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CEO Spotlight: DCT Industrial Trust Focused on the U.S.

12/05/2013 | By Mitch Irzinski

Phil Hawkins, CEO of DCT Industrial Trust (NYSE: DCT), joined REIT.com for a CEO Spotlight video interview at REITWorld 2013: NAREIT’s Annual Convention for All Things REIT at the San Francisco Marriott Marquis.

DCT recently divested its Mexican operations. Hawkins discussed the strategy behind the decision.

“It goes back to our strategy of focusing our people and our capital on fewer markets, and markets where we can make a difference,” he said. “The investment required to be competitively significant in Mexico was substantial in both land and people.  The opportunities in the U.S. were exciting, both with our people and our capital, and then as pricing improved pretty significantly over the last 12 months in Mexico, the tradeoff became pretty straightforward for DCT.  We like Mexico as a market, it just wasn’t our strength, nor a strength that we felt our shareholders would benefit from us trying to develop. So, we sold.”

Hawkins was asked if we can expect an exclusively U.S. focus for the near-term.

“For the long-term,” he said. “Our focus is the U.S. For now a number of years, we’ve been positioning the company and the portfolio to be in fewer markets.  The intent is to remain in fewer markets, not to add to the list, certainly not to go outside the United States.  Our expertise is the U.S., I think we benefit from that focus, and the opportunities in the U.S. are terrific. So, we have no intention of broadening the footprint beyond were we are.”

Hawkins talked about where he sees opportunities in the United States.

“Certainly right now development is an exciting opportunity for us,” he said. “We spent a lot of time building the development capability, and acquiring land at attractive prices that allow us to develop at really attractive risk adjusted returns.”

Hawkins also shared his opinion regarding the supply and demand dynamics in the improving economy.

“The supply has increased as markets have improved, in the markets where they’ve improved the most,” he said. “I think you still want to watch it, but I’m optimistic, and I’m optimistic because of the way current development is being funded. It is not being funded by bank loans, it’s being funded by equity.”