<PAGE>   1

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-K

(X)     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
        For the fiscal year ended December 31, 1998        OR

( )     Transition report pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934
        For the transition period from                   to                    .
                                       ------------------    -------------------

                       Commission File Number 33-97014-01



                        FIRST INDUSTRIAL SECURITIES, L.P.
             (Exact name of Registrant as specified in its Charter)

          DELAWARE                                          36-4036965
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

 311 S. WACKER DRIVE, SUITE 4000, CHICAGO, ILLINOIS           60606
     (Address of principal executive offices)               (Zip Code)

                                 (312) 344-4300
              (Registrant's telephone number, including area code)

          Securities registered pursuant to Section 12(b) of the Act:

          GUARANTEE OF THE 9 1/2% SERIES A CUMULATIVE PREFERRED STOCK
                     OF FIRST INDUSTRIAL REALTY TRUST, INC.
                                (Title of class)

                             NEW YORK STOCK EXCHANGE
                     (Name of exchange on which registered)


        Securities registered pursuant to Section 12(g) of the Act: NONE




Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X  No   .
                                      ---   ---





<PAGE>   2


                        FIRST INDUSTRIAL SECURITIES, L.P.

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                    PAGE
                                                                                                    ----
PART I.
<S>       <C>                                                                                       <C>
Item 1.   Business....................................................................................3
Item 2.   The Properties..............................................................................4
Item 3.   Legal Proceedings...........................................................................9
Item 4.   Submission of Matters to a Vote of Security Holders.........................................9


PART II.

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters......................10
Item 6.   Selected Financial Data....................................................................10
Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations......11
Item 7a.  Quantitative and Qualitative Disclosures About Market Risk.................................15
Item 8.   Financial Statements and Supplementary Data................................................15
Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosures......15


PART III.

Item 10.  Directors and Executive Officers of the Registrant.........................................16
Item 11.  Executive Compensation.....................................................................16
Item 12.  Security Ownership of Certain Beneficial Owners and Management.............................16
Item 13.  Certain Relationships and Related Transactions.............................................16


PART IV.

Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K...........................17



SIGNATURES...........................................................................................18
</TABLE>


                                       2
<PAGE>   3

         This report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. First Industrial Securities,
L.P. (the "Company") intends such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained in the
Private Securities Reform Act of 1995, and is including this statement for
purposes of complying with these safe harbor provisions. Forward-looking
statements, which are based on certain assumptions and describe future plans,
strategies and expectations of the Company, are generally identifiable by use of
the words "believe", "expect", "intend", "anticipate", "estimate", "project" or
similar expressions. The Company's ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which
could have a material adverse affect on the operations and future prospects of
the Company include, but are not limited to, changes in: economic conditions
generally and the real estate market specifically, legislative/regulatory
changes, availability of capital, interest rates, competition, supply and demand
for industrial properties in the Company's current market areas and general
accounting principles, policies and guidelines. These risks and uncertainties
should be considered in evaluating forward-looking statements and undue reliance
should not be placed on such statements. Further information concerning the
Company and its business, including additional factors that could materially
affect the Company's financial results, is included herein and in the Company's
other filings with the Securities and Exchange Commission.

                                     PART I

ITEM 1.  BUSINESS

THE COMPANY

GENERAL

         First Industrial Securities, L.P. (the "Company") is a Delaware limited
partnership which owns 19 industrial properties (the "Properties"). The
Properties consist of seven light industrial properties, five bulk warehouse
properties, four manufacturing properties, two regional warehouse properties and
one R&D/Flex property. The markets in which the Properties are located include:
Chicago, IL, Minneapolis/St. Paul, MN, Grand Rapids, MI, Detroit, MI and Central
Pennsylvania. The Properties contain an aggregate of approximately 2.2 million
square feet of gross leasable area ("GLA") which, as of December 31, 1998, was
99.4% leased to 33 tenants. At December 31, 1998, the Company had no employees.
The Company's executive offices are located at 311 South Wacker Drive, Suite
4000, Chicago, Illinois 60606, and its telephone number is (312) 344-4300.

         The Company was formed in 1995 in connection with the issuance of
1,650,000 shares of $.01 par value Series A Cumulative Preferred Stock (the
"Series A Preferred Stock") of First Industrial Realty Trust, Inc. ("FR"). The
1% general partner of the Company is First Industrial Securities Corporation
("Securities Corporation"), which is a wholly owned subsidiary of FR. The 99%
limited partner of the Company is First Industrial, L.P. (the "Operating
Partnership"), of which FR is the sole general partner.

         In connection with the issuance of the Series A Preferred Stock, FR
contributed to Securities Corporation the gross proceeds from the issuance of
the Series A Preferred Stock in exchange for preferred stock of Securities
Corporation, and Securities Corporation contributed such proceeds to the Company
in exchange for a preferred limited partnership interest in the Company. The
Operating Partnership and First Industrial Pennsylvania, L.P. contributed the
Properties to the Company in exchange for limited partnership interests in the
Company (the "Contribution"). The Pennsylvania Partnership subsequently
distributed its limited partnership interest to the Operating Partnership, which
is the Company's limited partner.



                                       3
<PAGE>   4


THE GUARANTEE AND LIMITED PARTNERSHIP AGREEMENT

         The Company has guaranteed the payment of dividends on, and payments
upon liquidation or redemption of, the Series A Preferred Stock under a
guarantee (the "Guarantee") contained in a Guarantee and Payment Agreement (the
"Guarantee Agreement"). The Guarantee Agreement is administered by American
National Bank and Trust Company, as guarantee agent (together with any subagents
which it may appoint, the "Guarantee Agent"). The Guarantee Agent may enforce
the Guarantee directly against the Company only at the direction of the holders
of at least 25% of the outstanding Series A Preferred Stock. No holder of Series
A Preferred Stock may seek directly to enforce the Guarantee. The Guarantee and
the Guarantee Agreement will terminate upon confirmation to the Company from
Fitch Investors Service, L.P. and Standard & Poor's Ratings Group that,
immediately following such a termination, the Series A Preferred Stock would be
rated at least BBB, whether or not the Series A Preferred Stock is so rated
prior to such termination.

         The limited partnership agreement of the Company (the "Limited
Partnership Agreement") and the Guarantee Agreement contain covenants generally
restricting the Company's activities to the ownership and operation of the
Properties and, under certain circumstances, other industrial properties. These
covenants shall cease to have any effect upon the termination of the Guarantee.
Under its Articles of Incorporation, Securities Corporation`s sole purpose will
be to act as general partner of the Company and to pay dividends on its common
and preferred stock. These and other restrictions are intended to assure that
even in the event of FR, the Operating Partnership or other affiliates of FR
becoming subject to federal bankruptcy proceedings, neither Securities
Corporation nor the Company nor their assets will be treated as subject to such
bankruptcy proceedings under the doctrine of substantive consolidation or other
doctrines (except to the extent liabilities are imposed by non-insolvency
regulatory statutes on affiliates) and that activities of FR, the Operating
Partnership and other affiliates will not cause Securities Corporation or the
Company to become insolvent or unable to pay their debts as they mature
(including the Guarantee).

ITEM 2.  THE PROPERTIES

GENERAL

         At December 31, 1998 the Company owned 19 in-service industrial
properties containing approximately 2.2 million square feet of GLA in four
states. The Properties are generally located in business parks which have
convenient access to interstate highways and air transportation. The median age
of the Properties as of December 31, 1998 was approximately eleven years.

         The Company classifies its Properties into five industrial categories:
Light Industrial, R&D/Flex, Bulk Warehouse, Regional Warehouse and
Manufacturing. While some Properties may have characteristics which fall under
more than one property type, the Company has used what it feels is the most
dominating characteristic to categorize the property.



                                       4
<PAGE>   5


The following table summarizes certain information as of December 31, 1998 with
respect to the Properties.

         
         
                               PROPERTY SUMMARY
<TABLE>  
<CAPTION>
                                                                                               Regional
                    Light Industrial          R&D/ FLEX              Bulk Warehouse            Warehouse            Manufacturing
                  -------------------  -----------------------   ---------------------   ---------------------   -------------------
                              Number                  Number                 Number                   Number                Number
Metropolitan                   of                      of                      of                      of                     of
   Area            GLA      Properties     GLA      Properties     GLA      Properties     GLA      Properties     GLA    Properties
------------     -------    ----------   -------    ----------   -------    ----------   -------    ----------   -------  ----------
<S>               <C>             <C>     <C>             <C>   <C>               <C>    <C>        <C>          <C>       <C>
Chicago           41,820           1      49,730           1     225,000           1          --          --     323,425           1

Minneapolis/
St. Paul              --          --          --          --          --          --      75,939           1     541,193           3

Grand Rapids      80,000           1          --          --     384,500           3          --          --          --          --

Detroit          290,747           4          --          --          --          --      66,395           1          --          --

Central
Pennsylvania      49,350           1          --          --     100,000           1          --          --          --          --
                 -------     -------     -------     -------     -------     -------     -------     -------     -------     -------

Total            461,917           7      49,730           1     709,500           5     142,334           2     864,618           4
                 =======     =======     =======     =======     =======     =======     =======     =======     =======     =======
</TABLE>


<TABLE>
<CAPTION>
                                                 TOTALS
                        --------------------------------------------------------
                                                      AVERAGE         GLA AS A %
                                      NUMBER OF     OCCUPANCY AT       OF TOTAL
 METROPOLITAN AREA         GLA        PROPERTIES      12/31/98        PORTFOLIO
--------------------    ---------     ----------    ------------      ----------
<S>                       <C>                 <C>         <C>             <C>
Chicago                   639,975             4           100%            29%
Minneapolis/St. Paul      617,132             4            98%            27%
Grand Rapids              464,500             4           100%            21%
Detroit                   357,142             5           100%            16%
Central Pennsylvania      149,350             2           100%             7%
--------------------    ---------     ---------     ---------      ---------
   Total or Average     2,228,099            19            99%           100%
                        =========     =========     =========      =========
</TABLE>



                                       5
<PAGE>   6

DETAIL PROPERTY LISTING

        The following table lists all of the Properties as of December 31, 1998,
none of which were subject to mortgage liens as of such date.

