10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2005
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from           to

Commission file number 333-21873

First Industrial, L.P.

(Exact Name of Registrant as Specified in its Charter)

Delaware	36-3924586
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer 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 þ          No o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes þ          No o

FIRST INDUSTRIAL, L.P.

Form 10-Q

For the Period Ended June 30, 2005

INDEX

		Page
PART I: FINANCIAL INFORMATION
Item 1.	Financial Statements		2
	Consolidated Balance Sheets as of June 30, 2005 and December 31, 2004		2
	Consolidated Statements of Operations and Comprehensive Income for the Three and Six Months Ended June 30, 2005 and June 30, 2004 (Restated)		3
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2005, and June 30, 2004 (Restated)		5
	Notes to Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		35
Item 4.	Controls and Procedures		35
PART II: OTHER INFORMATION
Item 1.	Legal Proceedings		36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		36
Item 3.	Defaults Upon Senior Securities		36
Item 4.	Submission of Matters to a Vote of Security Holders		36
Item 5.	Other Information		36
Item 6.	Exhibits		36
SIGNATURE			38
EXHIBIT INDEX			39
Certification of Principal Executive Officer
Certification of Principal Financial Officer
Certification of the Principal Executive Officer and the Principal Financial Officer

1

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

FIRST INDUSTRIAL, L.P.

CONSOLIDATED BALANCE SHEETS

				June 30,			December 31,
				2005			2004
				(Unaudited)
				(Dollars in Thousands)
ASSETS
Assets:
	Investment in Real Estate:
		Land		$	425,662		$	423,836
		Buildings and Improvements			2,066,763			2,039,486
		Construction in Progress			53,108			23,092
		Less: Accumulated Depreciation			(332,544	)		(321,003	)
			Net Investment in Real Estate		2,212,989			2,165,411
	Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $1,390 and $2,908 at June 30, 2005 and December 31, 2004, respectively				52,641			50,286
	Investments in and Advances to Other Real Estate Partnerships				331,252			339,967
	Cash and Cash Equivalents				908			3,069
	Restricted Cash				—			25
	Tenant Accounts Receivable, Net				6,364			6,509
	Investments in Joint Ventures				13,645			5,489
	Deferred Rent Receivable				18,158			15,928
	Deferred Financing Costs, Net				10,667			11,569
	Prepaid Expenses and Other Assets, Net				121,704			119,430
			Total Assets	$	2,768,328		$	2,717,683
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
	Mortgage Loans Payable, Net			$	56,307		$	57,449
	Senior Unsecured Debt, Net				1,348,197			1,347,524
	Unsecured Line of Credit				229,500			167,500
	Mortgage Loan Payable and Accrued Interest on Real Estate Held For Sale				13,732			—
	Accounts Payable, Accrued Expenses and Other Liabilities, Net				70,097			73,560
	Rents Received in Advance and Security Deposits				26,025			26,441
	Distributions Payable				35,717			35,487
			Total Liabilities		1,779,575			1,707,961
Commitments and Contingencies					—			—
Partners’ Capital:
	General Partner Preferred Units (20,750 units issued and outstanding at June 30, 2005 and December 31, 2004, respectively)				240,697			240,697
	General Partner Units (43,171,212 and 42,834,091 units issued and outstanding at June 30, 2005 and December 31, 2004, respectively)				623,642			638,727
	Unamortized Value of General Partnership Restricted Units				(21,484	)		(19,611	)
	Limited Partners’ Units (6,448,857 and 6,455,914 units issued and outstanding at June 30, 2005 and December 31, 2004, respectively)				150,145			153,609
	Accumulated Other Comprehensive Loss				(4,247	)		(3,700	)
			Total Partners’ Capital		988,753			1,009,722
			Total Liabilities and Partners’ Capital	$	2,768,328		$	2,717,683

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

2

FIRST INDUSTRIAL, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

												Restated
						Restated
									Six Months			Six Months
			Three Months			Three Months			Ended			Ended
			Ended			Ended			June 30,			June 30,
			June 30, 2005			June 30, 2004			2005			2004
			(Dollars in Thousands, except per Unit data)
			(Unaudited)
Revenues:
	Rental Income		$	55,501		$	48,065		$	108,906		$	95,942
	Tenant Recoveries and Other Income			19,331			16,013			40,136			34,089
		Total Revenues		74,832			64,078			149,042			130,031
Expenses:
	Real Estate Taxes			11,790			9,985			23,313			20,193
	Repairs and Maintenance			5,391			4,975			12,066			10,659
	Property Management			4,153			3,249			7,765			5,457
	Utilities			2,433			1,943			5,124			4,403
	Insurance			528			691			989			1,339
	Other			2,007			1,133			3,249			2,701
	General and Administrative			11,335			9,631			22,957			16,698
	Amortization of Deferred Financing Costs			509			463			1,017			908
	Depreciation and Other Amortization			25,099			19,879			48,775			37,385
		Total Expenses		63,245			51,949			125,255			99,743
Other Income/ Expense:
	Interest Income			420			556			717			1,089
	Interest Expense			(25,847	)		(23,878	)		(51,606	)		(47,467	)
	Mark-to-Market/ Gain on Settlement of Interest Rate Protection Agreement			(1,404	)		1,450			(463	)		1,450
		Total Other Income/ Expense		(26,831	)		(21,872	)		(51,352	)		(44,928	)
Loss from Continuing Operations Before Equity in (Loss) Income in Joint Ventures, Equity in Income of Other Real Estate Partnerships and Income Tax Benefit				(15,244	)		(9,743	)		(27,565	)		(14,640	)
Equity in (Loss) Income of Joint Ventures				(98	)		301			(220	)		546
Equity in Income of Other Real Estate Partnerships				9,786			7,191			16,529			14,572
Income Tax Benefit				1,871			1,453			3,837			2,262
(Loss) Income from Continuing Operations				(3,685	)		(798	)		(7,419	)		2,740
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $28,426 and $27,089 for the Three Months ended June 30, 2005 and 2004, respectively, $40,139 and $51,748 for the Six Months ended June 30, 2005 and 2004, respectively,)				29,089			30,169			42,213			58,777
Provision for Income Taxes Allocable to Discontinued Operations (Including $2,611 and $1,565 for the Three Months ended June 30, 2005 and 2004, respectively, and $5,782 and $3,675 for the Six Months ended June 30, 2005 and 2004, respectively, allocable to Gain on Sale of Real Estate)				(2,527	)		(2,110	)		(6,188	)		(4,685	)
Income Before Gain on Sale of Real Estate				22,877			27,261			28,606			56,832
Gain on Sale of Real Estate				3,180			1,878			23,851			4,993
Provision for Income Taxes Allocable to Gain on Sale of Real Estate				(1,252	)		(710	)		(8,977	)		(1,424	)
Net Income				24,805			28,429			43,480			60,401
Less: Preferred Unit Distributions				(2,310	)		(4,790	)		(4,620	)		(9,834	)
Less: Redemption of Preferred Units				—			(7,359	)		—			(7,359	)
Net Income Available to Unitholders			$	22,495		$	16,280		$	38,860		$	43,208
Basic Earnings Per Unit:
	(Loss) Income from Continuing Operations		$	(0.08	)	$	(0.25	)	$	0.06		$	(0.23	)
	Net Income Available to Unitholders		$	0.46		$	0.35		$	0.80		$	0.93
Diluted Earnings Per Unit:
	(Loss) Income from Continuing Operations		$	(0.08	)	$	(0.25	)	$	0.06		$	(0.23	)
	Net Income Available to Unitholders		$	0.46		$	0.35		$	0.79		$	0.93
Distributions declared per Common Unit outstanding				0.695			0.685			1.390			1.370
Net Income			$	24,805		$	28,429		$	43,480		$	60,401
Other Comprehensive (Loss) Income:
	Settlement of Interest Rate Protection Agreements			—			6,657			—			6,657
	Mark-to-Market of Interest Rate Protection Agreements and Interest Rate Swap Agreements			—			(388	)		—			(7	)
	Amortization of Interest Rate Protection Agreements			(273	)		(1	)		(547	)		53
Comprehensive Income			$	24,532		$	34,697		$	42,933		$	67,104

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

3

FIRST INDUSTRIAL, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

							Restated
				Six Months			Six Months
				Ended			Ended
				June 30,			June 30,
				2005			2004
				(Dollars in thousands)
				(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net Income			$	43,480		$	60,401
	Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
		Depreciation			39,530			33,584
		Amortization of Deferred Financing Costs			1,017			908
		Other Amortization			14,112			10,571
		Provision for Bad Debt			860			1,217
		Equity in Loss (Income) of Joint Ventures			220			(546	)
		Distributions from Joint Ventures			—			546
		Gain on Sale of Real Estate			(63,990	)		(56,741	)
		Mark to Market of Interest Rate Protection Agreement			463			—
		Equity in Income of Other Real Estate Partnerships			(16,529	)		(14,572	)
		Distributions from Investment in Other Real Estate Partnerships			16,529			14,572
		Increase in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net			(8,930	)		(15,132	)
		Increase in Deferred Rent Receivable			(2,857	)		(2,120	)
		Decrease in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits			(2,877	)		(18,158	)
			Net Cash Provided by Operating Activities		21,028			14,530
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of and Additions to Investment in Real Estate				(275,706	)		(183,479	)
	Net Proceeds from Sales of Investments in Real Estate				236,149			184,726
	Investments in and Advances to Other Real Estate Partnerships				(25,504	)		(38,857	)
	Distributions from Other Real Estate Partnerships in Excess of Equity in Income				34,219			39,241
	Contributions to and Investments in Joint Ventures				(11,191	)		(4,020	)
	Distributions from Joint Ventures				402			620
	Repayment of Mortgage Loans Receivable				26,265			13,474
	Decrease (Increase) in Restricted Cash				25			(7,993	)
			Net Cash (Used In) Provided by Investing Activities		(15,341	)		3,712
CASH FLOWS FROM FINANCING ACTIVITIES:
	Unit Contributions				6,479			31,967
	Unit Distributions				(68,594	)		(64,613	)
	Proceeds from the Sale of Preferred Units				—			200,000
	Preferred Unit Offering Costs				—			(5,576	)
	Redemption of Preferred Units				—			(200,000	)
	Repurchase of Restricted Units				(3,262	)		(3,468	)
	Proceeds from Mortgage Loan Payable				1,167			—
	Preferred Unit Distributions				(4,620	)		(9,075	)
	Proceeds from Senior Unsecured Debt				—			134,496
	Other Proceeds from Senior Unsecured Debt				—			6,657
	Repayments on Mortgage Loans Payable				(902	)		(577	)
	Proceeds from Unsecured Line of Credit				153,500			312,000
	Repayments on Unsecured Line of Credit				(91,500	)		(423,900	)
	Cash Book Overdraft.				—			7,607
	Debt Issuance Costs				(116	)		(3,760	)
			Net Cash Used in Financing Activities		(7,848	)		(18,242	)
Net Decrease in Cash and Cash Equivalents					(2,161	)		—
Cash and Cash Equivalents, Beginning of Period					3,069			—
Cash and Cash Equivalents, End of Period				$	908		$	—

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

4

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per Unit data)

(Unaudited)

1. Organization and Formation of Partnership

      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 is First Industrial Realty Trust, Inc. (the “Company”) with an approximate 87.0% and 86.3% ownership interest at June 30, 2005 and June 30, 2004, respectively. The limited partners of the Operating Partnership own approximately a 13.0% and 13.7% interest in the Operating Partnership at June 30, 2005 and June 30, 2004, respectively. The Company also owns a preferred general partnership interest in the Operating Partnership with an aggregate liquidation priority of $125,000. 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 Operating Partnership is the sole member of several limited liability companies (the “L.L.C.s”), the sole stockholder of First Industrial Development Services, Inc., and holds at least a 99% limited partnership interest in each of eight limited partnerships (together, the “Other Real Estate Partnerships”).

