Best Buy Co. retailer leases warehouse space

October 14, 1994|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

The Best Buy Co. has signed a lease for a new local distribution center to serve its growing appliance business in the Baltimore/Washington area, company officials said yesterday.

The company's 93,104-square-foot center at 6940 San Tomas Road, in Elkridge, dovetails with the Minneapolis-based discount retailer's plan to open several stores in the region.

"We intend to keep and distribute home appliances there for delivery in the region, as well as establish a service center to repair appliances," said James P. Mixon, a Best Buy senior vice president. "The main reasons we chose that building were because of its size, and we wanted a location that could serve both cities and beyond."

Best Buy is leasing 65 percent of a 125,700-square-foot facility owned by TCW Realty Advisors in the Route 100 Industrial Park. The five-year lease, which brings the building to 100 percent occupancy, is valued at an estimated $1.8 million and is expected to initially create 30 jobs. TCW was represented in the transaction by Robert Z. Smith, vice president of KLNB Inc.

Best Buy, the nation's No. 3 consumer electronics chain, has rapidly been expanding into territories of its chief rival and the No. 1 chain, Richmond, Va.-based Circuit City Stores Inc.

By the end of next year, Best Buy hopes to have opened as many as 14 stores in the region, augmenting its 176 locations in 22 states already in operation. Thus far, the company has committed to stores in Columbia, Gaithersburg, Laurel and Fairfax, Va. The Columbia store is scheduled to open by the end of the month.

The primary regional distribution center supplying products to those stores is a 700,000-square-foot warehouse in Staunton, Va., that opened last winter, Mr. Mixon added.

In the first six months of its 1995 fiscal year that ended Aug. 27, Best Buy reported net income of $11.8 million on sales of $1.78 billion. Those figures represent increases of 30 percent and 77 percent, respectively, over the comparable period last year.

Best Buy marks the latest retailer to commit to distribution space in the Baltimore/Washington corridor as growth in the general economy and competition for new store locations has accelerated.

Other retailers to commit to distribution space in recent weeks include the May Department Store Co., which signed with TCW for 108,000 square feet in the Savage area of Howard County to meet increased sales in its Hecht's department store chain; and Office Depot Inc., which will operate from roughly 100,000 square feet in Alex. Brown Kleinwort Benson Realty Advisors Corp.'s Greenwood Place project, also in Howard County.

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