But to come up with the $61 million needed for the transaction, the parent REIT either had to dip into its already depleted pool of US investment funds or sell other assets. It took the latter route, selling the Asian properties for $1.3 billion, plus liabilities assumed as part of the transaction. But by doing that, ProLogis expects to take a net loss of 4% to 6% of the book value of the sold assets. It also cuts itself off from anticipated long-term revenues.

First Industrial's European holdings are owned as part of a series of joint ventures with the California State Teachers' Retirement System. The two parties had high hopes for the $1.6 billion endeavor, which was only launched at the beginning of 2008. But warning signs surfaced barely nine months later, with a Sept. 22 announcement saying they were extending the deadline for the joint ventures by several years because they were having trouble finding what they considered correctly priced real estate.

In regard to the decision to suspend the Europeans operations, First Industrial interim CEO W. Ed Tyler says the move is part of an effort to reduce costs by reducing the number and size of corporate and regional offices. "We are positioning the company for the challenging economic and industry environment through additional actions to streamline expenses," he explains. "While the associated organizational changes are not easy, by reducing costs, we are enhancing our overall competitiveness now and for the future."

The CEOs of both First Industrial and ProLogis were forced to step down in November in response to dwindling returns and falling stock prices. Fitch Ratings has substantially lowered the credit rating of the two REITs, downgrading the former to BBB- and the latter to BBB. First Industrial stock closed the week of Dec. 19 at $7.86 a share, compared to a 52-week high of $37.23. ProLogis shares rose to $10.90 on news of the Asian sale but fell to $9.16 as of Dec. 22, about 85% off their 52-week high of $66.58.