First Industrial Realty Trust Reports Fourth Quarter and Full Year 2011 Results

CHICAGO, Feb. 22, 2012 /PRNewswire/ — First Industrial Realty Trust, Inc. (NYSE: FR – News), a leading owner and operator of industrial real estate and provider of supply chain solutions, today announced results for the fourth quarter and full year 2011.  Diluted net loss available to common stockholders per share (EPS) was $(0.05) in the fourth quarter, compared to $(0.43) a year ago.  Full year 2011 diluted net loss available to common stockholders was $(0.34) per share, compared to $(3.53) per share in 2010.
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First Industrial’s fourth quarter FFO was $0.23 per share/unit on a diluted basis, compared to $0.15 per share/unit last year.  Full year 2011 FFO was $0.89 per share/unit on a diluted basis versus $0.80 per share/unit in 2010.
FFO per share results for the fourth quarter of 2011 include a $0.01 per share loss on retirement of debt and a $0.01 per share reversal of impairment on undepreciated real estate.  FFO results for the full year 2011 include a $0.06 loss on retirement of debt, $0.02 per share of restructuring charges and an $0.08 per share reversal of impairment on undepreciated assets.
“The First Industrial team continued to deliver on all fronts in 2011 – driving occupancy, strengthening our capital base, and improving our portfolio through targeted asset sales and a return to investing,” said Bruce W. Duncan, First Industrial’s president and CEO.  “We are positioned for growth in 2012 by leasing our vacancies and making disciplined new investments, while we continue to refine our portfolio through select asset sales.”
Portfolio Performance for On Balance Sheet Properties – Fourth Quarter 2011

• In-service occupancy was 87.9% at the end of the quarter, up 130 basis points from 86.6% at the end of the third quarter 2011, and up 290 basis points from 85.0% at the end of the fourth quarter of 2010.
• Retained tenants in 69.9% of square footage up for renewal.
• Excluding lease termination fees, same store cash basis net operating income (NOI) increased 0.5%.  Including lease termination fees, same store cash basis NOI decreased 1.2%.
• Rental rates decreased 11.3% on a cash basis; leasing costs were $2.93 per square foot.

Capital Markets Activities and Financial Position (Balance Sheet Information)
In the fourth quarter, the Company:

• Closed a new $450 million senior unsecured revolving credit facility with a three year term and one year extension option, with interest-only payments currently at LIBOR plus 210 basis points, and a facility fee on the unused portion that ranges from 25-35 basis points.
• Repurchased $6.0 million of its senior unsecured notes due 2028, $5.1 million of its 7.5% senior unsecured notes due 2017, $5.0 million of its 5.95% senior unsecured notes due 2017, $1.1 million of its senior unsecured notes due 2014, and $0.5 million of its senior unsecured notes due 2016.  

“We added to our capital flexibility and capacity by putting in place our new $450 million line of credit in the fourth quarter,” said Scott Musil, chief financial officer.  “For future capital deployment, we will continue to weigh potential new investments against debt reduction opportunities, such as our $17.7 million of debt repurchases in the quarter.”
Investment and Divestment Activities
In the fourth quarter, the Company:

• Completed asset sales for gross proceeds of approximately $12.4 million comprised of five industrial properties totaling approximately 468,000 square feet.

In the first quarter of 2012 to date, the Company:

• Acquired its joint venture partner’s 85% interest in a 390,000 square-foot Class A distribution center in Central Pennsylvania for a total investment of $21.8 million at an in-place cap rate of 7.1%.
• Completed the construction of its First Inland Logistics Center development, a 692,000 square-foot state-of-the-art distribution center in Southern California.

Common Dividend Policy
First Industrial’s dividend policy is determined by our board of directors, and is dependent on multiple factors, including cash flow and capital expenditure requirements, as well as ensuring we meet the minimum distribution requirements set forth in the Code.  We met these requirements in 2011.
Outlook for 2012
Mr. Duncan stated, “Industry fundamentals continue to be good, as leasing markets are active and new supply remains limited largely to bulk distribution centers in select coastal markets.  As the economy continues to grow moderately, we expect tenants will continue to absorb industrial space which will benefit our portfolio.  We expect our occupancy to decline in the first quarter due to seasonality and known moveouts, and increase over the balance of the year.”

