NEWPORT BEACH, CA-Australian REIT Dexus took a big stepWednesday in a plan to invest at least $600 million in industrialproperties in three West Coast port markets, primarily in theGreater Los Angeles area, when the Sydney-based company opened anoffice here and staffed it with a team to execute its West Coaststrategy.

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Dexus CEO Victor Hoog Antink tells GlobeSt.com that the strategyinvolves selling the company's East Coast and Central US holdingsover the next few years in order to concentrate its portfolio onthe West Coast. That plan is intended to replicate the company'sAustralian strategy of investing in a very few markets but with ahigh concentration of holdings in those markets, which has workedvery well for the REIT in Australia, Hoog Antink explains.

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Heading the Newport Beach office is Jane Lloyd, managingdirector of US investments. Dexus has hired Bruce McDonald andBryan Bentrott, both formerly of Master Development Corp., asmanaging director of development & asset management andmanaging director of acquisitions & leasing, respectively,along with a team of six former Master Development executives withexpertise in property management, finance and operations.

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Dexus owns 25.7 million square feet of industrial and logisticsspace in 98 US and Canadian properties, 97 of them in the US. Theproperties are in 17 different geographic submarkets.

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Hoog Antink tells GlobeSt.com that although the Dexus strategyinvolves selling its Eastern and Central US assets, it will notneed to wait to sell them before buying on the West Coast. "We willactually allocate capital to the West Coast so that if they (theNewport Beach-based team) want to buy ahead of sales, they can dothat," the Dexus CEO says. He points out that the company has"plenty of financial capability and flexibility," with more than $1billion available in credit lines today and lowleverage―under 30%. In addition to acquisitions, its WestCoast investments could also include build-to-suit projects, henotes. Regarding the dispositions of properties in the eastern andcentral markets, he adds, "We're not in a hurry. We will take ourtime."

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Dexus will concentrate its investments in the Greater LosAngeles area, the Oakland area and Seattle-Tacoma because of thehuge volume of trade that comes through the ports in those markets,according to Hoog Antink. The company will be among the top fiveindustrial investors on the West Coast once it executes itsstrategy, he says.

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Hoog Antink explains that the Dexus strategy of concentratingits holdings into key markets provides three primary benefits forthe REIT: One, it helps the company to establish stronger andlonger-term relationships with tenants because the highconcentration of ownership enables it to offer tenants a broadrange of options for increasing or decreasing occupancy or choosinga build-to-suit. Two, it generates business from a host of sourcessuch as accountants, lawyers, investment bankers and real estateagents because Dexus has such a large presence in the market.Three, it attracts high-quality staff that in turn help to generateopportunities for the REIT.

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The Dexus US strategy also will involve transferring themanagement of its West Coast properties―and a group ofWhirlpool facilities―in-house from the third-partymanagers it now employs. Properties east of the Rockies will staywith their current managers until they are sold. According to PaulSay, head of corporate development and international, the companyplans to bring the Whirlpool properties management in-house by July1 and the balance of the West Coast properties by Jan. 1, 2011.Rreef will continue to provide asset management services for thebalance of the Dexus US portfolio, and CB Richad Ellis willcontinue to provide property management services.

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Dexus thinks that now is a good time to buy, Hoog Antink says.He says that the company believes the market is at bottom and thatoccupancies and rental rates will increase as the US economyrecovers. "Traditionally the US is so resilient that the recoveryusually happens sooner and with more velocity than people in therest of the world expect," he says. Dexus, however, is "not tryingto play the cycles," Hoog Antink points out. "We think it's a goodtime to buy, but we are here for the long term," he says.

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