Fitch Removes First Industrial from Rating Watch Negative; Affirms 'BBB' IDR.

NEW YORK -- Fitch Ratings has affirmed the following ratings of First Industrial Realty Trust, Inc. (NYSE:FR)('the company') and its operating partnership, First Industrial, L.P.:

First Industrial Realty Trust, Inc.

--Issuer Default Rating (IDR) at 'BBB';

--$325 million of preferred securities at 'BBB-';

First Industrial, L.P.

--Issuer Default Rating (IDR) at 'BBB';

--Approximately $1.4 billion of senior unsecured notes at 'BBB';

--$200 million of senior unsecured exchangeable notes at 'BBB';

--$500 million unsecured bank credit facility at 'BBB'.

In addition, Fitch has removed the company from Rating Watch Negative, where it was originally placed on May 10, 2006. The Rating Outlook is Stable.

The ratings affirmation centers on FR's geographically diverse portfolio, which includes a large pool of unencumbered industrial properties. Moreover, as of March 31, 2007, FR's stabilized unencumbered property assets coverage of unsecured debt was 1.8x (times), an appropriate level for the rating category. The affirmed ratings are also supported by the company's flexible funding profile, as most of FR's debt is fixed rate and unsecured debt that matures evenly over the next several years. In addition, Fitch's rating action reflects FR's risk-adjusted capitalization, which is steady and adequate for the current rating level. From a macroeconomic standpoint, demand for industrial real estate is expected to be favorable in 2007, providing further foundation for the ratings. Finally, the ratings affirmation recognizes the local market expertise of FR's property managers.

While affirming the ratings, Fitch remains concerned about the company's debt service coverage ratios. During FR's Rating Watch Negative period during the past year, Fitch has monitored company reported earnings (including and excluding the effects of gains on sale) relative to fixed charges, comprised of interest expense, capitalized interest, and preferred dividends. Fitch has analyzed FR's earnings relative to fixed charges on a risk-adjusted basis, as well.

Based on Fitch's review of company reported earnings, Fitch calculates FR's recurring EBITDA fixed-charge coverage ratio, a measure in which Fitch excludes the effects of earnings from asset sales and also adjusts earnings to account for recurring capital expenditures and noncash rents, to be 1.2x for the 12 months ending March 31, 2007. Taking into account the effects of gains, FR's earnings covered fixed charges by higher levels. However, FR's fixed-charge coverage ratios, especially before the effects of gains, were lower than those of similarly rated real estate investment trusts (REITs) during that period.

On a risk-adjusted basis, Fitch believes FR's fixed charge coverage ratios during the 12 months ending March 31, 2007, are low for the rating category. This risk-adjusted earnings analysis incorporates Fitch's view that gains on sale of industrial product are somewhat contingent upon favorable market conditions.

Going forward, Fitch will analyze FR's earnings (including and excluding the effects of gains on sale) relative to fixed charges, as well as the company's risk-adjusted earnings in relation to fixed charges.

Fitch will also continue to monitor FR's dividend payout ratios, as in recent periods the company's net proceeds from asset sales have materially contributed to the company's ability to pay its common stock dividends.

The Stable Outlook reflects First Industrial's improved portfolio fundamentals. Since Fitch's previous review of FR in May 2006, FR's occupancies have risen and rental rates have improved, contributing to positive same property net operating income (NOI) results. While Fitch acknowledges that FR has redefined its same store property pool to now consist of all 'operating' properties (as opposed to properties that were considered in-service), Fitch believes nevertheless that during the past year same property NOI performance has benefited the company's recurring EBITDA fixed-charge coverage ratios.

Fitch's Stable Outlook and/or existing ratings for First Industrial could come under pressure if earnings from operating properties relative to fixed charges decline materially. During the next 12 to 24 months, Fitch will also closely monitor the company's portfolio occupancy, financial flexibility, unencumbered asset coverage, and operating cash flow performance.

Headquartered in Chicago, First Industrial is a REIT that owns, manages, acquires, sells, develops, and redevelops industrial real estate. As of March 31, 2007, the company owned 891 properties (including 17 under development), totaling 70.6 million square feet. As of March 31, 2007, the company owned $3.2 billion in total book assets and had $1 billion in outstanding shareholders' equity.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.