			Low End of		High End of
			Guidance for 2012		Guidance for 2012
			(Per share/unit)		(Per share/unit)
Net Income (Loss) Available to Common Stockholders			(0.40)		(0.30)
Add: Real Estate Depreciation/Amortization			1.33		1.33
FFO (NAREIT Definition)			$                    0.93		$                    1.03

The following assumptions were used:

• Average in-service occupancy of 87.5% to 89.0%.
• Same-store NOI of positive 2% to 4% for the full year.
• JV FFO of approximately $0.8 million.
• General and administrative expense of approximately $21.5 million to $22.5 million.
• The Company plans to sell properties in 2012 depending upon market conditions the impact of which is not included in our FFO and EPS guidance above.  Guidance does not include the impact of any future impairment gains or losses.
• Guidance does not include the impact of any future property investments; however, guidance does reflect the impact of the 390,000 square-foot acquisition completed in 1Q12 described above.
• Guidance does not include the impact of any future debt repurchases prior to maturity or future debt issuances.
• Guidance does not include the impact of issuing additional equity, which the Company may elect to do, depending on market conditions.

A number of factors could impact our ability to deliver results in line with our assumptions, such as interest rates, the economies of North America, the supply and demand of industrial real estate, the availability and terms of financing to potential acquirers of real estate, the timing and yields for divestment and investment, and numerous other variables.  There can be no assurance that First Industrial can achieve such results.
FFO Definition
First Industrial reports FFO in accordance with the NAREIT definition to provide a comparative measure to other REITs.  NAREIT recommends that REITs define FFO as net income, excluding gains (or losses) from the sale of previously depreciated property, plus depreciation and amortization, excluding impairments from previously depreciated assets, and after adjustments for unconsolidated partnerships and joint ventures.
About First Industrial Realty Trust, Inc.
First Industrial Realty Trust, Inc. (NYSE: FR – News) 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, our local market experts manage, lease, buy, (re)develop, and sell bulk and regional distribution centers, light industrial, and other industrial facility types.  We have a track record of industry leading customer service, and in total, we own, manage and have under development approximately 70.9 million square feet of industrial space.  For more information, please visit us at www.firstindustrial.com. We post or otherwise make available on this website from time to time information that may be of interest to investors.
Forward-Looking Information
This press release and the presentation to which it refers may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “seek,” “target,” “potential,” “focus,” “may,” “should” or similar expressions. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a materially adverse effect on our operations and future prospects include, but are not limited to: changes in national, international, regional and local economic conditions generally and real estate markets specifically; changes in legislation/regulation (including changes to laws governing the taxation of real estate investment trusts) and actions of regulatory authorities (including the Internal Revenue Service); our ability to qualify and maintain our status as a real estate investment trust; the availability and attractiveness of financing (including both public and private capital) to us and to our potential counterparties; the availability and attractiveness of terms of additional debt repurchases; interest rates; our credit agency ratings; our ability to comply with applicable financial covenants; competition; changes in supply and demand for industrial properties (including land, the supply and demand for which is inherently more volatile than other types of industrial property) in the Company’s current and proposed market areas; difficulties in consummating acquisitions and dispositions; risks related to our investments in properties through joint ventures; environmental liabilities; slippages in development or lease-up schedules; tenant creditworthiness; higher-than-expected costs; changes in asset valuations and related impairment charges; changes in general accounting principles, policies and guidelines applicable to real estate investment trusts; international business risks; and those additional factors described under the heading “Risk Factors” and elsewhere in the Company’s annual report on Form 10-K for the year ended December 31, 2010 and in the Company’s subsequent ’34 Act reports. We caution you not to place undue reliance on forward-looking statements, which reflect our outlook only and speak only as of the date of this press release or the dates indicated in the statements. We assume no obligation to update or supplement forward-looking statements. For further information on these and other factors that could impact the Company and the statements contained herein, reference should be made to the Company’s filings with the Securities and Exchange Commission.
A schedule of selected financial information is attached.
First Industrial Realty Trust, Inc. (NYSE: FR – News), a leading owner and operator of industrial real estate and provider of supply chain solutions, will host its quarterly conference call on Thursday, February 23, 2012 at 11:00 a.m. EST (10:00 a.m. CST).  The conference call may be accessed by dialing (866) 542-2938 and entering reservation code 51563038.  The conference call will also be webcast live on the Investor Relations page of the Company’s website at www.firstindustrial.com.  The replay will also be available on the website.
The Company’s fourth quarter and full year supplemental information can be viewed on First Industrial’s website, www.firstindustrial.com, under the “Investor Relations” tab.

