Industrial REIT Executive Walks Narrow Finance Line
Gayle Starr used to stride through warehouses bustling with workers and forklifts and find that she was the only woman in the building. Now she is senior vice president of capital markets at San Francisco-based AMB Property Corp., the giant developer and operator of industrial warehouses that owns 156.9 million sq. ft. in 14 countries.
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One of a handful of top women executives in the industrial sector, she is responsible for AMB's secured and unsecured debt. She averages a dozen corporate and portfolio financings annually and tends more than 40 lender relationships.
Starr has fought the recession on the front lines, closing loans despite the credit crisis. As with other REITs, the company's stock has come under fire, freefalling from a 52-week high of $57.13 to a low of $8.73. The stock closed at $22.99 on Aug. 26.
In the second quarter, AMB acted decisively to retire some of its debt by issuing equity and selling properties, improving its financial position from the first and fourth quarters.
“They've done a fairly good job of deleveraging their balance sheet,” says Chicago analyst David Rodziewicz of Morningstar. But he is concerned by AMB's development pipeline of 9 million sq. ft. set for delivery by 2010, when $1.6 billion of its debt matures.
Through June, AMB sold $461 million worth of properties with an average stabilized cap rate of 6.9%. In a second-quarter earnings call, chairman and CEO Hamid Moghadam said the REIT's debt shrank by more than $750 million while available cash rose by $300 million.
As she sought loans, Starr followed a conservative path, avoiding commercial mortgage-backed securities. “We didn't do any fancy derivatives. We did basic financing with life insurance companies.”
An attorney, Starr joined AMB 17 years ago, learning property and asset management, construction and development. She travels the globe to secure loans, closing $2 billion in financing in 2008.
Her low tolerance for high-leverage loans still guides AMB's financing. “That has worked out for us immeasurably.”
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© 2012 Penton Media Inc.
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