US - First Industrial, the North American Real Estate Investment Trust (REIT), has arranged a new $110m (€78.6m) debt facility for its ventures with the California State Teachers' Retirement System (CalSTRS).
The three-year term loan, priced at a LIBOR plus 2.75% and includes accordion features which, subject to commitments, allow the loan to be increased up to $275m (€196.6m) while a revolving credit line of up to $175m has also been added, generating a total potential facility of $450m.
"The ability to execute this term loan at attractive terms in the current challenging credit environment reflects the quality of our joint venture assets, our sponsorship, and our joint venture partner," said Ed Tyler, interim chief executive officer of First Industrial.
The loan was arranged through Regions Bank, PNC Bank and WestLB as administrative agent, and Robert Walter, senior vice president of capital markets at First Industrial, was in charge of leading the firm's team on the transaction.
CalSTRS, the second-largest pension fund in the United States, and First Industrial agreed in January 2008 a $475m (€339.7m) joint venture to invest in logistics in the Netherlands and Belgium.
On 22 September 22 they then announced they were extending their agreement for five joint ventures through to December 2018, partly because they were having trouble finding industrial real estate that they believed was priced correctly.
These include the $1.6bn (€1.1bn) Development and Repositioning JV, the $1.6bn (€1.1bn) Strategic Land and Development JV, the $1bn (€715m) 2005 Core JV, the $475m (™339.3m) FirstCal Europe JV and the $285m (€204m) FirstCal Canada JV.
Earlier this week, First industrial announced it was ending its European operations as part of a cost cutting and realignment program.
"We are positioning the company for the challenging economic and industry environment through additional actions to streamline expenses," said Tyler.
Tyler said a number of factors including interest rates, the economies of the US and Canada, the supply and demand of industrial real estate and financing terms for potential real estate buyers could impact estimated returns.
The US REIT, which entered Europe last year, estimates the pre-tax charge to earnings will be between $27.3m (€19.5m) and $27.9m (€20m) as a result of the management changes, redundancies and office closing costs.
At the same time, around $14.9m (€10.7m) to $15.1m (€10.8m) of the pre-tax charges and cash expenditures will be paid before the end of the first quarter 2009.
The company also announced its chief financial officer, Mike Havala, has resigned and Scott Musil, chief accounting officer, has been named acting chief financial officer.