FIRST INDUSTRIAL REALTY TRUST, INC.
Selected Financial Data
(In thousands, except for per share/unit)
(Unaudited)
		Three Months Ended				Year Ended
		December 31,		December 31,		December 31,		December 31,
		2011		2010		2011		2010
Statement of Operations and Other Data:
Total  Revenues		$          79,677		$          80,127		$        317,835		$        321,778
Property Expenses		(27,546)		(27,326)		(108,590)		(108,651)
General & Administrative Expense		(5,585)		(5,358)		(20,638)		(26,589)
Restructuring Costs		-		(309)		(1,553)		(1,858)
Impairment of Real Estate		1,006		(15,516)		8,807		(112,904)
Depreciation of Corporate F,F&E		(328)		(458)		(1,426)		(1,975)
Depreciation and Amortization of Real Estate		(32,351)		(29,298)		(120,178)		(123,323)
Construction Expenses		-		(51)		-		(507)
Total  Expenses		(64,804)		(78,316)		(243,578)		(375,807)
Interest Income		888		1,244		3,922		4,364
Interest Expense		(23,196)		(27,159)		(100,127)		(105,898)
Amortization of Deferred Financing Costs		(726)		(1,061)		(3,963)		(3,473)
Loss from Retirement of Debt		(855)		(320)		(5,459)		(4,304)
Mark-to-Market (Loss) Gain on Interest Rate Protection Agreements		(158)		681		(1,718)		(1,107)
Foreign Currency Exchange Loss		-		-		(332)		(190)
Loss from Continuing Operations Before Gain on Sale of Joint Venture Interest,
Equity in Income of Joint Ventures, Gain on Change in Control of Interests
and Income Tax Provision		(9,174)		(24,804)		(33,420)		(164,637)
Gain on Sale of Joint Venture Interest		-		1,352		-		11,226
Equity in Income of Joint Ventures (b)		73		950		980		675
Gain on Change in Control of Interests		-		-		689		-
Income Tax Provision		(424)		(536)		(450)		(2,963)
Loss from Continuing Operations		(9,525)		(23,038)		(32,201)		(155,699)
Discontinued Operations:
Income (Loss) Attributable to Discontinued Operations		1,464		(3,702)		2,920		(77,529)
Gain on Sale of Real Estate		7,068		1,525		20,419		11,092
Benefit (Provision) for Income Taxes Allocable to Discontinued Operations		817		-		(1,246)		-
Total Discontinued Operations		9,349		(2,177)		22,093		(66,437)
Loss Before Gain on Sale of Real Estate		(176)		(25,215)		(10,108)		(222,136)
Gain on Sale of Real Estate		-		-		1,370		859
Provision for Income Taxes Allocable to Gain on Sale of Real Estate		-		-		(452)		(342)
