<PAGE>   1


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-Q


     /X/   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
     FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
     /  /  Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934


                           --------------------------
                       Commission File Number  333-21873
                           --------------------------


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



                DELAWARE                                36-3924586
       (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)



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



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, and (2) has been subject to such filing
requirements for the past 90 days.      Yes  /X /      No / /






<PAGE>   2

                             FIRST INDUSTRIAL, L.P.
                                   FORM 10-Q
            FOR THE SIX MONTHS AND THREE MONTHS ENDED JUNE 30, 1998

                                     INDEX



                                           
PART I:  FINANCIAL INFORMATION

Item 1.  Financial Statements


<TABLE>
<CAPTION>
                                                                                                         PAGE 

<S>                                                                                                       <C>
  Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997..................................  2
                                                                                                         
  Consolidated Statements of Operations for the Six  Months Ended June 30, 1998  and                     
    June 30, 1997........................................................................................  3
                                                                                                         
  Consolidated Statements of Operations for the Three Months Ended June 30, 1998 and                     
    June 30, 1997........................................................................................  4
                                                                                                         
  Consolidated Statements of Cash Flows for the Six Months Ended June 30, 1998  and                      
    June 30, 1997........................................................................................  5
                                                                                                         
  Notes to Consolidated Financial Statements.............................................................  6-16
                                                                                                         
Item 2. Management's Discussion and Analysis of Financial Condition and                                  
         Results of Operations...........................................................................  17-23
                                                                                                         

PART II:  OTHER INFORMATION
<CAPTION>


<S>                                                                                                        <C>
Item 1.  Legal Proceedings...............................................................................  24
Item 2.  Changes in Securities...........................................................................  24
Item 3.  Defaults Upon Senior Securities.................................................................  24
Item 4.  Submission of Matters to a Vote of Security Holders.............................................  24
Item 5.  Other Information...............................................................................  24
Item 6.  Exhibits and Reports on Form 8-K and Form 8-K/A.................................................  24-25


SIGNATURE................................................................................................  26


EXHIBIT INDEX............................................................................................  27
</TABLE>



                                       1
<PAGE>   3

                         PART I.  FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                             FIRST INDUSTRIAL, L.P.
                          CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)




<TABLE>


<CAPTION>
                                                                            June 30,            December 31,
                                                                             1998                  1997
                                                                        -------------          --------------         
                          ASSETS
<S>                                                                    <C>                     <C>
Assets:
 Investment in Real Estate:                       
  Land........................................................          $     312,911          $     184,704
  Buildings and Improvements..................................              1,735,942              1,012,145
  Furniture, Fixtures and Equipment...........................                  1,358                    ---
  Construction in Progress....................................                 19,403                   4,211
  Less: Accumulated Depreciation..............................               (120,564)                (22,319)
                                                                        -------------          --------------
    Net Investment in Real Estate.............................              1,949,050               1,178,741

  Investment in Other Real Estate Partnerships................                318,170                 643,621
  Cash and Cash Equivalents...................................                    713                   4,995
  Tenant Accounts Receivable, Net.............................                  8,427                   2,944
  Deferred Rent Receivable....................................                  9,127                   2,584
  Deferred Financing Costs, Net...............................                  7,894                   6,808
  Prepaid Expenses and Other Assets, Net......................                 45,105                  30,490
                                                                        -------------          --------------
     Total Assets.............................................          $   2,338,486          $    1,870,183
                                                                        =============          ==============

                                 LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Mortgage Loans Payable......................................                 $63,001                 $61,198
 Senior Unsecured Debt.......................................                 748,785                 648,994
 Acquisition Facility Payable................................                 230,100                 129,400
 Accounts Payable and Accrued Expenses.......................                  40,096                  32,629
 Rents Received in Advance and Security Deposits.............                  14,673                   9,775
 Distributions Payable.......................................                  23,553                  22,010
                                                                        -------------          --------------
    Total Liabilities........................................               1,120,208                 904,006
                                                                        -------------          --------------
                                                         
 Commitments and Contingencies...............................                     ---                    ---
                                                         
 Partners' Capital:                                                       
   General Partner Preferred Units...........................                 336,990                 144,290
   General Partner Units.....................................                 705,459                 674,191
   Limited Partners Units....................................                 175,829                 147,696
                                                                        -------------          --------------
     Total Partners' Capital.................................               1,218,278                 966,177
                                                                        -------------          --------------
     Total Liabilities and Partners' Capital.................           $   2,338,486          $    1,870,183
                                                                        =============          ==============
</TABLE>                                                                  

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

                                       2
<PAGE>   4



                             FIRST INDUSTRIAL, L.P.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  (DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
                                  (UNAUDITED)




<TABLE> 
<CAPTION>
              
                                                                                            Six Months                Six  Months  
                                                                                              Ended                      Ended
                                                                                          June 30, 1998             June  30, 1997
                                                                                          ------------                -----------
<S>                                                                                       <C>                         <C>
Revenues:
 Rental Income..............................................................              $    110,730                $    32,447
 Tenant Recoveries and Other Income.........................................                    25,608                      7,831
                                                                                          ------------                -----------
   Total Revenues...........................................................                   136,338                     40,278
                                                                                          ------------                -----------
Expenses:                                                                   
 Real Estate Taxes..........................................................                    22,668                      6,933
 Repairs and Maintenance....................................................                     6,514                      1,715
 Property Management........................................................                     5,436                      1,766
 Utilities..................................................................                     3,639                      1,160
 Insurance..................................................................                       381                         95
 Other......................................................................                     1,922                        514
 General and Administrative.................................................                     5,982                      2,642
 Interest...................................................................                    30,594                      9,107
 Amortization of Interest Rate Protection Agreements
  and Deferred Financing Costs..............................................                       369                          8
 Depreciation and Other Amortization........................................                    25,525                      6,243
                                                                                          ------------                -----------
   Total Expenses...........................................................                   103,030                     30,183
                                                                                          ------------                -----------

Income from Operations Before Equity in Income of Other Real Estate         
 Partnerships and Disposition of Interest Rate Protection Agreements........                    33,308                     10,095
Equity in Income of Other Real Estate Partnerships..........................                    14,046                      8,030
Disposition of Interest Rate Protection Agreements..........................                       ---                      4,038
                                                                                          ------------                -----------
Income from Operations......................................................                    47,354                     22,163
Gain on Sales of Real Estate, Net...........................................                        93                        460
                                                                                          ------------                -----------
Income Before Extraordinary Loss and  Cumulative Effect of Change in        
 Accounting Principle.......................................................                    47,447                     22,623
Extraordinary Loss..........................................................                       ---                     (3,428)
Cumulative Effect of Change in Accounting Principle.........................                      (719)                       ---
                                                                                          ------------                -----------
Net Income..................................................................                    46,728                     19,195
Less: Preferred Unit Distributions..........................................                   (12,228)                    (1,405)
                                                                                          ------------                -----------
Net Income Available to Unitholders.........................................              $     34,500                $    17,790
                                                                                          ============                ===========
Net Income Available to Unitholders Before Extraordinary Loss and           
 Cumulative Effect of Change in Accounting  Principle per
 Weighted Average Unit Outstanding:
   Basic....................................................................              $     .81                   $     .63
                                                                                          ============                ===========
   Diluted..................................................................              $     .81                   $     .62
                                                                                          ============                ===========

Net Income Available to Unitholders per Weighted Average Unit Outstanding:                                                    
  Basic.....................................................................              $     .80                   $     .53
                                                                                          ============                ===========
  Diluted...................................................................              $     .79                   $     .52
                                                                                          ============                ===========
</TABLE>                                                                    
        
    The accompanying notes are an integral part of the financial statements.

                                       3

<PAGE>   5

                             FIRST INDUSTRIAL, L.P.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  (DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
                                  (UNAUDITED)




<TABLE>                                                                     
<CAPTION>

                                                                                          Three Months        Three Months   
                                                                                             Ended                Ended
                                                                                         June 30, 1998        June 30, 1997
                                                                                         -------------        --------------
<S>                                                                                        <C>                     <C>
Revenues:                                                                   
 Rental Income..............................................................               $ 59,396                $17,757
 Tenant Recoveries and Other Income.........................................                 13,864                  3,622
                                                                                         -------------        --------------
   Total Revenues...........................................................                 73,260                 21,379
                                                                                         -------------        --------------

Expenses:                                                                   
 Real Estate Taxes..........................................................                 11,860                  3,745
 Repairs and Maintenance....................................................                  3,535                    631
 Property Management........................................................                  2,951                    925
 Utilities..................................................................                  1,695                    523
 Insurance..................................................................                    202                     47
 Other......................................................................                  1,070                    226
 General and Administrative.................................................                  3,363                  1,385
 Interest...................................................................                 16,525                  6,758
 Amortization of Interest Rate Protection Agreements and                    
   Deferred Financing Costs.................................................                    208                    187
 Depreciation and Other Amortization........................................                 13,908                  3,243
                                                                                         -------------        --------------
   Total Expenses...........................................................                 55,317                 17,670
                                                                                         -------------        --------------

