Bruce Duncan, president and CEO of First Industrial Realty Trust (NYSE: FR), joined REIT.com for a CEO Spotlight interview at REITWorld 2012: NAREIT's Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
First Industrial Realty Trust is a leading owner and operator of industrial real estate and provider of supply chain solutions to multinational corporations and regional customers. Across major markets in North America, the company's local experts manage, lease, buy, develop, and sell bulk and regional distribution centers, light industrial, and other industrial facility types.
In terms of the recovery underway in the industrial real estate space, Duncan said the industry is in about the fifth inning of a nine-inning game.
"We are making progress. The world economy is getting better. Markets are absorbing industrial space," Duncan said. "So, I am encouraged heading into 2013 as long as we continue to have this honest economic growth we have been seeing over the past year."
Duncan discussed First Industrial's efforts in recent years to shed some non-core and underperforming assets from its portfolio.
"In October 2010 we identified about $350 million in non-strategic assets that we planned to dispose of, and we are about halfway through that process," Duncan said. "We anticipate selling the balance of this non-strategic portfolio over the next couple of years."
Even once those identified assets are shed, Duncan said asset management remains an ongoing process and the company regularly evaluates the holdings in its portfolio.
First Industrial also has a strong track record of development, and Duncan said building new assets is another way to strengthen the overall quality of its portfolio. The company recently finished a 700,000 square foot development in the Inland Empire that was leased to a good-quality tenant for 15 years.
"We just started $115 million in new developments," Duncan said. "We have a 490,000 square foot project in an infill location in L.A. County. We have a 300,000 square foot project in Chino, and we have a 708,000 square foot development in York, PA."
"We are very excited about our development business. We have great capability, and it not only helps us with good yields but upgrading the quality of our portfolio," Duncan said.