Company: FR
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000921825-25-000019
Chunk: 443

Company: FIRST INDUSTRIAL REALTY TRUST INC
Filing Date: 2025-02-14
Form: 10-K
Item: Item 12
Chunk 443
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 Venture reviews its long-lived assets for potential impairment whenever an event or changes in circumstances indicate the carrying value of the asset may not be recoverable. If further assessment of recoverability is needed, the Joint Venture will estimate the future net cash flows expected to result from the use of the property and its eventual disposition. Estimated future net cash flows are based on estimates of future operating performance and market conditions. If the sum of the expected future net cash flows (undiscounted and without interest charges) is less than the carrying amount of the property or group of properties, the Joint Venture will recognize an impairment loss equal to the amount in which the carrying value exceeds the estimated fair value of the property or group of properties.  The assessment of fair value requires the use of 

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estimates and assumptions relating to the timing and amounts of cash flow projections, discount rates and termination capitalization rates.

Interest expense, real estate taxes, and other directly related costs incurred during construction periods are capitalized to a development project from the point the Joint Venture begins undergoing necessary activities to get the development ready for its intended use and ceases when a development project is substantially completed and held available for occupancy.  Upon substantial completion, the Joint Venture reclassifies construction in progress to building and tenant improvements and will start depreciating the asset based on the estimated useful life. 

Depreciation expense is computed using the straight-line method based on the following useful lives:

 YearsBuildings and Improvements40Tenant ImprovementsShorter of Useful Life or Terms of Related Lease 

Construction expenditures for tenant improvements, leasehold improvements and leasing commissions, inclusive of related party coordination fees, are capitalized and amortized over the terms of each specific lease. Repairs and maintenance are charged to expense when incurred. 

The Joint Venture classifies certain properties and related assets and liabilities as held for sale when the sale of an asset has been approved by the Members, a legally enforceable contract has been executed and the buyer's due diligence period, if any, has expired. At such time, the respective assets and liabilities are presented separately on the Consolidated Balance Sheets. Upon held for sale classification, depreciation ceases and the properties are reflected at the lower of depreciated cost or fair value, less costs to dispose. 

Fair Value of Financial Instruments

The fair values of prepaid expenses and other assets, accounts payable and other accrued expenses and due to related party were not materially different from their carrying or contract values due to the short-term nature of these financial instruments. The Joint Venture has concluded that its determination