Income from Operations Before Equity in Income of Other Real Estate         
 Partnerships and Disposition of Interest Rate Protection                   
 Agreements.................................................................                 17,943                  3,709
Equity in Income of Other Real Estate Partnerships..........................                  5,289                  2,196
Disposition of Interest Rate Protection Agreements..........................                    ---                  4,038
                                                                                         -------------        --------------
Income from Operations......................................................                 23,232                  9,943
Gain on Sales of Real Estate, Net...........................................                     50                    460
                                                                                         -------------        --------------
Income Before Extraordinary Loss and  Cumulative Effect of Change in        
 Accounting Principle.......................................................                 23,282                 10,403
Extraordinary Loss..........................................................                    ---                 (3,428)
Cumulative Effect of Change in Accounting Principle.........................                   (719)                   ---
                                                                                         -------------        --------------
Net Income..................................................................                 22,563                  6,975
Less: Preferred Unit Distributions..........................................                 (7,230)                (1,405)
                                                                                         -------------        --------------
Net Income Available to Unitholders.........................................               $ 15,333                $ 5,570
                                                                                         =============        ==============
Net Income Available to Unitholders Before Extraordinary Loss and           
 Cumulative Effect of Change in Accounting Principle per                   
 Weighted Average Unit Outstanding:                                         
   Basic....................................................................               $   .36                 $   .26
                                                                                         =============        ==============
   Diluted..................................................................               $   .36                 $   .26
                                                                                         =============        ==============
Net Income Available to Unitholders per Weighted Average Unit Outstanding:                                             
   Basic....................................................................               $   .35                 $   .16
                                                                                         =============        ==============
   Diluted..................................................................               $   .35                 $   .16
                                                                                         =============        ==============
</TABLE>  
          
   The accompanying notes are an integral part of the financial statements.



                                       4

<PAGE>   6


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





<TABLE>                                                    

                                                              Six Months Ended          Six Months Ended
                                                                June 30, 1998             June 30, 1997
                                                              ----------------          ----------------
<S>                                                         <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                      
Net Income................................................. $     46,728               $         19,195   
 Adjustments to Reconcile Net Income to Net Cash Provided
  by Operating Activities:
 Depreciation..............................................       23,140                          5,682
 Amortization of Interest Rate Protection Agreements and
  Deferred Financing Costs.................................          369                              8
 Other Amortization........................................        2,759                            599
 Disposition of Interest Rate Protection Agreements........          ---                         (4,038)
 Gain on Sales of Properties, Net..........................          (93)                          (460)
 Equity in Income of Other Real Estate Partnerships........      (14,046)                        (8,030)
 Cumulative Effect of Change in Accounting Principle.......          719                            ---
 Extraordinary Loss........................................          ---                          3,428
 Provision for Bad Debts...................................          297                             79
 Increase in Tenant Accounts Receivable and Prepaid
  Expenses and Other Assets................................      (11,760)                       (11,814)
 Increase in Deferred Rent Receivable......................       (1,862)                          (629)
 (Decrease) Increase in Accounts Payable and Accrued
  Expenses and Rents Received in Advance and Security
  Deposits.................................................         (155)                         3,769
 Increase in Organization Costs............................          ---                            (20)
                                                            ------------               ----------------
   Net Cash Provided by Operating Activities...............       46,096                          7,769
                                                            ------------               ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:                                                                     
 Purchases and Additions to Investment in Real Estate......     (379,849)                      (184,096)
 Contributions to Investment in Other Real Estate
  Partnerships.............................................      (58,858)                      (349,455)
 Distributions from Investment in Other Real Estate
  Partnerships.............................................       10,707                         29,424
 Proceeds from Sales of Investment in Real Estate..........        7,117                         12,182
 Repayment of Mortgage Loans Receivable....................        1,007                         (3,708)
 Increase in Restricted Cash...............................          ---                        (11,858)
                                                            ------------               ----------------
  Net Cash Used in Investing Activities....................     (419,876)                      (507,511)
                                                            ------------               ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:                                                                     
 Unit Contributions........................................       35,334                          1,214
 Unit Distributions........................................      (44,502)                       (33,185)
 Preferred Unit Contributions..............................      192,700                        144,290
 Preferred Unit Distributions..............................      (12,229)                        (1,117)
 Repayments on Mortgage Loans Payable......................         (723)                          (399)
 Repayment of Promissory Notes Payable.....................          ---                         (9,919)
 Proceeds from Senior Unsecured Debt.......................       99,753                        349,150
 Other Proceeds from Senior Unsecured Debt.................        2,760                          2,246
 Other Costs of Senior Unsecured Debt......................       (2,565)                           ---
 Proceeds from Sale of Interest Rate Protection Agreement..          ---                          6,440
 Proceeds from Acquisition Facilities Payable..............      411,200                        220,200
 Repayments on Acquisition Facilities Payable..............     (310,500)                      (169,600)
 Debt Issuance Costs.......................................       (1,730)                        (6,445)
                                                            ------------               ----------------
  Net Cash Provided by Financing Activities.................     369,498                        502,875
                                                            ------------               ----------------
 Net (Decrease) Increase in Cash and Cash Equivalents......       (4,282)                         3,133
 Cash and Cash Equivalents, Beginning of Period............        4,995                          4,295
                                                            ------------               ----------------
 Cash and Cash Equivalents, End of Period.................. $        713               $          7,428
                                                            ============               ================
</TABLE>

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



                                       5

<PAGE>   7

                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)

1.     ORGANIZATION AND FORMATION OF COMPANY

     First Industrial, L.P. (the "Operating Partnership") was organized as a
limited partnership in the state of Delaware on November 23, 1993.  The sole
general partner of the Operating Partnership is First Industrial Realty Trust,
Inc. (the "Company") with an approximate 84.9%  ownership interest at June 30,
1998.  The Company also owns preferred units with an aggregate liquidation
priority of $350 million. The Company is a real estate investment trust (REIT)
as defined in the Internal Revenue Code.  The Company's operations are
conducted primarily through the Operating Partnership.  The limited partners of
the Operating Partnership own approximately a 15.1%  aggregate ownership
interest at June 30, 1998.

     The Operating Partnership is the sole member of 21 limited liability
corporations (the "L.L.C.'s"), owns a 95% economic interest in FR Development
Services, Inc. as well as a 99% limited partnership interest (subject in one
case as described below to a preferred limited partnership interest) in each of
First Industrial Financing Partnership, L.P. (the "Financing Partnership"),
First Industrial Securities, L.P. (the "Securities Partnership"), First
Industrial Mortgage Partnership, L.P. (the "Mortgage Partnership"), First
Industrial Pennsylvania Partnership, L.P. (the "Pennsylvania Partnership"),
First Industrial Harrisburg, L.P. (the "Harrisburg Partnership"), First
Industrial Indianapolis, L.P. (the "Indianapolis Partnership") and First
Industrial Development Services Group, L.P. ("FIDS, L.P.") (together, the "Other
Real Estate Partnerships"). The financial statements of the Operating
Partnership report the L.L.C.'s and FR Development Services, Inc. on a
consolidated basis (hereinafter defined as the "Consolidated Operating
Partnership")and the Other Real Estate Partnerships are accounted for under the
equity method of accounting.  The minority ownership interest in FR Development
Services, Inc. is not reflected in the consolidated financial statements due to
its immateriality. As of June 30, 1998,  the Consolidated Operating Partnership
owned 857 in-service properties containing an aggregate of approximately 56.2
million square feet of gross leasable area ("GLA").  On a combined basis, as of
June 30, 1998, the Other Real Estate Partnerships owned 96 in-service properties
containing an aggregate of approximately 11.5 million square feet of GLA.  Of
the 96 properties owned by the Other Real Estate Partnerships at June 30, 1998,
23 are owned by the Financing Partnership, 19 are owned by the Securities
Partnership, 23 are owned by the Mortgage Partnership, 21 are owned by the
Pennsylvania Partnership, five are owned by the Harrisburg Partnership, four are
owned by the Indianapolis Partnership  and one is held by FIDS, L.P.

     The general partners of the Other Real Estate Partnerships are separate
corporations, each with a one percent general partnership interest in the Other
Real Estate Partnership for which it acts as a general partner.  Each general
partner of the Other Real Estate Partnerships is a wholly owned subsidiary of
the Company.  The general partner of the Securities Partnership, First
Industrial Securities Corporation, also owns a preferred limited partnership
interest in the Securities Partnership which entitles it to receive a fixed
quarterly distribution, and results in it being allocated income in the same
amount, equal to the fixed quarterly dividend the Company pays on its 9.5%
Series A Cumulative Preferred Stock.

     Profits, losses and distributions of the Operating Partnership are
allocated to the general partner and the limited partners in accordance with
the provisions contained within its restated and amended partnership agreement.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The accompanying interim financial statements have been prepared in
accordance with the accounting policies described in the financial statements
and related notes included in the Operating Partnership's 1997 Form 10-K and
should be read in conjunction with such financial statements and related notes.
The following notes to these interim financial statements highlight
significant changes to the notes included in the December 31, 1997 audited
financial statements included in the Operating Partnership's 1997 Form 10-K and
present interim disclosures as required by the Securities and Exchange
Commission.



