Wedbush downgraded First Industrial Realty to Neutral from Outperform with a price target of $49, down from $59. The company took the “responsible action” of lowering its guidance for occupancy and same store net operating income growth, and noted that national deliveries of about 300msf could raise the vacancy rate from 5.3% to the mid-6% range, the analyst tells investors in a research note. The firm thinks the stock and industrial real estate investment trust sector will have a hard time outperforming with that backdrop, even if it lasts just a few quarters. Meanwhile, Southern California is First Industrial’s largest exposure at 24% of revenues, and the market is undergoing a correction of its own, says Wedbush.
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