First Industrial (FR) shares surge 3.35% on robust leasing, 94% occupancy, 26.5% rent growth

The share price of First Industrial Realty Trust (FR) climbed 3.35% on Wednesday, marking its third consecutive day of gains and pushing the stock to its highest level since October 2025. The intraday surge of 3.45% reflects growing investor confidence in the logistics REIT’s strategic execution and market positioning.

Recent leasing momentum has been a key catalyst for the stock’s rise. The company secured over 772,000 square feet of new leases in Q3 2025, including full occupancy of high-barrier properties in Phoenix, South Florida, and the Inland Empire. These deals, coupled with a 94% portfolio occupancy rate, underscore robust demand for logistics assets in supply-constrained markets, directly boosting cash flow and net operating income (NOI).

Rental rate growth has further amplified upside potential. Cash rental rates on new and renewal leases rose 26.5% in Q3 2025, with guidance for 2025 and 2026 reflecting even steeper increases. These gains, driven by tenant demand for long-term space amid economic uncertainty, have elevated funds from operations (FFO) expectations. The company raised its 2025 FFO guidance by $0.04, signaling operational strength and aligning with investor focus on cash flow metrics for REIT valuations.

Strategic capital management has also supported stability. First Industrial hedged $350 million in borrowing costs through forward interest rate swaps, locking in rates at 4.10%-4.13% for 2026. This proactive approach mitigates financial risk in a volatile rate environment, enhancing long-term predictability for investors. Additionally, the company’s acquisition of a Northern California land site and divestiture of underperforming assets in Denver and Houston highlight its disciplined capital allocation strategy.

Looking ahead, the CEO emphasized firming industrial fundamentals, including stabilizing vacancy rates and moderate new development. With 32% of 2025 expirations already renewed, the company is well-positioned to capitalize on future rent growth in high-demand coastal markets. While risks such as economic volatility and competition remain, First Industrial’s focus on operational efficiency and strategic markets reinforces its resilience in a competitive logistics sector.