                                      6
<PAGE>   8


                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

     In order to conform with generally accepted accounting principles,
management, in preparation of the Operating Partnership'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
and the reported amounts of revenues and expenses.  Actual results could differ
from those estimates.

     In the opinion of management, all adjustments consist of normal recurring
adjustments necessary to present fairly the financial position of the Operating
Partnership as of June 30, 1998 and the results of its operations and its cash
flows for each of the six months and three months ended June 30, 1998 and 1997.

Tenant Accounts Receivable, net:

     The Operating Partnership provides an allowance for doubtful accounts
against the portion of tenant accounts receivable which is estimated to be
uncollectible.  Tenant accounts receivable in the consolidated balance sheets
are shown net of an allowance for doubtful accounts of $1,297 and $1,000 as of
June 30, 1998 and December 31, 1997, respectfully.

Recent Accounting Pronouncements:

     In June 1997, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income".  This statement, effective for fiscal years beginning after December
15, 1997, requires the Operating Partnership 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 Operating Partnership's net income available to
its unitholders 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 Operating Partnership has not yet
determined the impact of this statement on its financial statements.

     In March 1998, the FASB's Emerging Issues Task Force (the "Task Force")
issued Emerging Issues Task Force Issue No. 97-11, "Accounting for Internal
Costs Relating to Real Estate Property Acquisitions" ("EITF 97-11").  EITF
97-11, effective March 19, 1998, requires that internal costs of preacquisition
activities incurred in connection with the acquisition of an operating property
should be expensed as incurred.  The Task Force concluded that a property is
considered operating if, at the date of acquisition, major construction
activity is substantially completed on the property and (a) it is held
available for occupancy upon completion of tenant improvements by the acquirer
or (b) it is already income producing.  The Operating Partnership adopted EITF
97-11 as of March 19, 1998.  Prior to March 19, 1998,   the  Operating
Partnership  capitalized  internal  costs  of  preacquisition  activities
incurred connection with  the  acquisition  of  operating  properties.   The
Operating Partnership estimates that the adoption of



                                      7




<PAGE>   9
                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

EITF 97-11 will result in a cumulative increase of approximately $2,500 to
$3,000 in the amount of general and administrative expense reflected in the
Operating Partnership's consolidated statement of operations in 1998.

     In April 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5").  SOP 98-5
requires that the net unamortized balance of all start-up costs and
organizational costs be written off as a cumulative effect of a change in
accounting principle and all future start-up costs and organizational costs be
expensed.  In the second quarter of 1998, the Operating Partnership reported a
cumulative effect of a change in accounting principle in the amount of
approximately $719 to reflect the write-off of the unamortized balance of
organizational costs on the Operating Partnership's balance sheet.

     During the second quarter of 1998, the FASB issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities".  This statement, effective for fiscal years beginning
after June 15, 1999, establishes accounting and reporting standards requiring
that every derivative instrument, including certain derivative instruments
imbedded in other contracts, be recorded in the balance sheet as either an
asset or liability measured at its fair value.  The statement also requires
that  the  changes in the derivative's fair value be recognized in earnings
unless specific hedge accounting criteria are met.  The Operating Partnership
is currently assessing the impact of this new statement on its consolidated
financial position, liquidity, and results of operations.


3.     INVESTMENT IN OTHER REAL ESTATE PARTNERSHIPS

     The Investment in Other Real Estate Partnerships reflects the Operating
Partnership's 99% limited partnership equity interest in the  entities
described in Note 1 to these financial statements.

     Summarized condensed financial information as derived from the financial
statements of the Other Real Estate Partnerships is presented below:

Condensed Combined Balance Sheets:



<TABLE>
<CAPTION>

                                                                    June 30, 1998        December 31, 1997
                                 ASSETS                          -------------------    ------------------
<S>                                                               <C>                   <C>
Assets:                                                         
 Investment in Real Estate, Net.................................  $          369,452     $         694,926
 Other Assets...................................................              38,441               355,726
                                                                 -------------------    ------------------
    Total Assets................................................  $          407,893     $       1,050,652
                                                                 ===================    ==================   
                       LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Mortgage Loans  Payable........................................  $           39,784     $          40,000
 Defeased Mortgage Loan Payable.................................                 ---               300,000
 Other Liabilities..............................................               6,177                23,317
                                                                 -------------------    ------------------
    Total Liabilities...........................................              45,961               363,317
                                                                 -------------------    ------------------
 Partners' Capital..............................................             361,932               687,335
                                                                 -------------------    ------------------
    Total Liabilities and Partners' Capital.....................  $          407,893     $       1,050,652
                                                                 ===================    ==================   
</TABLE>




                                      8


<PAGE>   10


                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)



3.     INVESTMENT IN OTHER REAL ESTATE PARTNERSHIPS, CONTINUED


Condensed Combined Statements of Operations
                                   


<TABLE>                                                        
<CAPTION>                                                      
                                                                                       Six  Months Ended
                                                                             --------------------------------------
                                                                               June 30,                 June 30,
                                                                                 1998                     1997
                                                                             -------------            -------------
<S>                                                                          <C>                       <C>
Total Revenues.................................................              $      27,137             $     58,502
Property Expenses..............................................                     (6,162)                 (15,172)
Interest Expense...............................................                     (1,419)                 (12,214)
Amortization of Interest Rate Protection Agreements and
 Deferred Financing Costs......................................                        (32)                  (1,371)
Depreciation and Other Amortization............................                     (4,800)                 (11,468)
Loss on Disposition of Interest Rate Protection Agreements.....                        ---                   (2,608)
Gain on Sales of Real Estate...................................                      2,282                    3,538
Extraordinary Loss.............................................                        ---                   (9,135)
Cumulative Effect of Change in Accounting Principle............                       (858)                     ---
                                                                             -------------            -------------
Net Income.....................................................              $      16,148             $     10,072
                                                                             =============            ============= 
</TABLE>

     On January 2, 1998, the Financing Partnership distributed 173 properties
with a net book value of $387,647 to the Operating Partnership.


4.     MORTGAGE LOANS, SENIOR UNSECURED DEBT AND ACQUISITION FACILITY PAYABLE

     On March 31, 1998, the Operating Partnership issued $100 million of Dealer
remarketable securities which mature on April 5, 2011 and bear a coupon
interest rate of 6.50% (the "2011 Drs.").  The issue price of the 2011 Drs. was
99.753%.  Interest is paid semi-annually in arrears on April 5 and October 5.
The 2011 Drs. are callable (the "Call Option"), at the option of J.P. Morgan
Securities, Inc., as Remarketing Dealer (the "Remarketing Dealer"), on April 5,
2001 (the "Remarketing Date").  The Operating Partnership received
approximately $2,760 of proceeds from the Remarketing Dealer as consideration
for the Call Option.  The Operating Partnership will amortize the proceeds over
the life of the Call Option as an adjustment to interest expense.  If the
holder of the Call Option calls the 2011 Drs. and elects to remarket the 2011
Drs., then after the Remarketing Date, the interest rate on the 2011 Drs. will
be reset at a fixed rate until April 5, 2011 based upon a predetermined formula
as disclosed in the related Prospectus Supplement.  If the Remarketing Dealer
elects not to remarket the 2011 Drs., then the Operating Partnership will be
required to repurchase, on the Remarketing Date, any 2011 Drs. that have not
been purchased by the Remarketing Dealer at 100% of the principal amount
thereof, plus accrued and unpaid interest, if any.  The Operating Partnership
also settled an interest rate protection agreement which was used to fix the
interest rate on the 2011 Drs. prior to issuance.  The debt issue discount and
the settlement amount of the interest rate protection agreement are being
amortized over the life of the 2011 Drs. as an adjustment to interest expense.
The 2011 Drs. contain certain covenants including limitations on incurrence of
debt and debt service coverage.

                                      9
<PAGE>   11






                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)

4.   MORTGAGE LOANS, SENIOR UNSECURED DEBT AND ACQUISITION FACILITY PAYABLE,
     CONTINUED

     On April 16, 1998, the Operating Partnership assumed a mortgage loan in
the amount of $2,525 (the "Acquisition Mortgage Loan IV").  The Acquisition
Mortgage Loan IV is collateralized by one property in Baltimore, Maryland,
bears interest at a fixed rate of 8.95% and provides for monthly principal and
interest payments based on a 20-year amortization schedule.  The Acquisition
Mortgage Loan IV matures on October 1, 2006.  The Acquisition Mortgage Loan IV
may be prepaid only after October 1, 2001 in exchange for the greater of a 1%
prepayment fee or a yield maintenance premium.