Net Loss		(176)		(25,215)		(9,190)		(221,619)
Net Loss Attributable to the Noncontrolling Interest		255		2,241		1,745		18,798
Net Income (Loss) Attributable to First Industrial Realty Trust, Inc.		79		(22,974)		(7,445)		(202,821)
Preferred Dividends		(4,763)		(4,854)		(19,565)		(19,677)
Net Loss Available to First Industrial Realty Trust, Inc.’s
Common Stockholders and Participating Securities		$           (4,684)		$         (27,828)		$         (27,010)		$       (222,498)
RECONCILIATION OF NET LOSS AVAILABLE TO
FIRST INDUSTRIAL REALTY TRUST, INC.’S COMMON
STOCKHOLDERS AND PARTICIPATING SECURITIES TO FFO (c) AND FAD (c)
Net Loss Available to First Industrial Realty Trust, Inc.’s
Common Stockholders and Participating Securities		$           (4,684)		$         (27,828)		$         (27,010)		$       (222,498)
Depreciation and Amortization of Real Estate		32,351		29,298		120,178		123,323
Depreciation and Amortization of Real Estate Included in Discontinued Operations		230		1,192		2,145		11,273
Noncontrolling Interest		(255)		(2,241)		(1,745)		(18,798)
Depreciation and Amortization of Real Estate from Joint Ventures (b)		102		(187)		551		947
Impairment of Depreciated Real Estate		(400)		6,265		(1,687)		90,204
Impairment of Depreciated Real Estate Included in Discontinued Operations		648		6,019		6,146		81,648
Gain on Change in Control of Interests		-		-		(689)		-
Non-NAREIT Compliant Gain		(7,068)		(1,525)		(20,419)		(11,073)
Non-NAREIT Compliant Gain from Joint Ventures (b)		-		(350)		(616)		(231)
Funds From Operations (NAREIT) (“FFO”) (c)		$          20,924		$          10,643		$          76,854		$          54,795
Loss from Retirement of Debt		855		320		5,459		4,304
Restricted Stock Amortization		991		1,373		3,759		6,040
Amortization of Deferred Financing Costs		726		1,061		3,963		3,473
Depreciation of Corporate F,F&E		328		458		1,426		1,975
Impairment of Undepreciated Real Estate		(606)		9,251		(7,120)		22,700
Mark-to-Market Loss (Gain) on Interest Rate Protection Agreements		158		(681)		1,718		1,107
Non-Incremental Capital Expenditures		(18,306)		(16,289)		(56,038)		(42,476)
Straight-Line Rent		(1,987)		(2,113)		(7,733)		(7,041)
Funds Available for Distribution (“FAD”)  (c)		$            3,083		$            4,023		$          22,288		$          44,877