                                PROPERTY LISTING

<TABLE>
<CAPTION>
                                                                                              LAND
                                         LOCATION        YEAR BUILT/        BUILDING          AREA                       OCCUPANCY
BUILDING ADDRESS                       (CITY/STATE)       RENOVATED           TYPE           (ACRES)        GLA         AT 12/31/98
-----------------------------      -------------------   -----------     ---------------     -------     ----------     ------------
<S>                                <C>                   <C>             <C>                 <C>         <C>            <C>
2101-2125 Gardner Road             Broadview, IL           1950/69       Manufacturing          9.98       323,425              100%
365 North Avenue                   Carol Stream, IL         1969         Bulk Warehouse        28.65       225,000              100%
2942 MacArthur Boulevard           Northbrook, IL           1979         R&D/Flex               3.12        49,730              100%
3150-3160 MacArthur Boulevard      Northbrook, IL           1978         Light Industrial       2.14        41,820              100%
900 Apollo Road                    Eagan, MN                1970         Manufacturing         39.00       312,265              100%
7316 Aspen Lane North              Brooklyn Park, MN        1978         Manufacturing          6.63        97,640               87%
6707 Shingle Creek Parkway         Brooklyn Center, MN      1986         Reg. Warehouse         4.22        75,939              100%
6655 Wedgwood Road                 Maple Grove, MN          1989         Manufacturing         17.88       131,288              100%
425 Gordon Industrial Court        Grand Rapids, MI         1990         Bulk Warehouse         8.77       173,875 (a)          100%
2851 Prairie Street                Grandville, MI           1989         Bulk Warehouse         5.45       117,251              100%
2945 Walkent Court                 Grand Rapids, MI         1993         Bulk Warehouse         4.45        93,374              100%
537 76th Street                    Grand Rapids, MI         1987         Light Industrial       5.26        80,000              100%
2965 Technology Drive              Rochester Hills, MI      1995         Reg. Warehouse         4.92        66,395              100%
4177A Varsity Drive                Ann Arbor, MI            1993         Light Industrial       2.48        11,050              100%
6515 Cobb Drive                    Sterling Heights, MI     1984         Light Industrial       2.91        47,597              100%
1451 Lincoln Avenue                Madison Heights, MI      1967         Light Industrial       3.92        75,000              100%
4400 Purks Drive                   Auburn Hills, MI         1987         Light Industrial      13.04       157,100 (b)          100%
7195 Grayson Road                  Harrisburg, PA           1994         Bulk Warehouse         6.02       100,000              100%
5020 Louise Drive                  Mechanicsburg, PA        1995         Light Industrial       5.06        49,350              100%
                                                                                                         ---------      ------------
                                                                         TOTAL                           2,228,099               99%
                                                                                                         =========      ============
</TABLE>

(a) On April 1, 1997, the Company completed a 17,000 square foot expansion of
    this property.

(b) On February 1, 1998, the Company completed a 70,000 square foot expansion of
    this property.

TENANT AND LEASE INFORMATION

        Many of the Company's leases have an initial term of between three and
five years and provide for periodic rental increases that are either fixed or
based on changes in the Consumer Price Index. Industrial tenants typically have
net or semi-net leases and pay as additional rent their percentage of the
property's operating costs, including the costs of common area maintenance,
property taxes and insurance. As of December 31, 1998, 99.4% of the GLA of the
Properties was leased.



                                       6
<PAGE>   7


        The following table sets forth, as of December 31, 1998, the annualized
December 1998 base rent, and the total GLA leased, by tenants responsible for
more than one percent of the aggregate annualized December 1998 base rent.

<TABLE>
<CAPTION>
                                       ANNUALIZED BASE RENT
                                         (IN THOUSANDS)                     GLA
                                    ------------------------     ------------------------
TENANT                                AMOUNT      % OF TOTAL      OCCUPIED     % OF TOTAL
-------------------------------     ---------     ----------     ---------     ----------
<S>                                 <C>                <C>         <C>               <C> 
Sci-Med Life Systems, Inc.          $   1,129          13.0%       131,288           5.9%
Meyercord Company                         834           9.6%       225,000          10.1%
Prestige Plastics                         765           8.8%       312,265          14.0%
MSX International Engineering             697           8.0%       157,100           7.1%
B.L. Downey Company, Inc.                 480           5.5%       162,306           7.3%
Underwriters Laboratories                 423           4.9%        49,730           2.2%
American Axle & Manufacturing             383           4.4%        66,395           3.0%
Alabama Metals Industries Corp.           366           4.2%       100,000           4.5%
Nelson Metal Products Corp.               358           4.1%       117,251           5.3%
Universal Trim, Inc.                      315           3.6%        75,000           3.4%
International Paper Company               278           3.2%        93,374           4.2%
NWS Michigan                              242           2.8%       113,875           5.1%
Transpak, Inc.                            223           2.6%        47,597           2.1%
Auer Steel & Heating Supply Co.           220           2.5%        47,861           2.1%
ITT Educational Services, Inc.            206           2.4%        21,000           0.9%
Independent Metals Corp.                  205           2.4%        61,119           2.7%
Espec Corp.                               194           2.2%        60,000           2.7%
Crest Engineering Company                 185           2.1%        40,040           1.8%
St. Thomas Creations                      150           1.7%        28,350           1.3%
Blevins, Inc.                             140           1.6%        40,000           1.8%
Spartan Stores, Inc.                      120           1.4%        40,000           1.8%
J.C. Penny Co., Inc.                      107           1.2%        28,078           1.3%
Phaidon Press                              94           1.1%        24,800           1.1%
                                    ---------     ---------      ---------     ---------
TOTAL                               $   8,114          93.3%     2,042,429          91.7%
                                    =========     =========      =========     =========
</TABLE>

        The following table shows scheduled lease expirations for all leases for
the Company's Properties as of December 31, 1998.

<TABLE>
<CAPTION>
                                                                             PERCENTAGE OF
                                                              ANNUALIZED        TOTAL
                  NUMBER                     PERCENTAGE OF  BASE RENT UNDER   ANNUALIZED
  YEAR OF       OF LEASES        GLA             GLA        EXPIRING LEASES   BASE RENT
EXPIRATION (1)  EXPIRING      EXPIRING (2)     EXPIRING     (IN THOUSANDS)    EXPIRING
--------------  ---------     ------------   -------------  ---------------  -------------
<S>             <C>           <C>            <C>            <C>              <C>
      1999              5       105,628            4.8%      $     380             4.4%
      2000              8       408,160           18.4%          2,227            25.6%
      2001              3       145,601            6.6%            508             5.8%
      2002              3       250,500           11.3%            943            10.8%
      2003              6       452,749           20.4%          1,979            22.7%
      2004              4       469,085           21.2%          1,288            14.8%
      2005              2        66,395            3.0%            383             4.4%
      2006              1        21,000            0.9%            206             2.4%
      2007              3       296,181           13.4%            791             9.1%
Thereafter             --            --             --              --              --
                ---------     ---------      ---------       ---------       ---------
Total                  35     2,215,299            100%      $   8,705             100%
                =========     =========      =========       =========       =========
</TABLE>

--------------
(1)   Lease expirations as of December 31, assuming tenants do not exercise
      existing renewal, termination, or purchase options.
(2)   Does not include existing vacancies of 12,800 aggregate square feet.



                                       7
<PAGE>   8

 MATERIAL PROPERTIES

         At December 31, 1998, three of the Company's Properties (the "Material
Properties") represent ten percent or more of the aggregate book value of the
Properties as of December 31, 1998, or ten percent or more of the aggregate
annualized rental revenues as of December 31, 1998.

