New York Society of Security Analysts REIT Conference. Robert Micera SVP and National Head of Net Lease Investments March 19, 2008

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Transcription:

New York Society of Security Analysts REIT Conference Robert Micera SVP and National Head of Net Lease Investments March 19, 2008

Safe Harbor This presentation contains forward-looking information about the Company. A number of factors could cause the Company's actual results to differ materially from those anticipated, including changes in: national, international, regional and local economic conditions generally and real estate markets specifically, legislation/regulation (including changes to laws governing the taxation of real estate investment trusts), availability of financing, interest rate levels, competition, supply and demand for industrial properties in the Company's current and proposed market areas, potential environmental liabilities, slippage in development or lease-up schedules, tenant credit risks, higher-than-expected costs, changes in general accounting principles, policies and guidelines applicable to real estate investment trusts, and risks related to doing business internationally (including foreign currency exchange risks). For further information on these and other factors that could impact the Company and the statements contained herein, reference should be made to the Company's filings with the Securities and Exchange Commission. 2

Agenda I. Brief Overview of First Industrial II. Focus on Sale-Leasebacks, Surplus Property Sales, and Private Equity Transactions 3

First Industrial Realty Trust, Inc. NYSE: FR $4 billion total market capitalization Broad platform top industrial real estate markets in U.S., Canada, The Netherlands and Belgium Portfolio of owned, operated and managed properties More than 100 million square feet of industrial space 1,000 buildings 2,900 tenants 11% average annual total return since IPO 9.4% dividend yield as of 3/17/08 4

Major Accomplishments Capital Raising Investments Portfolio Net Economic Gains JV FFO Customer Service Talent Platform $6.4B in new JV capital since 05; $1.9B in 07 #1 investor in U.S. industrial real estate in 06 and 05 5.9% Same store NOI growth in 07; Occupancy to 95.1% Seven consecutive years of growth Grew from $16M in 05 to $61M in 07 Leading scores: 9 of 10 customers recommend FR Increased development, acquisition & net lease expertise Entered/expanded into more high growth markets Unique Franchise Serving Corporate Customers 5

FFO Growth $3.61 13% CAGR $4.13 $4.64 Growth Drivers Net operating income Net economic gains Joint venture investments Development activity 2005 2006 2007 6

Strategically Aligned With Major Growth Drivers Long-Term FFO Growth Numerous Growth Drivers Strategically Increased Resources Strengthening The First Industrial Franchise 7

Growth Drivers 1. Corporate Customer Focus 2. International Trade 3. Supply Chain Reconfiguration 4. Demographic Trends 5. Industry Trends 8

9

Strategy All Industrial Facility Types in Supply Chain Expertise Across All Real Estate Disciplines Creating Value for Customers Local Market Expertise Multiple Capital Sources Leading Customer Service 10

idea NEW PRODUCT launch START PRODUCTION Industrial Supply Chain Solutions for Every Phase of Our Customers Business Cycle grow ACCELERATING DEMAND reconfigure SHIFTING NEEDS expand NEW MARKETS AND PRODUCTS 11

Expanding Platform Edmonton Calgary Seattle San Francisco Salt Lake City Denver Minneapolis Milwaukee Chicago Indianapolis St. Louis Toronto Detroit Central PA Cleveland Columbus Cincinnati Louisville N. New Jersey Philadelphia S. New Jersey Baltimore/ DC Amsterdam Los Angeles Irvine San Diego Phoenix Dallas Nashville Memphis Atlanta Brussels Houston Tampa Orlando Miami 12

Expanding Capital Base to Fund Growth $9.9 Billion Canada Europe Core Program Land/Development $285 Million $475 Million $505 Million $1.6 Billion Net Lease $400 Million Development/ Repositioning Core Acquisition $4.4 Billion $286 Million Net Lease $1.6 Billion $1.1 Billion Balance Sheet $4 Billion Balance Sheet $4.0 Billion 13 March March 2005 2008

