Hartz Buys $36M Distribution Center

ABERDEEN, MD-Hartz Mountain Industries, which manages one of the largest privately held commercial real estate portfolios in the US, has expanded outside of its New Jersey stronghold and invested in the DC-area market for the first time with a $36 million acquisition of a 634,000 sf, Class A distribution center located at 913 Old Philadelphia Road in Aberdeen, Md. It bought the facility, which is fully leased and solely occupied by Pier 1 Imports, from BlackRock Realty Inc.

According to Gus Milano, executive vice president at Hartz, the company is looking to acquire additional assets in this market, although nothing specific is pending. “We think that in the long term this market will be a strong industrial base,” he tells GlobeSt.com.

Secaucus, NJ-based Hartz Mountain developed most of the 200-property, 38 million sf portfolio it owns and manages. “Even though it’s not in New Jersey and even though we didn’t build it, 913 Old Philadelphia Road looks like a lot of the property in our portfolio; a premier location and an excellent property with a respected tenant,” says Emanuel Stern, President and COO of Hartz Mountain Industries.

Stern says that the concentration of properties the firm already holds in its home region has limited its ability to diversify and expand, “so deals like Aberdeen are more and more appealing.”

CB Richard Ellis’ Bo Cashman and Bill Pellington represented BlackRock Realty, Inc. Cashman tells GlobeSt,com that the I-95 location made the asset very attractive to investors. Hartz was one of 15 investors groups that made offers to purchase the property, according to Cashman. “Investors are following where the tenants want to be, which is close proximity to I-95 and high density areas. My impression from the tenant’s standpoint is that its logistics depends on being in this type of central location.”

The $56.50 per sf purchase price, he adds, is something of a premium for this market. “But it reflects the quality of the building and the quality of the tenant.” In general Cashman says, bulk industrial is faring very well along the 1-95 Corridor, especially further north from the District of Columbia. “Land constraints around the DC area have pushed growth further up 1-95,” he says.