First Industrial Realty Trust Inc. (NYSE:FR) Q3 2018 Earnings Conference Call Transcript
Oct 25, 2018 • 11:00 am ET
Good morning. My name is Jason, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Industrial Third Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.
(Operator Instructions). I would now like to turn call over to Mr. Art Harmon, Vice President of Investor Relations. Sir, you may begin your conference.
Thanks, Jason. Hello, everybody, and welcome to our call.
(Forward-Looking Cautionary Statement)
Our call will begin with remarks by Peter Baccile, our President and Chief Executive Officer; and Scott Musil, our Chief Financial Officer, after which we will open it up to your questions. Also, on the call today are Jojo Yap, our Chief Investment Officer; Peter Schultz, Executive Vice President; Chris Schneider, Senior Vice President of Operations and Bob Walter, Senior Vice President of Capital Markets and Asset Management.
Now, let me turn the call over to Peter.
Good morning, everyone. Continued strong performance by our team, our portfolio and the industrial real estate market overall drove another excellent quarter. We grew occupancy 70 basis points to finish the quarter at 97.6%. Cash same-store NOI grew at 6.8% and cash rental rates were up 9%. These metrics and others provide a firm foundation for a continued strong rental rate growth in 2019. As we have done in the past, let me give you a snapshot of our 2019 rollovers signed to date.
We've already inked approximately 40% of next year's role at a cash increase of 10.7%. We note that this is only a portion of leases to roll, but directionally, it is an useful data point for you on 2019 rents at this point in time. While we were in the early phases of our budgeting process and we'll be able to give you an updated picture for the full year on our fourth quarter call in February.
Moving on to the bigger picture, fluctuations in the stock market, concerns over trade and tariffs, and the increase in interest rates rightly have many wondering about the direction of the economy. However, the US economy is strong with solid GDP growth, high consumer confidence and record or near record unemployment that is driving a strong labor market and some real wage growth.
From our viewpoint, we continue to see tenants investing in their supply chain to accommodate future growth and consumption. CBRE Econometric Advisors, preliminary, third quarter report is consistent with this view. New additions to supply are not keeping up with tenant demand in most markets.
Third quarter net absorption was 63 million square feet compared to completions of 50 million and year-to-date net absorption was 166 million square feet with completions at 141 million square feet. So, for the first nine months of this year, we have seen tenants continue to grow their businesses while facing limited alternatives for their industrial space needs. We are taking advantage of this