Search
 

GlobeSt.com UPDATE: $1B Portfolio Is No Buy-and-Hold for JV

CHICAGO-The 216-property, 14.4-million-sf portfolio acquired from Indianapolis-based Duke Realty Corp. is likely to be liquidated in about five years, according to First Industrial Realty Trust, which partners for the second time with the California State Teachers Retirement System.

By Mark Ruda | Updated on September 16, 2005

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

CHICAGO-Teaming up for the second time this year, First Industrial Realty Trust Inc. and the California State Teachers Retirement System have a different modus operandi in mind with the 216-property, 14.4-million-sf portfolio it acquired for $1.01 billion from Duke Realty Corp. While the first, $950-million joint venture between the locally-based national industrial REIT and the mammoth pension fund seeks to buy into value-added opportunities, the most recent hook-up will focus on stabilizing the new assets and selling them, possibly within five years.

“Ultimately, we think the parts of the portfolio are more valuable than the whole,” says president and chief executive officer Michael W. Brennan. While occupancy across the portfolio stands at 85%, First Industrial believes it can push that above 90%, Brennan explains. That will push a 7.75% going-in capitalization rate to 9% once the portfolio is stabilized.

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?

NOT FOR REPRINT

© 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

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.