     The following table discloses certain information regarding the Operating
Partnership's mortgage loans, senior unsecured debt and acquisition facility
payable:

<TABLE>
<CAPTION>

                                                                     
                                              OUTSTANDING  BALANCE AT    ACCRUED INTEREST PAYABLE AT  INTEREST RATE AT 
                                        -------------------------------  ---------------------------  -----------------
                                             JUNE 30,      DECEMBER  31,    JUNE 30,    DECEMBER 31,     JUNE 30,        MATURITY
                                               1998             1997          1998          1997           1998            DATE
                                        -------------      -------------  -----------   ------------  -------------    -----------
MORTGAGE LOANS PAYABLE                                                                  
<S>                                     <C>                <C>            <C>           <C>                <C>          <C>
CIGNA Loan.........................     $   35,522         $  35,813      $    ---      $     ---          7.500%         4/01/03
Assumed Loans......................          8,809             8,950           ---            ---          9.250%         1/01/13
LB Mortgage Loan  II...............            705               705           ---            ---          8.000%           (1)
Acquisition Mortgage Loan I......            3,993             4,135           ---             29          8.500%         8/01/08
Acquisition Mortgage Loan II.....            7,913             7,997            51             52          7.750%         4/01/06
Acquisition Mortgage Loan III...             3,543             3,598            26             27          8.875%         6/01/03
Acquisition Mortgage Loan IV.....            2,516               ---            19            ---          8.950%        10/01/06
                                        -----------        ----------     ---------     ----------                   
Total..............................     $   63,001         $  61,198      $     96      $     108   
                                        ===========        ==========     =========     ==========                 
SENIOR UNSECURED DEBT                                                                                               
---------------------                                                                                               
2005 Notes.........................     $   50,000         $  50,000      $    383      $     393          6.900%        11/21/05
2006 Notes.........................        150,000           150,000           875            671          7.000%        12/01/06
2007 Notes.........................        149,953(2)        149,951         1,457          1,457          7.600%         5/15/07
2011 Notes.........................         99,400(2)         99,377           942            942          7.375%         5/15/11(3)
2017 Notes.........................         99,814(2)         99,809           625            479          7.500%        12/01/17(4)
2027 Notes ........................         99,859(2)         99,857           914            914          7.150%         5/15/27(5)
2011 Drs...........................         99,759(2)            ---         1,625            ---          6.500%(7)      4/05/11(6)
                                        -----------        ----------     ---------     ----------
Total..............................     $  748,785         $ 648,994      $  6,821      $   4,856
                                        ===========        ==========     =========     ==========

ACQUISITION FACILITY PAYABLE                                                              
----------------------------                                                              
1997 Unsecured Acquisition                                                                
Facility...........................     $ 230,100          $ 129,400      $    695        $   297          6.510%         4/30/01
                                        ===========        ==========     =========     ==========
</TABLE>

(1)  The maturity date of the LB Mortgage Loan II is based on a contingent event
     relating to the environmental status of the property collateralizing the
     loan.

(2)  The 2007 Notes, 2011 Notes, 2017 Notes, 2027 Notes and the 2011 Drs. are
     net of unamortized discounts of $47, $600, $186, $141 and $241,
     respectively.

(3)  The 2011 Notes are redeemable at the option of the holder thereof, on May
     15, 2004.

(4)  The 2017 Notes are redeemable at the option of the Company at any time
     based upon a predetermined formula.

(5)  The 2027 Notes are redeemable at the option of the holders thereof, on May
     15, 2002.

(6)  The 2011 Drs. are required to be redeemed by the Operating Partnership on
     April 5, 2001 if the Remarketing Dealer elects not to remarket the 2011
     Drs.

(7)  The 2011 Drs. bear interest at an annual rate of 6.50% to the Remarketing
     Date.  If the holder of the Call Option calls the 2011 Drs. and elects to
     remarket the 2011 Drs., then after the Remarketing Date, the interest rate
     on the 2011 Drs. will be reset at a fixed rate until April 5, 2011 based on
     a predetermined formula as disclosed in the related Prospectus Supplement.




                                      10


<PAGE>   12



                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)


4.   MORTGAGE LOANS, SENIOR UNSECURED DEBT AND ACQUISITION FACILITY PAYABLE,
     CONTINUED

     The following is a schedule of the stated maturities of the mortgage
loans, senior unsecured debt and acquisition facility payable for the next five
years ending December 31, and thereafter:


<TABLE>
<CAPTION>

                Amount
            ----------------
<S>         <C>
1998        $            672
1999                   1,586
2000                   1,722
2001                 231,969
2002                   2,028
Thereafter           804,419
            ----------------
Total       $      1,042,396
            ================
</TABLE>

     The maturity date of the Lazarus Burman Mortgage Loan II is based on a
contingent event, as a result, this loan is not included in the above table.

     The Operating Partnership, from time to time, enters into interest rate
protection agreements which are used to lock into a fixed interest rate on
anticipated offerings of senior unsecured debt.  At June 30, 1998, the
following interest rate protection agreements were outstanding:


<TABLE>
<CAPTION>

             Notional  Origination                                             Settlement
              Amount      Date           Interest Rate     Valuation Basis        Date
          ----------  -----------------  -------------     ----------------  --------------
<S>       <C>         <C>                   <C>            <C>               <C> 
          $   50,000  January 2, 1998       5.937%         30-Year Treasury  October 1, 1998
          $  100,000  October 28, 1997      6.317%         30-Year Treasury   July 1, 1998
          $  100,000  December 19, 1997     5.994%         30-Year Treasury  January 4, 1999
</TABLE>

5.    PARTNERS' CAPITAL

     The Operating Partnership has issued general partnership units, limited
partnership units (together, the "Units") and preferred general partnership
units.  The general partnership units resulted from capital contributions from
the Company.  The limited partnership units are issued in conjunction with the
acquisition of certain properties (see discussion below).  The preferred
general partnership units resulted from preferred capital contributions from
the Company.  The Operating Partnership will be required to make all required
distributions on the preferred general partnership units prior to any
distribution of cash or assets to the holders of the general and limited
partnership units except for distributions required to enable the Company to
maintain its qualification as a REIT.

Unit Contributions:

     During the six months ended June 30, 1998, the Operating Partnership
issued 983,956 Units valued, in the aggregate, at $33,802 in exchange for
interests in certain properties.  These contributions are reflected in the
Operating Partnership's financial statements as limited partners contributions.




                                      11
<PAGE>   13

                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)


5.    PARTNERS' CAPITAL, CONTINUED

     On April 23, 1998, the Company issued, in a private placement, 1,112,644
shares of $.01 par value Common Stock (the "April 1998 Equity Offering").  The
net proceeds of approximately $34,100 received from the April 1998 Equity
Offering were contributed to the Operating Partnership in exchange for 1,112,644
Units in the Operating Partnership and are reflected in the Operating
Partnership's financial statements as a general partner contribution. 

     During the six months ended June 30, 1998, certain employees of the Company
exercised 81,000 employee stock options.  Gross proceeds to the Company were
approximately $1,968. The gross proceeds from the option exercises were
contributed to the Operating Partnership in exchange for Units and are reflected
in the Operating Partnership's financial statements as a general partner
contribution. 

     During the six months ended June 30, 1998, the Company awarded 51,850
shares of restricted Common Stock to certain employees and 1,179 shares of
restricted Common Stock to certain Directors.  Another employee of the Company
converted certain employee stock options to 6,123 shares of restricted Common
Stock.  The Operating Partnership issued Units to the Company in the same
amount.  These shares of restricted Common Stock had a fair value of $2,095 on
the date of grant.  The restricted Common Stock vests over a period from five to
ten years.  Compensation expense will be charged to earnings over the vesting
period.

Preferred Unit Contributions:

     On February 4, 1998, the Company issued 5,000,000 Depositary Shares, each
representing 1/100th of a share of the Company's 7.95%, $.01 par value, Series
D Cumulative Preferred Stock (the "Series D Preferred Stock"), at an initial
offering price of  $25 per Depositary Share.  The net proceeds of $120,562
received from the Series D Preferred Stock were contributed to the Operating
Partnership in exchange for 7.95% Series D Cumulative Preferred Units (the
"Series D Preferred Units") and are reflected in the Operating Partnership's
financial statements as a general partner preferred unit contribution.

     On March 18 1998, the Company issued 3,000,000 Depositary Shares, each
representing 1/100th of a share of the Company's 7.90%, $.01 par value, Series
E Cumulative Preferred Stock (the "Series E Preferred Stock"), at an initial
offering price of $25 per Depositary Share. The net proceeds of $72,138
received from the Series E Preferred Stock were contributed to the Operating
Partnership in exchange for 7.90% Series E Cumulative Preferred Units (the
"Series E Preferred Units") and are reflected in the Operating Partnership's
financial statements as a general partner preferred unit contribution.

Non-Qualified Employee Stock Options:

     On January 2, 1998, the Company granted 4,370,000 non-qualified employee
stock options.  These stock options vest over three years based upon certain
performance measures.  The stock options have a strike price of $35.8125 per
share and expire ten years from the date of grant.  The exercise of these stock
options will result in the issuance of Units to the Company in the same amount.

     On May 14, 1998, the Company granted 899,000 non-qualified employee stock
options.   These stock options vest over one year and have a strike price of
$31.13 per share.  The stock options expire between seven and ten years from
the date of grant.  The exercise of these stock options will result in the
issuance of Units to the Company in the same amount.


