Industrial developer and investor First Industrial announced on Friday that it has arranged a new $110 mln (EUR 78 mln) term loan facility for its joint ventures with the California State Teachers' Retirement System (Calstrs), the second-largest public pension fund in the US. The facility includes accordion features, subject to new commitments, that allow the loan to be expanded up to $275 mln and a revolving credit line up to $175 mln to be added, for a total potential facility of $450 mln, the company said.
Industrial developer and investor First Industrial announced on Friday that it has arranged a new $110 mln (EUR 78 mln) term loan facility for its joint ventures with the California State Teachers' Retirement System (Calstrs), the second-largest public pension fund in the US. The facility includes accordion features, subject to new commitments, that allow the loan to be expanded up to $275 mln and a revolving credit line up to $175 mln to be added, for a total potential facility of $450 mln, the company said.
The loan was arranged through a syndicate of WestLB, PNC Bank, and Regions Bank.
On Thursday the US group announced it was shutting down its European operations as part of a series of actions aimed at cutting costs on the back of tighter credit market conditions. The US REIT, which entered Europe just over a year ago, said it was 'discontinuing its European operations' in line with its plan to reduce expenses. Managing director for Europe Jan Scheers would not comment on the decision.
The group also announced additional cost reductions which will be achieved through further cuts in corporate and regional office staffing and other overhead costs. Interim group CEO Ed Tyler also warned that the company may deliver lower-than-expected results as the economic crisis in Northern America deepens. 'A number of factors could impact our ability to deliver results in line with our assumptions underlying our updated guidance, such as interest rates, the economies of the United States and Canada, the supply and demand of industrial real estate, the availability and terms of financing to potential acquirers of real estate. There can be no assurance that First Industrial can achieve such results.'
In addition, the company said that Chief Financial Officer Mike Havala has stepped down and will be replaced by Scott Musil, chief accounting officer. Havala's resigation follows hard on the heels of CEO Michael W. Brennan's departure at end-October.
Founded in 1994, First Industrial said last year it was entering Europe to capitalise on significant growth prospects in the logistics markets in particular of the Netherlands and Belgium. It also hired Scheers, a former Macquarie Goodman director, to lead its European expansion drive, opening offices in France and Germany in July. In early 2008 First Industrial announced a $475 mln joint venture with the California State Teachers' Retirement System (CalSTRS) to invest in logistics properties across Europe. The partnership's capitalisation was 35% equity and 65% debt. Credit facilities were provided by WestLB's New York branch.
