Company: FR
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000921825-25-000019
Chunk: 445

Company: FIRST INDUSTRIAL REALTY TRUST INC
Filing Date: 2025-02-14
Form: 10-K
Item: Item 12
Chunk 445
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 property expenses certain lessor costs, such as real estate taxes, that the Joint Venture contractually requires the tenant to pay directly to a third party on the Joint Venture’s behalf. The amounts paid directly to third parties by tenants for lessor costs are also excluded from lease revenues.

Gain on Sale of Real Estate

Asset sales are generally recognized when control of the asset being sold is transferred to the buyer. As the assets are sold, their costs and related accumulated depreciation, if any, are derecognized with resulting gains or losses reflected in net income. Estimated future costs to be incurred by the Joint Venture after completion of each sale are accrued and included in the determination of the gain on sales.

When leases contain purchase options, the Joint Venture will assess the probability that the tenant will execute the purchase option both at lease commencement or at the time the tenant communicates their intent to execute the purchase option. If the Joint Venture determines that the execution of the purchase option is reasonably certain, the Joint Venture will account for the lease as a sales-type lease and derecognize the associated real estate assets on the Joint Venture’s balance sheet and record a gain or loss on sale.

Income Taxes

In accordance with limited liability company taxation, each of the Members is responsible for reporting their share of taxable income or loss. Accordingly, no provision has been made in the financial statements for federal or state income taxes. 

The Joint Venture files a federal tax return as well as a state return. The statute of limitations for income taxes is generally three years. As such, the Joint Venture’s tax returns for the 2024, 2023 and 2022 tax years are subject to examination.

3. Investment in Real Estate

On August 14, 2020, the Joint Venture acquired approximately 575 developable acres of land for a purchase price of $70,530, excluding closing costs and on March 24, 2021, the Joint Venture acquired approximately two additional developable acres of land for a purchase price of $370, excluding closing costs. The Joint Venture accounted for the land parcels as asset acquisitions and therefore capitalized transaction costs to the land bases. 

On June 30, 2022, the Joint Venture sold 358 developable acres of land to a third party. Gross proceeds from the sale were $255,287 and the gain on sale of real estate was $171,671. On March 30, 2023, the Joint Venture sold 31 developable acres of land to a third party. Gross proceeds