The term for the joint venture is 10 years with the capitalbeing recycled into the venture as properties are sold. TheCalifornia State Teachers' Retirement System (CalSTRS) willinitially contribute up to $150 million with First Industrialcontributing up to $17 million. The projected capitalization is 35%equity and 65% debt. The New York branch of WestLB AG is the leadlender for FirstCal Industrial Europe LLC and CB Richard EllisInvestors is advising CalSTRS in the venture.

The initial geographical focus of the venture will be theindustrial markets in Rotterdam and Amsterdam in the Netherlandsand Antwerp, Brussels and Ghent in Belgium. The venture may alsolater invest in other European markets. FirstCal Industrial Europewill acquire land for build-to-suit facilities and land forspeculative developments in addition to existing facilities toreposition and lease, redevelop or for sale-leasebacks, Yap says.First Industrial, as the venture manager, will receive fees fordevelopment, property management, leasing, dispositions andportfolio administration and may also receive performance-basedincentives.

First Industrial is forming the joint venture to serve the needsof the company's clients, Yap says. "We see opportunities inowning, managing and building industrial real estate in theNetherlands and Belgium," he says. "And, that is really driven bythe growth of our customers due to supply chain reconfigurationthat is going on in that part of the world." With moreinternational trade, companies are reconfiguring their supplychains, and there is a greater demand in the Netherlands andBelgium for industrial facilities such as warehouses anddistribution centers, he says. The venture with CalSTRS allowsFirst Industrial to have "the appropriate capital to fund our newinvestment opportunities," Yap says.