      The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships 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 financial statements of the Operating Partnership report the L.L.C.s and First Industrial Development Services, Inc. (the “Consolidated Operating Partnership”) on a consolidated basis. As of June 30, 2005, the Consolidated Operating Partnership owned 796 industrial properties (inclusive of developments in process) containing an aggregate of approximately 63.0 million square feet of gross leasable area (“GLA”). On a combined basis, as of June 30, 2005, the Other Real Estate Partnerships owned 100 industrial properties containing an aggregate of approximately 9.5 million square feet of GLA.

      On March 21, 2005, the Operating Partnership, through entities it, directly or indirectly, wholly-owns entered into a joint venture arrangement with an institutional investor to invest in industrial properties (the “March 2005 Joint Venture”). The Operating Partnership, through entities it, directly or indirectly, wholly-owns, owns a ten percent equity interest in and provides property management, leasing, development, disposition and portfolio management services to the March 2005 Joint Venture.

      The Operating Partnership, through separate wholly-owned limited liability companies of which it is the sole member, also owns minority equity interests in, and provides asset and property management services to, two other joint ventures which invest in industrial properties (the “September 1998 Joint Venture” and the “May 2003 Joint Venture”). The Operating Partnership, through separate wholly-owned limited liability companies of which it is the sole member, also owned a minority interest in and provided property management services to another joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the March 2005 Joint Venture, the September 1998 Joint Venture and the May 2003 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties.

      The Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting. The operating data of the Other Real Estate Partnerships and the Joint Ventures is not consolidated with that of the Consolidated Operating Partnership as presented herein.

5

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2. Summary of Significant Accounting Policies

      The accompanying unaudited interim financial statements have been prepared in accordance with the accounting policies described in the financial statements and related notes included in the Consolidated Operating Partnership’s 2004 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, 2004 audited financial statements included in the Consolidated Operating Partnership’s 2004 Form 10-K and present interim disclosures as required by the Securities and Exchange Commission.

      In order to conform with generally accepted accounting principles, management, in preparation of the Consolidated 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 as of June 30, 2005 and December 31, 2004, and the reported amounts of revenues and expenses for each of the six and three months ended June 30, 2005 and June 30, 2004. Actual results could differ from those estimates.

      In the opinion of management, the accompanying unaudited interim financial statements reflect all adjustments necessary for a fair statement of the financial position of the Consolidated Operating Partnership as of June 30, 2005 and December 31, 2004 and the results of its operations and comprehensive income for each of the six and three months ended June 30, 2005 and June 30, 2004, and its cash flows for the six months ended June 30, 2005 and June 30, 2004, and all adjustments are of a normal recurring nature.

Restatement:

      In the consolidated statement of operations for the six and three months ended June 30, 2004 and cash flows for the six months ended June 30, 2004 presented in its Form 10-Q/ A filed November 9, 2004, the Consolidated Operating Partnership allocated its entire tax provision/benefit to income from discontinued operations. The Consolidated Operating Partnership has determined that its tax provision/benefit should be allocated between income from continuing operations, income from discontinued operations and gain on sale of real estate. The Consolidated Operating Partnership has restated its consolidated statement of operations for the six and three months ended June 30, 2004 and cash flows for the six months ended June 30, 2004 to reflect this new allocation in this Form 10-Q. See Note 12 for further disclosure about the restatement.

Income Taxes:

      In accordance with partnership taxation, each of the partners is responsible for reporting their share of taxable income or loss. Accordingly, a provision has been made for federal income taxes in the accompanying consolidated financial statements only as it relates to the activities conducted in its taxable REIT subsidiary, First Industrial Development Services, Inc. which has been accounted for under Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“FAS 109”). Additionally, the Operating Partnership and certain of its subsidiaries are subject to certain state and local income taxes; these taxes are included within the provision for income taxes in the accompanying consolidated financial statements. In accordance with FAS 109, the total benefit/expense has been separately allocated to income from continuing operations, income from discontinued operations and gain on sale of real estate.

6

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stock Incentive Plan:

      Prior to January 1, 2003, the Consolidated Operating Partnership accounted for its stock incentive plans under the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Under APB 25, compensation expense is not recognized for options issued in which the strike price is equal to the fair value of the Company’s stock on the date of grant. On January 1, 2003, the Consolidated Operating Partnership adopted the fair value recognition provisions of the FASB Statement of Financial Accounting Standards No. 123, “Accounting for Stock Based Compensation” (“FAS 123”), as amended by Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure”. The Consolidated Operating Partnership is applying the fair value recognition provisions of FAS 123 prospectively to all employee option awards granted after December 31, 2002. The Consolidated Operating Partnership has not awarded options to employees or directors of the Company during the six months ended June 30, 2005 and June 30, 2004, and therefore no stock-based employee compensation expense is included in net income available to unitholders related to the fair value recognition provisions of FAS 123.

      The following table illustrates the pro forma effect on net income and earnings per unit as if the fair value recognition provisions of FAS 123 had been applied to all outstanding and unvested option awards in each period presented:

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2005			2004			2005			2004
Net Income Available to Unitholders — as reported	$	22,495		$	16,280		$	38,860		$	43,208
Less: Total Stock-Based Employee Compensation Expense Determined Under the Fair Value Method		(19	)		(120	)		(65	)		(241	)
Net Income Available to Unitholders — pro forma	$	22,476		$	16,160		$	38,795		$	42,967
Net Income Available to Unitholders per Share — as reported — Basic	$	0.46		$	0.35		$	0.80		$	0.93
Net Income Available to Unitholders per Share — pro forma — Basic	$	0.46		$	0.34		$	0.80		$	0.92
Net Income Available to Unitholders per Share — as reported — Diluted	$	0.46		$	0.35		$	0.79		$	0.93
Net Income Available to Unitholders per Share — pro forma — Diluted	$	0.46		$	0.34		$	0.79		$	0.92

Discontinued Operations:

      On January 1, 2002, the Consolidated Operating Partnership adopted the FASB Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”). FAS 144 addresses financial accounting and reporting for the disposal of long-lived assets. FAS 144 requires that the results of operations and gains or losses on the sale of property be presented in discontinued operations if both of the following criteria are met: (a) the operations and cash flows of the property have been (or will be) eliminated from the ongoing operations of the Consolidated Operating Partnership as a result of the disposal transaction and (b) the Consolidated Operating Partnership will not have any significant continuing involvement in the operations of the property after the disposal transaction. FAS 144 also requires prior period results of operations for these properties to be restated and presented in discontinued operations in prior consolidated statements of operations.

7

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Reclassification:

      Certain 2004 items have been reclassified to conform to 2005 presentation.

Recent Accounting Pronouncements:

      In December, 2004, the FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29” (“FAS 153”). The amendments made by FAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” FAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Operating Partnership does not believe that the adoption of FAS 153 will have a material effect on the Operating Partnership’s consolidated financial statements.

      In December, 2004, the FASB issued Statement of Financial Accounting Standards No. 123: (Revised 2004) — Share-Based Payment (“FAS 123R”). FAS 123R replaces FAS 123, which the Company adopted on January 1, 2003. FAS 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements and measured based on the fair value of the equity or liability instruments issued. FAS 123R is effective as of the first interim or annual reporting period that begins after December, 2005. The Operating Partnership does not believe that the adoption of FAS 123R will have a material effect on the Operating Partnership’s consolidated financial statements.

      In May, 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections” (“FAS 154”) which supersedes APB Opinion No. 20, “Accounting Changes” and Statement of Financial Accounting Standards No. 3, “Reporting Accounting Changes in Interim Financial Statements.” FAS 154 changes the requirements for the accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. FAS 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.

      In June, 2005, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regarding EITF 04-05, “Investor’s Accounting for an Investment in a Limited Partnership When the Investor is the Sole General Partner and the Limited Partners Have Certain Rights.” The conclusion provides a framework for addressing the question of when a sole general partner, as defined in EITF 04-05, should consolidate a limited partnership. The EITF has concluded that the general partner of a limited partnership should consolidate a limited partnership unless (1) the limited partners possess substantive kick-out rights as defined in paragraph B20 of FIN 46R, or (2) the limited partners possess substantive participating rights similar to the rights described in Issue 96-16, “Investor’s Accounting for an Investee When the Investor has a Majority of the Voting Interest by the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights.” In addition, the EITF concluded that the guidance should be expanded to include all limited partnerships, including those with multiple general partners. The Consolidated Operating Partnership will adopt EITF 04-05 as of December 31, 2005. The Consolidated Operating Partnership is currently assessing all of its investments in unconsolidated real estate joint ventures to determine the impact, if any, the adoption of EITF 04-05 will have on results of operations, financial position or liquidity.

8

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

3. Investments in and Advances to Other Real Estate Partnerships

      The investments in and advances to Other Real Estate Partnerships reflects the Operating Partnership’s limited partnership equity interests in the entities referred to in Note 1 to these financial statements.

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

      Condensed Combined Balance Sheets:

			June 30,		December 31,
			2005		2004
ASSETS
Assets:
	Investment in Real Estate, Net		$	318,326	$	312,679
	Other Assets, Net			28,255		39,640
		Total Assets	$	346,581	$	352,319
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
	Mortgage Loans Payable		$	2,419	$	2,456
	Other Liabilities			9,981		6,947
		Total Liabilities		12,400		9,403
	Partners’ Capital			334,181		342,916
		Total Liabilities and Partners’ Capital	$	346,581	$	352,319

      Condensed Combined Statements of Operations:

							Six Months			Six Months
	Three Months			Three Months			Ended			Ended
	Ended			Ended			June 30,			June 30,
	June 30, 2005			June 30, 2004			2005			2004
Total Revenues, Including Interest Income	$	11,608		$	10,360		$	23,310		$	21,158
Property Expenses		(3,674	)		(3,265	)		(7,890	)		(6,953	)
Interest Expense		(43	)		(44	)		(87	)		(89	)
Amortization of Deferred Financing Costs		(1	)		(1	)		(2	)		(2	)
Depreciation and Other Amortization		(3,570	)		(3,018	)		(7,065	)		(6,024	)
Gain on Sale of Real Estate		52			1,459			865			1,590
Income from Discontinued Operations (Including Gain on Sale of Real Estate of $5,264 and $1,184 for the Three Months Ended June 30, 2005 and 2004, respectively, and $7,047 and $3,736 for the Six Months Ended June 30, 2005 and 2004, respectively)		5,492			1,755			7,534			5,017
Net Income	$	9,864		$	7,246		$	16,665		$	14,697

9

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

4. Investments in Joint Ventures

      As of June 30, 2005, the September 1998 Joint Venture owned 41 industrial properties comprising approximately 1.3 million square feet of GLA, the May 2003 Joint Venture owned 10 industrial properties comprising approximately 4.3 million square feet of GLA, and the March 2005 Joint Venture owned 11 industrial properties comprising approximately 2.1 million square feet of GLA and several land parcels. During the six months ended June 30, 2005, the Operating Partnership sold seven industrial properties and several land parcels to the March 2005 Joint Venture at a total sales price of $89,023.

      The Consolidated Operating Partnership deferred 15% of the gain on sale of real estate and acquisition fees and 10% of the gain on sale of real estate, which is equal to the Consolidated Operating Partnership’s economic interests in the May 2003 Joint Venture and the March 2005 Joint Venture, respectively. Total deferrals were $2,410 for the six months ended June 30, 2005. The deferrals reduce the Consolidated Operating Partnership’s investment in the joint ventures and are amortized into income over the life of the properties, generally 40 to 45 years. If either Joint Venture sells any of these properties to a third party, the Consolidated Operating Partnership will recognize the unamortized portion of the deferred gain and fees as equity in income of joint ventures. If the Consolidated Operating Partnership repurchases any of these properties, the deferrals will be netted against the basis of the property purchased (which reduces the basis of the property).