                                      12
<PAGE>   14


                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)

6.    ACQUISITION OF REAL ESTATE

     During the six months ended June 30, 1998, the Consolidated Operating
Partnership acquired 162 existing industrial properties and several land
parcels.  The aggregate purchase price for these acquisitions totaled
approximately $373,500, excluding costs incurred in conjunction with the
acquisition of the properties.

     Of the 162 existing industrial properties purchased by the Operating
Partnership during the six months ended June 30, 1998, four existing industrial
properties were purchased from Western Suburban Industrial Investments Limited
Partnership ("Western") in which the sole general partner, having a 5%
interest, was Tomasz/Shidler Investment Corporation, of which the sole
shareholders were a Director and Director/Officer of the general partner of the
Operating Partnership who also had a 53% and 32% limited partnership interest
in Western, respectively.  Further, an additional Director/Officer and an
Officer of the general partner of the Operating Partnership were limited
partners in Western having interests of 2% and .5%, respectively.  The
aggregate purchase price for this acquisition totaled approximately $7,900,
excluding costs incurred in conjunction with the acquisition of the properties.

     During the second quarter of 1998, the Operating Partnership completed an
acquisition of a real estate firm for which an officer and an employee of the
Operating Partnership owned a 77.5% interest.  Gross proceeds to the real estate
firm totaled approximately $2,349.

7.    SALES OF REAL ESTATE

     During the six months ended June 30, 1998, the Operating Partnership sold
two existing industrial properties and one land parcel.  Gross proceeds from
these sales were approximately $7,117.  The gain on sales of real estate was
approximately $93, net of federal income taxes.



                                      13
<PAGE>   15


                             FIRST INDUSTRIAL, L.P.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)

8.       SUPPLEMENTAL INFORMATION TO STATEMENT OF CASH FLOWS


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:



<TABLE>
<CAPTION>

                                                                                           Six Months Ended
                                                                            -----------------------------------------------
                                                                                  June 30, 1998           June 30, 1997
                                                                            -----------------------  ----------------------
<S>                                                                         <C>                       <C>
Interest paid, net of capitalized interest................................  $                28,243   $               5,856
                                                                            =======================  ======================
Interest capitalized......................................................  $                 1,907   $                 157
                                                                            =======================  ======================
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND                            
FINANCING ACTIVITIES:                                                     
Distributions payable on Units............................................                  $23,553   $              17,510
                                                                            =======================  ======================
IN CONJUNCTION WITH THE PROPERTY ACQUISITIONS, THE FOLLOWING ASSETS AND 
LIABILITIES WERE ASSUMED AND OPERATING PARTNERSHIP UNITS EXCHANGED:
Purchase of real estate..................................................   $               373,500   $             230,625
Accrued real estate taxes and security deposits..........................                    (3,520)                 (2,460)
Mortgage loans...........................................................                    (2,525)                 (4,505)
Operating Partnership Units..............................................                   (33,802)                (53,471)
                                                                            -----------------------  ----------------------
                                                                            $               333,653  $              170,189
                                                                            =======================  ======================
IN CONJUNCTION WITH THE DISTRIBUTION OF 173 PROPERTIES FROM THE FINANCING 
PARTNERSHIP TO THE OPERATING PARTNERSHIP ON JANUARY 2, 1998, THE FOLLOWING 
ASSETS AND LIABILITIES WERE ASSUMED:
Investment in real estate, net..........................................    $               382,190
Tenant accounts receivable..............................................                      3,017
Deferred rent receivable................................................                      4,689
Other assets............................................................                      6,209
Accounts payable and accrued expenses...................................                     (5,920)
Rents received in advance and security deposits.........................                     (2,538)
                                                                            -----------------------  
Investment in other real estate partnerships............................    $               387,647
                                                                            =======================  
</TABLE>


                                      14
<PAGE>   16

                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)

9.    EARNINGS PER UNIT

     Net income per weighted average Units - Basic, is based on the weighted
average Units outstanding.  Net Income per weighted average Unit - Diluted, is
based on the weighted average Units outstanding plus the effect of in-the-money
employee stock options that result in the issuance of general partnership
units.  The computation of basic and diluted EPU is presented below:



<TABLE>
<CAPTION>
                                                                                                                        
                                                                      Six Months       Six Months     Three Months     Three Months
                                                                        Ended            Ended           Ended            Ended
                                                                    June  30, 1998    June 30, 1997  June  30, 1998  June  30, 1997
                                                                    --------------    -------------  --------------  --------------
<S>                                                                 <C>               <C>            <C>             <C>
Numerator:
----------
Income Before Extraordinary Loss and Cumulative Effect of
 Change in Accounting Principle...................................  $      47,447     $     22,623          23,282          10,403
Less: Preferred Distributions.....................................        (12,228)          (1,405)         (7,230)         (1,405)
                                                                    -------------     ------------   -------------   -------------
Net Income Available to Unitholders Before Extraordinary
 Loss and Cumulative  Effect of Change in Accounting Principle  -
 For Basic and Diluted EPU........................................         35,219           21,218          16,052           8,998
Extraordinary Loss................................................            ---           (3,428)            ---          (3,428)
Cumulative Effect of Change in Accounting Principle...............           (719)             ---            (719)            ---
                                                                    -------------     ------------   -------------   -------------
Net Income Available to Unitholders - For Basic and
 Diluted  EPU.....................................................  $      34,500     $     17,790          15,333           5,570
                                                                    =============     ============   =============   =============
Denominator:
------------
Weighted Average Units - Basic....................................         43,233           33,783          44,069          34,096
Effect of Dilutive Securities:
 Employee Common Stock Options of the Company
 that result in the issuance of general partnership
 units............................................................            338              283             264             271
                                                                    -------------     ------------   -------------   -------------
Weighted Average Units - Diluted..................................         43,571           34,066          44,333          34,367
                                                                    =============     ============   =============   =============
Basic EPU:
----------
Net Income Available to Unitholders Before
 Extraordinary Loss and Cumulative Effect of Change
 in Accounting Principle .........................................  $         .81     $        .63   $         .36   $         .26
                                                                    =============     ============   =============   =============
Extraordinary Loss................................................  $         ---     $       (.10)  $         ---   $        (.10)
                                                                    =============     ============   =============   =============
Cumulative Effect of Change in Accounting Principle...............  $        (.02)    $        ---   $        (.02)  $         ---
                                                                    =============     ============   =============   =============
Net Income Available to Unitholders...............................  $         .80     $        .53   $         .35   $         .16
                                                                    =============     ============   =============   =============
Diluted EPU:
------------
Net Income Available to Unitholders Before
 Extraordinary Loss and Cumulative Effect of Change
 in Accounting Principle..........................................  $         .81     $        .62   $         .36   $         .26
                                                                    =============     ============   =============   =============
Extraordinary Loss................................................  $         ---     $       (.10)  $         ---   $        (.10)
                                                                    =============     ============   =============   =============
Cumulative Effect of Change in Accounting Principle...............  $        (.02)    $        ---   $        (.02)  $         ---
                                                                    =============     ============   =============   =============
Net Income Available to Unitholders...............................  $         .79     $        .52   $         .35   $         .16
                                                                    =============     ============   =============   =============
</TABLE>



                                      15
<PAGE>   17

                             FIRST INDUSTRIAL, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
                                  (UNAUDITED)

10.    COMMITMENTS AND CONTINGENCIES

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

     The Operating Partnership has committed to the construction of five
development projects totaling approximately .6 million square feet of GLA. The
estimated total construction costs are approximately $22,817.  These
developments are expected to be funded with cash flow from operations as well as
borrowings under the Operating Partnership's $300,000 unsecured revolving credit
facility (the "1997 Unsecured Acquisition Facility").

     In the second quarter of 1998, the Operating Partnership entered into a
non-binding letter of intent with an institutional investor to create a joint
venture that would invest in industrial properties.  The venture is subject,
among other contingencies, to due diligence and the negotiation of definitive
documentation. There can be no assurance that such venture will be created, or
if created, will be successful.

11.   SUBSEQUENT EVENTS

     From July 1, 1998 to August 5, 1998,  the Company acquired five industrial
properties.  The aggregate purchase price for these acquisitions totaled
approximately $22,362, excluding costs incurred in conjunction with the
acquisition of the properties.

     On July 20, 1998, the Operating Partnership paid a second quarter 1998
distribution of $.53 per Unit, totaling approximately $23,553.

     On July 14, 1998, the Operating Partnership issued $200,000 of senior
unsecured debt which matures on July 15, 2028 and bears a coupon interest rate
of 7.60% (the "2028 Notes").  The issue price of the 2028 Notes was 99.882%.
Interest is paid semi-annually in arrears on January 15 and July 15.  The
Operating Partnership also settled interest rate protection agreements, in the
notional amount of $150,000, which were used to fix the interest rate on the
2028 Notes prior to issuance.  The debt issue discount and the settlement
amount of the interest rate protection agreements are being amortized over the
life of the 2028 Notes as an adjustment to the interest expense.  The 2028
Notes contain certain covenants including limitation on incurrence of debt and
debt service coverage.


                                      16


<PAGE>   18
                             FIRST INDUSTRIAL, L.P.
      ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

     The following discussion and analysis of First Industrial, L.P.'s  (the
"Operating Partnership") financial condition and results of operations should
be read in conjunction with the financial statements and notes thereto
appearing elsewhere in this Form 10-Q.

