First Industrial, CalSTRS Extend $5B JV

The ventures include the $1.6-billion Development and Repositioning JV (FirstCal 1), the $1.6-billion Strategic Land and Development JV (FirstCal 3), the $475-million FirstCal Europe JV, the $285 million FirstCal Canada JV, and the 2005 Core JV (FirstCal 2), which was formed for the acquisition of a $1-billion portfolio. Since 2005, First Industrial has added approximately $5 billion in joint venture capital capacity with CalSTRS. First Industrial and CalSTRS have also extended the respective investment periods for the Development and Repositioning JV, the Strategic Land and Development JV, FirstCal Europe, and FirstCal Canada through December 2011.

In a statement, officials from the REIT said that the ventures provide a substantial amount of capital for investment. Using the ventures, "we invest in attractive acquisition and development opportunities, as they arise, that benefit our shareholders and our partner," said Mike Brennan, president and CEO of First Industrial, in the statement. Company officials did not respond to questions about this story.

Using the ventures, the REIT has been acquiring land for build-to-suit facilities and land for speculative developments, in addition to existing facilities to reposition and lease, redevelop or for sale-leasebacks. The trust receives fees for this service. CB Richard Ellis is the advisor to CalSTRS on the ventures.

Some of the ventures didn't start that long ago, and already had end-dates in 2018. The Europe and Canada JV were formed with 10-year terms in January 2008, with 35% equity and 65% debt. FirstCal 3 was formed in July 2006, and FirstCal 2 started in 2005. Properties in the ventures include a 759,000-sf spec distribution center in the DalPort Business Park in Wilmer, TX; 55 acres near the Edmonton International Airport that can hold 1.1 million sf; 1,300 acres of raw in Inland Empire, CA; and even a 177,000-sf distribution center at 220 W. Manville St. in Compton, CA.

In an April interview with GlobeSt.com discussing one of the ventures, Phil Bowman, an SVP with the REIT, says the ventures allow the company to be competitive during a time when financing is scarce for buying or developing. "We close on an all-cash basis, so we're in a good position to make acquisitions," Bowman said.