      At June 30, 2005 and December 31, 2004, the Consolidated Operating Partnership has a receivable from the Joint Ventures of $928 and $1,261, respectively, which mainly relates to borrowings made, as allowed by the partnership agreement, by the September 1998 Joint Venture from the Consolidated Operating Partnership. During the six months ended June 30, 2005 and 2004, the Consolidated Operating Partnership invested the following amounts in its joint ventures as well as received distributions and recognized fees from acquisition, disposition, property management, development and asset management services in the following amounts:

	For the Six Months
	Ended
	June 30,		June 30,
	2005		2004
Contributions	$	10,385	$	2,525
Distributions	$	402	$	1,166
Fees	$	2,661	$	1,811

5. Mortgage Loans Payable, Net, Senior Unsecured Debt, Net and Unsecured Line of Credit

      On January 12, 2005, in conjunction with the acquisition of a parcel of land, the seller provided the Operating Partnership a mortgage loan in the amount of $1,167 (the “Acquisition Mortgage Loan XV”). The Acquisition Mortgage Loan XV is collateralized by a land parcel in Lebanon, TN, does not require principal payments prior to maturity on January 12, 2006 and has a 0% interest rate. Since the Acquisition Mortgage XV is non-interest bearing, a discount should be applied with an offsetting amount allocated to the basis of the land. The Consolidated Operating Partnership has concluded that the discount is not material and has not accounted for the discount or the land basis adjustment.

      On March 31, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $1,977 (the “Acquisition Mortgage Loan XVI”). The Acquisition Mortgage Loan XVI is collateralized by one property in New Hope, MN, bears interest at a fixed rate of 5.50% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan XVI matures on September 30, 2024. In conjunction with the assumption of the Acquisition Mortgage Loan XVI, the Consolidated Operating

10

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Partnership recorded a premium in the amount of $32 which will be amortized as an adjustment to interest expense through March 31, 2009. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVI is 5.30%. The Acquisition Mortgage Loan XVI may be prepaid on April 1, 2009 without incurring a prepayment fee.

      On June 27, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $3,056 (the “Acquisition Mortgage Loan XVII”). The Acquisition Mortgage Loan XVII is collateralized by one property in Villa Rica, GA, bears interest at a fixed rate of 7.38% and provides for monthly principal and interest payments based on a 15-year amortization schedule. The Acquisition Mortgage Loan XVII matures on May 1, 2016. In conjunction with the assumption of the Acquisition Mortgage Loan XVII, the Consolidated Operating Partnership recorded a premium in the amount of $258 which will be amortized as an adjustment to interest expense through May 1, 2016. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVII is 5.70%.

      On June 30, 2005, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $6,513 (the “Acquisition Mortgage Loan XVIII”). The Acquisition Mortgage Loan XVIII is collateralized by one property in Hammonton, NJ, bears interest at a fixed rate of 7.58% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan XVIII matures on March 1, 2011. In conjunction with the assumption of the Acquisition Mortgage Loan XVIII, the Consolidated Operating Partnership recorded a premium in the amount of $749 which will be amortized as an adjustment to interest expense through November 30, 2010. Including the impact of the premium recorded, the Consolidated Operating Partnership’s effective interest rate on the Acquisition Mortgage Loan XVIII is 4.93%. The Acquisition Mortgage Loan XVIII may be prepaid on December 1, 2010 without incurring a prepayment fee.

      The following table discloses certain information regarding the Consolidated Operating Partnership’s mortgage loans payable, senior unsecured debt and unsecured line of credit:

							Accrued Interest					Interest
	Outstanding Balance at						Payable at					Rate at
	June 30,			December 31,			June 30,			December 31,		June 30,			Maturity
	2005			2004			2005			2004		2005			Date
Mortgage Loans Payable, Net
Assumed Loan I	$	2,624		$	2,874		$	—		$	22		9.250	%		09/01/09
Assumed Loan II		1,910			1,995			—			15		9.250	%		01/01/13
Acquisition Mortgage Loan IV		1,987			2,037			15			15		8.950	%		10/01/06
Acquisition Mortgage Loan VIII		5,386			5,461			37			38		8.260	%		12/01/19
Acquisition Mortgage Loan IX		5,586			5,664			38			39		8.260	%		12/01/19
Acquisition Mortgage Loan X		15,992	(1)		16,251	(1)		96			99		8.250	%		12/01/10
Acquisition Mortgage Loan XII		2,534	(1)		2,565	(1)		14			15		7.540	%		01/01/12
Acquisition Mortgage Loan XIII ..		13,691	(1,3)		13,862	(1)		41	(3)		42		5.600	%		11/10/12
Acquisition Mortgage Loan XIV		6,568	(1)		6,740	(1)		35			13		6.940	%		07/01/09
Acquisition Mortgage Loan XV		1,167			—			—			—		0.000	%		01/12/06
Acquisition Mortgage Loan XVI		1,993	(1)		—			9			—		5.500	%		09/30/24
Acquisition Mortgage Loan XVII		3,314	(1)		—			3			—		7.375	%		05/01/16
Acquisition Mortgage Loan XVIII		7,244	(1)		—			—			—		7.580	%		03/01/11
Total	$	69,996		$	57,449		$	288		$	298

11

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

							Accrued Interest				Interest
	Outstanding Balance at						Payable at				Rate at
	June 30,			December 31,			June 30,		December 31,		June 30,			Maturity
	2005			2004			2005		2004		2005			Date
Senior Unsecured Debt, Net
2005 Notes	$	50,000		$	50,000		$	383	$	383		6.900	%		11/21/05
2006 Notes		150,000			150,000			875		875		7.000	%		12/01/06
2007 Notes		149,990	(2)		149,988	(2)		1,456		1,456		7.600	%		05/15/07
2017 Notes		99,881	(2)		99,876	(2)		625		625		7.500	%		12/01/17
2027 Notes		15,054	(2)		15,053	(2)		138		138		7.150	%		05/15/27
2028 Notes		199,819	(2)		199,815	(2)		7,009		7,009		7.600	%		07/15/28
2011 Notes		199,654	(2)		199,624	(2)		4,343		4,343		7.375	%		03/15/11
2012 Notes		199,063	(2)		198,994	(2)		2,903		2,903		6.875	%		04/15/12
2032 Notes		49,402	(2)		49,390	(2)		818		818		7.750	%		04/15/32
2009 Notes		124,828	(2)		124,806	(2)		292		292		5.250	%		06/15/09
2014 Notes		110,506	(2)		109,978	(2)		669		669		6.420	%		06/01/14
Total	$	1,348,197		$	1,347,524		$	19,511	$	19,511
Unsecured Line of Credit
Unsecured Line of Credit	$	229,500		$	167,500		$	1,028	$	549		3.959	%		09/28/07

(1)	At June 30, 2005, the Acquisition Mortgage Loan X, the Acquisition Mortgage Loan XII, the Acquisition Mortgage Loan XIII, the Acquisition Mortgage Loan XIV, the Acquisition Mortgage Loan XVI, the Acquisition Mortgage Loan XVII and the Acquisition Mortgage Loan XVIII includes unamortized premiums of $2,100, $248, $424, $493, $30, $258 and $749, respectively. At December 31, 2004, the Acquisition Mortgage Loan X, the Acquisition Mortgage Loan XII, the Acquisition Mortgage Loan XIII, and the Acquisition Mortgage Loan XIV include unamortized premiums of $2,291, $267, $453 and $553, respectively.
(2)	At June 30, 2005, the 2007 Notes, 2017 Notes, 2027 Notes, 2028 Notes, 2011 Notes, 2012 Notes, 2032 Notes, 2009 Notes and the 2014 Notes are net of unamortized discounts of $10, $119, $16, $181, $346, $937, $598, $172 and $14,494, respectively. At December 31, 2004, the 2007 Notes, 2017 Notes, 2027 Notes, 2028 Notes, 2011 Notes, 2012 Notes, 2032 Notes, 2009 Notes and the 2014 Notes are net of unamortized discounts of $13, $124, $16, $185, $376, $1,006, $610, $194 and $15,023, respectively.
(3)	At June 30, 2005 the outstanding balance of Acquisition Mortgage Loan XIII and the accrued interest are classified as Mortgage Loan Payable and Accrued Interest on Real Estate Held for Sale.

12

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following is a schedule of the stated maturities and scheduled principal payments of the mortgage loans, senior unsecured debt and unsecured line of credit, exclusive of premiums and discounts, for the next five years ending December 31, and thereafter:

	Amount
Remainder of 2005	$	51,175
2006		155,406
2007		381,992
2008		2,692
2009		132,510
Thereafter		936,489
Total	$	1,660,264

Other Comprehensive Income:

      In conjunction with the prior issuances of senior unsecured debt, the Consolidated Operating Partnership entered into interest rate protection agreements to fix the interest rate on anticipated offerings of senior unsecured debt (the “Interest Rate Protection Agreements”). In the next 12 months, the Consolidated Operating Partnership will amortize approximately $1,068 into net income by reducing interest expense.

Derivatives:

      On January 13, 2005, the Consolidated Operating Partnership, through First Industrial Development Services, Inc., entered into an interest rate protection agreement which hedged the change in value of a build to suit development project the Consolidated Operating Partnership is in the process of constructing. This interest rate protection agreement has a notional value of $50,000, is based on the five year treasury, has a strike rate of 3.936% and settles on October 4, 2005. Per SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”), fair value and cash flow hedge accounting for hedges of non-financial assets and liabilities is limited to hedges of the risk of changes in the market price of the entire hedged item because changes in the price of an ingredient or component of a non-financial item generally do not have a predictable, separately measurable effect on the price of the item. Since the interest rate protection agreement is hedging a component of the change in value of the build to suit development, the interest rate protection agreement does not qualify for hedge accounting and the change in value of the interest rate protection agreement will be recognized immediately in net income as opposed to other comprehensive income. Accordingly, the Consolidated Operating Partnership recognized $463 in net loss from the mark-to-market of the interest rate protection agreement for the six months ended June 30, 2005.

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

13

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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, 2005, certain employees exercised 241,964 non-qualified employee stock options. Net proceeds to the Company were approximately $6,479. The Company contributed the net proceeds to the Consolidated Operating Partnership and the Consolidated Operating Partnership, through the Operating Partnership, issued Units to the Company in the same amount.

      During the six months ended June 30, 2005, the Company awarded 189,878 shares of restricted common stock to certain employees of the Company and 2,101 shares of restricted common stock to certain Directors of the Company. The Operating Partnership issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $8,055 on the date of grant. The restricted common stock vests over periods from one to ten years. Compensation expense will be charged to earnings over the respective vesting period.

      During the six months ended June 30, 2005, the Operating Partnership issued 37,587 Units having an aggregate market value of approximately $1,507 in exchange for property.

Distributions:

      On January 24, 2005, the Operating Partnership paid a fourth quarter 2004 distribution of $0.6950 per Unit, totaling approximately $34,255. On April 18, 2005, the Operating Partnership paid a first quarter 2005 distribution of $0.6950 per Unit, totaling approximately $34,339.