FIRST INDUSTRIAL REALTY TRUST, INC.
Selected Financial Data
(In thousands, except for per share/unit)
(Unaudited)
		Three Months Ended				Year Ended
		December 31,		December 31,		December 31,		December 31,
		2011		2010		2011		2010
RECONCILIATION OF NET LOSS AVAILABLE TO
FIRST INDUSTRIAL REALTY TRUST, INC.’S COMMON
STOCKHOLDERS AND PARTICIPATING SECURITIES TO EBITDA (c) AND NOI (c)
Net Loss Available to First Industrial Realty Trust, Inc.’s
Common Stockholders and Participating Securities		$           (4,684)		$         (27,828)		$         (27,010)		$       (222,498)
Interest Expense		23,196		27,159		100,127		105,898
Interest Expense Included in Discontinued Operations		-		66		63		268
Restructuring Costs		-		309		1,553		1,858
Impairment of Undepreciated Real Estate		(606)		9,251		(7,120)		22,700
Impairment of Depreciated Real Estate		(400)		6,265		(1,687)		90,204
Impairment of Depreciated Real Estate Included in Discontinued Operations		648		6,019		6,146		81,648
Depreciation and Amortization of Real Estate		32,351		29,298		120,178		123,323
Depreciation and Amortization of Real Estate Included in Discontinued Operations		230		1,192		2,145		11,273
Preferred Dividends		4,763		4,854		19,565		19,677
(Benefit) Provision for Income Taxes		(393)		536		2,148		3,305
Noncontrolling Interest		(255)		(2,241)		(1,745)		(18,798)
Loss from Retirement of Debt		855		320		5,459		4,304
Amortization of Deferred Financing Costs		726		1,061		3,963		3,473
Depreciation of Corporate F,F&E		328		458		1,426		1,975
Depreciation and Amortization of Real Estate from Joint Ventures (b)		102		(187)		551		947
Gain on Change in Control of Interests		-		-		(689)		-
Non-NAREIT Compliant Gain		(7,068)		(1,525)		(20,419)		(11,073)
Non-NAREIT Compliant Gain from Joint Ventures (b)		-		(350)		(616)		(231)
EBITDA (c)		$          49,793		$          54,657		$        204,038		$        218,253
General and Administrative Expense		5,585		5,358		20,638		26,589
Foreign Currency Exchange Loss		-		-		332		190
Mark-to-Market Loss (Gain) on Interest Rate Protection Agreements		158		(681)		1,718		1,107
NAREIT Compliant Economic Gain (c)		-		-		(1,370)		(878)
FFO of Joint Ventures (c)		(445)		(1,912)		(1,885)		(17,569)
Net Operating Income (“NOI”) (c)		$          55,091		$          57,422		$        223,471		$        227,692
RECONCILIATION OF GAIN ON SALE OF REAL ESTATE
TO NAREIT COMPLIANT ECONOMIC GAIN (c)
Gain on Sale of Real Estate		$                    -		$                    -		$            1,370		$               859
Gain on Sale of Real Estate included in Discontinued Operations		7,068		1,525		20,419		11,092
Non-NAREIT Compliant Gain		(7,068)		(1,525)		(20,419)		(11,073)
NAREIT Compliant Economic Gain (c)		$                    -		$                    -		$            1,370		$               878
Weighted Avg. Number of Shares/Units Outstanding – Basic/Diluted   (a)		91,200		69,413		85,913		68,327
Weighted Avg. Number of Shares Outstanding – Basic/Diluted   (a)		85,941		64,049		80,616		62,953
Per Share/Unit Data:
FFO (NAREIT) Allocable to Common Stockholders and Unitholders		$          20,924		$          10,643		$          76,854		$          54,795
- Basic/Diluted   (a)		$              0.23		$              0.15		$              0.89		$              0.80
Loss from Continuing Operations, including Gain on Sale of Real Estate, Net of Income Tax		$           (9,525)		$         (23,038)		$         (31,283)		$       (155,182)
Add: Noncontrolling Interest Allocable to Continuing Operations and Gain on Sale of Real Estate		798		2,065		3,097		13,623
Less: Preferred Dividends		(4,763)		(4,854)		(19,565)		(19,677)
Loss from Continuing Operations Available to First Industrial Realty Trust, Inc.’s Common Stockholders		$         (13,490)		$         (25,827)		$         (47,751)		$       (161,236)
- Basic/Diluted   (a)		$             (0.16)		$             (0.40)		$             (0.59)		$             (2.56)
Net Loss Available to First Industrial Realty Trust, Inc.’s Common Stockholders		$           (4,684)		$         (27,828)		$         (27,010)		$       (222,498)
- Basic/Diluted   (a)		$             (0.05)		$             (0.43)		$             (0.34)		$             (3.53)
Balance Sheet Data (end of period):
Real Estate Before Accumulated Depreciation		$     2,992,096		$     2,618,767
Real Estate and Other Held For Sale, Net		91,659		392,291
Total Assets		2,666,657		2,750,054
Debt		1,479,483		1,742,782
Total Liabilities		1,594,062		1,857,910
Total Equity		$     1,072,595		$        892,144

