Company's Howard project is a $5.4 million speculation New distribution center has no tenant yet.

Commercial real estate

November 06, 1991|By Kevin Thomas | Kevin Thomas,Evening Sun Staff

Winchester Commercial, the Calverton-based real estate development firm, is doing what few other builders are daring during these recession-tainted months -- mounting a speculative construction project.

The company, which is a division of Winchester Homes Inc., a subsidiary of the Weyerhauser Co., has begun construction on a 141,600-square-foot distribution building at Meadowridge Business Park in Howard County.

The $5.4 million building, which is slated to be completed in spring 1992, has no tenant. Business analysts have expressed caution about such speculative projects since the 1980s construction boom went bust about a year ago.

But Donald Knutson, vice president of Winchester, said he is confidant the project will be a success.

Knutson said that since the Meadowridge Business Park opened in 1990, all of its properties have been leased. The users at the park, which is off U.S. 1 near Interstate 95, include Michelin Tire Corp. with 332,400 square feet and Reico Kitchen Distributors with 170,000 square feet.

A third property, totaling approximately 170,000 square feet, has been leased to Moore Business Forms and is currently under construction.

"In a time that is certainly not robust, the park still performs well," Knutson said, adding that a number of prospective tenants are currently being pursued for the new building.

Of the 1.5 million square feet of industrial space planned at Meadowridge, 750,000 square feet has been developed or is currently under construction.

Knutson noted that while the vacancy rate among office buildings is relatively high in the Baltimore area, distribution buildings are averaging vacancy rates in the "single digits."

That, plus the fact that there are no other new distribution centers in the Baltimore and Washington International Airport area, should make the new Meadowridge building an attractive product, he said.

The new building will have some special features, including a 24-foot-high ceiling, compared with the more traditional 18- to 20-foot height. Knutson said the higher ceiling will allow a distributor to handle larger volumes of merchandise.

In addition, the building will have a larger than usual truck court and a greater than average number of loading doors.

While the building has no tenant, it does have a buyer. The Multi-Employer Property Trust has made a commitment to buy the building upon completion. Kennedy Associates Real Estate Counsel Inc. of Washington D.C. is acting as adviser and intermediary in the sale.

***

* The KMJ Group Inc., a professional consulting firm, has leased 1,680 square feet of office space at 16 S. Calvert St. Kenilworth Equities Ltd. represented the tenant and landlord, Trical Limited Partnership.

* YKK AP America Inc., a subsidiary of YKK Corp. of Japan, will lease a 20,000-square-foot warehouse in the Corridor Industrial Park in Savage. The international manufacturer of aluminum architectural products will use its Howard County location as its mid-Atlantic distribution center for its northern division.

* United States Can Co. has leased 72,240 square feet at 6935 San Tomas Road in Elkridge, a James F. Knott Development Corp. facility. The Chicago-based producer of aerosol cans and paint cans will use the Elkridge facility to manufacture paint cans.

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