         The following table shows the occupancy rate and average annual base
rent per square foot for each of the Material Properties for the periods
indicated:


<TABLE>
<CAPTION>
                                    6655 WEDGEWOOD ROAD              365 NORTH AVENUE            2101-2125 GARDNER ROAD
                                      MAPLE GROVE, MN                CAROL STREAM, IL                 BROADVIEW, IL
                                  --------------------------------------------------------------------------------------
                                                 AVERAGE                          AVERAGE                      AVERAGE
                                                 ANNUAL                           ANNUAL                       ANNUAL
                                  OCCUPANCY     BASE RENT       OCCUPANCY        BASE RENT     OCCUPANCY      BASE RENT
           YEAR                    RATE (1)    PER SQ. FT.        RATE (1)      PER SQ. FT.     RATE (1)     PER SQ. FT.
-------------------------         ---------    -----------      ----------      -----------    ---------     -----------
<S>                               <C>          <C>              <C>             <C>             <C>          <C>
1998 ....................           100%          $8.60            100%          $3.71            100%         $3.25
1997 ....................           100%           8.60            100%           3.58            100%          3.05
1996 ....................           100%           8.60            100%           3.79             93%          3.09
1995 ....................           100%           8.60            100%           4.00            100%          2.81
1994 ....................           100%           7.63            100%           4.00            100%          2.67
1993 ....................            (2)             (2)            (3)             (3)           100%          2.59
</TABLE>

(1)  As of December 31 of the year indicated.
(2)  The Company acquired this property on September 30, 1994. Information for
     periods prior to January 1, 1994, is not available.
(3)  The Company acquired this property on November 14, 1994. Information for
     periods prior to January 1, 1994, is not available.


         The following table sets forth certain information concerning the
tenants and leases in the Material Properties as of December 31, 1998.

<TABLE>
<CAPTION>
                                                                                          ANNUALIZED      PRIMARY       MAXIMUM
                                                                           GLA           BASE RENT AT      LEASE         LEASE
                                                    NATURE OF           OCCUPIED           DECEMBER         TERM         TERM
TENANT                                               BUSINESS           (SQ. FT.)          31, 1998      EXPIRATION   EXPIRATION
--------------------------------------------    -------------------    ----------        ------------    ----------   ----------
<S>                                             <C>                    <C>               <C>             <C>          <C>
6655 WEDGEWOOD ROAD
    SciMed Life Systems, Inc. (1) ..........    Medical instruments       131,288         $1,129,272       2000          2005
                                                                                                                     
                                                                                                                     
365 NORTH AVENUE                                                                                                     
    Meyercord Company ......................    Commercial printing       225,000 (2)        833,748       2002          2012
                                                                                                                     
2101-2125 GARDNER ROAD                                                                                               
    B.L. Downey ............................    Plastics                  162,306            480,425       2007          2012

                                                Rolled steel
    Alabama Metals Industries Corp. ........    processor                 100,000            366,012       2003          2008
                                                                                                                     
                                                Rolled steel               
    Independent Metals Corporation .........    processor                  61,119            204,774       2003          2008
</TABLE>

-----------------------

(1)  The tenant had the right to terminate the lease on 9 months prior notice
     beginning December 31, 1998, without an early termination fee. The tenant
     gave notice of early termination in March 1998 and subsequently moved out
     in January 1999.
(2)  The tenant has subleased 87,571 sq. ft. of this property to CP&P, 
     Incorporated, which is a fast food paper and plastic supplier.



                                       8
<PAGE>   9

PROPERTY MANAGEMENT

         The Company's properties are managed by the Operating Partnership, of
which FR is the sole general partner.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is involved in legal proceedings arising in the ordinary
course of business. All such proceedings, taken together, are not expected to
have a material impact on the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         None.


                                       9
<PAGE>   10


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         None.

ITEM 6.  SELECTED FINANCIAL DATA

         The following sets forth selected financial and operating data for the
Company and its Predecessor Businesses (hereinafter defined). The following data
should be read in conjunction with the financial statements and notes thereto
and Management's Discussion and Analysis of Financial Condition and Results of
Operations included elsewhere in this Form 10-K. "Predecessor Businesses"
include the historical statements of operations of the Properties from the date
of acquisition (or, if the Property was developed, the date placed in service)
by the Operating Partnership or the Pennsylvania Partnership for the period
January 1, 1995 to December 15, 1995 (or the earlier date of contribution to the
Company) and the year ended December 31, 1994.

<TABLE>
<CAPTION>
                                                          FIRST INDUSTRIAL SECURITIES, L.P.                PREDECESSOR BUSINESSES
                                           ------------------------------------------------------------  ---------------------------
                                                                                         FOR THE PERIOD  FOR THE PERIOD
                                            FOR THE         FOR THE         FOR THE        AUGUST 14,      JANUARY 1,      FOR THE
                                           YEAR ENDED      YEAR ENDED      YEAR ENDED       1995 TO          1995 TO      YEAR ENDED
                                           DECEMBER        DECEMBER        DECEMBER        DECEMBER         DECEMBER      DECEMBER
                                            31, 1998        31, 1997        31, 1996        31, 1995         15, 1995     31, 1994
                                           ----------      ----------      ----------    --------------  --------------  -----------
                                                                       (IN THOUSANDS, EXCEPT PROPERTY DATA)
<S>                                        <C>             <C>             <C>             <C>             <C>           <C>       
STATEMENTS OF OPERATIONS DATA:
 Total Revenues .......................    $   11,821      $   11,355      $   11,516      $    1,223      $   8,048     $    2,940
 Property Expenses ....................         3,112           3,311           3,394             269          2,291            771
 Interest Expense .....................            --              --              --              --          2,376            846
 Depreciation and Amortization ........         1,913           1,820           1,766             271          1,261            491
                                           ----------      ----------      ----------      ----------      ---------     ----------
 Net Income ...........................    $    6,796      $    6,224      $    6,356      $      683      $   2,120     $      832
                                           ==========      ==========      ==========      ==========      =========     ==========
BALANCE SHEET DATA (END OF PERIOD):
 Real Estate, Before Accumulated
  Depreciation ........................    $   80,600      $   79,491      $   76,255      $   75,319                    $   52,638

 Real Estate, After Accumulated
  Depreciation ........................        73,437          74,106          72,582          73,338                        52,149
 Total Assets .........................        77,449          76,822          76,337          75,878                        52,404
 Acquisition Facility .................            --              --              --              --                        25,175
 Total Liabilities ....................         1,322           1,521           1,440           1,110                        26,200
 Partners' Capital ....................    $   76,127      $   75,301      $   74,897      $   74,768                    $   26,204
OTHER DATA (END OF PERIOD):
 Total Properties .....................            19              19              19              19                            12
 Total GLA in sq. ft ..................     2,228,099       2,158,099       2,141,099       2,139,459                     1,489,094
 Occupancy % ..........................            99%             99%             97%            100%                           99%
</TABLE>




                                       10
<PAGE>   11

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

         The following discussion should be read in conjunction with "Selected
Financial Data" and the historical Financial Statements and Notes thereto
appearing elsewhere in this Form 10-K.

         First Industrial Securities, L.P. (the "Company") is a Delaware limited
partnership formed on August 14, 1995, the 1% general partner of which is First
Industrial Securities Corporation ("Securities Corporation"), a wholly owned
subsidiary of First Industrial Realty Trust, Inc. ("FR"), and the 99% limited
partner of which is First Industrial, L.P. (the "Operating Partnership"), of
which FR is the sole general partner. Securities Corporation also owns a
preferred limited partnership interest in the Company.

RESULTS OF OPERATIONS

         At December 31, 1998 and 1997, the Company owned 19 in-service
industrial properties containing approximately 2.2 million square feet. At
December 31, 1996, the Company owned 19 in-service Properties containing
approximately 2.1 million square feet.

         On April 1, 1997, the Company completed a 17,000 square foot expansion
of an existing industrial property located in Grand Rapids, Michigan. The cost
of the expansion was approximately $.3 million and was funded with cash flows
from operations.

         On February 1, 1998, the Company completed a 70,000 square foot
expansion of an existing industrial property located in Auburn Hills, Michigan.
The cost of the expansion was approximately $2.6 million and was funded with
cash flows from operations and a general and limited partner capital
contribution made in 1997.

COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO YEAR  ENDED DECEMBER 31, 1997

         Total revenues increased by approximately $.5 million, or 4.1%, due
primarily to an increase in rental income due to an increase in occupancy,
general rent increases and additional rental income from the expansion of one of
the Company's properties that was completed and placed in service on February 1,
1998. Average occupancy for the twelve months ended December 31, 1998 and 1997
was 99% and 94%, respectively.

         Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses
decreased by $.2 million or 6.0% due primarily to a decrease in snow removal and
related expenses incurred for properties located in certain of the Company's
metropolitan areas during the year ended December 31, 1998 as compared to the
year ended December 31, 1997.

         Depreciation and amortization increased by approximately $.1 million,
or 5.1%, due primarily to the additional depreciation related to the expansion
of one of the Company's properties that was completed and placed in service on
February 1, 1998.

COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR  ENDED DECEMBER 31, 1996

         Revenues decreased by approximately $.2 million or 1.4%, due primarily
to a decrease in occupancy. Average occupancy for the years ended December 31,
1997 and 1996 was 94% and 97%, respectively. The lower average occupancy for the
year ended 1997 is due to vacancies in the first and second quarters of 1997. As
of December 31, 1997, 99% of the GLA of the Properties was leased.


                                       11
<PAGE>   12

         Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses
remained relatively unchanged.

         Depreciation and amortization remained relatively unchanged.

LIQUIDITY AND CAPITAL RESOURCES

         As of December 31, 1998 and 1997, the Company had no outstanding
indebtedness.

YEAR ENDED DECEMBER 31, 1998

         Net cash provided by operating activities of approximately $8.5 million
for the year ended December 31, 1998 was primarily comprised of net income of
approximately $6.8 million and adjustments for non-cash items of approximately
$2.0 million, offset by the net change in operating assets and liabilities of
approximately $.3 million. The adjustments for non-cash items are comprised of
depreciation and amortization of approximately $1.9 million and a provision for
bad debts of approximately $.1 million, offset by the effect of straight-lining
of rental income.

