FIRST INDUSTRIAL REALTY TRUST INC

4. Indebtedness

On July 29, 2022, the Joint Venture entered into a construction loan with a borrowing capacity of $149,514, which matures on July 29, 2025. The construction loan accrues interest at a variable rate of SOFR plus 3%. Such interest is added to the construction loan balance while construction is ongoing. Payments of interest will become due once construction is substantially complete. The gross outstanding balance of the construction loan is $95,711 and $9,037, respectively, net of unamortized debt issuance costs of $730 and $1,188, respectively, on the Consolidated Balance Sheets at December 31, 2023 and 2022. The fair value of the construction loan at December 31, 2023 and 2022 is $95,358 and $8,934, respectively, and was determined by discounting the future cash flows using rates, as advised by our banker, at which a similar construction loan would be made to borrowers with similar credit ratings and for the same remaining term, assuming no repayment until maturity. The Joint Venture has concluded that its determination of fair value for the construction loan was primarily based on level 3 inputs. The Joint Venture believes it is in compliance with all covenants related to the construction loan as of December 31, 2023.