Vacant storage site sold in P.G.

Continental Realty pays about $11 million for Hechinger facility

Warehouse market tight

January 05, 1999|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

A Towson development firm has purchased the former Hechinger Co.'s national distribution center in Landover for roughly $11 million, in the hope of capitalizing on the tight market for warehouse space in the Washington suburbs.

Continental Realty Corp.'s purchase of the vacant 647,000-square-foot building comes about a year and a half after the $100 million sale of the home-improvement retailer to a Los Angeles firm.

Leonard Green & Partners LP, a private investment firm, merged Hechinger with Builders Square after its purchase, creating the nation's third-largest home-improvement chain with 279 stores in the Midwest, South and along the East Coast. As a result, Green decided to change Hechinger's distribution patterns.

"It's a first-class facility with excellent parking, wonderful amenities, high ceiling heights and great access to both Baltimore and Washington," said Lawrence G. Rief, a Continental partner. "We just thought it was a real gem in the rough."

Hechinger, which built the distribution center in phases from 1977 to 1984, had been seeking nearly $17 million for the building. Hechinger officials did not return several calls for comment yesterday.

Although the project at 3500 Pennsy Drive is empty, Rief said he is in serious negotiations with several prospective tenants to lease a significant portion of the building.

"I'm confident they'll have a tre- mendous amount of success," said Ben Meisels, the Miller Corporate Real Estate Services vice president who represented Continental in the purchase. "I can't think of any organization better suited to deal with a project like this."

The Hechinger building represents the latest in a series of rehabilitation projects that Rief and Continental have embarked on, after deals for the Glenn Dale Business Center in Prince George's County and the Wicomico Industrial Center in Baltimore. A Continental partnership owns the Reisterstown Road Plaza.

"The Hechinger building is a great opportunity for an investor such as Continental that can see the upside potential in the building that wasn't designed and built in the cookie-cutter mold," said Greg Crum, a senior vice president at Trammell Crow Co., the Dallas real estate firm that negotiated the sale on behalf of Hechinger.

The warehouse sale -- together with a similar deal between Hechinger and soft-drink maker Canada Dry for a smaller building nearby -- represent some of the last loose ends of the once-independent 87-year-old business, which at one time operated 117 stores.

"The building is in phenomenal condition," Meisels said. "It was built like Fort Knox, and it's been incredibly well-maintained."

Pub Date: 1/05/99

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