      On March 31, 2005, the Operating Partnership paid first quarter 2005 distributions of $53.906 per Unit on its 8.625% Series C Cumulative Preferred Units (the “Series C Preferred Units”), a semi-annual distribution of $3,118.00 per Unit on its Series F Preferred Units and a semi-annual distribution of $3,618.00 per Unit on its Series G Preferred Units. The preferred unit distributions paid on March 31, 2005, totaled approximately $3,542. On June 30, 2005, the Operating Partnership paid second quarter 2005 distributions of $53.906 per Unit Series C Preferred Units, totaling approximately $1,078 and accrued dividends of $780 on its Series F Preferred Units and $452 on its Series G Preferred Units.

7. Acquisition of Real Estate

      During the six months ended June 30, 2005, the Consolidated Operating Partnership acquired 46 industrial properties comprising approximately 6.5 million square feet of GLA and several land parcels. The purchase price for 45 industrial properties totaled approximately $215,282, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. Additionally, one industrial property was acquired through foreclosure due to a default on a mortgage loan receivable.

8. Sale of Real Estate, Real Estate Held for Sale and Discontinued Operations

      During the six months ended June 30, 2005, the Consolidated Operating Partnership sold 34 industrial properties comprising approximately 4.8 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 34 industrial properties and several land parcels were approximately $269,032. The gain on sale of real estate, net of income taxes was approximately $49,231. Twenty-six of the 34 sold industrial properties meet the criteria established by FAS 144 to be included in discontinued operations. Therefore, in accordance with FAS 144, the results of operations and gain on sale of real estate, net of income taxes for the 26 sold industrial properties that meet the criteria established by FAS 144 are included in discontinued operations. The results of operations and gain on sale of real estate,

14

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

net of income taxes for the eight industrial properties and several land parcels that do not meet the criteria established by FAS 144 are included in continuing operations.

      At June 30, 2005, the Consolidated Operating Partnership had 10 industrial properties comprising approximately 1.3 million square feet of GLA held for sale. In accordance with FAS 144, the results of operations of the 10 industrial properties held for sale at June 30, 2005 are included in discontinued operations. There can be no assurance that such industrial properties held for sale will be sold.

      Income from discontinued operations for the six months ended June 30, 2005 reflects the results of operations and gain on sale of real estate, net of income taxes of 26 industrial properties that were sold during the six months ended June 30, 2005 as well as the results of operations of 10 industrial properties held for sale at June 30, 2005.

      Income from discontinued operations for the six months ended June 30, 2004 reflects the results of operations of 26 industrial properties that were sold during the six months ended June 30, 2005, 86 industrial properties that were sold during the year ended December 31, 2004, 10 industrial properties identified as held for sale at June 30, 2005, as well as the gain on sale of real estate from 47 industrial properties which were sold during the six months ended June 30, 2004.

      The following table discloses certain information regarding the industrial properties included in discontinued operations by the Consolidated Operating Partnership, for the three and six months ended June 30, 2005 and June 30, 2004.

										Restated
				Restated
							Six Months			Six Months
	Three Months			Three Months			Ended			Ended
	Ended			Ended			June 30,			June 30,
	June 30, 2005			June 30, 2004			2005			2004
Total Revenues	$	2,470		$	7,531		$	6,365		$	16,894
Operating Expenses		(1,014	)		(2,262	)		(2,322	)		(5,554	)
Depreciation and Amortization		(621	)		(2,125	)		(1,625	)		(4,183	)
Interest Expense		(172	)		(64	)		(344	)		(128	)
Provision for Income Taxes		84			(545	)		(406	)		(1,010	)
Gain on Sale of Real Estate		28,426			27,089			40,139			51,748
Provision for Income Taxes Allocable to Gain on Sale		(2,611	)		(1,565	)		(5,782	)		(3,675	)
Income from Discontinued Operations	$	26,562		$	28,059		$	36,025		$	54,092

15

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

9. Supplemental Information to Statement of Cash Flows

      Supplemental disclosure of cash flow information:

		Six Months Ended			Six Months Ended
		June 30, 2005			June 30, 2004
Interest paid, net of capitalized interest		$	51,481		$	47,419
	Interest capitalized	$	1,482		$	649
Supplemental schedule of non-cash investing and financing activities:
	Distribution payable on units	$	34,485		$	32,737
	Distribution payable on preferred units	$	1,232		$	759
Exchange of limited partnership units for general partnership units:
	Limited partnership units	$	(1,085	)	$	(3,948	)
	General partnership units		1,085			3,948
		$	—		$	—
In conjunction with the property and land acquisitions, the following liabilities were assumed:
	Accounts payable and accrued expenses	$	(1,630	)	$	—
	Issuance of Limited Partnership Units	$	(1,507	)	$	(599	)
	Mortgage Debt	$	(11,545	)	$	—
Foreclosed property acquisition and write-off of defaulted note receivable		$	3,870		$	—
Write-off of retired assets		$	19,318		$	—
In conjunction with certain property sales, the Operating Partnership provided seller financing:
	Notes Receivable	$	21,443		$	8,573

16

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10. Earnings Per Unit (“EPU”)

      The computation of basic and diluted EPU is presented below:

							Restated						Restated
				Three Months			Three Months			Six Months			Six Months
				Ended			Ended			Ended			Ended
				June 30,			June 30,			June 30,			June 30,
				2005			2004			2005			2004
Numerator:
	(Loss) Income from Continuing Operations			$	(3,685	)	$	(798	)	$	(7,419	)	$	2,740
	Gain On Sale of Real Estate, Net of Income Taxes				1,928			1,168			14,874			3,569
	Less: Preferred Unit Distributions				(2,310	)		(4,790	)		(4,620	)		(9,834	)
	Less: Redemption of Preferred Units				—			(7,359	)		—			(7,359	)
	(Loss) Income from Continuing Operations Available to Unitholders — For Basic and Diluted EPU				(4,067	)		(11,779	)		2,835			(10,884	)
	Discontinued Operations, Net of Income Taxes				26,562			28,059			36,025			54,092
	Net Income Available to Unitholders			$	22,495		$	16,280		$	38,860		$	43,208
Denominator:
	Weighted Average Units — Basic				48,759,271			46,908,514			48,692,754			46,568,519
		Effect of Dilutive Securities that Result in the Issuance of General Partner Units:
			Employee and Director Common Stock Options		—			—			167,336			—
			Employee and Director Shares of Restricted Stock		—			—			102,232			—
	Weighted Average Units Outstanding — Diluted				48,759,271			46,908,514			48,962,322			46,568,519
Basic EPU:
	(Loss) Income from Continuing Operations Available to Unitholders			$	(0.08	)	$	(0.25	)	$	0.06		$	(0.23	)
	Discontinued Operations, Net of Income Taxes			$	0.54		$	0.60		$	0.74		$	1.16
	Net Income Available to Unitholders			$	0.46		$	0.35		$	0.80		$	0.93
Diluted EPU:
	(Loss) Income from Continuing Operations Available to Unitholders			$	(0.08	)	$	(0.25	)	$	0.06		$	(0.23	)
	Discontinued Operations, Net of Income Taxes			$	0.54		$	0.60		$	0.74		$	1.16
	Net Income Available to Unitholders			$	0.46		$	0.35		$	0.79		$	0.93

      Weighted average units – diluted are the same as weighted average units — basic as the dilutive effect of stock options and restricted stock was excluded because its inclusion would have been anti-dilutive to the loss from continuing operations available to unitholders. The dilutive stock options excluded from the computation are 147,599 and 150,944, respectively, for the three months ended June 30, 2005 and 2004

17

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and 241,045 for the six months ended June 30, 2005. The dilutive restricted stock excluded from the computation are 97,495 and 96,241, respectively, for the three months ended June 30, 2005 and 2004 and 130,356 for the six months ended June 30, 2005.

11. Commitments and Contingencies

      In the normal course of business, the Consolidated 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 Consolidated Operating Partnership.

      The Consolidated Operating Partnership has committed to the construction of certain industrial properties totaling approximately 2.1 million square feet of GLA. The estimated total construction costs are approximately $143.3 million. Of this amount, approximately $68.4 million remains to be funded. There can be no assurance the actual completion cost will not exceed the estimated completion cost stated above.

      At June 30, 2005, the Consolidated Operating Partnership had 18 letters of credit outstanding in the aggregate amount of $10,115. These letters of credit expire between July 2005 and April 2007.

12. Restatement of Consolidated Statement of Operations

      In the consolidated statement of operations for the three and six months ended June 30, 2004 and cash flows for the six months ended June 30, 2004 presented in its Form 10-Q/ A filed November 9, 2004, the Consolidated Operating Partnership allocated its entire tax provision/benefit to income from discontinued operations. The Consolidated Operating Partnership has determined that its tax provision/benefit should be allocated between income from continuing operations, income from discontinued operations and gain on sale of real estate. The Consolidated Operating Partnership has restated its

18

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

consolidated statement of operations for the three and six months ended June 30, 2004 and cash flows for the six months ended June 30, 2004 to reflect this new allocation in this Form 10-Q.

		For the Three Months Ended June 30, 2004
		As Previously
		Reported on
		Form 10-Q/A			Restatement			Restated
		Filed			of Benefit			Amounts			Adjustment for			As Reported
		November 9,			(Expense) of			for 2004			Discontinued			on 2005
		2004			Income Tax			10-Q/A			Operations			10-Q
(Loss) Income from Continuing Operations Before Income Tax Benefit, Equity in Income of Joint Ventures and Equity in Income of Other Real Estate Partnerships		$	(7,525	)	$	—		$	(7,525	)	$	(2,218	)	$	(9,743	)
Income Tax Benefit			—			1,102			1,102			351			1,453
Equity in Income of Joint Ventures			301			—			301			—			301
Equity in Income of Other Real Estate Partnerships			7,191			—			7,191			—			7,191
(Loss) Income from Continuing Operations			(33	)		1,102			1,069			(1,867	)		(798	)
Income from Discontinued Operations			27,951			—			27,951			2,218			30,169
Income Tax Provision Allocable to Discontinued Operations			(1,367	)		(392	)		(1,759	)		(351	)		(2,110	)
Income Before Gain on Sale of Real Estate			26,551			710			27,261			—			27,261
Gain on Sale of Real Estate			1,878			—			1,878			—			1,878
Income Tax Provision Allocable to Gain on Sale of Real Estate			—			(710	)		(710	)		—			(710	)
Net Income			28,429			—			28,429			—			28,429
Less: Preferred Unit Distributions			(4,790	)		—			(4,790	)		—			(4,790	)
Less: Redemption of Preferred Units			(7,359	)		—			(7,359	)		—			(7,359	)
Net Income Available to Unitholders		$	16,280		$	—		$	16,280		$	—		$	16,280
Basic Earnings Per Unit:
	(Loss) Income from Continuing Operations	$	(0.22	)	$	0.01		$	(0.21	)	$	(0.04	)	$	(0.25	)
	Income (Loss) from Discontinued Operations	$	0.57		$	(0.01	)	$	0.56		$	0.04		$	0.60
	Net Income Available to Unitholders	$	0.35		$	—		$	0.35		$	—		$	0.35
Diluted Earnings Per Unit:
	(Loss) Income from Continuing Operations	$	(0.22	)	$	0.01		$	(0.21	)	$	(0.04	)	$	(0.25	)
	Income (Loss) from Discontinued Operations	$	0.56		$	(0.01	)	$	0.56		$	0.04		$	0.60
	Net Income Available to Unitholders	$	0.35		$	—		$	0.35		$	—		$	0.35