a) In accordance with GAAP, the diluted weighted average number of shares/units outstanding and the diluted weighted average number of shares outstanding are the same as the basic weighted average number of shares/units outstanding and the basic weighted average number of shares outstanding, respectively, for periods in which continuing operations is a loss, as the dilutive effect of stock options and restricted units would be antidilutive to the loss from continuing operations per share. The Company has conformed with the GAAP computation of diluted common shares in computing per share amounts for items included on the Statement of Operations, including FFO and FAD.
GAAP requires unvested equity based compensation awards that have nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) to be included in the two class method of the computation of EPS.  For the three and twelve months ended December 31, 2011 and December 31, 2010, there was no impact on basic and diluted EPS as participating security holders are not obligated to share in losses.  The Company conforms the calculation of FFO and FAD with the calculation of EPS.
b) Represents the Company’s pro rata share of net income (loss), depreciation and amortization on real estate and Non-NAREIT compliant gain (loss).
c) Investors in and analysts following the real estate industry utilize funds from operations (“FFO”), net operating income (“NOI”), EBITDA and funds available for distribution (“FAD”), variously defined, as supplemental performance measures.  While the Company believes net income (loss) available to First Industrial Realty Trust, Inc.’s common stockholders and participating securities, as defined by GAAP, is the most appropriate measure, it considers FFO, NOI, EBITDA and FAD, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures.  FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets.  NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as general and administrative expenses.  EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs.  FAD provides a tool to further evaluate the ability to fund dividends.  In addition, FFO, NOI, EBITDA and FAD are commonly used in various ratios, pricing multiples/yields and returns and valuation calculations used to measure financial position, performance and value.
From January 1, 2009 until September 30, 2011, the Company calculated FFO to be equal to net income (loss) available to First Industrial Realty Trust, Inc.’s common stockholders and participating securities, plus depreciation and amortization on real estate less non-NAREIT compliant gain (loss) in accordance with NAREIT’s definition of FFO.  In the fourth quarter of 2011, NAREIT modified its definition of FFO to exclude impairment write downs of depreciable real estate from FFO.  Beginning in the fourth quarter of 2011, the Company adopted NAREIT’s updated FFO definition and restated FFO for the year ended December 31, 2011 and December 31, 2010 in accordance with NAREIT’s updated FFO definition.  The impact of this change was to increase FFO by $4.5 million or $0.05 per share for the year ended December 31, 2011 and to increase FFO by $171.9 million or $2.51 per share for the year ended December 31, 2010.  The Company also restated the three months ended December 31, 2010.  The impact of this change was to increase FFO by $12.3 million or $0.17 per share.
NOI is defined as revenues of the Company, minus property expenses such as real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses.  NOI includes NOI from discontinued operations.
EBITDA is defined as NOI plus the equity in FFO of the Company’s joint ventures, which are accounted for under the equity method of accounting, plus or minus NAREIT compliant economic gain (loss), plus foreign exchange loss, plus or minus mark-to-market gain or loss on interest rate protection agreements, minus general and administrative expenses.  EBITDA includes EBITDA from discontinued operations.
FAD is defined as EBITDA minus GAAP interest expense, minus restructuring costs, minus preferred stock dividends, minus straight-line rental income, minus provision for income taxes or plus benefit for income taxes, minus or plus mark-to-market gain or loss on interest rate protection agreements, plus restricted stock amortization, minus non-incremental capital expenditures.  Non-incremental capital expenditures are building improvements and leasing costs required to maintain current revenues.  See footnote (aa).
FFO, NOI, EBITDA and FAD do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions.  FFO, NOI, EBITDA and FAD should not be considered as substitutes for net income (loss) available to common stockholders and participating securities (calculated in accordance with GAAP) as a measure of results of operations or cash flows (calculated in accordance with GAAP) as a measure of liquidity.  FFO, NOI, EBITDA and FAD as currently calculated by the Company may not be comparable to similarly titled, but variously calculated, measures of other REITs.
In addition, the Company considers cash-basis same store NOI (“SS NOI”) to be a useful supplemental measure of its operating performance.  Same store properties, for the period beginning January 1, 2011, include all properties owned prior to January 1, 2010 and held as an operating property through the end of the current reporting period, and developments and redevelopments that were placed in service or were substantially completed for 12 months prior to January 1, 2010 (the “Same Store Pool”).  The Company defines SS NOI as NOI, less NOI of properties not in the Same Store Pool, less the impact of straight-line rent, the amortization of lease inducements and the amortization of above/below market rent.  For the quarters ended December 31, 2011 and December 31, 2010, NOI was $55,091 and $57,422, respectively; NOI of properties not in the Same Store Pool was $(269) and $950, respectively; the impact of straight-line rent, the amortization of lease inducements and the amortization of above/below market rent was $1,940 and $2,396, respectively.  The Company excludes straight-line rent, amortization of lease inducements and above/below market rent in calculating SS NOI because the Company believes it provides a better measure of actual cash basis rental growth for a year-over-year comparison.  In addition, the Company believes that SS NOI helps the investing public compare the operating performance of a company’s real estate as compared to other companies.  While SS NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income (loss) as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance.  SS NOI also does not reflect general and administrative expenses, interest expenses, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact our results from operations. Further, the Company’s computation of SS NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating SS NOI.http://tourism9.com/    http://vkins.com/

