Activist Escalates War on First Industrial, Demands Board Overhaul

STAMFORD, CT – March 20, 2026 – Activist investor Land & Buildings Investment Management has intensified its public battle against First Industrial Realty Trust (NYSE: FR), calling on fellow shareholders to withhold votes for two of the company’s longest-serving directors, including its chairman. The move marks a significant escalation in a campaign aimed at what the activist firm calls an “entrenched” board and a persistent “governance discount” plaguing the industrial real estate giant.

In a letter sent to shareholders, Land & Buildings (L&B) detailed its case for an overhaul, urging investors to vote against Chairman Matt Dominski and Director H. Patrick Hackett, Jr. at the upcoming annual meeting on April 30. The activist's call to action came shortly after it withdrew the board nomination of its own founder and CIO, Jonathan Litt, a prominent figure in real estate activism. L&B stated it could be “more effective from outside the boardroom,” citing a lack of constructive engagement from First Industrial’s leadership on meaningful governance improvements.

The Activist's Case: An "Insular Boardroom Culture"

Land & Buildings’ core argument is that First Industrial Realty Trust has consistently underperformed its potential due to a stagnant and insular board. The activist firm claims the company trades at a significant discount to both its intrinsic Net Asset Value (NAV) and its closest peers, such as Prologis and EastGroup Properties.

L&B quantifies this underperformance, estimating FR’s NAV at $73 per share, which suggests a potential 20% upside from its current stock price. The firm attributes this gap to a “governance discount” of approximately $15 per share, or $2 billion in foregone market capitalization, which it links directly to the board’s composition and actions. “The Board, led by Chairman Dominski, has repeatedly refused to collaboratively engage with shareholders on a clear path to unlock value,” L&B stated in its public communication.

The activist has sharply criticized the board’s tenure, noting that prior to its recent actions, no new director had been added in five years and the average tenure stood at a decade. The firm specifically targeted Hackett, a director since 2009, and Chairman Dominski as symbols of this entrenchment. L&B also pointed to a 25% increase in CEO Peter Baccile’s total compensation to $8.3 million in 2025 as a point of contention amid the alleged underperformance.

Initially, L&B had proposed a series of value-creation steps, including a substantial asset disposition program and a strategic review. However, after claiming CEO Peter Baccile asserted there was no current need for governance improvements, L&B withdrew Litt’s nomination and shifted its strategy to a public campaign against the incumbent directors.

First Industrial's Defense: A Record of "Superior Returns"

First Industrial Realty Trust has mounted a robust defense, characterizing Land & Buildings’ campaign as a series of “misleading statements.” The company firmly rejects the narrative of underperformance, instead pointing to a track record it claims has generated “superior total shareholder returns relative to its proxy and industrial peers on a one-, three- and five-year basis.”

In response to the activist pressure, the company has made two significant moves. On March 16, it announced the appointment of a new independent director, Frank E. Schmitz, a veteran with decades of global real estate investment experience. His appointment, effective June 1, will bring the board to seven members, six of whom are independent. This action directly addresses L&B’s criticism about a lack of board refreshment.

Furthermore, the board authorized a new $250 million share repurchase program, which represents about 3% of the company's outstanding shares. First Industrial framed this as a “complimentary component of our disciplined capital allocation strategy” designed to enhance shareholder value. Management maintains that its strategy is working, delivering sustained value through a strong portfolio, durable growth, and efficient management under the board's oversight.

The company is now urging shareholders to vote for its slate of director nominees on the WHITE proxy card and to “disregard Land & Buildings’ materials.”

Performance Under the Microscope

With both sides presenting conflicting narratives, the company's financial and operational metrics reveal a complex picture. First Industrial has demonstrated strong operational momentum, reporting a 32% cash rental rate increase on leases in 2025 and targeting 30-40% growth in 2026. Its fourth-quarter 2025 revenue of $188.41 million surpassed analyst expectations, and analysts have raised their 2026 Funds From Operations (FFO) estimates for the company.

This positive performance has earned the company some support on Wall Street. RBC Capital, for instance, raised its price target to $66, maintaining an “Outperform” rating due to strong earnings growth potential. Yet, the consensus rating among analysts remains a more cautious “Hold” or “Buy,” with price targets that reflect both optimism and the uncertainty created by the proxy contest.

However, L&B’s core argument about a valuation discount persists. The activist’s comparison of FR’s implied capitalization rate to that of its peers highlights a valuation gap that is difficult to ignore. Whether this gap is due to governance, as L&B contends, or other strategic factors, is now the central question for investors. The debate puts the spotlight on the role of the board and its longest-tenured members in charting a course that closes this valuation gap.

A Wider Battleground for REIT Governance

The clash at First Industrial is indicative of a broader trend of shareholder activism sweeping the Real Estate Investment Trust (REIT) sector. Activist funds like Land & Buildings, which has a long track record of engaging with companies such as Equity Commonwealth and Ventas, are increasingly scrutinizing board composition, director tenure, and capital allocation strategies across the industry.

These campaigns often force boards to justify their long-term strategies and governance practices in a public forum. The withdrawal of Jonathan Litt’s nomination in favor of a “withhold” campaign is a tactical shift that underscores the activist’s conviction that change must start at the top. The upcoming vote at First Industrial’s annual meeting will serve as a crucial referendum on the company’s leadership and strategy. Shareholders must now weigh the board’s defense of its performance against the activist’s compelling call for urgent change.