SuperValu sells Harford warehouse to Chicago REIT

New building planned to enlarge site off I-95

February 06, 2003|By Meredith Cohn | Meredith Cohn,SUN STAFF

A Harford County warehouse owned by SuperValu Inc. was sold to a Chicago-based real estate investment trust that plans to fill it with other businesses and add a new building next door, the buyer confirmed yesterday.

In one of the area's first big industrial deals of the year, First Industrial Realty Trust Inc. bought the 527,600-square-foot warehouse off Interstate 95 and will lease a portion back to the grocery operator and wholesaler.

SuperValu, which uses a little over a third of the warehouse, bought the building in 1994 for about $20 million and was asking $21.5 million. A spokesman for First Industrial would say only that the property was acquired for close to the asking price.

First Industrial, one of the nation's largest owners of industrial buildings, will also take control of 22 acres and will seek to find a business that wants a new warehouse of up to 330,000 square feet.

"Harford County has been designated as a market where we do want to own bulk distribution buildings, and we intend to be active in the market," said Jeff Thomas, regional director for First Industrial. "This kind of all fell into place for us."

First Industrial buys, develops and owns warehouses in 25 states and has 64 million square feet of space in more than 900 properties, including 17 in the Baltimore region.

The deal was brokered by Bill Pellington and John Wilhide of CB Richard Ellis. They had been working on the SuperValu deal for months, Pellington said.

The brokers will seek tenants for the remainder of the building.

"The building offered some stability with the lease-back in place, but it also offered the ability to add value," Pellington said. "They can lease it up and develop the site out front."

The lack of a full slate of tenants, which is required by most institutional investors such as pension funds, was not a deterrent to other buyers, Pellington said.

He said the building at 504 Advantage Way attracted several potential buyers, despite the somewhat lackluster commercial real estate market.

The building is in a state enterprise zone that allows businesses to receive tax breaks for operating there.

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