Tangled in diplomacy, EU struggles to frame new financial rules

BRUSSELS (Reuters) – When it takes six hours to draft a single sentence in a 100-page document, you know things are moving slowly.
In meeting rooms of embassies across Brussels, diplomats are haggling over the finer details of dozens of reforms more than four years after the financial crisis that devastated European banks and triggered the euro zone’s struggle with debt.
While the United States agreed in 2010 an initial framework to prevent financiers taking the kind of risks that sparked the deepest global recession since the 1930s, the European Union‘s response is often tangled in backroom diplomacy.
“Bailout is a naughty word these days but we haven’t created a system to deal with failing banks without one,” said a diplomat from a northern European country who is working on around 15 different EU dossiers to regulate finance. “We are still spending hours arguing over the wording of a sentence.”
The crisis revealed how regulators and even top bank executives on both sides of the Atlantic failed to grasp the risks in the complex financial architecture they helped build.
But agreeing new laws among the bloc’s 27 member countries and the European Parliament is becoming so burdensome that diplomats worry Europe‘s defenses will not be in place should a new crisis hit.
German lender IKB was the first casualty of the financial crash in mid-2007, imploding after pursuing what one banker described as an “all you can eat” strategy, snapping up U.S. subprime mortgage debt.
By the time the worst of the crisis was over in Europe, more than 50 lenders had to be rescued by their governments.
The EU responded with rules governing hedge funds and banker pay. But it has yet to outline a framework law for dealing with banks threatened with collapse, a reform many analysts believe is central in ensuring that bank bondholders – and not the taxpayer – pay to rescue banks in future.
The delicate state of Europe’s banks, which have been faced with the possibility of a chaotic Greek debt default, is partly to blame.
Banks still have trillions of euros of risky loans on their books, and it has taken the near-unlimited offer of funds from the European Central Bank to prevent another credit freeze.
LEEWAY OR LIMIT?
Michel Barnier, the former French foreign minister given the task of leading an overhaul of EU financial regulation two years ago, is due to present his bank salvage plan sometime this year.
But even when he does, the proposed legislation could take three years to become law.
“We can’t afford any more delays,” Olle Schmidt, a liberal who is leading financial reform efforts in the European parliament. “If Europe is to be able to react swiftly to another crisis, these defenses must be in place.”
Diplomats have also clashed over proposed rules governing the amount of capital banks must keep in reserve to cover the risks of lending. This is crucial in preventing another credit boom of the kind that led to the financial crash.
Britain wants more leeway to impose stricter standards on capital than the EU, while France wants the limit capped, reflecting the different way the crisis affected the two neighboring countries.
“The French banking system did OK, albeit with public support, whereas British banks took some serious hits,” said Sony Kapoor, founder of think tank Re-Define.
Overhauling banking is just one of the dossiers keeping diplomats up late at night in the glass and steel buildings of Brussels’s European quarter – working in tandem with colleagues in their home capitals.
While EU leaders have held 17 summits over the past two years to resolve the sovereign debt debacle, diplomats are sifting their way through proposals for regulating derivatives, trading, insider dealing, credit rating agencies and banker pay.
And with most working groups held in English, non-native speakers often struggle to grasp the highly technical issues.
One official recalled an embarrassing misunderstanding, when an ambassador appeared to describe a discussion on hedge funds as being “like a short shit in a long bath.” Participants later concluded he meant “a short sheet on a long bed.”
“Sometimes you understand the words but you don’t understand the meaning,” said one eastern European diplomat.
The final legal text is often as mystifying as the process that created it. “They are unreadable,” said Eddy Wymeersch, a former regulator, commenting on hedge fund rules. “It is just page after page of legalese.”
Bruce Stokes, an analyst with think tank the German Marshall Fund, believes Washington works faster because directly elected members of Congress and not bureaucrats draft legislation. “Brussels is not that accountable,” he said.
Washington drew up the Dodd-Frank act in 2010, a framework for financial reform that includes sweeping changes including bans on banks trading on their own account.
Fleshing out the full detail of these rules will, however, require further work and the European Commission points to its success in moving earlier on banker pay and bank capital.
In Europe, much of the responsibility for rewriting the rulebook for finance falls to the Commission, proposing and writing the first draft of laws that are then sent to European countries and the bloc’s parliament for approval.
“The European legislative system is designed far more for incremental adjustment than for major reform,” said Nicolas Veron, an expert in financial policy who works in both Washington and Brussels. “It’s more bureaucratically driven, but that doesn’t mean that the outcome is not political.”
With things moving so slowly, those working on the dossiers say the new regulations are in danger of being overtaken by events.
“I’ll be retired by the time all of this is done,” said one banker, whose job it is to predict the direction of legislation. “It’s not the kind of work I’d recommend.”
(Writing by Robin Emmott; additional reporting by Claire Davenport, editing by Mike Peacock)

