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First Industrial Realty Trust's CEO Discusses Q2 2012 Results - Earnings Call Transcript

To that end, in late June, we closed on the acquisition of three development ready land sites in our target markets and have launched those developments. Two of the sites are in Southern California and were acquired as a package. The first site is located in a constrained infill location in LA County, adjacent to the 710 Freeway, approximately 25 minutes directly north of the Ports of LA and Long Beach.

There we are building First Bandini Logistics Center, a 489,000 square foot distribution center. We believe it will be a perfect home for a company located in the South Bay or Vernon Commerce sub-market that we want to upgrade to a state of the art [clock stop] facility with abundant trailer parking that is scarce in the submarket.

Total investment is estimated at $54 million with an estimated yield based on first year’s stabilized NOI over our GAAP basis of 6.5%. The facility is expected to be completed in the third quarter of 2013.

The second site is located in Chino, California; an infill submarket in the Inland Empire West. The site will be the home of First Chino Logistic Center; a 300,000 square foot distribution center. The building will offer expert functionality with double stag trailer lots that are difficult to find in the market. Users attracted to the Chino submarket want to take advantage of lower rental rate relative to nearby Los Angeles locations and lower transpiration costs compared to Eastern Inland Empire options.

Total investment is expected to be approximately $20 million. The estimated yield based on the first year stabilized NOI over our GAAP investment basis is 7.1%. We are targeting completion in the second quarter of 2013.

We also acquired a site in Central Pennsylvania, in New York that will be the home of our first logistic center at I-83. We are developing a 708,000 square foot distribution facility to meet market demand; with the supply of buildings greater than 500,000 square feet is limited.

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