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CHICAGO-First Industrial Realty Inc. reported a drop in both revenue and funds from operation; still company officials were upbeat about the results.

“We are pleased with our first quarter results, which reflect our focus on leasing and our efforts to manage expenses throughout the organization,” says president and CEO Bruce Duncan. “These disciplines are central to our strategy to navigate through the challenging economic, industry and financing environment in the near-term, and position the Company for future opportunities.”

Diluted net income was $0.35 per common share, down from $1.10 per share during the first quarter 2008. Likewise FFO fell to $0.38 per share, compared to last year’s Q1 numbers of $0.44 per share.

FFO fell predominately due to restructuring and cost reduction plans. “FFO included charges of approximately $5 million, or $0.10 per share/unit, related to the Company’s previously announced cost reduction and restructuring plan,” a company official says. First Industrial expects to see an additional $1 million of restructuring charges in the next couple quarters.

The industrial-focused company’s portfolio is 86% occupied, down slightly from Q4 2008′s numbers of 88.1%. Only 69% of tenants up for lease renewed during Q1. An average rental rates increased 0.7% to $2.18 per square foot.

“The impact of the current recession continues to affect businesses throughout North America, and we expect industrial real estate fundamentals to remain challenging throughout the year,” Duncan says. “To achieve our 2009 plan, our team is squarely focused on leasing our space, managing expenses, and completing our secured debt refinancing.”

The main concern for company officials now is the secured debt that is set to mature in June. First Industrial is in negotiations to refinance that debt. It has already repurchased $6 million of June maturities; and has less than $25 million of debt maturing before the start of 2011, not counting the June maturities.

”Our June debt maturity remains our top priority, and we are progressing in our negotiations with several lenders to obtain secured debt to refinance the remaining $119 million,” says CFO Scott Musil. “Our diversified portfolio is largely unencumbered, providing us with a range of assets to meet lenders’ criteria and execute our near-term capital plan.”

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