RESULTS OF OPERATIONS

     At June 30, 1998, the Operating Partnership and its consolidated
partnerships and limited liability corporations owned 857 in-service properties
with approximately 56.2 million square feet of gross leasable area ("GLA"),
compared to 208 in-service properties with approximately 18.1 million square
feet of GLA at June 30, 1997.  The addition of 479 properties between July 1,
1997 and June 30, 1998 included the acquisitions of 472 properties totaling
approximately 23.7 million square feet of GLA, the completed development of
seven properties totaling approximately 1.2 million square feet of GLA and the
distribution of 173 properties from First Industrial Financing Partnership,
L.P. (the "Financing Partnership") totaling approximately 13.4 million square
feet of GLA.  The Operating Partnership also sold three in-service properties
totaling approximately .2 million square feet of GLA,  one property held for
redevelopment and several land parcels.

     COMPARISON OF SIX MONTHS ENDED JUNE 30, 1998 TO SIX MONTHS ENDED JUNE 30,
1997

     Rental income and tenant recoveries and other income increased by $96.1
million or 238.5% due primarily to the properties acquired or developed after
June 30, 1997 and the distribution of 173 properties from the Financing
Partnership to the Operating Partnership on January 2, 1998.  Revenues from
properties owned prior to January 1, 1997, decreased by approximately $.3
million or .5% due primarily to a decrease in tenant recovery income charges
related to the decrease in operating expenses as discussed below.

     Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses,
increased by $28.4 million or 232.9% due primarily to the properties acquired
or developed after June 30, 1997 and the distribution of 173 properties from
the Financing Partnership to the Operating Partnership on January 2, 1998.
Expenses from properties owned prior to January 1, 1997, decreased by
approximately $.8 million or 4.5% due primarily to a decrease in snow removal
and related expenses incurred for properties located in certain of the
Operating Partnership's metropolitan areas during the six months ended June 30,
1998 as compared to the six months ended June 30, 1997.

     General and administrative expense increased by approximately $3.3
million, of which, approximately $2.2 million is due primarily to the
additional expenses associated with managing the Operating Partnership's
growing operations including additional professional fees relating to
additional properties owned and additional personnel to manage and expand the
Operating Partnership's business.  Approximately $1.1 million of the increase
is the result of the adoption of Emerging Issues Task Force Issue No. 97-11,
"Accounting for Internal Costs Relating to Real Estate Property Acquisitions"
("EITF 97-11"), which requires that internal costs of preacquisition activities
incurred in connection with the acquisition of an operating property should be
expensed as incurred.  The Operating Partnership adopted EITF 97-11 on March
19, 1998.

     Interest expense increased by approximately $21.5 million for the six
months ended June 30, 1998 compared to the six months ended June 30, 1997 due
primarily to a higher average debt balance outstanding resulting from the
issuance of unsecured debt to fund the acquisition and development of
additional properties.



                                      17

<PAGE>   19

     Depreciation and other amortization increased by $19.3 million due
primarily to the additional depreciation and amortization related to the
properties acquired after June 30, 1997 and the distribution of 173 properties
from the Financing Partnership to the Operating Partnership on January 2, 1998.

     The $.7 million cumulative effect of change in accounting principle is the
result of the write-off of the unamortized balance of organizational costs on
the Operating Partnership's balance sheet due to the early adoption of
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities",
("SOP 98-5"), as further discussed later in this Management's Discussion and
Analysis.

     Equity in Income of Other Real Estate Partnerships increased by $6.0
million or 74.9% due primarily to four of the Other Real Estate Partnerships 
having a greater amount of in-service properties for the six months ended 
June 30, 1998 compared to the six months ended June 30, 1997.

COMPARISON OF THREE MONTHS ENDED JUNE 30, 1998 TO THREE MONTHS ENDED JUNE 30,
1997

     Revenues increased by $51.9 million or 242.7% due primarily to the
properties acquired or developed after June 30, 1997 and the distribution of
173 properties from the Financing Partnership to the Operating Partnership on
January 2, 1998.  Revenues from properties owned prior to April 1, 1997,
increased by approximately $1.8 million or 5.1% due to general rent increases
and an increase in tenant recovery income charges due to an increase in
property operating expenses as discussed below.

     Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses,
increased by $15.2 million or 249.6% due primarily to the properties acquired
or developed after June 30, 1997 and the distribution of 173 properties from
the Financing Partnership to the Operating Partnership on January 2, 1998.
Expenses from properties owned prior to April 1, 1997, increased by
approximately $ .6 million or 5.7% due to an increase in real estate tax
expense, utilities and other expense in the majority of the Operating
Partnership's metropolitan areas during the three months ended June 30, 1998 as
compared to the three months ended June 30, 1997.

     General and administrative expense increased by approximately $2.0
million, of which approximately $1.2 million is due primarily to the additional
expenses associated with managing the Operating Partnership's growing
operations, including additional professional fees relating to additional
properties owned and additional personnel to manage and expand the Operating
Partnership's business.  Approximately $.8 million of the increase is the
result of the adoption of EITF 97-11.

     Interest expense increased by approximately $9.8 million for the three
months ended June 30, 1998 compared to the three months ended June 30, 1997 due
primarily to a higher average debt balance  outstanding resulting from the
issuance of unsecured debt to fund the acquisition and development of
additional properties.

     Depreciation and other amortization increased by $10.7 million due
primarily to the additional depreciation and amortization related to the
properties acquired after June 30, 1997 and the distribution of 173 properties
from the Financing Partnership to the Operating Partnership on January 2, 1998.

     The $.7 million cumulative effect of change in accounting principle is the
result of the write-off of the unamortized balance of organizational costs on
the Operating Partnership's balance sheet due to the early adoption of SOP
98-5, as further discussed later in this Management's Discussion and Analysis.

     Equity in Income of Other Real Estate Partnerships increased by $3.1
million or 140.9% due primarily to four of the Other Real Estate Partnerships 
having a greater amount of in-service properties for the three months ended 
June 30, 1998 compared to the three months ended June 30, 1997.


                                      18
<PAGE>   20
LIQUIDITY AND CAPITAL RESOURCES

     On June 30, 1998, the Operating Partnership's unrestricted cash and cash
equivalents totaled approximately $.7 million.

     Net cash provided by operating activities was $46.1 million for the six
months ended June 30, 1998 compared to $7.8 million for the six months ended
June 30, 1997.  This increase is due primarily to an increase in net operating
income (which is defined as total revenues less property related expenses) 
due to the operations of properties acquired or developed between July 1,
1997 and June 30, 1998 and the distribution of 173 properties from the
Financing Partnership to the Operating Partnership on January 2, 1998 partially
offset by an increase in interest expense and general and administrative
expense as discussed in "Results of Operations" above. 

     Net cash used in investing activities decreased from $507.5 million for the
six months ended June 30, 1997 to $419.9 million for the six months ended June
30, 1998. This decrease is due to an increase in the acquisition of properties
offset by a decrease in the amount of contributions made to the Other Real
Estate Partnerships to fund acquisitions and developments.

     Net cash provided by financing activities decreased from $502.9 million for
the six months ended June 30, 1997 to $369.5 million for the six months ended
June 30, 1998 due primarily to a decrease in the amount of senior unsecured debt
issued partially offset by an increase in preferred and general contributions
from the general partner.

     The ratio of earnings to fixed charges and preferred stock dividends was
1.74 for the six months ended June 30, 1998 compared to 2.55 for the six months
ended June 30, 1997.  The decrease is primarily due to additional interest
expense and preferred general partner unit distributions incurred during the six
months ended June 30, 1998 from additional debt issued and preferred general
partner contributions to fund property acquisitions and developments, which is
partially offset by higher net operating income from property acquisitions and
the distribution of 173 properties from the Financing Partnership to the
Operating Partnership on January 2, 1998 as discussed in "Results of Operations"
above.

     Between January 1, 1998 and June 30, 1998, the Operating Partnership
purchased 162 industrial properties and several land parcels, for an aggregate
purchase price of approximately $373.5 million, excluding costs incurred in
conjunction with the acquisition price.

     Of the 162 existing industrial properties and several land parcels
purchased by the Operating Partnership during the six months ended June 30,
1998, four existing industrial properties were purchased from Western Suburban
Industrial Investments Limited Partnership ("Western") in which the sole general
partner, having a 5% interest, was Tomasz/Shidler Investment Corporation, of
which the sole shareholders were a Director and Director/Officer of the general
partner of the Operating Partnership who also had a 53% and 32% limited
partnership interest in Western, respectively. Further, an additional
Director/Officer of the general partner of the Operating Partnership was a
limited partner in Western having an interest of 2%.  The aggregate purchase
price for this acquisition totaled approximately $7.9 million, excluding costs
incurred in conjunction with the acquisition of the properties.

     During the second quarter of 1998, the Operating Partnership completed an
acquisition of a real estate firm for which an officer and an employee of the
Operating Partnership owned a 77.5% interest.  Gross proceeds to the real estate
firm totaled approximately $2.3 million.

