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CHICAGO-Although the industrial sector has been said to be holding up strong in the current economic downturn, First Industrial Realty Trust, Inc. officials are bearish about future prospects. Funds from operations were up 10.8% in the third quarter, but Presidentand CEO Michael Brennan says the largest provider of diversified industrial real estate in the US is revising its growth estimates down from 8% to the 4% to 6% range.

“That said, there will be opportunities in this environment,” Brennan says. “This is the moment the (Integrated Industrial Solutions) team has been waiting for.”

The company’s corporate services arm, which includes build-to-suit and development deals, posted $82.9 million in sales at a 16.9% internal rate of return in the third quarter. For the year, IIS sales have been $218.8 million, at a 18.9% IRR.

Meanwhile, the company is showing aggressive on rental rates to keep occupancy at 91.5%. “We have some flexibility on the rental rate side,” says executive vice president of operations David Draft. “We’re being very, very careful not to lose a transaction due to our rental rate structure.”

Adds Brennan, “We’re not going to make any gains in occupancy.”

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