First Industrial shares jumped 3.1% to $30.99 after the earnings report was released Thursday.

The REIT sold more than 24 properties in the first quarter for $60.9 million at an average capitalization rate of 9.1% and average unleveraged internal rate of return of 22.0%, says chief investment officer Johannson L. Yap. Of those sales, 87% were to the "most aggressive" buyers, Yap says, which are users and existing customers.

Despite the economic downturn, conditions should remain positive for industrial real estate, Yap adds. "Users will continue to buy," Yap says. "Our research shows there's not enough product to supply the buyer demand."

There are occupancy and rental rate issues in some markets, however. Overall, occupancy fell to 93.7% of the REIT's 80-million-sf portfolio. The lowest occupancy rates were seen in Cincinnati (79.5%), Indianapolis (87%) and Atlanta (90%), says executive vice president of operations David Draft.

However, First Industrial enjoyed a record quarter for cash-on-cash rent increases of 8.9%, Draft says, with Central Pennsylvania (19.3%), St. Louis (18.1%), Nashville (17.4%), Northern New Jersey (14.9%), Detroit (12.3%), Los Angeles and Dallas/Fort Worth (10.6% each). On the other end of the spectrum, a 1.2% decline was seen in Atlanta, while meager increases were seen in Minneapolis (1.2%), Philadelphia (3.3%) and Tampa (3.8%).

First Industrial focuses on the nation's top 25 markets, and has a presence in 21. Of the remaining four, San Francisco and Seattle are deemed to be overpriced, while limited opportunities exist in Miami and San Diego. "We're making a pretty good living in the 21 markets we're in now," says president and chief executive officer Mike Brennan.