First Industrial Announces New $475 Million Joint Venture to Invest in Real Estate in The Netherlands and Belgium with the California State Teachers' Retirement System
       By: First Industrial Realty Trust, Inc.
Posted: 2008-01-07 03:55:40
First Industrial Realty Trust, Inc. (NYSE: FR), a leading provider of industrial real estate supply chain solutions, today announced that it has formed a new joint venture, FirstCal Industrial Europe, LLC, with the California State Teachers' Retirement System (CalSTRS), the second-largest public pension fund in the United States with a $175 billion portfolio. The venture will serve a wide spectrum of customer needs by investing in various types of real estate: land for build-to-suit and speculative development, existing industrial facilities to be redeveloped, repositioned and leased, and sale-leasebacks. CB Richard Ellis Investors is the advisor to CalSTRS on this venture.

"Supply chains continue to evolve in the European Union, and we expect customer demand for distribution centers and other industrial facility types to grow in key logistics hubs such as Rotterdam, Amsterdam, and the Golden Triangle in Belgium," said Mike Brennan, president and chief executive officer of First Industrial. "This new joint venture with our partner, CalSTRS, provides us with additional capital to deliver state-of-the-art supply chain solutions in these strategic markets."

The major industrial markets in The Netherlands are Rotterdam and Amsterdam. The Port of Rotterdam is the largest containerized cargo seaport in Europe and has reported more than a 10% increase in volume over the past four years. Amsterdam's industrial market is comprised of Amstel/Southeast, Westport and Schiphol -- the site of Europe's third largest cargo airport, Schiphol Airport. In Belgium, the Golden Triangle of Antwerp/Brussels/Ghent has experienced strong demand from the logistics and distribution sectors due to its extensive rail, highway and seaport infrastructure. Antwerp is the third largest containerized cargo seaport in Europe and Brussels Airport Zaventem is among Europe's largest cargo airports.

The total investment capacity of the new venture is approximately $475 million. The expected capitalization is 35 percent equity and 65 percent debt. For the equity portion, CalSTRS has agreed to initially contribute up to $150 million and First Industrial has agreed to initially contribute up to $17 million, representing a 90 percent and 10 percent equity interest, respectively. Since the joint venture recycles capital back into the venture as properties are sold, the $475 million investment capacity is a "point-in-time" limit and total investments can exceed $475 million over the life of the venture. Credit facilities in multiple currencies have been arranged with WestLB AG, New York branch, the lead lender.

"Adding to First Industrial's wide array of capital sources is a key component of our overall strategy of serving corporate customers' supply chain needs, and we are pleased to expand our relationship with CalSTRS through this new European joint venture," said Mike Havala, First Industrial's chief financial officer.

First Industrial recently announced its expansion into The Netherlands and Belgium, along with the hiring of Jan Scheers as managing director. The venture will make investments in The Netherlands and Belgium, and may accommodate investments in other European markets in the future. The initial term of the joint venture is 10 years.

As venture manager, First Industrial will receive fees for development, property management, leasing, dispositions and portfolio administration. In addition, First Industrial has the opportunity to earn performance-based incentives.

First Industrial Realty Trust, Inc. (NYSE: FR) provides industrial real estate solutions for every stage of a customer's supply chain, no matter how large or complex. Across more than 30 markets in the United States, Canada, The Netherlands and Belgium, our local market experts buy, (re)develop, lease, manage and sell industrial properties, including all of the major facility types -- R&D/flex, light industrial, manufacturing, and regional and bulk distribution centers. We continue to receive leading customer service scores from Kingsley Associates, an independent research firm, and in total, we own, manage and have under development more than 100 million square feet of industrial space. For more information, please visit us at http://www.firstindustrial.com.

This press release contains forward-looking information about the Company. A number of factors could cause the Company's actual results to differ materially from those anticipated, including changes in: national, international, regional and local economic conditions generally and real estate markets specifically, legislation/regulation (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rate levels, competition, supply and demand for industrial properties in the Company's current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs, changes in general accounting principles, policies and guidelines applicable to real estate investment trusts, and risks related to doing business internationally (including foreign currency exchange risks). For further information on these and other factors that could impact the Company and the statements contained herein, reference should be made to the Company's filings with the Securities and Exchange Commission.
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