PHILADELPHIA-FirstCal, the joint-venture fund between Chicago-based First Industrial Realty Trust and California State Teachers' Retirement System, spends $8.2 million, or just over $27 per sf, for the 301,115-sf rail-served industrial building located on 13 acres at 2500 Grant Ave. in Northeast Industrial Park. The seller is Grant Avenue Associates, a private real estate investment partnership.

The facility was built in the early 1950s and is the former corporate headquarters for Penn Fruit, a grocery chain that went out of business in the 1970s. Peter Corcoran, director of the Philadelphia region in First Industrial's Exton office, says his company plans to spend several million on improvements to "bring the property to institutional investment standards." The renovation includes a new roof, exterior and interior refinishing, new loading doors, upgraded lighting and a repaved parking lot.

The building is currently about 30% leased to three tenants Forman Mills, Linen Factory Outlet and Jomar Hosiery. The remaining approximately 200,000 sf includes warehouse and retail space, with the latter providing exposure along Grant Avenue opposite an existing shopping center.

Corcoran represented First Industrial. Patrick J. Green, SVP of industrial brokerage in the local office of CB Richard Ellis, represented the seller. Green and Paul Wierzel, a First Industrial senior leasing and marketing manager, are marketing the space. The warehousing area can be divided into units of from 30,000 sf to the full 200,000 sf, and the asking rental rate for warehouse space is $3.75 per sf, triple net. Office areas can be built to suit, Wierzel says.

FirstCal has a total investment capacity of approximately $950 million, with an expected capitalization of 35% equity and 65% debt. In a statement, Mike Brennan, First Industrial's president and CEO, says, "this joint venture provides us with greater capacity to expand our share of the most lucrative part of the industrial real estate business, the development and repositioning of corporate real estate assets." In late summer, First Industrial entered South Florida with the opening of an office in Miami. In September, using FirstCal funding, it acquired a 268,000-sf facility in the Medley submarket there and an eight-acre site for development of up to 156,000 sf in Flagler Station Business Park.