First Industrial Realty Trust Inc., a Chicago-based REIT, is developing numerous projects in Central Florida through a joint venture with the California State Teachers' Retirement System, also known as CalSTRS. The latest result is the purchase of 134 acres along US 27 in Lake County, north of Orlando, for the development of an industrial project dubbed First Park Groveland.

CalSTRS, the nation's second-largest public pension fund with a $175-billion portfolio, is also partnering with First Industrial on several other projects within Central and Southwest Florida, including two new buildings at First Park Brandon, east of Tampa.

"We try to show them all our stuff first," says Robert Krueger, First Industrial's regional director in Tampa. "If they choose not to and we still think it's a good deal, we will still do it ourselves. It allows us to do a lot more than we would normally be able to do."

First Industrial currently owns or manages 2.2 million sf of industrial space and roughly 300 acres of developable land in Florida, primarily in the Interstate 4 corridor between Tampa and Orlando.

Developments include a 400,000-sf speculative building at First Park Bridgewater near Lakeland, as well as a 500,000-sf build-to-suit distribution center for German-based grocer Aldi Group at First Park Haines City, in eastern Polk County. A 74-acre addition to the Haines City project, which was launched last summer with 160 acres, is now under consideration.

Krueger says the Groveland acquisition is an indication that industrial developers need to lock in land positions now, despite the economic downturn, so that projects are ready to open in time for the recovery. He points out that Bridgewater, which started in 2002 with 120 acres, is now out of land for additional buildings.

"By the time you buy the land, go through site plan approvals and get your infrastructure and roadways, you're going to burn up 12 months," Krueger observes. "Before we can even turn ground on a building in Groveland, we're probably looking eight or nine months out. You have to have stuff in the pipeline to keep in the game."

Acquiring sites at a cheaper price—and before other developers realize they are available—allows First Industrial to offer more favorable rents to prospective tenants, Krueger says. As more industrial developers seek suitable property along I-4, it's getting more difficult to secure those sites.

"There's more competition for us as we look down the road two years from now, when we run out of land and have to get back in the game again," he says. "There's always risk in the development business, but you can mitigate that based on past history and knowing what people are looking for."

Even as First Industrial and CalSTRS seek to develop their Groveland property and sell parcels to corporate users, Krueger says the joint venture will continue scouting the I-4 landscape.

"Central Florida is where the growth is," he says. "When we see an opportunity for a good site that is priced accordingly, we're going to pursue it. We're still looking for land."

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