2007 Highlights 12% growth in FFO 5.9% increase in same store NOI Occupancy rose to 95.1% Rental rates increased 4.2% Expanded platform into The Netherlands/Belgium, Calgary/Edmonton, Toronto, and Seattle/Tacoma Expanded Strategic Land and Development JV to $1.6 Billion New $475 Million European JV and $285 Million Canadian JV Developable land totals 4,300 acres; 68 million s.f. Grew land positions in high growth markets of S. California, Florida, Phoenix Investment pipeline of $2.2 Billion 14

First Industrial Solutions Sale-Leaseback Surplus Property Sales Private Equity Transactions 15

Unlocking Value Through Real Estate Target Customers Corporate Customers Private Equity Firms Sale-Leasebacks and Surplus Assets Can Provide: Acquisition Capital Recapitalization Financing Growth Capital 16

Competitive Advantages Broad platform Local expertise & resources in major markets in U.S., Canada, The Netherlands and Belgium More than 100 million square feet owned, managed and under development 500+ employees Multiple capital sources Balance Sheet/unsecured credit line Capital recycling Nearly $6 billion in total joint venture capacity with partners UBS Wealth Management North American Property Fund & California State Teachers Retirement System (CalSTRS) 17

Competitive Advantages - Acquisitions Buy, build & develop anything industrial Resources of local development, acquisition, property management and leasing expertise No maximum/minimum deal size Responsive/quick close Flexible sale-leaseback structures Short to long-term leases Partial or fully occupied buildings Cancellation, expansion, purchase options available Forward commitments 18

Portfolio Sale-Leaseback Case Study Rockwell Automation Client Objective Sale-leaseback of $152 million portfolio of operational assets 24 properties in 17 markets Primarily Manufacturing/Distribution Minimal contingencies All or nothing Challenges 5 to 15-year lease terms Termination options for every lease Multiple markets FR SOLUTION Speed of service purchase agreement/earnest money provided within 5 days Site visits to 66% of the properties in four days Awarded the transaction in July 2005 Willingness to provide short and long-term leases Accommodated tenant s termination requirements Accepted all or nothing 19

Portfolio Sale-Leaseback Case Study Volkswagen of North America and Volkswagen of Canada Client Objective One transaction involving three properties in two countries (U.S. & Canada) Required a 45-day time frame for closing Company wanted operational flexibility: expansion rights, long-term lease with renewal options Challenges Accelerated closing deadline Sale included excess land Multi-national transaction with complex title, zoning and currency issues Expansion options FR SOLUTION Closed entire portfolio (both US & Canada) in client s time frame One-stop-shop flexibility allowed for FR to tackle multi-market issues and provide optimal timely response Structured 15-year lease with expansion and renewal options for all three facilities 20

Portfolio Sale-Leaseback Case Study Jevic Transportation and Sun Capital Partners, Inc. Client Objective Sun Capital Partners, Inc., $3.5B private equity sponsor, was seeking to monetize real estate and use the proceeds to reduce debt Sun was seeking a one-stop-shop provider of sale-leaseback financing for a multi-market, multi-asset type portfolio Challenges Specialized truck terminal facilities used in the less than truckload industry sector Land required for trailer storage was also included in transaction Multi-market, multi-asset type transaction including a portfolio of two industrial/truck terminals and one office/hq facility FR SOLUTION: Efficiently closed portfolio sale-leaseback to monetize assets for the operating company FR s team performed extensive industry research on this business sector in order to understand the business and its client s needs 21

Sale-Leaseback Case Study Jacobson Companies, Inc. Client Objective Private equity firm recapitalization of target company Multi-property, multi-city portfolio Unlock real estate value/reduce overall equity contribution Needed single transaction Challenges Highly leveraged, non-investment grade credit Above market rent Secondary markets FR SOLUTION Successfully negotiated 10-year sale-leaseback Accepted entire portfolio 22

Sale-Leaseback Case Study Taylor & Francis Client Objective Accelerated close (< 45 days) Sought funds to renovate 345,000 s.f. distribution facility Consolidate two other facilities into this one Challenges Company had recently merged in May 2004 Primarily older property in secondary/tertiary markets FR SOLUTION Closed in client s desired time frame (< 45 days) Provided an additional $1 million to retrofit the facility Structured a 10-year lease with options 23