     During the six months ended June 30, 1998, the Operating Partnership sold
two existing industrial properties and one land parcel.  Gross proceeds from
these sales were approximately $7.1 million.  The gain on sales of real estate
was approximately $.09 million, net of federal income taxes.

     The Operating Partnership has committed to the construction of five
developments totaling approximately .6 million square feet of GLA.  The
estimated total construction costs are approximately $22.8 million.  These
developments are expected to be funded with cash flow from operations as well as

                                      19
<PAGE>   21


borrowings under the Operating Partnership's $300 million unsecured revolving 
credit facility (the "1997 Unsecured Acquisition Facility").

     During the six months ended June 30, 1998, the Operating Partnership issued
983,956 units valued, in the aggregate, at $33.8 million in exchange for
interests in certain properties.  These contributions are reflected in the
Operating Partnership's financial statements as limited partners contributions.

     From July 1, 1998 to August 5, 1998,  the Operating Partnership acquired
five industrial properties.  The aggregate purchase price for these acquisitions
totaled approximately $22.4  million, excluding costs incurred in conjunction
with the acquisition of  the properties.

     On March 31, 1998, the Operating Partnership issued $100 million of Dealer
remarketable securities which mature on April 5, 2011 and bear a coupon interest
rate of 6.50% (the "2011 Drs.").  The issue price of the 2011 Drs. was 99.753%.
Interest is paid semi-annually in arrears on April 5 and October 5. The 2011
Drs. are callable (the "Call Option"), at the option of J.P. Morgan Securities,
Inc., as Remarketing Dealer (the "Remarketing Dealer"), on April 5, 2001 (the
"Remarketing Date").  The Operating Partnership received approximately $2,760 of
proceeds from the Remarketing Dealer as consideration for the Call Option.  The
Operating Partnership will amortize the proceeds over the life of the Call
Option as an adjustment to interest expense.  If the holder of the Call Option
calls the 2011 Drs. and elects to remarket the 2011 Drs., then after the
Remarketing Date, the interest rate on the 2011 Drs. will be reset at a fixed
rate until April 5, 2011 based upon a predetermined formula as disclosed in the
related Prospectus Supplement.  If the Remarketing Dealer elects not to remarket
the 2011 Drs., then the Operating Partnership will be required to repurchase, on
the Remarketing Date, any 2011 Drs. that have not been purchased by the
Remarketing Dealer at 100% of the principal amount thereof, plus accrued and
unpaid interest, if any.  The Operating Partnership also settled an interest
rate protection agreement which was used to fix the interest rate on the 2011
Drs. prior to issuance.  The debt issue discount and the settlement amount of
the interest rate protection agreement are being amortized over the life of the
2011 Drs. as an adjustment to interest expense. The 2011 Drs. contain certain
covenants including limitations on incurrence of debt and debt service coverage.

     On April 16, 1998,  the Operating Partnership assumed a mortgage loan in
the amount of $2.5 million (the "Acquisition Mortgage Loan IV").  The
Acquisition Mortgage Loan IV is collateralized  by one property in Baltimore,
Maryland, bears interest at a fixed rate of 8.95% and provides for monthly
principle and interest payments based on a 20-year amortization schedule.  The
Acquisition Mortgage Loan IV matures October 1, 2006.  The Acquisition Mortgage
Loan IV may be prepaid only after October 1, 2001 in exchange for the greater of
a 1% prepayment fee or a yield maintenance premium.

     On July 14, 1998, the Operating Partnership issued $200 million of senior
unsecured debt which matures on July 15, 2028 and bears a coupon interest rate
of 7.60% (the "2028 Notes").  The issue price of the 2028 Notes was 99.882%.
Interest is paid semi-annually in arrears on January 15 and July 15.  The
Operating Partnership also settled interest rate protection agreements in the
notional amount of $150 million which were used to fix the interest rate on the
2028 Notes prior to issuance.   The debt issue discount and the settlement
amount of the interest rate protection agreements are being amortized over the
life of the 2028 Notes as an adjustment to the interest expense.  The 2028
Notes contain certain covenants including limitation on incurrence of debt and
debt service coverage.

     On February 4, 1998, the Company issued 5,000,000 Depository Shares, each
representing 1/100th of a share of the Company's 7.95%, $.01 par value, Series
D Cumulative Preferred Stock (the "Series D Preferred Stock"), at an initial
offering price of  $25 per Depository Share.  The net proceeds of $120.6
million received from the Series D Preferred Stock were contributed to the
Operating Partnership in exchange for 7.95% Series D Cumulative Preferred Units
(the "Series D Preferred Units") and are reflected in the Operating
Partnership's financial statements as a general partner preferred unit
contribution.



                                      20
<PAGE>   22

     On March 18 1998, the Company issued 3,000,000 Depository Shares, each
representing 1/100th of a share of the Company's 7.90%, $.01 par value, Series
E Cumulative Preferred Stock (the "Series E Preferred Stock"), at an initial
offering price of $25 per Depository Share. The net proceeds of $72.1 million
received from the Series E Preferred Stock were contributed to the Operating
Partnership in exchange for 7.90% Series E Cumulative Preferred Units (the
"Series E Preferred Units") and are reflected in the Operating Partnership's
financial statements as a general partner preferred unit contribution.

     On April 23, 1998, the Company issued, in a private placement, 1,112,644
shares of $.01 par value Common Stock (the "April 1998 Equity Offering").  The
net proceeds of approximately $34.1 million received from the April 1998 Equity
Offering were contributed to the Operating Partnership in exchange for
1,112,644 Units in the Operating Partnership and are reflected in the Operating
Partnership's financial statements as a general partner contribution.

     During the six months ended June 30, 1998, certain employees of the Company
exercised 81,000 employee stock options. Gross proceeds to the Company were
approximately $2.0 million. The gross proceeds from the option exercises were
contributed to the Operating Partnership in exchange for Units and are reflected
in the Operating Partnership's financial statements as a general partner
contribution.

     During the six months ended June 30, 1998, the Company awarded 51,850
shares of restricted Common Stock to certain employees and 1,179 shares of
restricted Common Stock to certain Directors.  Another employee of the Company
converted certain employee stock options to 6,123 shares of restricted Common
Stock.  These shares of restricted Common Stock had a fair value of
approximately $2.1 million on the date of grant.  The restricted Common Stock
vests over a period from five to ten years.  Compensation expense will be
charged to earnings over the vesting period.

     On January 2, 1998, the Company granted 4,370,000 non-qualified employee
stock options. These stock options vest over three years based upon certain 
performance measures. The stock options have a strike price of $35.8125 per 
share and expire ten years from the date of grant. The exercise of these stock 
options will result in the issuance of Units to the Company in the same amount.

     On May 14, 1998, the Company granted 899,000 non-qualified employee stock
options. These stock options vest over one year and have a strike price of 
$31.13 per share. The stock options expire between seven and ten years from the
date of grant. The exercise of these stock options will result in the issuance
of Units to the Company in the same amount.

     On January 20, 1998, the Operating Partnership paid a fourth quarter 1997
distribution of $.53 per unit, totaling approximately $22.0 million.  On April
20, 1998, the Operating Partnership paid a first quarter 1998 distribution of
$.53 per unit, totaling approximately $22.5 million.   On July 20, 1998,  the
Operating Partnership paid a second quarter 1998 distribution of $.53 per unit,
totaling approximately $23.6 million.

     On March 31, 1998, the Operating Partnership paid a first quarter
distribution of $54.688 per unit on its Series B Cumulative Preferred units. On
March 31, 1998, the Operating Partnership paid a first quarter distribution of
$53.906 per unit on its Series C Cumulative Preferred units.  On March 31,
1998, the Operating Partnership paid a second quarter distribution of $30.365
per unit on its Series D Preferred units.  The preferred unit distributions
paid on March 31, 1998 totaled, in the aggregate, approximately $4.8 million.
On March 31, 1998,  the Operating Partnership accrued $7.13194 per Series E
Preferred unit, totaling $.2 million for the three months ended March 31, 1998.

     On June 30, 1998, the Operating Partnership paid a second quarter
distribution of $54.688 per unit on its Series B Cumulative Preferred units. On
June 30, 1998, the Operating Partnership paid a second quarter distribution of
$53.906 per unit on its Series C Cumulative Preferred units.  On June 30, 1998,
the Operating Partnership paid a second quarter distribution of $49.687 per
unit on its Series D Preferred units.  On June 30, 1998, the Operating
Partnership paid a period prorated first quarter distribution and a second
quarter distribution totaling $56.5069 per unit on its Series E Preferred
units.  The preferred unit distributions paid on June 30, 1998 totaled, in the
aggregate, approximately $7.4 million.

     In the second quarter of 1998, the Operating Partnership entered into a
non-binding letter of intent with an institutional investor to create a joint
venture that would invest in industrial properties.  The venture is subject,
among other contingencies, to due diligence and the negotiation of definitive
documentation. There can be no assurance that such venture will be created, or
if created, will be successful.

