First Industrial Realty Trust Inc. (NYSE: FR) has made a concerted effort in the last three years to reduce its leverage and extend debt maturities, according to Bruce Duncan, president and CEO.
In a video interview with REIT.com in New York at REITWeek 2012: NAREIT's Investor Forum, Duncan explained what that effort has entailed. Among the steps taken to accomplish these goals, First Industrial has issued equity and debt, bought back some of its debt and sold assets. As a result, First Industrial has cut its debt-to-EBITDA ratio down from 9.8 at the close of 2009 to 6.95 at the end of the first quarter of 2012.
Duncan expressed optimism about the outlook for the industrial REIT sector in the second half of the year.
"If you look at the industrial market, it continues to get better," said Duncan, noting that the sector has seen nine consecutive quarters of increased occupancy. "We think it continues as long as you get GDP growth. You get good demand from our tenants. We're seeing that both with small tenants and large tenants. We're pretty optimistic that as long as the world continues to grow, we'll do alright."
Looking ahead, Duncan said First Industrial's desire is to be a net acquirer of assets in the deal market. However, the company is finding significant competition in the market for acquisitions, he said.
"The biggest surprise this year has been how competitive it is to buy properties," Duncan said. That may lead First Industrial to undertake a more aggressive development program, according to Duncan. The company recently finished a new 700,000-square-foot project in Southern California.
Duncan did say that the company intends to sell between $75 million and $100 million of "non-strategic" properties for the year.
"We're continuing to weed down the bottom part of our portfolio," he said.
First Industrial is an owner and operator of industrial real estate and provider of supply chain solutions to multinational corporations and regional customers. The industrial REIT has its corporate headquarters in Chicago. The company has more than 70 million square feet of industrial space under ownership, management or development across North America.