Constellation Real Estate Group Inc. has begun developing a $9 million warehouse for Sunbelt Beverage Corp. in northern Anne Arundel County, further highlighting the growing demand for area distribution space.
The new 225,000-square-foot building will be occupied by Sunbelt subsidiary Churchill Distributors, the state's largest wine and spirits distributor, with $100 million in annual sales.
Churchill intends to transfer 350 employees from its 30-year-old warehouse operations in Arbutus and Halethorpe, in Baltimore County, when the building is completed in February.
"Our business expanded to the point where we outgrew our warehouses," said Churchill President Joseph F. Davolio. "The trend in our industry is toward a consolidation of distributors, and as that happens, we certainly hope that new brands will come our way."
Sunbelt, a Lutherville liquor distribution firm with $500 million in yearly sales and operations in five states, bought Churchill in 1988 from the McKesson Corp., Mr. Davolio said.
The Sunbelt's distribution center project marks the third new project in Constellation's 200-acre Brandon Woods Business Park, a coal residue disposal site for Baltimore Gas & Electric Co.'s nearby Brandon Shores power plant. Constellation, a BGE subsidiary, has executed similar deals with Fila USA Inc. and Commerce Corp. at the park.
"Brandon Woods, once again, has demonstrated its appeal to companies in need of a large warehouse and distribution site in a strategic and acces- sible location," said Randall M. Griffin, Constellation's president.
Sunbelt will pay $14.3 million in rent for the new building through 2012. The company also has the option to expand the project by 50,000 square feet, said Ben Meisels, a Miller Corporate Real Estate Services agent who, with principal Ira J. Miller, represented Sunbelt.
Sunbelt's agreement with Constellation caps a two-year, often frustrating search by the company to find adequate space in a metropolitan area where the vacancy level for industrial space has shrunk below 5 percent. Last fall, Sunbelt nearly committed to a former General Electric Co. plant in Columbia owned by the Rouse Co., part of its $40 million Gateway Commerce Center.
Later this month, Rouse plans to sell the 600,000-square-foot building to the Towle Group of Virginia, which will convert it to distribution space.
Towle plans to invest roughly $16 million in buying and renovating the GE plant, and recently filed for the permits in Howard County.
"What makes the GE building different is the capability for outside storage of trailers," said David P. Scheffenacker Jr., president of Preston Partners Inc., the firm Towle has retained to lease the old GE building.