Environmentally Challenged Acquisition Senior Aerospace Client Objective Disposition of a Superfund asset Limited ongoing exposure/liability Challenges Limited indemnification from credit worthy entities Extensive due diligence required in a limited time frame No parent guaranty FR SOLUTION Successfully closed in June 2005 In-house environmental team underwrote and mitigated environmental risks thru extensive due diligence: No Further Action letter State legislation Purchase of environmental insurance 24

Development/Repositioning Case Study Maytag Client Objective Supply chain reconfiguration for Eastern seaboard operation Reduce space needs in existing building leased from 3rd party under a long-term lease Immediate space need in Atlanta Required a build-to-suit in North I-81 corridor Challenges Multiple transaction type FR to assume existing leasehold obligation in existing building FR SOLUTION: Provided all required solutions Assumed leasehold obligation Constructed build-to-suit in Covington, PA Leased existing building in Atlanta 25

Customer Solutions Gourmet Express 332,465 SF Greenville, KY Distribution/Manufacturing Facility Jevic Transportation, Inc. 390,000 SF (an affiliated portfolio company of Sun Capital Partners, Inc.) Delanco, NJ; Markham, IL 2 Truck Terminal Facilities, 1 HQ Facility Brooks Industries, Inc. 276,124 SF Stratford, Ontario Distribution/Manufacturing Facility Amcor Sunclipse North America 290,920 SF Buena Park, CA HQ/Distribution Center 26

Customer Solutions Home Interiors & Gifts, Inc. 659,340 SF (a portfolio company of Highland Capital Mgmt, LP) Carrollton, TX Distribution/Warehouse Center Lenox Group, Inc. 506,003 SF Hagerstown, MD Warehouse/Distribution Center Volkswagen of America Volkswagen of Canada 977,686 SF Pleasant Prairie, WI; Haslet, TX; Ajax, Ontario 3 Parts Distribution Centers Navistar International 390,000 SF York County, PA Distribution Center 27

Customer Solutions C&S Wholesale Grocers, Inc. 765,000 SF Stockton, CA Refrigerator/Cooler/Warehouse/Distribution Center Cardinal Glass Industries 255,000 SF Hudson, WI Distribution Center United Supermarkets 494,142 SF Lubbock, TX Warehouse/Distribution Center American Leather, L.P. 250,000 SF Dallas, TX HQ/Distribution Center/Manufacturing 28

Customer Solutions Michelin North America 665,420 SF Houston, TX Industrial/Warehouse Deposition Sciences, Inc. 143,750 SF (a subsidiary of Advanced Lighting Technologies, a portfolio company of Saratoga Partners) Santa Rosa, CA Manufacturing/R&D Facility Nilfisk-Advance, Inc./Alto U.S., Inc. 705,315 SF Plymouth, MN & Springdale, AR Manufacturing/Warehouse/Office Facilities Pearson Education, Inc. 886,826 SF Cranbury, NJ Distribution Center 29

Customer Solutions Caterpillar, Inc. 1,380,070 SF Joliet, IL Manufacturing Facility Fila USA 379,012 SF (a subsidiary of Sports Brands International Ltd., a portfolio company of Cerberus Capital Mgmt) Baltimore, MD Warehouse Rockwell Automation 3,925,096 SF 24 US Locations Manufacturing/Distribution Centers Leggett & Platt 400,800 SF Atlanta, GA Warehouse/Manufacturing Facility 30

Customer Solutions Jacobson Companies 1,652,569 SF Various Warehouse Portfolio Firstar Fiber Corporation 355,694 SF Omaha, NE Distribution Center Elizabeth Arden 399,182 SF Roanoke, VA Distribution Center Schiff Nutrition 416,634 SF Salt Lake City, UT HQ/R&D/Light Manufacturing Facility 31

Customer Solutions Senior Aerospace 134,720 SF Burbank, CA HQ/Manufacturing Facility Taylor & Francis Books 345,000 SF Florence, KY Distribution Center Maytag, Inc. 917,000 SF PA, Atlanta Distribution Centers 32

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