First Industrial’s Bruce Duncan Steers REIT Through Some Painful Times

With a portfolio of 100 million sq. ft. of industrial space in North America, First Industrial Realty Trust is the nation’s third largest industrial REIT (NYSE: FR). But when the Chicago company announced in January it was hiring a new CEO, it chose a veteran with broad experience in hotel, retail and apartments.

Article Tools

Latest News

More Latest News

The new man is Bruce Duncan, 57, who took the titles of president and CEO. For now, he’ll also serve part-time as the non-executive chairman of Starwood Hotels & Resorts Worldwide, a position he’s held since 2005. Prior to that, Duncan served as CEO of Equity Residential and Cadillac Fairview Corp.

Duncan maintains that his lack of recent experience in the industrial sector is not a serious shortcoming. “The fact is that the whole commercial real estate world is deteriorating,” he says. “My job will be to get our team to fill up our properties with more tenants. I had the same kind of challenge at the other companies I worked for.”

Vacancies in many of First Industrial’s biggest markets have been soaring while lease rates have stalled and even declined. In metro Chicago, 10.3% of industrial property is currently vacant, up from 8.6% a year ago. The market hasn’t been so bad since the recession of 1991.

First Industrial’s stock price closed at $3.43 on Feb. 17, down from its 52-week high of $33.17 in mid-September.

The company has shut down its European operations, pared back its payroll and cut its dividend. New development planning has gone into hibernation. Of its roughly $2 billion in debt, just $135 million matures before 2011.

Duncan believes that more investors view industrial real estate as a safe harbor. Institutional investors are under-allocated in industrial and eager to invest. “Industrial assets are very financeable. You can take individual buildings or small pieces of a portfolio and offer them up to investors in bite-sized chunks.”

Many markets are experiencing negative absorption, driving down lease rates and valuations. That has got Duncan’s attention. His joint-venture partners, including the California State Teachers’ Retirement System, are looking for a market bottom as a signal to buy assets. “This will soon be a great time to be looking for new assets.”


Acceptable Use Policy
blog comments powered by Disqus

Photo Galleries

New York's Star Deals

http://nreionline.com/images/nyc_big_deals_homepage_thumb.jpgThe city that never sleeps is also the city that never stops growing, not even in the midst of recession. And deals, both bold and unprecedented, continue to be done. Check out image of New York's big deals.

Hudson Yards Development

http://nreionline.com/photo_gallery/hudson_yardsCheck out images for Coach's new global headquarters, which will anchor the initial tower of the Eastern Rail Yards site within the 26-acre mixed-

Videos

JLL at ICSC 2012

http://nreionline.com/video/bjorson_thumbnail.jpgCheck out these videos from JLL at ICSC 2012 in Las Vegas...

 

Click here to view more videos.


Blogs


http://nreionline.com/blog/schein_blog_headshot.jpg

Real Vox

Traffic Court

The Full Nelson

Events

Strategic Real Estate Investment Conference

Date: Thursday, June 7, 2012
Time: 7:45AM-6:00PM
Place: 1290 Avenue of the America, 5th Floor
What: A full-day event exploring portfolio diversification through opportunistic and alternative investments....

Click here to view more events...

http://nreionline.com/nrei-300x125-house-091211-resourcebook-jpg.jpg

This Week's Most Popular

Current Issue

http://nreionline.com/april2012_cover.jpg

NREI Newsletters



Retail Traffic Newsletters

View NREI Newsletters

NREI Newsline
NREI Seniors Housing Finance and Development
NREI The Green Sheet
NREI Institutional Outlook
NREI Distressed Real Estate Strategies
NREI Daily/Central
NREI Daily/New York
NREI Daily/New Jersey
NREI Weekender
NREI Global Real Estate Monitor
REIT Insider
Retail Traffic Online
The Site Optimizer

Join the Conversation