19

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

		For the Six Months Ended June 30, 2004
		As
		Previously
		Reported on
		Form 10-Q/A			Restatement			Restated
		Filed			of Benefit			Amounts			Adjustment for			As Reported
		November 9,			(Expense) of			for 2004			Discontinued			on 2005
		2004			Income Tax			10-Q/A			Operations			10-Q
Income (Loss) from Continuing Operations Before Income Tax Benefit, Equity in Income of Joint Ventures and Equity in Income of Other Real Estate Partnerships		$	(10,459	)	$	—		$	(10,459	)	$	(4,181	)	$	(14,640	)
Income Tax Benefit			—			1,630			1,630			632			2,262
Equity in Income of Joint Ventures			546			—			546			—			546
Equity in Income of Other Real Estate Partnerships			14,572			—			14,572			—			14,572
Income (Loss) from Continuing Operations			4,659			1,630			6,289			(3,549	)		2,740
Income from Discontinued Operations			54,596			—			54,596			4,181			58,777
Income Tax Provision Allocable to Discontinued Operations			(3,847	)		(206	)		(4,053	)		(632	)		(4,685	)
Income Before Gain on Sale of Real Estate			55,408			1,424			56,832			—			56,832
Gain on Sale of Real Estate			4,993			—			4,993			—			4,993
Income Tax Provision Allocable to Gain on Sale of Real Estate			—			(1,424	)		(1,424	)		—			(1,424	)
Net Income			60,401			—			60,401			—			60,401
Less: Preferred Unit Distributions			(9,834	)		—			(9,834	)		—			(9,834	)
Less: Redemption of Preferred Units			(7,359	)		—			(7,359	)		—			(7,359	)
Net Income Available to Unitholders		$	43,208		$	—		$	43,208		$	—		$	43,208
Basic Earnings Per Unit:
	Loss from Continuing Operations	$	(0.16	)	$	—		$	(0.16	)	$	(0.08	)	$	(0.23	)
	Income from Discontinued Operations	$	1.09		$	—		$	1.09		$	0.08		$	1.16
	Net Income Available to Unitholders	$	0.93		$	—		$	0.93		$	—		$	0.93
Diluted Earnings Per Unit:
	Loss from Continuing Operations	$	(0.16	)	$	—		$	(0.16	)	$	(0.08	)	$	(0.23	)
	Income from Discontinued Operations	$	1.08		$	—		$	1.09		$	0.08		$	1.16
	Net Income Available to Unitholders	$	0.92		$	—		$	0.93		$	—		$	0.93

13. Related Party Transactions

      At June 30, 2005 and December 31, 2004, the Consolidated Operating Partnership has a receivable balance of $6,019 and $9,650, respectively from a wholly-owned entity of the Company.

14. Subsequent Events

      From July 1, 2005 to August 1, 2005, the Consolidated Operating Partnership acquired three industrial properties and one land parcel for a purchase price of approximately $11,380 (approximately $7,368 of which was made through the issuance of limited partnership interests in the Operating

20

FIRST INDUSTRIAL, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Partnership (“Units”)), excluding costs incurred in conjunction with the acquisition of these industrial properties. The Consolidated Operating Partnership also sold six industrial properties and one land parcel for approximately $46,338 of gross proceeds during this time period. Additionally, in conjunction with the sale of three industrial properties on July 13, 2005, Mortgage Loan XIII, which was classified as mortgage loan payable and accrued interest on real estate held for sale at June 30, 2005, was assumed by a third party purchaser.

      On July 18, 2005, the Operating Partnership paid a second quarter 2005 distribution of $.6950 per Unit, totaling approximately $34,485.

      On August 1, 2005, the Company and the Operating Partnership entered into a $150,000 unsecured line of credit (the “Unsecured Line of Credit II”). Outstanding advances under the Unsecured Line of Credit II are due in full on the earlier of September 15, 2005 or such time as the Operating Partnership’s $300,000 unsecured line of credit (the “Unsecured Line of Credit I”) is amended or replaced. The Unsecured Line of Credit II provides for interest only payments at Prime or at LIBOR plus 70 basis points, at the Operating Partnership’s election. The Company has fully and unconditionally guaranteed payment of borrowings under the Unsecured Line of Credit II. The Operating Partnership intends to use the Unsecured Line of Credit II for general business purposes, including interim financing of property acquisitions and closing costs.

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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.

      This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Operating Partnership intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Operating Partnership, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions. The Operating Partnership’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Operating Partnership on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rate levels, competition, supply and demand for industrial properties in the Operating Partnership’s current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs and changes in general accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Operating Partnership and its business, including additional factors that could materially affect the Operating Partnership’s financial results, is included herein and in the Operating Partnership’s other filings with the Securities and Exchange Commission.

GENERAL

      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 87.0% ownership interest at June 30, 2005. The limited partners of the Operating Partnership own, in the aggregate, approximately a 13.0% interest in the Operating Partnership at June 30, 2005. The Company also owns a preferred general partnership interest in the Operating Partnership with an aggregate liquidation priority of $125 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 Operating Partnership is the sole member of several limited liability companies (the “L.L.C.s”) and the sole shareholder of First Industrial Development Services, Inc. and holds at least a 99% limited partnership interest in each of eight limited partnerships (together, the “Other Real Estate Partnerships”).

      The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% 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 financial statements of the Operating Partnership report the L.L.C.s and First Industrial Development Services, Inc. (the “Consolidated Operating Partnership”) on a consolidated basis.

      As of June 30, 2005, the Consolidated Operating Partnership owned 796 industrial properties (inclusive of developments in process) containing an aggregate of approximately 63.0 million square feet of gross leasable area (“GLA”). On a combined basis, as of June 30, 2005, the Other Real Estate Partnerships owned 100 industrial properties containing an aggregate of approximately 9.5 million square feet of GLA.

22

      On March 21, 2005, the Operating Partnership, through entities it, directly or indirectly wholly-owns, entered into a joint venture arrangement with an institutional investor to invest in industrial properties (the “March 2005 Joint Venture”). The Operating Partnership, through entities it, directly or indirectly, wholly-owns, owns a ten percent equity interest in and provides property management, leasing, development, disposition and portfolio management services to the March 2005 Joint Venture.

      The Operating Partnership, through separate wholly-owned limited liability companies of which it is the sole member, also owns minority equity interests in, and provides asset and property management services to, two other joint ventures which invest in industrial properties (the “September 1998 Joint Venture” and the “May 2003 Joint Venture”). The Operating Partnership, through separate wholly-owned limited liability companies of which it is the sole member, also owned a minority interest in and provided property management services to another joint venture which invested in industrial properties (the “December 2001 Joint Venture”; together with the March 2005 Joint Venture, the September 1998 Joint Venture and the May 2003 Joint Venture, the “Joint Ventures”). During the year ended December 31, 2004, the December 2001 Joint Venture sold all of its industrial properties.

      The Other Real Estate Partnerships and the Joint Ventures are accounted for under the equity method of accounting. The operating data of the Other Real Estate Partnerships and the Joint Ventures is not consolidated with that of the Consolidated Operating Partnership as presented herein.

MANAGEMENT’S OVERVIEW

      Management believes the Consolidated Operating Partnership’s financial condition and results of operations are, primarily, a function of the Consolidated Operating Partnership’s performance in four key areas: leasing of industrial properties, acquisition and development of additional industrial properties, redeployment of internal capital and access to external capital.

      The Consolidated Operating Partnership generates revenue primarily from rental income and tenant recoveries from the lease of industrial properties under long-term (generally three to six years) operating leases. Such revenue is offset by certain property specific operating expenses, such as real estate taxes, repairs and maintenance, property management, utilities and insurance expenses, along with certain other costs and expenses, such as depreciation and amortization costs and general and administrative and interest expenses. The Consolidated Operating Partnership’s revenue growth is dependent, in part, on its ability to (i) increase rental income, through increasing either or both occupancy rates and rental rates at the Consolidated Operating Partnership’s properties, (ii) maximize tenant recoveries and (iii) minimize operating and certain other expenses. Revenues generated from rental income and tenant recoveries are a significant source of funds, in addition to income generated from gains/losses on the sale of the Consolidated Operating Partnership’s properties (as discussed below), for the Consolidated Operating Partnership’s distributions. The leasing of property, in general, and occupancy rates, rental rates, operating expenses and certain non-operating expenses, in particular, are impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Consolidated Operating Partnership. The leasing of property also entails various risks, including the risk of tenant default. If the Consolidated Operating Partnership were unable to maintain or increase occupancy rates and rental rates at the Consolidated Operating Partnership’s properties or to maintain tenant recoveries and operating and certain other expenses consistent with historical levels and proportions, the Consolidated Operating Partnership’s revenue growth would be limited. Further, if a significant number of the Consolidated Operating Partnership’s tenants were unable to pay rent (including tenant recoveries) or if the Consolidated Operating Partnership were unable to rent its properties on favorable terms, the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Consolidated Operating Partnership’s common stock would be adversely affected.

      The Consolidated Operating Partnership’s revenue growth is also dependent, in part, on its ability to acquire existing, and acquire and develop new, additional industrial properties on favorable terms. The Consolidated Operating Partnership continually seeks to acquire existing industrial properties on favorable

23

terms, and, when conditions permit, also seeks to acquire and develop new industrial properties on favorable terms. Existing properties, as they are acquired, and acquired and developed properties, as they lease-up, generate revenue from rental income and tenant recoveries, income from which, as discussed above, is a source of funds for the Consolidated Operating Partnership’s distributions. The acquisition and development of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Consolidated Operating Partnership. The acquisition and development of properties also entails various risks, including the risk that the Consolidated Operating Partnership’s investments may not perform as expected. For example, acquired existing and acquired and developed new properties may not sustain and/or achieve anticipated occupancy and rental rate levels. With respect to acquired and developed new properties, the Consolidated Operating Partnership may not be able to complete construction on schedule or within budget, resulting in increased debt service expense and construction costs and delays in leasing the properties. Also, the Consolidated Operating Partnership faces significant competition for attractive acquisition and development opportunities from other well-capitalized real estate investors, including both publicly-traded real estate investment trusts and private investors. Further, as discussed below, the Consolidated Operating Partnership may not be able to finance the acquisition and development opportunities it identifies. If the Consolidated Operating Partnership were unable to acquire and develop sufficient additional properties on favorable terms, or if such investments did not perform as expected, the Consolidated Operating Partnership’s revenue growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Consolidated Operating Partnership’s common stock would be adversely affected.

      The Consolidated Operating Partnership also generates income from the sale of properties (including existing buildings, buildings which the Consolidated Operating Partnership has developed or re-developed on a merchant basis, and land). The Consolidated Operating Partnership is continually engaged in, and its income growth is dependent in part on, systematically redeploying its capital from properties and other assets with lower yield potential into properties and other assets with higher yield potential. As part of that process, the Consolidated Operating Partnership sells, on an ongoing basis, select stabilized properties or properties offering lower potential returns relative to their market value. The gain/loss on the sale of such properties is included in the Consolidated Operating Partnership’s income and is a significant source of funds, in addition to revenues generated from rental income and tenant recoveries, for the Consolidated Operating Partnership’s distributions. Also, a significant portion of the proceeds from such sales is used to fund the acquisition of existing, and the acquisition and development of new, industrial properties. The sale of properties is impacted, variously, by property specific, market specific, general economic and other conditions, many of which are beyond the control of the Consolidated Operating Partnership. The sale of properties also entails various risks, including competition from other sellers and the availability of attractive financing for potential buyers of the Consolidated Operating Partnership’s properties. Further, the Consolidated Operating Partnership’s ability to sell properties is limited by safe harbor rules applying to REITs under the Internal Revenue Code which relate to the number of properties that may be disposed of in a year, their tax bases and the cost of improvements made to the properties, along with other tests which enable a REIT to avoid punitive taxation on the sale of assets. If the Consolidated Operating Partnership were unable to sell properties on favorable terms, the Consolidated Operating Partnership’s income growth would be limited and its financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Consolidated Operating Partnership’s common stock would be adversely affected.

