First Industrial drops 3% as activist Litt withdraws board bid
Proxy fight concludes without board seats, removing near-term pressure for strategic changes at the $8.2B industrial REIT
First Industrial Realty Trust shares fell 3.1% to $57 on Friday after activist investor Jonathan Litt withdrew his nomination to join the company's board, effectively ending a months-long proxy fight that had sought to shake up the industrial real estate owner's leadership and governance structure.
The withdrawal removes a potential catalyst that Land & Buildings Investment Management had estimated could unlock $15 per share, or roughly 20% upside, through board refreshment and strategic changes. The stock now trades below its 50-day moving average of $59.83, though it remains above its 200-day average of $54.40, giving the Chicago-based REIT a market capitalization of $8.2 billion.
"We believe we can more effectively advocate for change from outside the boardroom," Litt stated, according to Bloomberg Law, ending the campaign just weeks before First Industrial's scheduled annual meeting on April 30.
The activist firm had targeted First Industrial since late 2025, criticizing what it termed a "governance discount" in the company's stock price and an entrenched board. Land & Buildings specifically sought to replace Chairman Matthew Dominski, who has served on the board for more than 15 years, and director H. Patrick Hackett Jr., a 16-year veteran. The activist proposed a $500 million to $1 billion asset disposition program with proceeds returned to shareholders, along with scheduling an investor day within 90 days.
First Industrial responded forcefully to the withdrawal, issuing a statement calling Land & Buildings' assertions "misleading statements about the Company's strategy and governance, including misrepresenting the Company's historical outperformance."
"In fact, the Company has delivered superior total shareholder returns relative to its proxy and industrial peers on a one-, three- and five-year basis," First Industrial said, defending its performance under the current board's leadership.
The company highlighted several recent initiatives demonstrating its commitment to shareholder value, including appointing Frank E. Schmitz as a new independent director effective June 1, and authorizing a $250 million share repurchase program. "First Industrial began 2026 from a position of strength, and we remain focused on capitalizing on the significant opportunities within our portfolio and development pipeline to drive continued cash flow growth and enhanced stockholder value," the statement continued.
The activist campaign's conclusion comes as First Industrial continues to demonstrate strong operational performance. The company reported Q4 2025 earnings that significantly exceeded analyst expectations, with diluted EPS of $0.59 beating forecasts of $0.42. Revenue reached $188.4 million, while funds from operations increased to $0.77 per diluted share, up from $0.71 in the prior year. The portfolio maintained a robust 94.4% occupancy rate, with cash basis rent growth accelerating to 38.3% for the quarter, up from 29.4% in Q4 2024.
First Industrial also provided 2026 guidance for NAREIT FFO between $3.09 and $3.19 per share and raised its Q1 2026 dividend by 12.4% to $0.50 per share, signaling confidence in its business momentum despite broader concerns about softening industrial real estate demand.
Analysts maintain a moderate buy consensus on First Industrial, with price targets generally ranging between $61 and $65, suggesting potential upside from current levels even without the activist pressure. Some analysts have expressed concerns about potential headwinds, including declining demand for industrial space and pressure on cash lease spreads for 2026.
The broader market also contributed to Friday's decline, with the Morningstar US Market Index falling 1.82%, but First Industrial's drop was more pronounced as the activist catalyst evaporated. The stock remains below its 52-week high of $64.01 but well above its year-low of $39.30.
With the proxy fight behind it, First Industrial now faces the challenge of executing its growth strategy without the external pressure that often accompanies activist campaigns. The $250 million buyback authorization, representing approximately 3% of the company's market cap, provides a near-term support mechanism for the stock, though analysts will be watching for evidence of sustained outperformance relative to industrial REIT peers to validate management's defense of its strategy.