CHICAGO-After reporting that its third quarter FFO rose 13.1%, analysts are confident that CenterPoint Properties REIT will continue to report FFO growth double that of the average industrial REIT for the foreseeable future. The secret to the industrial REIT’s success is its avoidance of growth for its own sake, keeping leverage conservative and delivering unique solutions to clients who will then be willing to pay a premium for that solution, says the REIT’s CEO.

“CenterPoint is one of the best managed REITs in the country by far,” says Robert Norfleet, REIT analyst at Davenport & Co. “They will continue to deliver returns that are double that of the average industrial REIT for the next three years at least.”

On Wednesday, Centerpoint reported that, excluding one-time accounting adjustments, net income available to shareholders soared 39% in the third quarter to $12.1 million. Same store growth was 6.7%, occupancy was 96% and debt as a percentage of total market capitalization was 36%.

“We learned tremendously from our experience in the 1980s when we were part of a publicly traded UK real estate company,” says CenterPoint CEO John Gates. Until 1993, when CenterPoint went public in the U.S., it was majority owned by Capitol & Regional Properties PLC of Great Britain. Gates says many publicly traded UK real estate concerns embarked on ambitious asset expansion pushes, with results that were often far less than spectacular.

Size doesn’t matter is what Gates learned. He has avoided some of the indiscriminate asset growth strategies that have gotten other industrial REITs in hot water. First Industrial REIT, also based here, is just now extricating itself from a 1990s asset growth tear that went sour. In an interview with last week, First Industrial CEO Mike Brennan said that the trust’s asset realignment strategy is on track.

Another thing Gates says he learned from his UK experience was the importance of conservative leveraging. “CenterPoint recycles their assets when they have maximized their value,” says Davenport & Co.’s Norfleet. “They have a self funding model and don’t constantly need to be going to the capital markets to raise money for investment.” In an example of the extent to which CenterPoint self funds, the trust’s CFO Paul Fisher said in a conference call Wednesday that net new investment is $190 million so far this year, but debt is up only $50 million.

CenterPoint, which is the Chicago area’s largest industrial developer, has many ongoing projects, but three very large ones stand out. The biggest is the $1 billion redevelopment of the former Joliet Arsenal, another is the $100 million Chicago International Produce Market and the third is a huge co-development with Ford Land for a supplier park to service the auto giant’s Torrance Avenue plant.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


GlobeSt. NET LEASE Fall 2023Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2023 ALM Global, LLC. All Rights Reserved.