Hechinger sites sold for $5.9 million

Chicago firm buys 11 locations

Woodlawn parcel is included

Retailing

February 15, 2000|By M. William Salganik | M. William Salganik,SUN STAFF

Klaff Realty LP said yesterday that it had closed on a $5.9 million deal to acquire 11 sites from Hechinger Co., the bankrupt home improvement retailer.

At seven of the sites, Klaff will assume Hechinger leases. At the other four -- including a 0.6-acre parcel on Security Boulevard in Woodlawn -- Klaff is acquiring vacant land.

The sites were among more than 100 locations put up for sale last fall, after Hechinger Co. ended efforts to reorganize in bankruptcy and ceased operations, Matthew Feldman, a New York lawyer representing Hechinger, said yesterday.

"Everything has been sold that could be sold," Feldman said.

Most of the sales have been completed, but closings are still expected on a few, he said.

Robert Weil, vice president and general counsel for Klaff, said his firm is "still in the process of assessing the highest and best use" for the vacant parcels and does not yet have firm plans for any.

The Chicago firm specializes in redevelopment of underperforming retail sites.

As for the seven Hechinger leases assumed by Klaff, Weil said that, unlike many of the Hechinger store sites, these stores already had tenants under Hechinger subleases.

"This is a little different than the other Hechinger properties," he said.

In most cases, Hechinger leases were bought back by the landlord or bought by commercial real estate companies that leased them to other retail stores.

He said Klaff could not change tenants in the seven leased sites but might undertake "strategic acquisitions or dispositions" -- seeking either to sell the leases to the building owners or to acquire the buildings from the owners.

Besides the Security Boulevard site, the other vacant parcels -- all 10 acres or more -- are in Memphis, Tenn.; Richmond, Va.; and Johnstown, Pa.

The seven leases acquired by Klaff are in Virginia Beach and Norfolk, Va., Allentown and York, Pa; and Greensboro, N.C.

A year ago, Hechinger, a regional operator losing market share to national giants Home Depot Inc. and Lowe's Cos. Inc., said it would close 34 stores.

In June, it filed for bankruptcy protection to attempt a reorganization, and announced another 89 stores would shut, leaving it with 117 in 21 states, including nine in the Baltimore area.

Finally, the 88-year-old Hechinger chain, based in Largo, announced it would close altogether.

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