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DPG Investments Scores with New Advisory Partners for Global Multi-Strategy Investment and Advisory Platform

SCOTTSDALE, Ariz.–(BUSINESS WIRE)–DPG Investments, LLC, and affiliates are building bench strength with the addition of three well-known executives and operating partners to the DPG advisory team. The new team members bring defined, proven skill sets with significant track records and extensive global networks to assist the continued growth of DPG’s private equity and merchant-banking platform.
A.C. Green, three-time NBA Champion and All-Star, brings his leadership and mentorship qualities in addition to his significant network and global business platform to DPG’s partnerships. Prior to his financial career, Mr. Green spent 16 seasons in the NBA and won three world championships with the Los Angeles Lakers. A.C. Green played in more consecutive games than any other player in NBA history, and only missed three games in his professional basketball career. His current ventures include the A.C. Green Youth Foundation, which helps kids build character, strong bodies and minds, and teaches winning and losing with dignity, teamwork and sacrifice.
Tom Blinten, founder of Panamax Capital, adds his 25 years of experience with over $12 billion in executed transactions to DPG Investments. Mr. Blinten has a proven track record as a global dealmaker and financier across a multitude of sectors, along with significant capital market distribution capabilities. His experience supports DPG and its affiliate’s growth initiative to expand their diversified, multi-strategy merchant-banking platform into Latin American and Asia. The addition of Mr. Blinten is expected to provide immediate opportunities for DPG’s Alternative Investment practice, which focuses on cross-border M&A, capital advisory and capital formation strategies, with an emphasis on international large-scale energy and infrastructure project financing. DPG also has ongoing participation in the Panamax Capital platform.
Ziad Abdelnour, founder and CEO of Blackhawk Partners, brings yet another seasoned deal maker, trader, financier and merchant banker extraordinaire to the DPG team. Mr. Abdelnour’s 25 years of industry experience and $10 billion in transaction volume provide key enhancements to the existing DPG Corporate Private Equity practice. This practice specifically focuses on lower/middle market management-led and leveraged buy-outs, special-situation investing, renewable energy and large project financing. Mr. Abdelnour’s leadership provides a solid foundation for the growth of DPG’s Corporate Finance and Buy-Out practice. Mr. Abdelnour’s most recent book, “Economic Warfare,” is quickly becoming a must-read for anyone interested in the underpinnings of the U.S. economy. Daniel P. Galvanoni will serve as special partner to the Blackhawk Partners platform.
DPG Investments and its affiliates provide global alternative investment management and advisory services. With offices in Arizona and California, DPG specializes in the allocation of capital across various asset classes on behalf of its select high net worth and ultra-high net worth family offices and institutional private equity managers. DPG’s current focus in the alternative investment sector includes real estate lending and acquisition, renewable energy and natural resources, corporate private equity, asset management, fund-to-fund advisory and venture capital. Through its solid platform and disciplined approach, DPG maintains a predominant foothold in the capital markets, trafficking significant and high-quality opportunities on a consistent basis.
Currently, DPG works principally and in conjunction with its numerous domestic and international capital partners, which service a diverse scope of transactions on a co-investment and allocation basis. These partners include, but are not limited to, hedge funds, REITS, equity portfolios, private merchant banks, pension funds and life insurance companies. DPG maintains a strong focus on ultra-high net worth family office partnerships throughout the U.S., Asia, Latin America and Europe.
The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions, and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words “may,” “will,” “should,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” and similar expressions identify forward-looking statements.
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