         Net cash used in investing activities of approximately $1.6 million for
the year ended December 31, 1998 was primarily comprised of capital expenditures
related to an expansion of one of the Company's properties located in Auburn
Hills, Michigan that was completed and placed in service on February 1, 1998 and
various other capital improvements.

         Net cash used in financing activities of approximately $6.0 million for
the year ended December 31, 1998 consisted of preferred limited partner
distributions totaling approximately $3.9 million and general and limited
partner distributions totaling approximately $2.1 million.

YEAR ENDED DECEMBER 31, 1997

         Net cash provided by operating activities of approximately $7.6 million
for the year ended December 31, 1997 was primarily comprised of net income of
approximately $6.2 million and adjustments for non-cash items of approximately
$1.4 million. The adjustments for non-cash items are comprised of depreciation
and amortization of approximately $1.8 million, offset by the effect of
straight-lining of rental income of approximately $.4 million.

         Net cash used in investing activities of approximately $2.8 million for
the year ended December 31, 1997 was primarily comprised of capital expenditures
related to an expansion of one of the Company's properties located in Grand
Rapids, Michigan that was completed and placed in service on April 1, 1997,
capital expenditures related to the expansion of one of the Company's properties
located in Auburn Hills, Michigan that was placed in service on February 1, 1998
and various other capital improvements.

         Net cash used in financing activities of approximately $5.8 million for
the year ended December 31, 1997 consisted of preferred limited partner
distributions of approximately $3.9 million and general and limited partner
distributions totaling approximately $2.3 million, offset by a pro rata general
and limited partner capital contribution from Securities Corporation and the
Operating Partnership, respectively, in the amount of approximately $.4 million.

YEAR ENDED DECEMBER 31, 1996

         Net cash provided by operating activities of approximately $7.5 million
for the year ended December 31, 1996 was primarily comprised of net income of
approximately $6.4 million and adjustments for non-cash items of approximately
$1.5 million, offset by the net change in operating assets and liabilities of
approximately $.4 million. The adjustments for non-cash items are comprised of
depreciation 


                                       12
<PAGE>   13

and amortization of approximately $1.7 million and a provision for bad debts of
approximately $.1 million, offset by the effect of straight-lining of rental
income of approximately $.3 million.

         Net cash used in investing activities of approximately $.9 million for
the year ended December 31, 1996 was primarily comprised of capital expenditures
related to an expansion of one of the Company's properties located in Grand
Rapids, Michigan that was completed and placed in service on April 1, 1997 and
various other capital improvements.

         Net cash used in financing activities of approximately $6.2 million for
the year ended December 31, 1996 consisted of preferred limited partner
distributions of approximately $3.9 million and general and limited partner
distributions totaling approximately $2.3 million.

DISTRIBUTIONS AND CONTRIBUTIONS

         In 1998, the Company paid preferred limited partnership distributions
of approximately $3.9 million to Securities Corporation. In 1998, the Company
paid pro rata general and limited partnership distributions to Securities
Corporation and the Operating Partnership, respectively, in the aggregate amount
of approximately $2.1 million.

         In 1997, the Company paid preferred limited partnership distributions
of approximately $3.9 million to Securities Corporation. In 1997, the Company
paid pro rata general and limited partnership distributions to Securities
Corporation and the Operating Partnership, respectively, in the aggregate amount
of approximately $2.3 million that were partially off-set by a pro rata general
and limited partnership capital contribution from Securities Corporation and the
Operating Partnership, respectively, in the amount of approximately $.4 million.

         In 1996, the Company paid preferred limited partnership distributions
of approximately $3.9 million to Securities Corporation. In 1996, the Company
paid pro rata general and limited partnership distributions to Securities
Corporation and the Operating Partnership, respectively, in the aggregate amount
of approximately $2.3 million.

SHORT-TERM AND LONG-TERM LIQUIDITY NEEDS

         The Company has considered its short-term (one year or less) liquidity
needs and the adequacy of its estimated cash flow from operations and other
expected liquidity sources to meet these needs. The Company believes that its
principal short-term liquidity needs are to fund normal recurring expenses and
to pay the quarterly preferred limited partnership distribution. The Company
anticipates that these needs will be met with cash flows provided by operating
activities.

         The Company expects to fund its long-term (greater than one year)
liquidity requirements for non-recurring capital improvements and property
expansions with its cash flow from operations, capital contributions and, in
part, with a deferred maintenance escrow established in connection with the
issuance of 1,650,000 shares of FR's $.01 par value Series A Cumulative
Preferred Stock which is included in restricted cash on the balance sheet.

INFLATION

         Inflation has not had a significant impact on the Company because of
the relatively low inflation rates in the Company's markets of operation. Most
of the Company's leases require the tenants to pay their share of operating
expenses, including common area maintenance, real estate taxes and insurance,
thereby reducing the Company's exposure to increases in costs and operating
expenses resulting from inflation. In addition, many of the leases are for terms
less than five years which may enable the Company to replace existing leases
with new leases at higher base rentals if rents of existing leases are below the
then-existing market rate.


                                       13
<PAGE>   14

YEAR 2000 CONCERNS

         The Year 2000 compliance issue concerns the inability of computerized
information systems and non-information systems to accurately calculate, store
or use a date after 1999. This could result in computer systems failures or
miscalculations causing disruptions of operations. The Year 2000 issue affects
almost all companies and organizations.

         The Company has discussed its software applications and internal
operational programs with its current information systems' vendor and, based on
such discussions, believes that such applications and programs will properly
recognize calendar dates beginning in the year 2000. The Company is discussing
with its material third-party service providers, such as its banks, payroll
processor and telecommunications provider, their Year 2000 compliance and is
assessing what effect their possible non-compliance might have on the Company.
In addition, the Company is discussing with its material vendors the possibility
of any interface difficulties and/or electrical or mechanical problems relating
to the year 2000 which may affect properties owned by the Company. The Company
has also surveyed substantially all of its tenants to determine the status of
their Year 2000 compliance and what effect their possible non-compliance might
have on the Company. The Company is currently processing the information
obtained from such tenant surveys and remains in discussions with its material
vendors and third-party service providers. Of the tenant surveys processed to
date, all have stated that they are Year 2000 compliant or will be Year 2000
compliant by the end of 1999. The Company plans to complete its assessment of
Year 2000 compliance by such parties by June 30, 1999. Until such time the
Company cannot estimate any potential adverse impact resulting from the failure
of tenants, vendors or third-party service providers to address their Year 2000
issues; however, to date, no significant Year 2000-related conditions have been
identified.

         Because the Company's evaluation of its Year 2000 issues has been
conducted by its own personnel or by its vendors in connection with their
servicing operations, the Company believes that its expenditures for assessing
its Year 2000 issues, though difficult to quantify, to date have not been
material. In addition, the Company is not aware of any Year 2000-related
conditions that it believes would likely require any material expenditures by
the Company in the future.

         Based on its current information, the Company believes that the risk
posed by any foreseeable Year 2000-related problem with its internal systems and
the systems at its properties (including both information and non-information
systems) or with its vendors or tenants is minimal. Year 2000-related problems
with the Company's software applications and internal operational programs or
with the electrical or mechanical systems at its properties are unlikely to
cause more than minor disruptions in the Company's operations. The Company
believes that the risk posed by Year 2000-related problems at certain of its
third-party service providers, such as its banks, payroll processor and
telecommunications provider is marginally greater, though, based on its current
information, the Company does not believe any such problems would have a
material effect on its operations. Any Year 2000 related problems at such
third-party service providers could delay the processing of financial
transactions and the Company's payroll and could disrupt the Company's internal
and external communications. At this time, the Company has not developed and
does not anticipate developing any contingency plans with respect to Year 2000
issues. In addition, the Company has no plans to seek independent verification
or review of its assessment of its Year 2000 issues. The Company does intend to
complete its assessment of, and to continue to monitor, its Year 2000 issues and
will develop contingency plans if, and to the extent, deemed necessary.

         While the Company believes that it will be Year 2000 compliant by
December 31, 1999, there can be no assurance that the Company has been or will
be successful in identifying and assessing Year 2000 issues, or that, to the
extent identified, the Company's efforts to remediate such issues will be
effective such that Year 2000 issues will not have a material adverse effect on
the Company's business, financial condition or results of operation.



                                       14
<PAGE>   15

OTHER

         In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income".
This statement, effective for fiscal years beginning after December 15, 1997,
requires the Company to report components of comprehensive income in a financial
statement that is displayed with the same prominence as other financial
statements. Comprehensive income is defined by Concepts Statement No. 6,
"Elements of Financial Statements" as the change in the equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. It includes all changes in equity during a period except
those resulting from investments by owners and distributions to owners. The
Company's net income approximates its comprehensive income as defined in
Concepts Statement No. 6, "Elements of Financial Statements".

         In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information". This statement, effective for financial statements for fiscal
years beginning after December 15, 1997, requires that a public business
enterprise report financial and descriptive information about its reportable
operating segments. Generally, financial information is required to be reported
on the basis that it is used internally for evaluating segment performance and
deciding how to allocate resources to segments. The general partner of the
Company views the Company as a single segment.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         None.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See Index to Financial Statements and Financial Statement Schedule on
         page F-1 of this Form 10-K.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURES

         None.


