(Read more on the industrial market.)
WILLIAMSPORT, MD-BPG Properties Ltd. has sold an industrial asset it owned here after it rehabilitated the building and then secured it with a long term lease. Acquired in 2005 from Lenox Corp., 16604 Industrial Dr. was sold to Atapco Properties for $9.2 million. Robert Cashman, Bruce Strasburg, Jonathan Beard and Marc Rampulla of CB Richard Ellis represented BPG in the transaction.
After BPG acquired the 170,858-sf warehouse called the Hagerstown Distribution Center, it launched a capital improvement program, George Haines, VP of BPG in charge of this transaction tells GlobeSt.com. The cost of the rehab--which included removing antiquated racking and mezzanine space,repainting the exterior and interior, and upgrading the sprinkler system to ESFR--ran about $1.50 per sf. The sprinkler upgrade in particular, he says "made the building a lot more appealing to tenants and makes it a more institutional grade building. Having that ESFR as part of the building's infrastructure is another box investors could check off." Other features in the building include 40 by 40 column spacing, 25 dock doors and two drive-in doors.
In 2006, BPG secured a 10-year lease with Rust-Oleum Corp., rendering it even more attractive to investors. "Ultimately this was a bread-and-butter value add play for us," Haines says.
Another value add component to the transaction is Rust-Oleum's long-term plans for the building, which has the potential to be expanded by up to 91,000 sf, Haines says. "Rust-Oleum has one facility next door and another a short distance away." The firm has already increased in space usage at the Hagerstown Distribution Center, inking a deal with BPG last November to grow by 62,000-sf.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
