(To read more on the industrial market, click here.)

CHICAGO-As envious as First Industrial Realty Trust officials may be over other REIT’s stock prices, they are resisting temptations to go private. Questions resurfaced this week during Citigroup’s 2006 REIT CEO conference, when First Industrial chief Michael W. Brennan expressed both disappointment with his company’s stock price as well as a preference for remaining a public company.

“We feel there are many benefits to being a public company,” Brennan said. However, if the company’s portfolio were valued at a 6% capitalization rate, First Industrial stock would be trading at $50 per share. “We’d like that recognition. We work hard for it.”

Brennan concedes $50 per share may be a bit rich. “It ain’t 40,” added the president and chief executive officer. However, First Industrial stock opened at $39.38 Tuesday, clearing the $39 hurdle with a 2.7% jump Monday.

In addition to owning and operating its own industrial 75.3-million-sf portfolio in 25 US markets, the REIT also has developed 25 million sf of space, handles sale-leasebacks and most recently, has entered into mammoth joint venture partnerships. While being a public company is one way to gain access to capital, First Industrial’s joint venture deals are expected to total more than $800 million this year. However, the joint venture business is off the REIT’s balance sheet.

CalEast Industrial Investors LLC, a joint venture including California Public Employees’ Retirement System and LaSalle Investment Management, is buying Oak Brook-based CenterPoint Properties Trust for $3.4 billion, which represented a 9% premium over the locally focused REIT’s December stock price. While CenterPoint Properties Trust is the largest industrial property owner in the Chicago market with 38 million sf that is half the size of First Industrial’s national portfolio. Meanwhile, CenterPoint’s market capitalization of $2.4 billion is $700 million larger than First Industrial’s.

One analyst suggested First Industrial’s stock price should be above $50 during a recent earnings conference call, and asked Brennan about the possibility of going private. “Are we pleased with our stock price? No we are not,” said Brennan, adding he got some encouragement from the CenterPoint acquisition. “What we are pleased to see is the market placed a high value on a value-creation infrastructure.”

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?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


GlobeSt Net Lease Spring 2024Event

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 GlobeSt.com now!

  • Free unlimited access to GlobeSt.com'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 ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.