Pier 1 Imports will expand Harford distribution center

Deal signals an upswing in the warehouse market

July 10, 2002|By Meredith Cohn | Meredith Cohn,SUN STAFF

Pier 1 Imports Inc. has agreed to expand its distribution center space in Harford County to about 1 million square feet, signaling that the lackluster warehouse market is on an upswing, brokers for the deal said yesterday.

The Fort Worth, Texas-based home furnishings importer will take over an empty 346,000-square-foot warehouse in Aberdeen, a few miles from the 630,000-square-foot building it has occupied since 1990.

The new building was constructed without a committed tenant last year in anticipation of a flurry of demand. Then the economy soured.

PM Realty Advisors, the landlord, had been asking $4.30 a square foot for the space at 400 Old Post Road. Details of the Pier 1 deal were not disclosed.

"We've been seeing a lot more activity in the last few months. We were getting a lot more inquiries about the building. There actually isn't a lot of Class A space left," said Robert S. Clements, executive vice president of Preston Partners, who represented the landlord along with Karl Lehmann, a company vice president.

Two other large warehouses, the former Warner Bros. building in Baltimore County and the former Fila building in Anne Arundel County, remain empty. Each contains less than 400,000 square feet. But Clements said a deal might be close for one of them.

That would be good news for the region's industrial market, which has a vacancy rate of 15.4 percent, the highest since 1993, according to a Collier Pinkard real estate report released last month.

Pier 1, which has more than 900 stores and six distribution centers, will open its new center in about a month.

The center will add 50 employees to the 110 now working in the county. The site is in a state enterprise zone and will afford Pier 1 tax breaks for hiring the workers. No other incentives were offered.

William M. Pellington, a first vice president at CB Richard Ellis, who represented the company in the lease, called the deal "good economic news" in general.

"Any time you lease a 350,000-square-foot warehouse it's a good sign, but it's particularly good considering the leasing environment we've been in for the last 18 months," Pellington said.

The retailer, possibly benefiting from a post-Sept. 11 rise in sales of home furnishings as people chose to spend more time at home, reported record sales and income in its first quarter, which ended June 1. Sales were $384 million, 18 percent more than in last year's quarter.

J. Thomas Sadowski, director of the Harford County Office of Economic Development, said other potential tenants and developers have expressed interest in breaking ground for buildings in the area.

Available land near the highways and zoning has given the county success in recent years in luring industrial users. Aside from some sublet space, no large new warehouses are available in Harford, Sadowski said.

"This is a significant lease," he said. "It may mean more development in the county. A lot of developers and investors had been looking at this building. It's a watershed mark."

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