      Currently, the Consolidated Operating Partnership utilizes a portion of the net sales proceeds from property sales, borrowings under unsecured lines of credit and proceeds from the issuance, when and as warranted, of additional equity securities to finance acquisitions and developments. Access to external capital on favorable terms plays a key role in the Consolidated Operating Partnership’s financial condition and results of operations, as it impacts the Consolidated Operating Partnership’s cost of capital and its ability and cost to refinance existing indebtedness as it matures and to fund acquisitions and developments through the issuance, when and as warranted, of additional equity securities. The Consolidated Operating Partnership’s ability to access external capital on favorable terms is dependent on various factors, including

24

general market conditions, interest rates, credit ratings on the Consolidated Operating Partnership’s capital stock and debt, the market’s perception of the Consolidated Operating Partnership’s growth potential, the Consolidated Operating Partnership’s current and potential future earnings and cash distributions and the market price of the Consolidated Operating Partnership’s capital stock. If the Consolidated Operating Partnership were unable to access external capital on favorable terms, the Consolidated Operating Partnership’s financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, the Consolidated Operating Partnership’s common stock would be adversely affected.

RESTATEMENT

      In the consolidated statement of operations for the three and six months ended June 30, 2004 and cash flows for the six months ended June 30, 2004 presented in its Form 10-QA filed November 9, 2004, the Company allocated its entire tax provision/benefit to income from discontinued operations. The Consolidated Operating Partnership has determined that its tax provision/benefit should be allocated between income from continuing operations, income from discontinued operations and gain on sale of real estate. The Consolidated Operating Partnership has restated its consolidated statement of operations for the three and six months ended June 30, 2004 and cash flows for the six months ended June 30, 2004 to reflect this new allocation in this Form 10-Q.

RESULTS OF OPERATIONS

Comparison of Six months ended June 30, 2005 to Six months ended June 30, 2004

      The Consolidated Operating Partnership’s net income available to unitholders was $38.9 million and $43.2 million for the six months ended June 30, 2005, and June 30, 2004, respectively. Basic and diluted net income available to unitholders was $0.80 and $0.79 per unit, respectively, for the six months ended June 30, 2005, and $0.93 per unit for the six months ended June 30, 2004.

      The tables below summarize the Consolidated Operating Partnership’s revenues, property expenses and depreciation and other amortization by various categories for the six months ended June 30, 2005 and June 30, 2004. Same store properties are in service properties owned prior to January 1, 2004. Acquired properties are properties that were acquired subsequent to December 31, 2003. Sold properties are properties that were sold subsequent to December 31, 2003. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after December 31, 2003 or acquisitions acquired prior to January 1, 2004 that were not placed in service as of December 31, 2003. These properties are placed in service as they reach stabilized occupancy (generally defined as 90% occupied). Other revenues are derived from the operations of the Consolidated Operating Partnership’s maintenance company, fees earned from the Consolidated Operating Partnership’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Consolidated Operating Partnership’s maintenance company and other miscellaneous regional expenses.

      The Consolidated Operating Partnership’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The

25

Consolidated Operating Partnership’s future revenues and expenses may vary materially from historical rates.

		Six Months			Six Months
		Ended			Ended
		June 30,			June 30,
		2005			2004			$ Change			% Change
REVENUES ($ in 000’s)
Same Store Properties		$	109,542		$	109,529		$	13			0.01	%
Acquired Properties			20,689			2,484			18,205			732.89	%
Sold Properties			5,519			17,704			(12,185	)		(68.83	)%
Properties Not In Service			12,240			12,178			62			0.51	%
Other			7,417			5,030			2,387			47.46	%
			155,407			146,925			8,482			5.77	%
Discontinued Operations			(6,365	)		(16,894	)		10,529			(62.32	)%
	Total Revenues	$	149,042		$	130,031		$	19,011			14.62	%

      At June 30, 2005 and June 30, 2004 occupancy rates of the Consolidated Operating Partnership’s same store properties were 89.4% and 88.1%, respectively. Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $18.2 million due to the 123 industrial properties acquired subsequent to December 31, 2003 totaling approximately 15.4 million square feet of GLA. Revenues from sold properties decreased $12.2 million, due to the 124 industrial properties sold subsequent to December 31, 2003, totaling approximately 11.6 million square feet of GLA. Revenues from properties not in service remained relatively unchanged. Other revenues increased by approximately $2.4 million due primarily to an increase in joint venture fees and assignment fees.

		Six Months			Six Months
		Ended			Ended
		June 30,			June 30,
		2005			2004			$ Change			% Change
PROPERTY EXPENSES ($ in 000’s)
Same Store Properties		$	37,255		$	35,772		$	1,483			4.15	%
Acquired Properties			5,534			902			4,632			513.53	%
Sold Properties			2,111			5,791			(3,680	)		(63.55	)%
Properties Not In Service			5,449			5,215			234			4.49	%
Other			4,479			2,626			1,853			70.56	%
			54,828			50,306			4,522			8.99	%
Discontinued Operations			(2,322	)		(5,554	)		3,232			(58.19	)%
	Total Property Expenses	$	52,506		$	44,752		$	7,754			17.33	%

      Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses. Property expenses from same store properties remained relatively unchanged. Property expenses from acquired properties increased by $4.6 million due to properties acquired subsequent to December 31, 2003. Property expenses from sold properties decreased by $3.7 million or 63.55%, due to properties sold subsequent to December 31, 2003. Property expenses from properties not in service remained relatively unchanged. Other expenses increased $1.9 million due primarily to increases in employee compensation.

      General and administrative expense increased by approximately $6.3 million, or 37.5%, due primarily to increases in employee compensation and an increase in outside professional fees.

26

      Amortization of deferred financing costs remained relatively unchanged.

	Six Months			Six Months
	Ended			Ended
	June 30,			June 30,
	2005			2004			$ Change			% Change
DEPRECIATION and OTHER AMORTIZATION ($ in 000’s)
Same Store Properties	$	33,605		$	29,568		$	4,037			13.65	%
Acquired Properties		9,170			1,235			7,935			642.51	%
Sold Properties		1,408			4,561			(3,153	)		(69.13	)%
Properties Not In Service and Other		5,560			5,564			(4	)		(0.07	)%
Corporate Furniture, Fixtures and Equipment		657			640			17			2.66	%
	$	50,400		$	41,568		$	8,832			21.25	%
Discontinued Operations		(1,625	)		(4,183	)		2,558			(61.15	)%
Total Depreciation and Other Amortization	$	48,775		$	37,385		$	11,390			30.47	%

      The increase in depreciation and other amortization for same store properties is primarily due to an acceleration of depreciation and amortization on tenant improvements and leasing commissions for tenants who terminated leases early as well as a net increase in leasing commissions and tenant improvements paid in 2005. Depreciation and other amortization from acquired properties increased by $7.9 million due to properties acquired subsequent to December 31, 2003. Depreciation and other amortization from sold properties decreased by $3.2 million or 69.13%, due to properties sold subsequent to December 31, 2003. Depreciation and other amortization for properties not in service and other and corporate furniture, fixtures and equipment remained relatively unchanged.

      Interest income decreased by approximately $.4 million due primarily to a decrease in the average mortgage loans receivable outstanding during the six months ended June 30, 2005, as compared to the six months ended June 30, 2004.

      Interest expense increased by approximately $4.1 million primarily due to an increase in the weighted average debt balance outstanding for the six months ended June 30, 2005 ($1,603.6 million), as compared to the six months ended June 30, 2004 ($1,449.3 million), as well as an increase in the weighted average interest rate for the six months ended June 30, 2005 (6.72%), as compared to the six months ended June 30, 2004 (6.69%).

      The Consolidated Operating Partnership recognized $.5 million loss on its mark-to-market of an interest rate protection agreement that was entered into in January 2005 in order to hedge the change in value of a build to suit development project.

      Equity in income of Other Real Estate Partnerships increased by approximately $2.0 million due primarily to an increase in gain on sale of real estate for the six months ended June 30, 2005 as compared to the six months ended June 30, 2004.

      Equity in (loss) income of joint ventures decreased by approximately $.8 million due primarily to the sale of all of the properties in the December 2001 Joint Venture in August of 2004.

      Income tax benefit increased by $1.6 million due primarily to an increase in general and administrative expense (“G&A”) in the Consolidated Operating Partnership’s taxable REIT subsidiary (the “TRS”) due to additional G&A costs, which increases operating losses, incurred in the six months ended June 30, 2005 compared to the six months ended June 30, 2004 associated with additional investment activity in the TRS. The increase in the income tax benefit is partially offset by an increase in state tax expense.

      The $14.9 million gain on sale of real estate, net of income taxes for the six months ended June 30, 2005 resulted from the sale of eight industrial properties and several land parcels that do not meet the

27

criteria established by FAS 144 for inclusion in discontinued operations. The $3.6 million gain on sale of real estate, net of income taxes for the six months ended June 30, 2004 resulted from the sale of two industrial properties and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.

      The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Consolidated Operating Partnership, for the six months ended June 30, 2005 and June 30, 2004.

				Restated
	Six Months			Six Months
	Ended			Ended
	June 30,			June 30,
	2005			2004
	($ in 000’s)
Total Revenues	$	6,365		$	16,894
Operating Expenses		(2,322	)		(5,554	)
Depreciation and Amortization		(1,625	)		(4,183	)
Interest Expense		(344	)		(128	)
Provision for Income Taxes		(406	)		(1,010	)
Gain on Sale of Real Estate, Net of Income Taxes		34,357			48,073
Income from Discontinued Operations	$	36,025		$	54,092

      Income from discontinued operations (net of income taxes) for the six months ended June 30, 2005 reflects the results of operations and gain on sale of real estate, net of income taxes, relating to 26 industrial properties that were sold during the six months ended June 30, 2005 and the results of operations from 10 properties identified as held for sale at June 30, 2005.

      Income from discontinued operations (net of income taxes) for the six months ended June 30, 2004 reflects the results of operations and gain on sale of real estate, net of income taxes, relating to 26 industrial properties that were sold during the six months ended June 30, 2005, 86 industrial properties that were sold during the year ended December 31, 2004 and 10 industrial properties identified as held for sale at June 30, 2005, as well as the gain on sale of real estate from 47 industrial properties which were sold during the six months ended June 30, 2004.

Comparison of Three Months Ended June 30, 2005 to Three Months Ended June 30, 2004

      The Consolidated Operating Partnership’s net income available to unitholders was $22.5 million and $16.3 million for the three months ended June 30, 2005, and June 30, 2004, respectively. Basic and diluted net income available to unitholders was $0.46 per unit for the three months ended June 30, 2005, and $0.35 per unit for the three months ended June 30, 2004.

      The tables below summarize the Consolidated Operating Partnership’s revenues, property expenses and depreciation and other amortization by various categories for the three months ended June 30, 2005 and June 30, 2004. Same store properties are in service properties owned prior to April 1, 2004. Acquired properties are properties that were acquired subsequent to March 31, 2004. Sold properties are properties that were sold subsequent to March 31, 2004. Properties that are not in service are properties that are under construction that have not reached stabilized occupancy or were placed in service after March 31, 2004 or acquisitions acquired prior to April 1, 2004 that were not placed in service as of March 31, 2004. These properties are placed in service as they reach stabilized occupancy (generally defined as 90% occupied). Other revenues are derived from the operations of the Consolidated Operating Partnership’s maintenance company, fees earned from the Consolidated Operating Partnership’s joint ventures, fees earned for developing properties for third parties and other miscellaneous revenues. Other expenses are derived from the operations of the Consolidated Operating Partnership’s maintenance company and other miscellaneous regional expenses.

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      The Consolidated Operating Partnership’s future financial condition and results of operations, including rental revenues, may be impacted by the future acquisition and sale of properties. The Consolidated Operating Partnership’s future revenues and expenses may vary materially from historical rates.