                                       15
<PAGE>   16

                                    PART III

ITEM 10 AND 11. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AND EXECUTIVE
                COMPENSATION

         The directors and executive officers of Securities Corporation, the
general partner of the Company are as follows:

<TABLE>
<CAPTION>
         Name                       Age           Office
         ----                       ---           ------
<S>                                 <C>           <C>
         Michael W. Brennan         42            President, Chief Executive Officer and Director
         Michael J. Havala          39            Chief Financial Officer and Director
         Patrick J. Galvin          59            Independent Director
</TABLE>

         The independent director receives an annual director's fee of $10,000.
No other director or executive officer of Securities Corporation receives any
separate compensation as such.

         The following biographical descriptions set forth certain information
with respect to the directors and executive officers of Securities Corporation:

         Michael W. Brennan. Mr. Brennan has been President and Chief Executive
Officer and Director of Securities Corporation since November 1998. Prior to
this, Mr. Brennan was the Chief Operating Officer of Securities Corporation
since its inception. Mr. Brennan has been President, Chief Executive Officer and
Director of FR since November 1998. From December 1995 to November 1998, Mr.
Brennan was the Chief Operating Officer and Director of FR and from April 1994
to December 1995, he was Senior Vice President, Asset Management of FR. Between
1988 and 1994, he was a partner of The Shidler Group and the President of the
Brennan/Tomasz/Shidler Investment Corporation and was in charge of asset
management, leasing, project finance, accounting and treasury functions for The
Shidler Group's Chicago operations.

         Michael J. Havala. Mr. Havala has been Chief Financial Officer and
Director of Securities Corporation since its inception and has been the Chief
Financial Officer of FR since April 1994. Between 1989 and 1994 he was Chief
Financial Officer for The Shidler Group's Midwest region with responsibility for
accounting, finance and treasury functions.

         Patrick J. Galvin. Mr. Galvin has been Director of Securities
Corporation since 1995. He has been a senior partner in the law firm of Galvin,
Galvin & Leeney in Hammond, Indiana since 1986. He is admitted to the practice
of law in the States of Indiana and Illinois and the District of Columbia and is
a member of the American Bar Association. Mr. Galvin holds a Bachelor of Arts
degree from the University of Notre Dame and received J.D. and L.L.M. in
taxation degrees from the Georgetown University Law Center. He serves on the
Board of Directors of Mercantile National Bank of Indiana.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Securities Corporation owns a 1% general partner interest and the
preferred limited partner interest in the Company. The Operating Partnership
owns a 99% limited partner interest in the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Company's Properties are managed by the Operating Partnership
pursuant to a property management agreement. Management fees incurred are based
on 3.25% of gross receipts. These fees totaled $.4 million for the year ended
December 31, 1998.



                                       16
<PAGE>   17
                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE AND 
         REPORTS ON FORM 8-K

     (a)    FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE AND EXHIBITS 
            (1 & 2) See Index to Financial Statements and Financial Statement 
                    Schedule on page F-1 of this Form 10-K

            (3)   Exhibits:

<TABLE>
<CAPTION>
                  Exhibit No.       Description
                  -----------       -----------
<S>                              <C>
                      4.1        The Limited Partnership Agreement of First
                                 Industrial Securities, L.P. (incorporated by
                                 reference to Exhibit 4.1 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      4.2        Amended and Restated Articles of Incorporation
                                 of First Industrial Securities Corporation
                                 (incorporated by reference to Exhibit 4.2 of
                                 the Company's Annual Report on Form 10-K for
                                 the year ended December 31, 1995, File No.
                                 33-97014-01).

                      4.3        Articles Supplementary of First Industrial
                                 Securities Corporation (incorporated by
                                 reference to Exhibit 4.3 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      4.4        Bylaws of First Industrial Securities
                                 Corporation (incorporated by reference to
                                 Exhibit 4.4 of the Company's Annual Report on
                                 Form 10-K for the year ended December 31, 1995,
                                 File No. 33-97014-01)

                      10.1       Guarantee and Payment Agreement (incorporated
                                 by reference to Exhibit 10.1 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      10.2       Agency and Advance Agreement (incorporated by
                                 reference to Exhibit 10.2 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      10.3       Guarantee Agency Agreement (incorporated by
                                 reference to Exhibit 10.3 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      10.4       Property Management Agreement (incorporated by
                                 reference to Exhibit 10.4 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      27     *   Financial Data Schedule

                             *   Filed herewith.
</TABLE>

            (b)   REPORTS ON FORM 8-K
                     None.


                                       17
<PAGE>   18

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                    FIRST INDUSTRIAL SECURITIES, L.P.
                                    BY: FIRST INDUSTRIAL SECURITIES CORPORATION,
                                        ITS SOLE GENERAL PARTNER


Date:  March 16, 1999                   By: /s/ Michael W. Brennan
                                           -------------------------------------
                                           Michael W. Brennan
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)


Date:  March 16, 1999                   By: /s/ Michael J. Havala
                                           -------------------------------------
                                           Michael J. Havala
                                           Chief Financial Officer
                                           (Principal Financial and Accounting 
                                           Officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                                       Title                                Date
---------                                       -----                                ----
<S>                                  <C>                                         <C>
/s/ Michael W. Brennan               President, Chief Executive Officer          March 16, 1999
--------------------------------     and Director
    Michael W. Brennan           

/s/ Michael J. Havala                Chief Financial Officer and Director        March 16, 1999
--------------------------------
    Michael J. Havala

/s/ Patrick J. Galvin                Director                                    March 16, 1999
--------------------------------
    Patrick J. Galvin
</TABLE>


<PAGE>   19

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
                  Exhibit No.       Description
                  -----------       -----------
<S>                              <C>
                      4.1        The Limited Partnership Agreement of First
                                 Industrial Securities, L.P. (incorporated by
                                 reference to Exhibit 4.1 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      4.2        Amended and Restated Articles of Incorporation
                                 of First Industrial Securities Corporation
                                 (incorporated by reference to Exhibit 4.2 of
                                 the Company's Annual Report on Form 10-K for
                                 the year ended December 31, 1995, File No.
                                 33-97014-01).

                      4.3        Articles Supplementary of First Industrial
                                 Securities Corporation (incorporated by
                                 reference to Exhibit 4.3 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      4.4        Bylaws of First Industrial Securities
                                 Corporation (incorporated by reference to
                                 Exhibit 4.4 of the Company's Annual Report on
                                 Form 10-K for the year ended December 31, 1995,
                                 File No. 33-97014-01)

                      10.1       Guarantee and Payment Agreement (incorporated
                                 by reference to Exhibit 10.1 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      10.2       Agency and Advance Agreement (incorporated by
                                 reference to Exhibit 10.2 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      10.3       Guarantee Agency Agreement (incorporated by
                                 reference to Exhibit 10.3 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      10.4       Property Management Agreement (incorporated by
                                 reference to Exhibit 10.4 of the Company's
                                 Annual Report on Form 10-K for the year ended
                                 December 31, 1995, File No. 33-97014-01)

                      27     *   Financial Data Schedule

                             *   Filed herewith.
</TABLE>
<PAGE>   20


                        FIRST INDUSTRIAL SECURITIES, L.P.

         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE




<TABLE>
<CAPTION>
                                                                                                 PAGE
                                                                                                 ----
<S>                                                                                                 <C>
FINANCIAL STATEMENTS

      Report of Independent Accountants........................................................   F-2

      Balance Sheets of First Industrial Securities,  L.P. (the "Company") as of
      December 31, 1998 and 1997...............................................................   F-3

      Statements  of Operations  of the Company for the Years Ended  December 31,
      1998,  1997 and 1996.....................................................................   F-4

      Statements of Changes in Partners'  Capital of the Company for the Years Ended December
      31, 1998, 1997 and 1996..................................................................   F-5
      
      Statements  of Cash Flows of the Company for the Years Ended  December 31,  1998,  1997
      and 1996.................................................................................   F-6
      
      Notes to Financial Statements............................................................   F-7
      
FINANCIAL STATEMENT SCHEDULE

    Report of Independent Accountants..........................................................   S-1

    Schedule III: Real Estate and Accumulated Depreciation.....................................   S-2
</TABLE>

                                      F-1

<PAGE>   21


                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Partners of
   First Industrial Securities, L.P.

In our opinion, the accompanying balance sheets and the related statements of
operations, of changes in partners' capital and of cash flows present fairly, in
all material respects, the financial position of First Industrial Securities,
L.P. (the "Company") at December 31, 1998 and 1997, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.





