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LONGMONT, CO-First Industrial Realty Trust has leased its only asset here, a 126,400-sf industrial building. The industrial REIT, which owns 5.3 million sf in the greater Denver area, says it has leased the building to AVA Solar, a manufacturer of thin film photovoltaic modules used in solar panels.

Located at 9586 I-25 Frontage Rd., the building will be used as AVA Solar’s first large-scale manufacturing facility. Approximately 20% of the building is built out for office use. The parties involved did not release the length of the lease and the negotiated lease rate. The triple-net asking rate for the building was $0.58 per sf per month, according to an online marketing brochure.

AVA Solar initially planned to begin its large-scale manufacturing in a brand new building in Fort Collins, Co, where its headquarters is located. Last month, it announced that it would, in the interest of expediency, begin large-scale manufacturing in an existing building. An AVA source confirms for GlobeSt.com that the existing building is the First Industrial facility.

“It became clear that building a new facility from scratch would take longer than we could afford given existing market conditions,” says AVA Solar VP Dave Halter. [The] we identified an existing building perfect for our needs that could start receiving production equipment arriving in April of this year.”

The First Industrial building previously was occupied Applied Films Corp., which is now a part of Applied Materials. Applied Films was a supplier of thin film deposition equipment used in flat panel displays. In 2005, it exercised an option to acquire the building, which it was then leasing, and agreed to flip the property to First Industrial for the option price of $7.4 million and lease it back on a long-term basis.

The lease commenced on Dec. 22, 2005 and was to run into 2011. Applied Films’ starting lease rate was $0.54 per sf per month. AFC noted in SEC filings that the flip shaved 20 months off its previous lease term and dropped the lease rate by $0.10 per sf per month.

In May 2006, Applied Films announced it was being acquired by Applied Materials for $464 million. Applied Films promptly vacated the property and subleased it for part of 2006, according to SEC filings. First Industrial’s director of leasing and marketing Mark Dwyer tells GlobeSt.com that Applied Films recently negotiated a lease termination agreement that became effective a few weeks ago.

Grubb & Ellis began marketing the property for lease or for sale in May 2007. The asking lease rate was the aforementioned $0.58 per sf per month. The asking sale price was $9.9 million. The lease agreement with Applied Films includes a $250,000 tenant-improvement allowance and a purchase option that will keep the property off the market for one year, Dwyer says.

Mike Wafer of Grubb & Ellis and Ron Webert from Bitzer Real Estate Partners had the leasing assignment. Ken McCrady with Realtec represented AVA Solar.

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