ProLogis' man in the north looking to grow even more

Real Estate Weekly, Dec 21, 2005 by Daniel Geiger

Newly named a senior vice president in charge of northeast development and acquisitions for ProLogis, the world's largest industrial REIT, Michael Nachamkin has a lot more to work with than when he last was with the company just over five years ago.

Although the firm was clearly a powerhouse before Nachamkin's departure, it has focused on bulking up even more, a goal evidenced most recently by its high profile $3.6 billion acquisition of fellow REIT giant, Catellus, in June, a transaction that was one of 2005's biggest. That deal, in addition to bringing the firm's holdings of distribution space in Southern California to an unprecedented 350 million s/f, also contains a trove of development opportunity on land just two miles from Port Elizabeth, part of the nation's third biggest industrial market.

"We're one of the top owners in New Jersey, but we have all this exciting opportunity to grow even more," Nachamkin said. "We can develop up to 5 million s/f."

Bulk distribution centers make up the majority of the REIT's portfolio and are what it is likely to be erected on the New Jersey sites. Nachamkin will oversee such development as part of his new role and also help guide the REIT's entry into the Canadian industrial market throughout Ontario, the fourth largest industrial market in North America and one in which ProLogis has much room to grow.

"I'm going to be focusing heavily on further acquisitions and development," Nachamkin said. "Ontario and specifically the greater Toronto area are brand new markets for us."

While managerial responsibilities for markets as massive as Ontario and New Jersey would be more than enough for even the most ambitious executives, Nachamkin oversees a swath of geography that also includes areas as far south as Alexandria, Virginia and Washington D.C. and as westerly as Pennsylvania.

Helping Nachamkin's efforts towards expansion is a uniformity of ProLogis's product that has encouraged tenants eager to expand their businesses to do so within the firm's vast network of locations.

"We develop buildings with similar design elements that have a consistent master plan and good road infrastructure," Nachamkin said. "Firms take our space because they know the kind of quality they are getting and the consistency of management. We can roll out locations for them all over the world."

During his five-year departure from ProLogis, Nachamkin was the president of Whitehall Industrial Properties, part of a family of opportunistic real estate funds managed by Goldman Sachs. The title was lofty, but the dolling out of hundreds of millions of dollars to developments and investments whose successes were primarily executed by skilled real estate operators working as joint venture partners with Goldman Sachs didn't hold the same appeal as the more hands on role that Nachamkin is assuming at ProLogis.

Nachamkin hasn't been back at the firm for even a month, but is already guiding the REIT's plans to develop between eight and nine buildings totaling 3.9 million s/f in Port Redding, New Jersey.

As part of another development near Port Elizabeth, the firm is building a 1.2 million s/f development that Nachamkin said will be at a competitive advantage because it is a "new property among nothing but old properties."

Another development in Toronto, called the Mississauga Gateway Center, will be a 1.7 million s/f master plan park, strategically located close to major transit hub, Pierson Airport.

"We're on the S&P 500 and have tons of available capital," Nachamkin said. "I'm really excited to be back with the firm and to work with the great local team here.

"Although it's such a huge firm, everybody here has the same mission, to take advantage of the opportunity we have to continue to grow and be the best in the business."