                                       PricewaterhouseCoopers LLP




Chicago, Illinois
February 16, 1999



                                       F-2

<PAGE>   22


                        FIRST INDUSTRIAL SECURITIES, L.P.
                                 BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)



<TABLE>
<CAPTION>
                                                                                   December 31,            December 31,
                                                                                       1998                    1997
                                                                                   ------------            ------------
<S>                                                                                 <C>                    <C>        
                                                                ASSETS
            Assets:
             Investment in Real Estate:
               Land...........................................................      $    11,580            $    11,626
               Buildings and Improvements.....................................           69,020                 65,767
               Construction in Progress.......................................               --                  2,098
               Less: Accumulated Depreciation.................................           (7,163)                (5,385)
                                                                                    -----------            -----------
               Net Investment in Real Estate..................................           73,437                 74,106
              Cash and Cash Equivalents.......................................            1,391                    458
              Restricted Cash.................................................              410                    411
              Tenant Accounts Receivable, Net.................................               38                     99
              Deferred Rent Receivable........................................            1,104                  1,102
              Prepaid Expenses and Other Assets, Net..........................            1,069                    646
                                                                                    -----------            -----------
                    Total Assets..............................................      $    77,449            $    76,822
                                                                                    ===========            ===========

                                                   LIABILITIES AND PARTNERS' CAPITAL
            Liabilities:
             Accounts Payable and Accrued Expenses............................      $       794            $     1,053
             Rents Received in Advance and Security Deposits..................              528                    468
                                                                                    -----------            -----------
                    Total Liabilities.........................................            1,322                  1,521
                                                                                    -----------            -----------

            Commitments and Contingencies.....................................               --                     --

            Partners' Capital:
            General Partner and Preferred Limited Partner.....................           41,266                 41,258
            Limited Partner...................................................           34,861                 34,043
                                                                                    -----------            -----------
                    Total Partners' Capital...................................           76,127                 75,301
                                                                                    -----------            -----------
                    Total Liabilities and Partners' Capital...................           77,449                 76,822
                                                                                    ===========            ===========
</TABLE>





    The accompanying notes are an integral part of the financial statements.

                                       F-3




<PAGE>   23


                        FIRST INDUSTRIAL SECURITIES, L.P.
                            STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)




<TABLE>
<CAPTION>
                                                For the Year        For the Year        For the Year
                                                   Ended               Ended               Ended
                                                December 31,        December 31,        December 31,
                                                    1998                1997                1996
                                                ------------        ------------        ------------
<S>                                              <C>                 <C>                 <C>       
Revenues:
 Rental Income............................       $    9,057          $    8,544          $    8,644
 Tenant Recoveries and Other Income.......            2,764               2,811               2,872
                                                 ----------          ----------          ----------
   Total Revenues.........................           11,821              11,355              11,516
                                                 ----------          ----------          ----------

Expenses:
 Real Estate Taxes........................            2,149               2,213               2,328
 Repairs and Maintenance..................              304                 444                 390
 Property Management......................              407                 380                 386
 Utilities................................              107                 158                 106
 Insurance................................               32                  32                  70
 Other....................................              113                  84                 114
 Depreciation and Other Amortization......            1,913               1,820               1,766
                                                 ----------          ----------          ----------
   Total Expenses.........................            5,025               5,131               5,160
                                                 ----------          ----------          ----------

Net Income................................       $    6,796          $    6,224          $    6,356
                                                 ==========          ==========          ==========
</TABLE>




    The accompanying notes are an integral part of the financial statements.


                                       F-4

<PAGE>   24


                        FIRST INDUSTRIAL SECURITIES, L.P.
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                    General
                                                                                  Partner and
                                                                 Limited       Preferred Limited
                                               Total             Partner            Partner
                                            -----------        -----------     -----------------

<S>                                         <C>                <C>                 <C>       
Balance at December 31, 1995..........      $    74,768        $    33,515         $   41,253
  Distributions.......................           (6,227)            (2,284)            (3,943)
  Net Income..........................            6,356              2,412              3,944
                                            -----------        -----------         ----------
Balance at December 31, 1996..........      $    74,897        $    33,643         $   41,254
 Contributions........................              400                396                  4
 Distributions........................           (6,220)            (2,277)            (3,943)
 Net Income...........................            6,224              2,281              3,943
                                            -----------        -----------         ----------
Balance at December 31, 1997..........      $    75,301        $    34,043         $   41,258
 Distributions........................           (5,970)            (2,029)            (3,941)
 Net Income...........................            6,796              2,847              3,949
                                            -----------        -----------         ----------
Balance at December 31, 1998..........      $    76,127        $    34,861         $   41,266
                                            ===========        ===========         ==========
</TABLE>







    The accompanying notes are an integral part of the financial statements.


                                       F-5

<PAGE>   25


                        FIRST INDUSTRIAL SECURITIES, L.P.
                            STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                              For the Year        For the Year          For the Year
                                                                  Ended               Ended                Ended
                                                              December 31,        December 31,          December 31,
                                                                  1998                1997                  1996
                                                              ------------        ------------          ------------

<S>                                                             <C>                <C>                    <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income................................................      $   6,796          $   6,224              $   6,356
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
    Depreciation and Amortization.........................          1,913              1,820                  1,766
    Provision for Bad Debts...............................             50                 --                     50
    Increase in Deferred Rent Receivable..................             (2)              (385)                  (291)
    Decrease (Increase) in Tenant Accounts Receivable.....             11                469                   (455)
    Increase in Prepaid Expenses and Other Assets.........           (558)              (123)                  (277)
    Decrease in Restricted Cash...........................              1                 --                     --
    Increase (Decrease)  in Accounts Payable and Accrued
      Expenses and  Rents Received in Advance and Security                                                    
      Deposits............................................            246               (368)                   330
                                                                ---------          ---------              ---------
        Net Cash Provided by Operating Activities.........          8,457              7,637                  7,479
                                                                ---------          ---------              ---------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of and Additions to Investment in Real Estate
     and Construction in Progress.........................         (1,554)            (2,787)                  (936)
                                                                ---------          ---------              ---------
    Net Cash Used In Investing Activities.................         (1,554)            (2,787)                  (936)
                                                                ---------          ---------              ---------

CASH FLOWS FROM FINANCING ACTIVITIES
    Distributions.........................................         (5,970)            (6,220)                (6,227)
    Capital Contributions.................................             --                400                     --
                                                                ---------          ---------              ---------
        Net Cash Used In Financing Activities.............         (5,970)            (5,820)                (6,227)
                                                                ---------          ---------              ---------

Net Increase (Decrease) in Cash and Cash Equivalents......            933               (970)                   316
Cash and Cash Equivalents, Beginning of Period............            458              1,428                  1,112
                                                                ---------          ---------              ---------
Cash and Cash Equivalents, End of Period..................      $   1,391          $     458              $   1,428
                                                                =========          =========              =========
</TABLE>









    The accompanying notes are an integral part of the financial statements.


                                       F-6


<PAGE>   26


                        FIRST INDUSTRIAL SECURITIES, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA )

1.       ORGANIZATION

         First Industrial Securities, L.P. ("the Company") is a Delaware limited
partnership formed on August 14, 1995, the 1% general partner of which is First
Industrial Securities Corporation ("Securities Corporation"), a wholly owned
subsidiary of First Industrial Realty Trust, Inc. ("FR"), and the 99% limited
partner of which is First Industrial, L.P. (the "Operating Partnership"), of
which FR is the sole general partner. Securities Corporation also owns a
preferred limited partnership interest in the Company.

         The limited partnership agreement of the Company (the "Limited
Partnership Agreement") and the Guarantee Agreement (herein after defined)
contain covenants generally restricting the Company's activities to the
ownership and operation of the properties and, under certain circumstances,
other industrial properties. These covenants shall cease to have any effect upon
the termination of the Guarantee. Under its Articles of Incorporation,
Securities Corporation's sole purpose will be to act as general partner of the
Company and to pay dividends on its common and preferred stock. These and other
restrictions are intended to assure that even in the event of FR, the Operating
Partnership or other affiliates of FR becoming subject to federal bankruptcy
proceedings, neither Securities Corporation nor the Company nor their assets
will be treated as subject to such bankruptcy proceedings under the doctrine of
substantive consolidation or other doctrines (except to the extent liabilities
are imposed by non-insolvency regulatory statutes on affiliates) and that
activities of FR, the Operating Partnership and other affiliates will not cause
Securities Corporation or the Company to become insolvent or unable to pay their
debts as they mature (including the Guarantee).



2.       FORMATION TRANSACTIONS

THE INITIAL CAPITALIZATION

         The Company was capitalized with a capital contribution of $1 on August
28, 1995 by Securities Corporation.


THE CONTRIBUTION TRANSACTIONS

         On November 17, 1995, FR completed a public offering of 1,500,000
shares of $.01 par value 9 1/2% Series A Cumulative Preferred Stock at $25.00
per share, and on December 14, 1995, FR issued 150,000 shares of $.01 par value
9 1/2% Series A Cumulative Preferred Stock for $25.00 per share pursuant to the
underwriters' exercise of their over-allotment option (together the "Series A
Preferred Shares"). The issuance of 1,650,000 Series A Preferred Shares is thus
referred to as the "Offering". Gross proceeds to FR from the Offering were
$41,250. FR contributed to Securities Corporation the gross proceeds from the
Offering in exchange for preferred stock of Securities Corporation, and
Securities Corporation contributed such proceeds to the Company in exchange for
a preferred limited partnership interest in the Company. The Operating
Partnership and First Industrial Pennsylvania, L.P. (the "Pennsylvania
Partnership"), a Delaware limited partnership and a subsidiary of the Operating
Partnership, contributed to the Company, in return for limited partnership
interests, 14 properties and 5 properties (described below) on November 17, 1995
and December 14, 1995, respectively, encumbered by liens collateralizing debt
under the 1994 Acquisition Facility (herein after defined). An amount of such
debt equal to the gross proceeds of the Offering was repaid by the Company and
such liens on the properties described below have been




                                       F-7


<PAGE>   27


                        FIRST INDUSTRIAL SECURITIES, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA )


2.       FORMATION TRANSACTIONS, CONTINUED

released. The Pennsylvania Partnership contributed its limited partnership
interest in the Company to the Operating Partnership. The foregoing is herein
collectively referred to as the "Contribution Transactions". The Company
commenced operations on November 17, 1995.


