First Industrial Realty Trust Inc. (NYSE:FR) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 25, 2018 • 10:30 am ET

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First Industrial Realty Trust Inc. (NYSE:FR) Q1 2018 Earnings Conference Call - Preliminary Transcript

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Q & A
Operator
Operator

(Operator Instructions)

Your first question comes from the line of Ki Bin Kim with SunTrust. Please go ahead.

Analyst
Ki Bin Kim

Thanks. Good morning, guys.

Executive
Unidentified Speaker

Good morning.

Analyst
Ki Bin Kim

First off congratulations on the BBB rating, I know that was a long time coming.

Executive
Unidentified Speaker

Thank you.

Analyst
Ki Bin Kim

And so, first question. The land site in Phoenix is obviously the potential is huge for per square footage and development dollars. Can you just give us more details on what the overall scope of the project looks like, what makes it what are the merits of this location that make it attractive to users' long-term? And some details like JV fees or promote some might be involved.

Executive
Unidentified Speaker

So, I'll start this and kick it over to Jojo for his input as well. But as you know it's 532 acres. The plan here and the vision that we share with our partners is to sell off some of the sites to other users for their own build-to-suite needs, develop some of the land on inspect as well as do build-to-suite. We like this market, we think we can develop to similar yield as we have already done in that marketplace. And so that's really the long-term plan. Jojo, you want to touch?

Executive
Johannson Yap

Sure. In terms of -- Ki Bin in terms of national park, this is the best national park and servicing the Southwest, Phoenix market today. The Southwest Phoenix market today is the largest distribution and logistics submarket in the whole Phoenix area. And has garnered the most amount of that absorption over the last 10 years. Why this is the best? We feel it's the best, because it has the best access and the least amount of congestion coming off straight from 10 and basically getting off 303, which is the major new highway. This part that we now control, basically sits between two-fold interchanges which is Indian School Road in Campbell Back road.

So, if you are a distributor, you cannot have better access than to this site servicing the whole Phoenix and the regional markets. It has also garnered significant amount of blue-chip tenants in companies, UPS being one which leads our 618,000 square feet. Dicks Sporting Goods is there, Ball Corporation is there, REI the fast-growing other companies also there. So, you already see discriminating customers coming in there. Of course, we feel good about the future amenity that UPS will be providing tenants out there as well.

Nothing really more to add. As Peter said in terms of the plan, we will pursue strategic plans sales to users only, and that we will engage and build the suite and speculative development.

Analyst
Ki Bin Kim

And then how about from JV.

Executive
Johannson Yap

And then in terms of fee bearing interest of JV, we -- like we said we are we cannot disclose the financial terms of the economics where we've disclosed so far of our 49% interest in the JV. We will earn as a management fees, leasing feels, development fees and property management fees. And potential incentive promotes