Company: FR
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000921825-25-000019
Chunk: 47

Company: FIRST INDUSTRIAL REALTY TRUST INC
Filing Date: 2025-02-14
Form: 10-K
Item: Item 1A
Chunk 47
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 our employees, officers and directors from focusing their time and effort on our business and subject the properties owned by the applicable joint venture to additional risk; and (vii) we may in certain circumstances be held liable for the actions or decisions of our joint venture partners. 

The occurrence of one or more of these events could adversely affect our financial condition, results of operations, cash flow and ability to make distributions to our stockholders and unitholders, the market price of the Company's common stock and the market value of the Units.

11

We own certain properties subject to ground leases that expose us to risks. 

For certain of our properties, we own the building and other improvements but have leased the underlying land pursuant to a long-term ground lease. These arrangements expose us to unique risks, including the potential loss of our interest in the properties if we breach the terms of the ground leases, fail to renew them, or if they are otherwise terminated. As the ground lease termination dates approach, the values of the properties could decline if extensions or renewals are not secured. Additionally, certain ground leases include annual payment escalations and/or periodic fair market value adjustments which could increase our lease obligations over time. These factors may adversely affect our financial condition, results of operations or ability to generate income from these properties.

We are exposed to the impacts of climate change.

We are subject to the physical and financial impacts of climate change, particularly due to our significant investment in properties located in coastal markets, including Southern California, Northern California, Houston and South Florida. These areas are also targeted markets for future growth. Properties in these regions are vulnerable to catastrophic weather events, such as severe storms, drought, earthquakes, floods, wildfires or other extreme weather conditions. An increase in the frequency or severity of such events could heighten our exposure to these risks, potentially disrupting our tenants' operations and impairing their ability to pay rent. Furthermore, the effects of climate change may adversely affect our ability to lease, develop or sell properties or to use them as collateral for financings. We maintain comprehensive insurance coverage to mitigate casualty risks, in amounts and of a kind that we believe are appropriate for the markets where each of our properties and their business operations are located. However, as climate change risks intensify, there is no assurance that insurance companies will continue to offer sufficient coverage or do so at commercially reasonable rates. A lack of adequate insurance or significant increases in premiums could materially affect our financial performance and operations.

Our insurance coverage does not include all potential losses.

Real property is