THE PROPERTIES

         Upon consummation of the Offering and the Contribution Transactions
(collectively, the "Formation Transactions"), the Company owned 19 properties
located in four states containing an aggregate of approximately 2.1 million
square feet (unaudited) of gross leasable area ("GLA"). Of the properties:

         (a) Four were acquired by the Operating Partnership prior to FR's
             initial public offering (the "Initial Offering") in June, 1994;

         (b) Two were acquired concurrently with the consummation of the Initial
             Offering; and

         (c) Thirteen were acquired or developed by either the Operating
             Partnership or the Pennsylvania Partnership subsequent to the
             Initial Offering.

         On April 1, 1997, the Company completed a 17,000 square foot 
(unaudited) expansion of an existing industrial property located in Grand
Rapids, Michigan. The cost of the expansion was approximately $252 and was
funded with cash flows from operations.

         On February 1, 1998, the Company completed a 70,000 square foot 
(unaudited) expansion of an existing industrial property located in Auburn
Hills, Michigan. The cost of the expansion was approximately $2,630 and was
funded with cash flows from operations.

         On July 31, 1998, a governmental entity condemned two parcels of land.
The Company received gross proceeds of approximately $108 as consideration for
these parcels of land, and the gain is reflected in total revenues.

THE GUARANTEE

         In connection with the Offering, the Company entered into a Guarantee
and Payment Agreement (the "Guarantee Agreement") pursuant to which the Company
guaranteed the payment of dividends on, and payments on liquidation or
redemption of, the Series A Preferred Shares.

         The guarantee was created through the execution of the Guarantee
Agreement between the Company and Securities Corporation, for the benefit of a
guarantee agent. The Guarantee Agreement is administered and enforced for the
benefit of the holders of the Series A Preferred Shares by the guarantee agent.
The guarantee agent may enforce the guarantee directly against the Company only
with the approval of the holders of at least 25% of the outstanding Series A
Preferred Shares. No holder may seek directly to enforce the guarantee.

         Under the terms of the Guarantee Agreement, the Company was required to
deposit approximately $414 into a restricted cash escrow account with the
guarantee agent (the "Restricted Escrow"). These funds were set aside to pay for
certain repair and maintenance items of the contributed properties. The balance
of the Restricted Escrow at December 31, 1998 and 1997 is $410 and $411,
respectively, and is included in restricted cash.



                                       F-8


<PAGE>   28


                        FIRST INDUSTRIAL SECURITIES, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA )


3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         In order to conform with generally accepted accounting principles,
management, in preparation of the Company's financial statements, is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of December
31, 1998 and 1997, and the reported amounts of revenues and expenses for the
years ended December 31, 1998, 1997 and 1996. Actual results could differ from
those estimates.

REVENUE RECOGNITION

         Rental income is recognized on a straight-line method under which
contractual rent increases are recognized evenly over the lease term. Tenant
recovery income includes payments from tenants for taxes, insurance and other
property operating expenses and are recognized as revenues in the period the
related expenses are incurred by the Company.

         The Company evaluates and, if applicable, provides for an allowance for
doubtful accounts against the portion of accounts receivable which is estimated
to be uncollectible. Accounts receivable in the balance sheets is shown net of
an allowance for doubtful accounts of $100 and $50 as of December 31, 1998 and
1997, respectively.


GENERAL AND ADMINISTRATIVE

         Expenses incurred related to the operations of the properties are
reflected in property management expense, therefore, there is no allocation of
FR's general and administrative expense.


INVESTMENT IN REAL ESTATE AND DEPRECIATION

         Real estate assets are carried at the lower of depreciated cost or fair
value as determined by the Company. The Company reviews its properties on a
quarterly basis for impairment and provides an allowance if impairments are
determined. First, to determine if impairment may exist, the Company reviews its
properties and identifies those which have had either an event of change or
event of circumstance warranting further assessment of recoverability. Then, the
Company estimates the fair value of those properties on an individual basis by
capitalizing the expected net operating income. Such amounts are then compared
to the property's depreciated cost to determine whether an impairment exists.



                                       F-9


<PAGE>   29


                        FIRST INDUSTRIAL SECURITIES, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA )

3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

         Real estate taxes and other directly related expenses incurred during
construction periods are capitalized and depreciated commencing with the date
placed in service, on the same basis as the related assets. Depreciation expense
is computed using the straight-line method based on the following useful lives:

<TABLE>
<CAPTION>
                                                               Years     
                                                             --------
<S>                                                          <C>
             Buildings and Improvements....................  38 to 40
             Land Improvements.............................  15
</TABLE>


         Construction expenditures for tenant improvements, leasehold
improvements and leasing commissions are capitalized and amortized over the
terms of each specific lease, and repairs and maintenance are charged to expense
when incurred. Expenditures for improvements are capitalized.


CASH AND CASH EQUIVALENTS

         Cash and cash equivalents include all cash and liquid investments with
an initial maturity of three months or less. The carrying amount approximates
fair value due to the short maturity of these investments.


INCOME TAXES

         No federal income taxes are payable by the Company and none have been
provided for in the accompanying financial statements. In accordance with
partnership taxation, each of the partners is responsible for reporting their
share of taxable income or loss.


FAIR VALUE OF FINANCIAL INVESTMENTS

         The Company's financial instruments include short-term investments,
tenant accounts receivable, accounts payable and other accrued expenses. The
fair value of these financial instruments was not materially different from
their carrying amount or contract values.






                                      F-10


<PAGE>   30


                        FIRST INDUSTRIAL SECURITIES, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA )

3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income".
This statement, effective for fiscal years beginning after December 15, 1997,
requires the Company to report components of comprehensive income in a financial
statement that is displayed with the same prominence as other financial
statements. Comprehensive income is defined by Concepts Statement No. 6,
"Elements of Financial Statements" as the change in the equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. It includes all changes in equity during a period except
those resulting from investments by owners and distributions to owners. The
Company's net income approximates its comprehensive income as defined in
Concepts Statement No. 6, "Elements of Financial Statements".


         In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information". This statement, effective for financial statements for fiscal
years beginning after December 15, 1997, requires that a public business
enterprise report financial and descriptive information about its reportable
operating segments. Generally, financial information is required to be reported
on the basis that it is used internally for evaluating segment performance and
deciding how to allocate resources to segments. The general partner of the
Company views the Company as a single segment.


4.       RELATED PARTY TRANSACTIONS

         The 19 properties owned by the Company are managed by the Operating
Partnership, of which FR is the sole general partner. Management fees incurred
are based on 3.25% of gross receipts. Such fees totaled $407, $380 and $386 for
the years ended December 31, 1998, 1997 and 1996, respectively. At December 31,
1998 and 1997, there were no accrued management fees due to the Operating
Partnership.



5.       PARTNERS' CAPITAL

         During 1998, the Company distributed $3,920 to Securities Corporation
in respect of its preferred limited partnership interest in the Company, and
Securities Corporation paid a preferred stock dividend of $3,920 to FR, in each
case, the amount equal to the aggregate dividend payable on FR's Series A
Preferred Stock.

         During 1998, the Company paid a pro rata general and limited
partnership distribution to Securities Corporation and the Operating
Partnership, respectively, in the aggregate amount of $2,050.

         During 1997, the Company distributed $3,920 to Securities Corporation
in respect of its preferred limited partnership interest in the Company, and
Securities Corporation paid a preferred stock dividend of $3,920 to FR, in each
case, the amount equal to the aggregate dividend payable on FR's Series A
Preferred Stock.






                                      F-11


<PAGE>   31


                        FIRST INDUSTRIAL SECURITIES, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA )


5.       PARTNERS' CAPITAL, CONTINUED

         During 1997, the Company paid a pro rata general and limited
partnership distribution to Securities Corporation and the Operating
Partnership, respectively, in the aggregate amount of $2,300.

         During 1997, the Company received a pro rata general and limited
partnership contribution from Securities Corporation and the Operating
Partnership, respectively, in the aggregate amount of $400.


6.       FUTURE RENTAL REVENUES

         The Company's properties are leased to tenants under net and semi-net
operating leases. Minimum lease payments receivable, excluding tenant
reimbursements of expenses, under noncancelable operating leases in effect as of
December 31, 1998 are approximately as follows:


                       1999                  $       9,524
                       2000                          9,015
                       2001                          7,137
                       2002                          6,277
                       2003                          4,498
                       Thereafter                    4,767
                                             -------------
                          Total              $      41,218
                                             =============

         Three of the Company's properties represent ten percent or more of the
aggregate book value of the assets as of December 31, 1998, or ten percent or
more of the Company's aggregate rental revenues as of December 31, 1998.



7.       COMMITMENTS AND CONTINGENCIES

         In the normal course of business, the Company is involved in legal
actions arising from the ownership of their properties. In management's opinion,
the liabilities, if any, that may ultimately result from such legal actions are
not expected to have a material adverse effect on the financial position,
results of operations or liquidity of the Company.