     The Operating Partnership 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 Operating
Partnership believes that its principal short-term liquidity needs are to fund
normal recurring expenses, debt service requirements and the minimum
distribution required by the Company to maintain the Company's REIT
qualification under the Internal Revenue Code. The Operating Partnership
anticipates that these needs will be met with cash flows provided by operating
activities.


                                      21
<PAGE>   23

     The Operating Partnership expects to meet long-term (greater than one
year) liquidity requirements such as property acquisitions, scheduled debt
maturities, major renovations, expansions and other non-recurring capital
improvements through long-term unsecured indebtedness and the issuance of
additional units in the Operating Partnership (the "Units") and preferred
units.  On June 30, 1998, the Operating Partnership had registered under the
Securities Act of 1933, as amended (the "Securities Act"), approximately $300.0
million of debt securities.  As of August 5, 1998, $100.0 million of debt
securities remained registered under the Securities Act and were unissued.  The
Operating Partnership may finance the development or acquisition of additional
properties through borrowings under the 1997 Unsecured Acquisition Facility. At
June 30, 1998, borrowings under the 1997 Unsecured Acquisition Facility bore
interest at a weighted average interest rate of 6.51%.  As of August 5, 1998,
the Operating Partnership had approximately $231.9 million available in
additional borrowings under the 1997 Unsecured Acquisition Facility.  Along
with the Operating Partnership's current strategy of meeting long-term
liquidity requirements through the issuance, from time to time, of long-term
secured and unsecured indebtedness and additional equity securities, the
Operating Partnership is actively considering joint ventures with various
institutional partners and the disposition of select assets as additional
financing strategies.

OTHER

     In June 1997, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income".  This statement, effective for fiscal years beginning after December
15, 1997, requires the Operating Partnership 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 Operating Partnership's net income available to
its unitholders 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 Operating Partnership has not yet
determined the impact of this statement on its financial statements.

     In March 1998, the FASB's Emerging Issues Task Force (the "Task Force")
issued Emerging Issues Task Force Issue No. 97-11, "Accounting for Internal
Costs Relating to Real Estate Property Acquisitions" ("EITF 97-11").  EITF
97-11, effective March 19, 1998, requires that internal costs of preacquisition
activities incurred in connection with the acquisition of an operating property
should be expensed as incurred.  The Task Force concluded that a property is
considered operating if, at the date of acquisition, major construction
activity is substantially completed on the property and (a) it is held
available for occupancy upon completion of tenant improvements by the acquirer
or (b) it is already income producing.  The Operating Partnership adopted EITF
97-11 as of March 19, 1998.  Prior to March 19, 1998, the Operating Partnership
capitalized internal costs of preacquisition activities incurred in connection
with the acquisition of operating properties.  The Operating Partnership
estimates that the adoption of EITF 97-11 will result in a cumulative increase
of approximately $2.5 million to $3.0 million in the amount of general and
administrative expense reflected in the Operating Partnership's consolidated
statement of operations in 1998.

     In April 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5").  SOP 98-5
requires that the net unamortized balance of all start-up costs and
organizational 


                                      22
<PAGE>   24

costs be written off as a cumulative effect of a change in accounting principle
and all future start-up costs and organizational costs be expensed.  In the
second quarter of 1998, the Operating Partnership has reported a cumulative
effect of a change in accounting principle in the amount of $.7 million to
reflect the write-off of the unamortized balance of organizational costs on the
Operating Partnership's balance sheet.

     During the second quarter of 1998, the FASB issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities".  This statement, effective for fiscal years beginning
after June 15, 1999, establishes accounting and reporting standards requiring
that every derivative instrument, including certain derivative instruments
imbedded in other contracts, be recorded in the balance sheet as either an
asset or liability measured at its fair value.  The statement also requires
that  the  changes in the derivative's fair value be recognized in earnings
unless specific hedge accounting criteria are met.  The Operating Partnership
is currently assessing the impact of this new statement on its consolidated
financial position, liquidity, and results of operations.



                                      23


<PAGE>   25

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
     None.

ITEM 2. CHANGES IN SECURITIES

During the six months ended June 30, 1998, the Operating Partnership issued an
aggregate of 983,956 limited partnership units having an aggregate value of
$33.8 million in exchange for property or interests in entities owning property.
As of August 5, 1998, the Operating Partnership has issued in 1998 an aggregate
of 985,146 limited partnership units having an aggregate value of $33.8 million
in exchange for property or interests in entities owning property.

All of the above limited partnership units were issued in private placements in
reliance on Section 4(2) of the Securities Act of 1933, as amended, including
Regulation D promulgated thereunder, to individuals or entities holding real
property or interests therein.  No underwriters were used in connection with
such issuances.

Subject to lock-up periods and certain adjustments, limited partnership units
are generally convertible into common stock, par value $.01, of the Company on a
one-for-one basis.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
     None.

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

ITEM 5. OTHER INFORMATION
     Not applicable.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A

Exhibit No.      Description


4.1  Sixth Amended and Restated Limited Partnership Agreement of First
     Industrial, L.P. (the "L.P. Agreement"), dated March 18, 1998 (incorporated
     by reference to Exhibit 10.1 of First Industrial Realty Trust, Inc.'s (the
     "Company") Annual Report on Form 10-K for the fiscal year ended December
     31, 1997, File No. 1-13102)

4.2  Supplemental Indenture No. 5, dated as of July 14, 1998, between First
     Industrial, L.P. and First Trust National Trust Association, as Trustee,
     relating to 7.60% Notes due July 15, 2028 (incorporated by reference to
     Exhibit 4.1 of Form 8-K of First Industrial, L.P. dated July 15, 1998, File
     No. 333-21873)

4.3  7.60% Notes due July 15, 2028 in principal amount of $200 million issued by
     First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the
     Form 8-K of First Industrial, L.P. dated July 15, 1998, File No. 333-21873)

4.4  Fourth Amendment to the L.P. Agreement, dated June 24, 1998 (incorporated
     by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal
     quarter ended June 30, 1998, File No. 1-13102)

4.5  Fifth Amendment to the L.P. Agreement, dated July 16, 1998 (incorporated by
     reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal
     quarter ended June 30, 1998, File No. 1-13102) 



                                      24
<PAGE>   26

Exhibit No. Description



27.1 *  Financial Data Schedule for the Six Months Ended June 30, 1998

27.2 *  Financial Data Schedule for the Six Months Ended June 30, 1997
        (Restated)



     *        Filed herewith.



Reports on Form 8-K and Form 8-K/A


      Report on Form 8-K dated April 6, 1998, filed April 20, 1998, as amended
      by the report on Form 8-K/A No. 1 filed June 16, 1998, relating to the
      acquisition of 167 properties and seven land parcels for future
      development.  The reports include Combined Historical Statements of
      Revenues and Certain Expenses for the acquired and to be acquired
      properties and Pro Forma Balance Sheet and Pro Forma Statements of
      Operations for the Operating Partnership.

      Report on Form 8-K dated March 26, 1998, filed April 7, 1998, relating to
      the Operating Partnership's offering of 6.50% Dealer remarketable
      securities due April 5, 2011.

      Report on Form 8-K dated July 9, 1998, filed July 15, 1998, relating to
      the Operating Partnership's offering of 7.60% Notes due July 15, 2028.

                                      25
<PAGE>   27


                                   SIGNATURE

     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, L.P.
                               BY: FIRST INDUSTRIAL REALTY TRUST, INC.
                               ITS SOLE GENERAL PARTNER


                              
Date: August 13, 1998          By:   /s/  Michael J. Havala
                                    --------------------------------------------
                                    Michael J. Havala
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)



                                      26


<PAGE>   28
                                 EXHIBIT INDEX



Exhibit No.      Description


4.1     Sixth Amended and Restated Limited Partnership Agreement of First
        Industrial, L.P. (the "L.P. Agreement"), dated March 18, 1998
        (incorporated by reference to Exhibit 10.1 of First Industrial Realty
        Trust, Inc.'s (the "Company") Annual Report on Form 10-K for the fiscal
        year ended December 31, 1997, File No. 1-13102)

4.2     Supplemental Indenture No. 5, dated as of July 14, 1998, between First
        Industrial, L.P. and First Trust National Trust Association, as Trustee,
        relating to 7.60% Notes due July 15, 2028 (incorporated by reference to
        Exhibit 4.1 of Form 8-K of First Industrial, L.P. dated July 15, 1998,
        File No. 333-21873)

4.3     7.60% Notes due July 15, 2028 in principal amount of $200 million issued
        by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of
        the Form 8-K of First Industrial, L.P. dated July 15, 1998, File No.
        333-21873)

4.4     Fourth Amendment to the L.P. Agreement, dated June 24, 1998
        (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the
        Company for the fiscal quarter ended June 30, 1998, File No. 1-13102)

4.5     Fifth Amendment to the L.P. Agreement, dated July 16, 1998 (incorporated
        by reference to Exhibit 10.3 of the Form 10-Q of the Company for the
        fiscal quarter ended June 30, 1998, File No. 1-13102)

27.1 *  Financial Data Schedule for the Six Months Ended June 30, 1998

27.2 *  Financial Data Schedule for the Six Months Ended June 30, 1997 
        (Restated)






     *        Filed herewith.



                                      27