Is First Industrial Realty Trust (FR) the Best Warehouse and Self-Storage Stock to Buy Now?

First Industrial Realty Trust (FR) has been making waves in the industrial real estate sector, with its focus on logistics properties and strategic acquisitions. As of January 19, 2025, FR's stock price was $50.78, with a 52-week high of $57.35 and a 52-week low of $45.10. The company's market capitalization is approximately $10.1 billion, and it has a beta of 1.1. FR's stock price has seen a 1.44% increase in the past month, an 8.09% decrease in the past three months, a 5.47% decrease in the past year, and a 17.11% increase in the past five years. The company's stock price has also increased by 114.94% since its IPO in 1994.

FR's financial performance has been strong, with revenue of $618.20 million in 2023, an increase of 14.51% compared to the previous year's $539.85 million. However, earnings decreased by -23.47% to $274.58 million in 2023. The company's FFO was $2.44 per share/unit on a diluted basis in 2023, compared to $2.28 in 2022. Excluding income related to the first quarter accelerated recognition of a tenant improvement reimbursement, full year 2023 FFO was $2.42 per share/unit. Excluding the income related to insurance claim settlements, fourth quarter and full year 2022 FFO was $0.59 and $2.27 per share/unit, respectively.

FR's dividend history is strong, with a current yield of 2.91%. The company has been paying a reliable dividend, with a 15.6% increase in the first quarter of 2024 and a 9.3% increase in the first quarter of 2022. FR's dividend growth has been steady, and its dividend payouts have been consistent.

FR's portfolio and new investments are concentrated in 15 target MSAs with an emphasis on supply-constrained, coastally-oriented markets. The company owns and has under development approximately 69.0 million square feet of industrial space as of September 30, 2024. FR's strategy of focusing on logistics properties and strategic acquisitions has contributed to its growth and value creation.

Analysts have a positive outlook on FR's stock, with an average rating of "Buy" and a 12-month stock price forecast of $57.83, which is an increase of 13.88% from the latest price. The company's Snowflake Score is 4/6 for valuation, 0/6 for future growth, 4/6 for past performance, 3/6 for financial health, and 5/6 for dividends, indicating a strong dividend history and a relatively attractive valuation.

FR's recent performance and growth prospects are driven by several key factors:

1. Strong Lease Renewals and New Leasing Activity: FR has been successful in renewing leases and securing new tenants, with a 58.3% cash rental rate increase on leases signed to-date commencing in 2024. This reflects the company's ability to capture strong rental rate growth on leasing and achieve a new company record for annual cash rental rate growth of 58.3% for 2023 commencements.
2. Rental Rate Growth: FR has achieved significant rental rate growth, both in new leases and renewals. As of Q3 2024, FR has signed approximately 53% of 2024 expirations at a cash rental rate increase of approximately 39%.
3. Development Activity: FR continues to expand its portfolio through strategic development projects. In Q3 2024, FR started a 542,000 square-foot development in Nashville with an estimated investment of $54 million. In Q2 2024, FR commenced development of three projects totaling 800,000 square feet, with an estimated total investment of $130 million.
4. Acquisitions and Dispositions: FR's acquisition and disposition strategy has contributed to its growth and value creation. In Q3 2024, FR acquired a fully leased four-building portfolio in Houston for $29 million. In Q3 and Q4 2024, FR sold ten buildings for a total of $101 million.
5. Financial Performance: FR's financial performance has been strong, with increasing FFO and dividend payouts. In Q1 2024, FR's FFO was $0.63 per share/unit, compared to $0.60 per share/unit a year ago. In Q2 2024, FR increased its first quarter 2024 dividend to $0.37 per share, a 15.6% increase.

Geopolitical uncertainties can impact FR's earnings and growth potential, as highlighted by analysts' concerns and market trends. However, FR's strong performance and growth prospects make it an attractive investment opportunity in the warehouse and self-storage sector.




In conclusion, First Industrial Realty Trust (FR) is a strong contender in the warehouse and self-storage stock market, with a positive outlook from analysts and a history of strong performance and dividend growth. FR's focus on logistics properties and strategic acquisitions, combined with its strong lease renewals and new leasing activity, rental rate growth, development activity, and financial performance, make it an attractive investment opportunity in the current market.