Real Estate Forum - February 2008

lobal digest

First Industrial-CalSTRS JV Targets Netherlands

First Industrial Realty Trust and the California State Teachers’ Retirement System have teamed up to invest $475 million in industrial properties in the Netherlands and Belgium.

Michael Brennan, president and CEO of First Industrial, says the decision to form this venture grew out of the REIT’s prior partnerships with CalSTRS. “We have a similar vision about the opportunities in the marketplace,” the Chicago-based executive explains. “We thought we would extend our relationship to the European arena where there are some strong opportunities.”

The partnership, FirstCal Industrial Europe LLC,

marks the REIT’s entrance into Europe. The JV will invest in land for build-to-suit and speculative development; existing industrial facilities to be redeveloped, repositioned, and leased; and sale-leasebacks. Brennan says the region’s large ports and population growth made this an attractive market for its first European play. “You have in that one area all the drivers for industrial

BRENNAN: demand that you frequently see over much wider geo-

“Supply chains graphic areas,” he notes. “The supply chains are continu- are continuing ing to evolve in the European Union. We’re expecting to evolve in the that demand for distribution centers and other industrial European facilities will increase in areas like Rotterdam,

_Union.” Amsterdam and the Golden Triangle in Belgium.”

CalSTRS will initially contribute $150 million,
accounting for 90% of the JV, and First Industrial will
kick in $17 million. FirstCal will borrow about 65% of the capital. The JV
will recycle capital back into the venture as properties are sold, which could
cause total investments to exceed $475 million over the 10-year life of the
entity. First Industrial will manage the partnership. CB Richard Ellis
Investors advised CalSTRS in the deal.—Jennifer McCandless

Hill, Makan Team on Middle East Projects In a move to expand into the development business, Marlton, NJ-based construction consulting firm Hill International has formed a 50-50 joint venture with Makan Capital Group of Riyadh, Saudi Arabia.

The Abu Dhabi-based partnership, Makan Hill International Ltd., will develop commercial, mixed-use and residential projects throughout the Middle East and North Africa. David Richter, president and chief operating officer of Hill, says his firm wanted to move away from being an agent in projects and more toward acting as a principal, and was therefore looking for a low-risk way to enter the development arena. He says Hill was working with MCG on another project when the opportunity to team up on this venture presented itself.

“MCG actually brought the idea of this joint venture development firm to the table,” Richter relates. “The Middle East is a very large market and it happens to be where MCG’s interest is. I think they’re going to be an ideal partner for us so that we can get our foot in the door of the development business.”

MCG plans to raise a $500-million fund to invest in the projects developed by the JV. Richter says the company has already identified possible development opportunities and expects to start building within a year. Makan Hill will construct the properties, while Hill will serve as project manager.—Jennifer McCandless

FOR $31M, GAZIT-GLOBE MAKES FIRST BRAZIL BUY Sao Paolo, Brazil—Tel Aviv-based real estate investment firm Gazit-Globe has made its first acquisition in Brazil with the $31.3-million purchase of a shopping center here. The 14,238-sm property is anchored by a Carrefour Supermarket and is located on 22,840 sm of land with the potential for further expansion.

PROLOGIS TO DEVELOP

2.1M-SF UK RAIL PARK

Birmingham, England—ProLogis plans
to develop a 2.1-million-sf, rail-served
distribution park in southeast London.
The 158-acre complex, to be called
ProLogis Park Howbury, will include
four large-scale industrial warehouses
and an intermodal facility that will be
served by
rail. The rail
infrastruc-
ture will
connect to
major freight
routes, sea-
ProLogis Park Howbury ports and
other logis-

tics parks throughout the country. It is the first of several such projects ProLogis intends to build throughout the UK using a number of environmentally friendly features, including rainwater harvesting, water-efficient irrigation and photovoltaic panels. Construction is expected to begin early this year.

SVN ADDS COSTA RICAN FIRM IN GLOBAL EXPANSION EFFORT Dominical, Costa Rica—Irvine, CA-based brokerage firm Sperry Van Ness has added its first international member here. The Costa Rica Real Estate Service MLS SA has joined SVN as a member firm and will operate as Sperry Van Ness Costa Rica/Panama. The locally based brokerage, specializing in land, hospitality and multifamily properties, currently has in excess of $40 million in listings and is led by co-founders Carlos DeNecochea and Jason Fairchild. ◆