First Industrial Commences ATM Program - Analyst Blog

First Industrial Realty Trust, Inc. FR initiated a new at-the-market (ATM) equity-offering program. The company plans to sell shares up to $13.3 million for an aggregate offering price of at most $200 million, from time to time, based on market conditions and capital requirements. 

Notably, this new ATM program replaced the earlier one, which was terminated on Mar 12, 2014. A consortium of renowned financial institutions such as Baird, Wells Fargo Securities of Wells Fargo & Company WFC, Mitsubishi UFJ Securities of Mitsubishi UFJ Financial Group, Inc. MTU and BofA Merrill Lynch of Bank of America Corp. BAC will support First Industrial Realty as the sales agent for the ATM offering.

First Industrial Realty plans to use net proceeds from the shares sale for general corporate purposes – such as funding proposed acquisitions and other related investments as well as reducing the debt level.

We believe that the above-mentioned transaction by First Industrial Realty will provide it financial flexibility and position it favorably to pursue expansion opportunities, which will go a long way in enhancing top-line growth. Though, the share dilution impact of the transaction is unavoidable.

In late February, First Industrial Realty reported fourth-quarter 2013 funds from operations (FFO) per share of 27 cents, which missed the Zacks Consensus Estimate by a penny. Nevertheless, this came above the prior-year quarter figure of 18 cents.

The year-over-year increase was attributable to solid occupancy gains and operating portfolio performance. Consequently, this industrial real estate investment trust (REIT) also hiked its first-quarter 2014 dividend by 20.6% sequentially. Moreover, as of Dec 31, 2013, the company's cash and cash equivalents stood at $7.6 million, up from $4.9 million at the end of 2012.

First Industrial Realty currently carries a Zacks Rank #2 (Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.