		Three Months			Three Months
		Ended			Ended
		June 30, 2005			June 30, 2004			$ Change			% Change
REVENUES ($ in 000’s)
Same Store Properties		$	55,492		$	55,978		$	(486	)		(0.87	)%
Acquired Properties			10,458			649			9,809			1511.40	%
Sold Properties			1,705			8,011			(6,306	)		(78.72	)%
Properties Not In Service			5,959			4,991			968			13.39	%
Other			3,688			1,980			1,708			86.26	%
		$	77,302		$	71,609		$	5,693			7.95	%
Discontinued Operations			(2,470	)		(7,531	)		5,061			(67.20	)%
	Total Revenues	$	74,832		$	64,078		$	10,754			16.78	%

      At June 30, 2005 and June 30, 2004 occupancy rates of the Consolidated Operating Partnership’s same store properties were 89.7% and 88.6%, respectively. Revenues from same store properties remained relatively unchanged. Revenues from acquired properties increased $9.8 million due to the 114 industrial properties acquired subsequent to March 31, 2004 totaling approximately 13.5 million square feet of GLA. Revenues from sold properties decreased $6.3 million, due to the 104 industrial properties sold subsequent to March 31, 2004, totaling approximately 9.5 million square feet of GLA. Revenues from properties not in service increased by $1.0 million due to an increase in occupancy. Other revenues increased by approximately $1.7 million due primarily to an increase in assignment fees.

		Three Months			Three Months
		Ended			Ended
		June 30, 2005			June 30, 2004			$ Change			% Change
PROPERTY EXPENSES ($ in 000’s)
Same Store Properties		$	18,338		$	17,079		$	1,259			7.37	%
Acquired Properties			2,654			125			2,529			2023.20	%
Sold Properties			872			2,356			(1,484	)		(62.99	)%
Properties Not In Service			2,756			3,125			(369	)		(11.81	)%
Other			2,696			1,553			1,143			73.60	%
		$	27,316		$	24,238		$	3,078			12.70	%
Discontinued Operations			(1,014	)		(2,262	)		1,248			(55.17	)%
	Total Property Expenses	$	26,302		$	21,976		$	4,326			19.69	%

      Property expenses include real estate taxes, repairs and maintenance, property management, utilities, insurance and other property related expenses. Property expenses from same store properties remained relatively unchanged. Property expenses from acquired properties increased by $2.5 million due to properties acquired subsequent to March 31, 2004. Property expenses from sold properties decreased by $1.5 million or 62.99%, due to properties sold subsequent to March 31, 2004. Property expenses from properties not in service decreased by $0.4 million due primarily to a decrease in bad debt expense. Other expenses increased $1.1 million due primarily to increases in employee compensation.

      General and administrative expense increased by approximately $1.7 million, or 17.7%, due primarily to increases in employee compensation.

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      Amortization of deferred financing costs remained relatively unchanged.

	Three Months			Three Months
	Ended			Ended
	June 30, 2005			June 30, 2004			$ Change			% Change
DEPRECIATION and OTHER AMORTIZATION ($ in 000’s)
Same Store Properties	$	17,455		$	16,067		$	1,388			8.64	%
Acquired Properties		4,810			416			4,394			1056.25	%
Sold Properties		405			2,438			(2,033	)		(83.39	)%
Properties Not In Service and Other		2,713			2,762			(49	)		(1.77	)%
Corporate Furniture, Fixtures and Equipment		337			321			16			4.98	%
	$	25,720		$	22,004		$	3,716			16.89	%
Discontinued Operations		(621	)		(2,125	)		1,504			(70.78	)%
Total Depreciation and Other Amortization	$	25,099		$	19,879		$	5,220			26.26	%

      The increase in depreciation and other amortization for same store properties is primarily due to an acceleration of depreciation and amortization on tenant improvements and leasing commissions for tenants who terminated leases early as well as a net increase in leasing commissions and tenant improvements paid in 2005. Depreciation and other amortization from acquired properties increased by $4.4 million due to properties acquired subsequent to March 31, 2004. Depreciation and other amortization from sold properties decreased by $2.0 million or 83.39%, due to properties sold subsequent to March 31, 2004. Depreciation and other amortization for properties not in service and other and corporate furniture, fixtures and equipment remained relatively unchanged.

      Interest income decreased by approximately $.1 million due primarily to a decrease in the average mortgage loans receivable outstanding during the three months ended June 30, 2005, as compared to the three months ended June 30, 2004.

      Interest expense increased by approximately $2.0 million primarily due to an increase in the weighted average debt balance outstanding for the three months ended June 30, 2005 ($1,616.2 million), as compared to the three months ended June 30, 2004 ($1,422.6 million), partially offset by a decrease in the weighted average interest rate for the three months ended June 30, 2005 (6.69%), as compared to the three months ended June 30, 2004 (6.84%).

      The Consolidated Operating Partnership recognized $1.4 million loss on its mark-to-market of an interest rate protection agreement that was entered into in January 2005 in order to hedge the change in value of a build to suit development project.

      Equity in income of Other Real Estate Partnerships increased by approximately $2.6 million due primarily to an increase in gain on sale of real estate for the three months ended June 30, 2005 as compared to the three months ended June 30, 2004.

      Equity in income of joint ventures decreased by approximately $.4 million due primarily to the sale of all of the properties in the December 2001 Joint Venture in August of 2004.

      Income tax benefit increased by $.4 million due primarily to an increase in general and administrative expense (“G&A”) in the TRS due to additional G&A costs, which increases operating losses, incurred in the three months ended June 30, 2005 compared to the three months ended June 30, 2004 associated with additional investment activity in the TRS. The increase in the income tax benefit is partially offset by an increase in state tax expense.

      The $1.9 million gain on sale of real estate, net of income taxes for the three months ended June 30, 2005 resulted from the sale of one industrial property and several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations. The $1.2 million gain on sale of real

30

estate, net of income taxes for the three months ended June 30, 2004 resulted from the sale of several land parcels that do not meet the criteria established by FAS 144 for inclusion in discontinued operations.

      The following table summarizes certain information regarding the industrial properties included in discontinued operations by the Consolidated Operating Partnership, for the three months ended June 30, 2005 and June 30, 2004.

				Restated
	Three Months			Three Months
	Ended			Ended
	June 30, 2005			June 30, 2004
	($ in 000’s)
Total Revenues	$	2,470		$	7,531
Operating Expenses		(1,014	)		(2,262	)
Depreciation and Amortization		(621	)		(2,125	)
Interest Expense		(172	)		(64	)
Provision for Income Taxes		84			(545	)
Gain on Sale of Real Estate, Net of Income Taxes		25,815			25,524
Income from Discontinued Operations	$	26,562		$	28,059

      Income from discontinued operations (net of income taxes) for the three months ended June 30, 2005 reflects the results of operations and gain on sale of real estate, net of income taxes, relating to 16 industrial properties that were sold during the three months ended June 30, 2005 and the results of operations from 10 properties identified as held for sale at June 30, 2005.

      Income from discontinued operations (net of income taxes) for the three months ended June 30, 2004 reflects the results of operations and gain on sale of real estate, net of income taxes, relating to 16 industrial properties that were sold during the three months ended June 30, 2005, 86 industrial properties that were sold during the year ended December 31, 2004 and 10 industrial properties identified as held for sale at June 30, 2005, as well as the gain on sale of real estate from 29 industrial properties which were sold during the three months ended June 30, 2004.

LIQUIDITY AND CAPITAL RESOURCES

      The Consolidated 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 Consolidated 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 Consolidated Operating Partnership anticipates that these needs will be met with cash flows provided by operating activities.

      The Consolidated Operating Partnership expects to meet long-term (greater than one year) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements principally through the disposition of select assets, long-term unsecured indebtedness and the issuance of additional Units and preferred Units. As of June 30, 2005 and August 1, 2005, $500.0 million of debt securities were registered and unissued under the Securities Act of 1933, as amended. The Consolidated Operating Partnership also may finance the development or acquisition of additional properties through borrowings under unsecured lines of credit. At June 30, 2005, borrowings under the Operating Partnership’s $300 million unsecured line of credit (the “Unsecured Line of Credit I”) bore interest at a weighted average interest rate of 3.959%. The Unsecured Line of Credit I bears interest at a floating rate of LIBOR plus .70%, or the Prime Rate, at the Operating Partnership’s election. As of August 1, 2005, approximately $ 39.4 million was available for additional borrowings under the Unsecured Line of Credit I. On August 1, 2005, the Company and the Operating

31

Partnership entered into a $150 million unsecured line of credit (the “Unsecured Line of Credit II”). Outstanding advances under the Unsecured Line of Credit II are due in full on the earlier of September 15, 2005 or such time as the Unsecured Line of Credit I is amended or replaced. The Unsecured Line of Credit II bears interest at a floating rate of LIBOR plus .70% or the Prime Rate, at the Operating Partnership’s election. As of August 1, 2005, approximately $150 million was available for borrowing under the Unsecured Line of Credit II.

Six months ended June 30, 2005

      Net cash provided by operating activities of approximately $21.0 million for the six months ended June 30, 2005 was comprised primarily of net income of approximately $43.5 million offset by adjustments for non-cash items of approximately $10.7 million and by the net change in operating assets and liabilities of approximately $11.8 million. The adjustments for the non-cash items of approximately $10.7 million are primarily comprised of depreciation and amortization of approximately $54.7 million, $.8 million of provision for bad debt, the mark to market of the interest rate protection of $.5 million and equity in net loss of joint ventures of approximately $.2 million, substantially offset by the gain on sale of real estate of approximately $64.0 million and the effect of the straight-lining of rental income of approximately $2.9 million.

      Net cash provided by investing activities of approximately $15.3 million for the six months ended June 30, 2005 was comprised primarily by the net proceeds from sales of investment in real estate, distributions from the Other Real Estate Partnerships, distributions from two of the Consolidated Operating Partnership’s industrial real estate joint ventures and the repayment of mortgage loans receivable partially offset by the acquisition and development of real estate, leasing costs and capital expenditures related to the expansion and improvement of existing real estate, investments in and advances to the Other Real Estate Partnerships, and contributions to and investments in the Consolidated Operating Partnership’s industrial real estate joint ventures.

      During the six months ended June 30, 2005, the Consolidated Operating Partnership sold 34 industrial properties comprising approximately 4.8 million square feet of GLA and several land parcels. Gross proceeds from the sales of the 34 industrial properties and several land parcels were approximately $269.0 million.

      During the six months ended June 30, 2005, the Consolidated Operating Partnership acquired 46 industrial properties comprising approximately 6.5 million square feet of GLA and several land parcels. The purchase price for 45 industrial properties totaled approximately $215.3 million, excluding costs incurred in conjunction with the acquisition of the industrial properties and land parcels. Additionally, one industrial property was acquired through foreclosure due to defaulted note receivable.

      The Consolidated Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is the sole member, invested approximately $10.4 million and received distributions of approximately $.4 million from the Operating Partnership’s industrial real estate joint ventures. As of June 30, 2005, the Operating Partnership’s industrial real estate joint ventures owned 62 industrial properties comprising approximately 7.7 million square feet of GLA.

      Net cash used in financing activities of approximately $7.8 million for the six months ended June 30, 2005 was comprised primarily of general partnership and limited partnership units (“Unit”) and preferred general partnership unit distributions, net repayments under the Unsecured Line of Credit I, the repurchase of restricted units and repayments on mortgage loans payable, partially offset by the net proceeds from the exercise of stock options and proceeds from a mortgage loan payable.

