Towle buys GE building in Columbia Firm seeks to capture portion of demand for area distribution space

Commercial real estate

April 26, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

A Virginia investment firm has purchased a former General Electric Co. manufacturing facility in Columbia, part of a $16 million renovation plan aimed at capturing a portion of the demand for area distribution space.

The Towle Group's purchase of the 587,000-square-foot former GE building and 15 adjacent acres from the Rouse Co. marks the latest event in a flurry of development activity involving warehouses.

Since the start of the year, six speculative industrial projects have been announced that will add roughly 2.5 million square feet to the Baltimore market, in response to declining vacancy levels and rising rental rates.

"We think we have a real opportunity in the marketplace," said Mark Gregg, president of the Towle Group.

"We'll have a modern building with some of the lowest rental rates available, in comparison to buildings that are newly constructed."

Towle should have little trouble financing the $7 million in renovations to the Gateway Commerce Center project, since its partner in the transaction is the Pritzker family, owner of the Hyatt Hotel Corp.

The duo also should benefit from timing. While many of the speculative projects won't be ready for occupancy until December, Towle expects that it will have 250,000 square feet available in late June.

Renovations are currently under way.

"Our advantage will be with the firm that needs space immediately," said Robert S. Clements, the Preston Partners executive vice president whom Towle has hired to market the project.

Towle also has the ability to expand the existing building by 50 percent, Mr. Gregg said.

Originally, the former electric range building was part of a three-building complex constructed by GE in 1971.

Rouse acquired the structures and 440 acres from the company in 1990 for roughly $40 million, a year after GE closed the operation.

Rouse used the land to develop its $50 million Snowden Square power retail center.

The other two industrial buildings that make up the complex are occupied by GATX Corp., Jack & Jill Ice Cream and the U.S. Army Corps of Engineers.

Towle's purchase at Gateway is its second in the region in the past year.

Last November, Towle purchased for in excess of $40 million the 440-acre King Farm in Montgomery County where it is planning 3,200 residences and 3.2 million square feet of office and retail space.

Pub Date: 4/26/96

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