         Two properties have leases granting the tenants options to purchase the
property. Such options are exercisable at various times and at a fixed purchased
price in each case in excess of the property's depreciated cost. The Company has
no notice of any exercise of any tenant purchase option.



                                      F-12


<PAGE>   32


                        FIRST INDUSTRIAL SECURITIES, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                             (DOLLARS IN THOUSANDS)


8.       QUARTERLY FINANCIAL INFORMATION (UNAUDITED)





<TABLE>
<CAPTION>
                                                             FIRST INDUSTRIAL SECURITIES, L.P.
                                                               YEAR ENDED DECEMBER 31, 1998
                                       ----------------------------------------------------------------------------
                                       FIRST QUARTER      SECOND QUARTER        THIRD QUARTER        FOURTH QUARTER
                                       -------------      --------------        -------------        --------------
<S>                                     <C>                 <C>                   <C>                 <C>          
Revenues ........................       $     3,030         $      3,209          $     3,054         $       2,528
Property Expenses................              (790)                (824)                (821)                 (677)
Depreciation and Amortization....              (462)                (469)                (482)                 (500)
                                        -----------         ------------          -----------         -------------
Net Income.......................       $     1,778         $      1,916          $     1,751         $       1,351
                                        ===========         ============          ===========         =============


<CAPTION>
                                                             FIRST INDUSTRIAL SECURITIES, L.P.
                                                               YEAR ENDED DECEMBER 31, 1997
                                       ----------------------------------------------------------------------------
                                       FIRST QUARTER      SECOND QUARTER        THIRD QUARTER        FOURTH QUARTER
                                       -------------      --------------        -------------        --------------
<S>                                     <C>                 <C>                   <C>                 <C>          
Revenues ........................      $       2,879      $        2,677        $       2,894        $        2,905
Property Expenses................               (904)               (829)                (784)                 (794)
Depreciation and Amortization....               (447)               (443)                (462)                 (468)
                                       -------------      --------------        -------------        --------------
Net Income.......................      $       1,528      $        1,405        $       1,648        $        1,643
                                       =============      ==============        =============        ==============
</TABLE>







                                      F-13
<PAGE>   33


                        REPORT OF INDEPENDENT ACCOUNTANTS




To the Partners of
     First Industrial Securities, L.P.

Our report on the financial statements of First Industrial Securities, L.P. is
included on page F-2 of this Form 10-K. In connection with our audits of such
financial statements, we have also audited the related financial statement
schedule listed in the Index to Financial Statements and Financial Statement
Schedule on page F-1 of this Form 10-K. In our opinion, the financial statement
schedule referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information required to be included therein.








                                       PricewaterhouseCoopers LLP




Chicago, Illinois
February 16, 1999





















                                       S-1



<PAGE>   34

                        FIRST INDUSTRIAL SECURITIES, L.P.
                                  SCHEDULE III:
                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                             AS OF DECEMBER 31, 1998
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                      COSTS       
                                                                                    CAPITALIZED   
                                                              INITIAL COST (a)     SUBSEQUENT TO  
                                    LOCATION             ------------------------  ACQUISITION OR 
BUILDING ADDRESS                  (CITY/STATE)             LAND       BUILDINGS      COMPLETION   
----------------                  ------------           ---------  -------------  -------------- 

<S>                              <C>                    <C>         <C>            <C>            
5020 Louise Drive                 Mechanicsburg, PA      $    707       $     --        $  2,773  
7195 Grayson                      Harrisburg, IL              478          2,771              80  
3150-3160 MacArthur Boulevard     Northbrook, IL              439          2,518              21  
2101-2125 Gardner Road            Broadview, IL             1,177          6,818             110  
365 North Avenue                  Carol Stream, IL          1,208          6,961              81  
2942 MacArthur Boulevard          Northbrook, IL              315          1,803             232  
2965 Technology Drive             Rochester Hills, MI         964          2,277             123  
1451 Lincoln Avenue               Madison Heights, MI         299          1,703             435  
4400 Purks Drive                  Auburn Hills, MI            602          3,410           2,687  
4177A Varsity Drive               Ann Arbor, MI                90            536              78  
6515 Cobb Drive                   Sterling Heights, MI        305          1,753             150  
425 Gordon Industrial Court       Grand Rapids, MI            611          3,747           1,331  
2851 Prairie Street               Grandville, MI              377          2,778             240  
2945 Walkent Court                Grand Rapids, MI            310          2,074             296  
537 76th Street                   Grand Rapids, MI            255          1,456             330  
6655 Wedgewood Road               Maple Grove, MN           1,466          8,342             143  
900 Apollo Road                   Eagan, MN                 1,029          5,855             511  
7316 Aspen Lane North             Brooklyn Park, MN           368          2,156             180  
6707 Shingle Creek Parkway        Brooklyn Center, MN         376          2,101             364  
                                                         --------       --------        --------  
                                                         $ 11,376       $ 59,059        $ 10,165  
                                                         ========       ========        ========  

<CAPTION>
                                          GROSS AMOUNT CARRIED
                                     AT CLOSE OF PERIOD (12/31/98)(c)
                                 ---------------------------------------     ACCUMULATED
                                              BUILDING AND                   DEPRECIATION    YEAR BUILT/   DEPRECIABLE
BUILDING ADDRESS                    LAND      IMPROVEMENTS       TOTAL         12/31/98       RENOVATED    LIVES(YEARS)
----------------                 ---------  ----------------  ----------    --------------   -----------  -------------

<S>                              <C>         <C>             <C>            <C>              <C>          <C>
5020 Louise Drive                $    716          $  2,764    $ 3,480            $   326       1995          (b)
7195 Grayson                          479             2,850       3,329               290       1994          (b)
3150-3160 MacArthur Boulevard         429             2,549       2,978               288       1978          (b)
2101-2125 Gardner Road              1,228             6,877       8,105               744     1950/69         (b)
365 North Avenue                    1,208             7,042       8,250               749       1969          (b)
2942 MacArthur Boulevard              311             2,039       2,350               215       1979          (b)
2965 Technology Drive                 964             2,400       3,364               231       1995          (b)
1451 Lincoln Avenue                   305             2,132       2,437               227       1967          (b)
4400 Purks Drive                      612             6,087       6,699               352       1987          (b)
4177A Varsity Drive                    90               614         704               114       1993          (b)
6515 Cobb Drive                       305             1,903       2,208               193       1984          (b)
425 Gordon Industrial Court           644             5,045       5,689               545       1990          (b)
2851 Prairie Street                   445             2,950       3,395               351       1989          (b)
2945 Walkent Court                    352             2,328       2,680               277       1993          (b)
537 76th Street                       258             1,783       2,041               178       1987          (b)
6655 Wedgewood Road                 1,466             8,485       9,951               927       1989          (b)
900 Apollo Road                     1,012             6,383       7,395               576       1970          (b)
7316 Aspen Lane North                 377             2,327       2,704               231       1978          (b)
6707 Shingle Creek Parkway            379             2,462       2,841               349       1986          (b)
                                 --------          --------    --------           ------- 
                                 $ 11,580          $ 69,020    $ 80,600           $ 7,163
                                 ========          ========    ========           ======= 
</TABLE>


NOTES:

     (a)      Initial cost for each respective property is total acquisition
              costs associated with its purchase.

     (b)      Depreciation is computed based upon the following estimated
              lives:

              Buildings and Improvements                       38 to 40 years
              Tenant Improvements and Leasehold Improvements   Life of lease
              Land Improvements                                15 years

     (c)      At December 31, 1998, aggregate cost of land, buildings and
              improvements for federal income tax purposes was approximately
              $80.6 million.

     These properties are owned by the Securities Partnership. The
     Securities Partnership guarantees the payment of the Series A
     Cumulative Preferred Stock dividends and amounts upon redemption,
     liquidation, dissolution or winding - up.




                                       S-2

<PAGE>   35


                        FIRST INDUSTRIAL SECURITIES, L.P.
                                  SCHEDULE III:
              REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
                             AS OF DECEMBER 31, 1998
                             (DOLLARS IN THOUSANDS)


The changes in total real estate assets for the years ended December 31, 1998
and 1997 are as follows:

<TABLE>
<CAPTION>
                                       First Industrial Securities, L.P.
                                       ---------------------------------
                                            1998              1997
                                        ------------      ------------
<S>                                     <C>               <C>         
Balance, Beginning of Year ........     $     79,491      $     76,255
Construction Costs and Improvements            1,155             3,236
Sale of Land ......................              (46)               --
                                        ------------      ------------
Balance, End of Year ..............           80,600            79,491
                                        ============      ============
</TABLE>


The changes in accumulated depreciation for the years ended December 31, 1998
and 1997 are as follows:

<TABLE>
<CAPTION>
                                       First Industrial Securities, L.P.
                                       ---------------------------------
                                            1998            1997
                                        ------------     ------------
<S>                                     <C>              <C>         
Balance, Beginning of Year ........     $      5,385     $      3,673
Depreciation for Year .............            1,778            1,712
                                        ------------     ------------
Balance, End of Year ..............     $      7,163     $      5,385
                                        ============     ============
</TABLE>























                                      S-3