(Read more on the industrial market.)
CHICAGO-First Industrial Realty Trust Inc., based here, and the California State Teachers' Retirement System are increasing the capital capacity of their joint venture FirstCal 3 LLC to $1.6 billion. The venture was formed in July 2006 with a $950 million commitment, a spokesman for First Industrial says. "We see, frankly, really good opportunities for industrial real estate space, particularly in critical markets that are going to benefit from demand for major distribution centers," the spokesman says.
CalSTRS has made an additional equity commitment of $200 million and First Industrial has made an additional equity commitment of $22 million. The venture has arranged for $500 million in credit facilities with WestLB AG being the lead lender. The venture is somewhat unique in that it has a longer term of 10 years. During the term of the venture, the capital will likely be recycled, he says. CalSTRS is being advised in the venture by CB Richard Ellis.
The projected capitalization is 35% equity and 65% debt, according to a released statement from First Industrial. The REIT is the venture manager and receives fees for development, property management, leasing dispositions and portfolio administration in addition to performance-based incentives.
FirstCal 3 plans to invest in North America in areas with "major coastal and inland ports," the spokesman says. The venture has already acquired 1,400 acres of land that can accommodate up to 20 million sf of industrial space, he says. "Large parcels of land" have been acquired in Dallas, the Inland Empire in California and Phoenix. The joint venture has also acquired 537 acres in southern Florida.
The venture decided to expand the capital commitment since it has acquired a large amount of land and now plans vertical development on the parcels, the spokesman says. The majority of the facilities will be bulk distribution buildings, he says. Construction is underway on a 759,000-sf speculative distribution center at the 356-acre DalPort Business Park in Wilmer, TX. Construction is also underway on a speculative building in Palm Beach County, FL that will be part of First Park South Florida business park, which is expected to have more than 6.2 million sf of industrial space, according to a First Industrial released statement.
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