (24,882 )     (30,997 )
Write-off of Fully Depreciated Assets
    (28,764 )     (19,092 )     —  
                         
Balance, End of Year
  $ 357,228     $ 323,493     $ 295,688  
                         


S-28

Table of Contents

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
FIRST INDUSTRIAL, L.P.
 
  By:  FIRST INDUSTRIAL REALTY TRUST, INC.
as general partner
 
  By:  /s/  Michael W. Brennan
Michael W. Brennan
President, Chief Executive Officer and Director(Principal Executive Officer)
 
Date: March 15, 2006
 
  By:  /s/  Michael J. Havala
Michael J. Havala
Chief Financial Officer (Principal Financial Officer)
 
Date: March 15, 2006
 
  By:  /s/  Scott A. Musil
Scott A. Musil
Senior Vice President, Controller,Treasurer and Assistant Secretary (Principal Accounting Officer)
 
Date: March 15, 2006
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
             
Signature
 
Title
 
Date
 
/s/  Jay H. Shidler
Jay H. Shidler
 		  Chairman of the Board of Directors   March 15, 2006
         
/s/  Michael W. Brennan
Michael W. Brennan
 		  President, Chief Executive Officer
and Director 		  March 15, 2006
         
/s/  Michael G. Damone
Michael G. Damone
 		  Director of Strategic Planning
and Director 		  March 15, 2006


S-29

Table of Contents

             
Signature
 
Title
 
Date
 
         
/s/  Kevin W. Lynch
Kevin W. Lynch
 		  Director   March 15, 2006
         
/s/  John E. Rau
John E. Rau
 		  Director   March 15, 2006
         
/s/  Robert J. Slater
Robert J. Slater
 		  Director   March 15, 2006
         
/s/  W. Edwin Tyler
W. Edwin Tyler
 		  Director   March 15, 2006
         
/s/  J. Steven Wilson
J. Steven Wilson
 		  Director   March 15, 2006
         
/s/  James F. Millar
James F. Millar
 		  Director   March 15, 2006

S-30

EX-12.1 2 c03085exv12w1.htm COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES exv12w1
 

Exhibit 12.1
FIRST INDUSTRIAL, LP
Ratio of Earnings to Fixed Charges
(Dollars in Thousands)
                         
   
12/31/2005
  
12/31/2004
  
12/31/2003
Income from Continuing Operations     12,488       40,214       31,540    
 
Plus:                          
 
Interest expense     108,164       98,458       94,637    
Amortization of DFC and IRPA     2,122       1,928       1,761    
   
 
 
Net Earnings     122,774       140,600       127,938    
   
 
 
Interest Expense     108,164       98,458       94,637    
Capitalized Interest     3,721       1,304       761    
Amortization of deferred financing costs and IRPA     2,122       1,928       1,761    
   
 
 
Fixed Charges and Preferred Stock Div     114,007       101,690       97,159    
   
 
 
 
Ratio of Earnings to Fixed Charges     1.08       1.38       1.32    
   
 
 
(a)   For purposes of computing the ratios of earnings to fixed charges and preferred stock dividends, earnings have been calculated by adding fixed charges (excluding capitalized interest) to income from continuing operations before minority interest allocable to continuing operations. Fixed charges consist of interest costs, whether expensed or capitalized and amortization of deferred financing costs.
EX-23 3 c03085exv23.htm CONSENT OF PRICEWATERHOUSECOOPERS LLP exv23
 

Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (File No. 333-117842) and Registration Statement on Form S-8 (File No. 333-100630) of First Industrial, L.P. of our report dated March 16, 2006 relating to the financial statements, financial statement schedule, management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
PricewaterhouseCoopers, LLP
Chicago, Illinois
March 16, 2006

EX-31.1 4 c03085exv31w1.htm CONSENT OF PRINCIPAL EXECUTIVE OFFICER exv31w1
 

EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Michael W. Brennan, certify that:
1.   I have reviewed this annual report on Form 10-K of First Industrial, L.P.;
 
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;
 
4.   The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
  a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
  b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
  c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
  d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
  a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
  b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 15, 2006
         
     
  /s/ Michael W. Brennan    
  Michael W. Brennan   
  President and Chief Executive Officer
First Industrial Realty Trust, Inc. 		  

 

EX-31.2 5 c03085exv31w2.htm CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER exv31w2
 

         
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Michael J. Havala, certify that:
1.   I have reviewed this annual report on Form 10-K of First Industrial, L.P.;
 
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in the report;
 
4.   The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
  a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
  b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
  c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
  d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
  a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
  b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 15, 2006
         
     
  /s/ Michael J. Havala    
  Michael J. Havala   
  Chief Financial Officer
First Industrial Realty Trust, Inc. 		  
 

 

EX-32.1 6 c03085exv32w1.htm CERTIFICATIONS exv32w1
 

Exhibit 32
CERTIFICATION
Accompanying Form 10-K Report
of First Industrial, L.P.
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Chapter 63, Title 18 U.S.C. §1350(a) and (b))
     Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. §1350(a) and (b)), each of the undersigned hereby certifies, to his knowledge, that the Annual Report on Form 10-K for the period ended December 31, 2005 of First Industrial, L.P. (the “Company”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
     
Dated: March 15, 2006   /s/ Michael W. Brennan
 
Michael W. Brennan
Chief Executive Officer
(Principal Executive Officer)
First Industrial Realty Trust, Inc.
Dated: March 15, 2006   /s/ Michael J. Havala
 
Michael J. Havala
Chief Financial Officer
(Principal Financial Officer)
First Industrial Realty Trust, Inc.
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The information contained in this written statement shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference to such filing.

-----END PRIVACY-ENHANCED MESSAGE-----