First Industrial, CalSTRS Target Europe with $475M JV

Chicago-based First Industrial Realty Trust and the California State Teachers’ Retirement System–CalSTRS–have formed a joint venture to invest $475 million in industrial real estate in The Netherlands and Belgium. The venture called First Cal Industrial Europe L.L.C., is First Industrial’s first foray outside the western hemisphere. First Industrial announced plans to enter The Netherlands and Belgium markets last July. In a statement prepared then, the company said that both countries offer significant growth opportunities due to rising volumes of containerized cargo, growing demand for modern distribution facilities, and an emerging trend toward leasing versus direct ownership by corporate customers. The announcement also noted that First Industrial had hired a Brussels-based managing director for its Netherlands and Belgium operations. “The timing of our new joint venture is consistent with our disciplined process for entering any new market,” Johannson Yap (pictured), First Industrial’s chief investment officer told CPN today. “We research the opportunities within a market, hire seasoned local market experts, and arrange appropriate capital for planned investments.” The major industrial markets in The Netherlands are Rotterdam and Amsterdam. The port of Rotterdam is the largest containerized cargo seaport in Europe. Reported volumes there have increased 10 percent during the past four years. Amsterdam’s industrial market includes Amstel/Southeast, Westport, and Schiphol — the site of Europe’s third largest cargo airport. In Belgium, the so-called Golden Triangle of Antwerp/Brussels/Ghent offers extensive rail, highway, and seaport infrastructure. Antwerp is the third largest containerized cargo seaport in Europe, and Brussels Airport Zaventem ranks among Europe’s largest cargo airports. CalSTRS will contribute approximately $150 million, and First Industrial, which will manage the venture, will contribute about $17 million. First Cal will borrow about 65 percent of the capital. The strategic plan calls for recycling capital back into the venture as properties are sold. As a result, total investments may exceed $475 million over the 10-year life of the venture. First Cal will invest in land for build-to-suit and speculative development; existing industrial facilities to be redeveloped, repositioned, and leased; and sale-leasebacks. First Industrial owns, manages, and has under development more than 100 million square feet of industrial space across 30 markets in the U.S., Canada, and now Europe. With a $175 billion portfolio, CalSTRS ranks as the second largest public pension fund in the U.S.