      During the six months ended June 30, 2005, the Company awarded 189,878 shares of restricted common stock to certain employees and 2,101 shares of restricted common stock to certain Directors. The Operating Partnership issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $8.1 million on the date of grant. The restricted common

32

stock vests over periods from one to ten years. Compensation expense will be charged to earnings over the respective vesting periods.

      During the six months ended June 30, 2005, certain employees exercised 241,964 non-qualified employee stock options. Net proceeds to the Company were approximately $6.5 million. The Consolidated Operating Partnership, through the Operating Partnership, issued Units to the Company in the same amount.

Market Risk

      The following discussion about the Consolidated Operating Partnership’s risk-management activities includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements.

      This analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments which are held by the Consolidated Operating Partnership at June 30, 2005 that are sensitive to changes in the interest rates. While this analysis may have some use as a benchmark, it should not be viewed as a forecast.

      In the normal course of business, the Consolidated Operating Partnership also faces risks that are either non-financial or non-quantifiable. Such risks principally include credit risk and legal risk and are not represented in the following analysis.

      At June 30, 2005, approximately $1,418.2 million (approximately 86.1% of total debt at June 30, 2005) of the Consolidated Operating Partnership’s debt was fixed rate debt and approximately $229.5 million (approximately 13.9% of total debt at June 30, 2005) was variable rate debt. During the six months ended June 30, 2005, the Company, through First Industrial Development Services, Inc., entered into an interest rate protection agreement which hedged the change in value of a build to suit development project the Company is in the process of constructing. This interest rate protection agreement has a notional value of $50.0 million, is based on the five year treasury, has a strike rate of 3.936% and settles on October 4, 2005. Currently, the Consolidated Operating Partnership does not enter into financial instruments for trading or other speculative purposes.

      For fixed rate debt, changes in interest rates generally affect the fair value of the debt, but not earnings or cash flows of the Consolidated Operating Partnership. Conversely, for variable rate debt, changes in the interest rate generally do not impact the fair value of the debt, but would affect the Consolidated Operating Partnership’s future earnings and cash flows. The interest rate risk and changes in fair market value of fixed rate debt generally do not have a significant impact on the Consolidated Operating Partnership until the Consolidated Operating Partnership is required to refinance such debt. See Note 5 to the consolidated financial statements for a discussion of the maturity dates of the Consolidated Operating Partnership’s various fixed rate debt.

      Based upon the amount of variable rate debt outstanding at June 30, 2005, a 10% increase or decrease in the interest rate on the Consolidated Operating Partnership’s variable rate debt would decrease or increase, respectively, future net income and cash flows by approximately $.9 million per year. A 10% increase in interest rates would decrease the fair value of the fixed rate debt at June 30, 2005 by approximately $48.4 million to $1,541.2 million. A 10% decrease in interest rates would increase the fair value of the fixed rate debt at June 30, 2005 by approximately $52.2 million to $1,641.8 million.

Recent Accounting Pronouncements

      In December, 2004, the FASB issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets — An Amendment of APB Opinion No. 29” (“FAS 153”). The amendments made by FAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have “commercial substance.” FAS 153 is effective for

33

nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Operating Partnership does not believe that the adoption of FAS 153 will have a material effect on the Operating Partnership’s consolidated financial statements.

      In December, 2004, the FASB issued Statement of Financial Accounting Standards No. 123: (Revised 2004) — Share-Based Payment (“FAS 123R”). FAS 123R replaces FAS 123, which the Company adopted on January 1, 2003. FAS 123R requires that the compensation cost relating to share-based payment transactions be recognized in financial statements and measured based on the fair value of the equity or liability instruments issued. FAS 123R is effective as of the first interim or annual reporting period that begins after December, 2005. The Operating Partnership does not believe that the adoption of FAS 123R will have a material effect on the Operating Partnership’s consolidated financial statements.

      In May, 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections” (“FAS 154”) which supersedes APB Opinion No. 20, “Accounting Changes” and Statement of Financial Accounting Standards No. 3, “Reporting Accounting Changes in Interim Financial Statements.” FAS 154 changes the requirements for the accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. FAS 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.

      In June, 2005, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) regarding EITF 04-05, “Investor’s Accounting for an Investment in a Limited Partnership When the Investor is the Sole General Partner and the Limited Partners Have Certain Rights.” The conclusion provides a framework for addressing the question of when a sole general partner, as defined in EITF 04-05, should consolidate a limited partnership. The EITF has concluded that the general partner of a limited partnership should consolidate a limited partnership unless (1) the limited partners possess substantive kick-out rights as defined in paragraph B20 of FIN 46R, or (2) the limited partners possess substantive participating rights similar to the rights described in Issue 96-16, ”Investor’s Accounting for an Investee When the Investor has a Majority of the Voting Interest by the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights.” In addition, the EITF concluded that the guidance should be expanded to include all limited partnerships, including those with multiple general partners. The Consolidated Operating Partnership will adopt EITF 04-05 as a December 31, 2005. The Consolidated Operating Partnership is currently assessing all of its investments in unconsolidated real estate joint ventures to determine the impact, if any, the adoption of EITF 04-05 will have on results of operations, financial position or liquidity.

Subsequent Events

      From July 1, 2005 to August 1, 2005, the Consolidated Operating Partnership acquired three industrial properties and one land parcel for a purchase price of approximately $11.4 million (approximately $7.4 million of which was made through the issuance of limited partnership interests in the Operating Partnership (“Units”)), excluding costs incurred in conjunction with the acquisition of these industrial properties. The Consolidated Operating Partnership also sold six industrial properties and one land parcel for approximately $46.3 million of gross proceeds during this time period. Additionally, in conjunction with the sale of three industrial properties on July 13, 2005, the mortgage loan amount which was classified as mortgage loan payable and accrued interest on real estate held for sale at June 30, 2005 was assumed by a third party purchaser.

      On July 18, 2005, the Operating Partnership paid a second quarter 2005 distribution of $.6950 per Unit, totaling approximately $34.5 million.

      On August 1, 2005, the Company and the Operating Partnership entered into the $150 million Unsecured Line of Credit II. Outstanding advances under the Unsecured Line of Credit II are due in full on the earlier of September 15, 2005 or such time as the Unsecured Line of Credit I is amended or

34

replaced. The Unsecured Line of Credit II provides for interest only payments at Prime or at LIBOR plus 70 basis points, at the Operating Partnership’s election. The Company has fully and unconditionally guaranteed payment of borrowings under the Unsecured Line of Credit II. The Operating Partnership intends to use the Unsecured Line of Credit II for general business purposes, including interim financing of property acquisitions and closing costs.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

      Response to this item is included in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” above.

Item 4. Controls and Procedures

      The Company’s principal executive officer and principal financial officer, after evaluating the effectiveness of the Operating Partnership’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report, based on the evaluation of these controls and procedures required by Exchange Act Rules 13a-15(b) or 15d-15(b), have concluded that as of the end of such period the Operating Partnership’s disclosure controls and procedures were effective.

      There has been no change in the Operating Partnership’s internal control over financial reporting that occurred during the fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

35

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

      None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

      On March 4, 2005, the Operating Partnership issued 37,587 Units having an aggregate market value of approximately $1.5 million in exchange for property.

      On July 22, 2005, the Operating Partnership issued 183,158 Units having an aggregate market value of approximately $7.4 million in exchange for property.

      All of the above 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, Units are convertible into common stock, $.01 par value, of the Company on a one-for-one basis or cash at the option of the Company.

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

      (a) Exhibits:

Exhibit
Number			Description
	3	.1***	Amendment No. 2 dated July 22, 2005 to the Eighth Amended and Restated Partnership Agreement of the Operating Partnership dated June 2, 2004 (incorporated by reference to Exhibit 10.1 of the Form 10-Q of First Industrial Realty Trust, Inc. (the “Company”) dated August 9, 2005, File No. 1-13102)
	10	.1***	Unsecured Term Loan Agreement dated August 1, 2005 among the Operating Partnership, the Company and JP Morgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company filed August 9, 2005, File No. 1-13102)
	31	.1*	Certification of Principal Executive Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	31	.2*	Certification of Principal Financial Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	32	.1**	Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes — Oxley Act of 2002.

* Filed herewith

** Furnished herewith

*** Previously filed

36

      The Company maintains a website at www.firstindustrial.com. Copies of the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports are available without charge on the Company’s website as soon as reasonably practicable after such reports are filed with or furnished to the SEC. In addition, the Company’s Corporate Governance Guidelines, Code of Business Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter, Nominating/ Corporate Governance Committee Charter, along with supplemental financial and operating information prepared by the Company, are all available without charge on the Company’s website or upon request to the Company. Amendments to, or waivers from, the Company’s Code of Business Conduct and Ethics that apply to the Company’s executive officers or directors shall be posted to the Company’s website at www.firstindustrial.com. Please direct requests as follows:

First Industrial Realty Trust, Inc.

311 S. Wacker, Suite 4000

Chicago, IL 60606

Attention: Investor Relations

37

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

By:  /s/ Scott A. Musil

Scott A. Musil

Senior Vice President-Controller

(Principal Accounting Officer)

Date: August 8, 2005

38

EXHIBIT INDEX

Exhibit
Number			Description
	3	.1***	Amendment No. 2 dated July 22, 2005 to the Eighth Amended and Restated Partnership Agreement of the Operating Partnership dated June 2, 2004 (incorporated by reference to Exhibit 10.1 of the Form 10-Q of First Industrial Realty Trust, Inc. (the “Company”) dated August 9, 2005, File No. 1-13102)
	10	.1***	Unsecured Term Loan Agreement dated August 1, 2005 among the Operating Partnership, the Company and JP Morgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company filed August 9, 2005, File No. 1-13102)
	31	.1*	Certification of Principal Executive Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	31	.2*	Certification of Principal Financial Officer of First Industrial Realty Trust, Inc., registrant’s sole general partner, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
	32	.1**	Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*  Filed herewith

**  Furnished herewith

***  Previously filed

39 EX-31.1 2 c97431exv31w1.htm CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Michael W. Brennan, certify that:

      1. I have reviewed this quarterly report on Form 10-Q of First Industrial, L.P.;

      2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

      3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

      4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

      a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

      b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

      c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

      d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

      5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

      a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

      b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Michael W. Brennan

Michael W. Brennan

President and Chief Executive Officer

First Industrial Realty Trust, Inc.

Date: August 8, 2005

40 EX-31.2 3 c97431exv31w2.htm CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Michael J. Havala, certify that:

      1. I have reviewed this quarterly report on Form 10-Q of First Industrial, L.P.;

      2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

      3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

      4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

      a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

      b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

      c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

      d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

      5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

      a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

      b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Michael J. Havala

Michael J. Havala

Chief Financial Officer

First Industrial Realty Trust, Inc.

Date: August 8, 2005

41 EX-32.1 4 c97431exv32w1.htm CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER AND THE PRINCIPAL FINANCIAL OFFICER

Exhibit 32.1

CERTIFICATION

Accompanying Form 10-Q Report

of First Industrial, L.P.

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Chapter 63, Title 18 U.S.C. §1350(a) and (b))

      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. §1350(a) and (b)), each of the undersigned hereby certifies, to his knowledge, that the Quarterly Report on Form 10-Q for the period ended June 30, 2005 of First Industrial, L.P. (the “Company”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 8, 2005	/s/ Michael W. Brennan ----------------------------------------------- Michael W. Brennan Chief Executive Officer (Principal Executive Officer) First Industrial Realty Trust, Inc.
Dated: August 8, 2005	/s/ Michael J. Havala ----------------------------------------------- Michael J. Havala Chief Financial Officer (Principal Financial Officer) First Industrial Realty Trust, Inc.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The information contained in this written statement shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference to such filing.

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