Monday, January 11, 2016

Alliance Acquires York Industrial Portfolio

by Steve Lubekin,
Alliance Partners HSP has scooped up another two industrial properties in York, PA, totaling approximately 566,000 square feet. The purchase, redevelopment and subsequent leasing of these buildings is the most recent in a series of industrial acquisitions by the company totaling approximately two million square feet.

Alliance HSP purchased distribution facilities at 2925 East Market Street and 789 Kings Mill Road from D&D Distribution, totaling 386,000 square feet and 180,000 square feet, respectively. As part of the transaction, Alliance HSP entered into a full building, three-year leaseback agreement with D&D Distribution at 789 Kings Mill Road.

Alliance HSP also signed Stauffer’s Biscuit Company, a long-term logistics customer of D&D, to a long-term lease for 250,000 square feet at 2925 East Market Street. As a result of these transactions, the combined 556,000 square feet in the two buildings was approximately 75 percent leased when acquired by Alliance HSP.

“We were faced with the need for a large capital investment in a tight money market, and we decided to approach Alliance HSP largely based upon their reputation for providing creative solutions to complicated acquisitions,” says Gene Burchette, chairman of the board at D&D Distribution. “Faced with environmental issues, tenant leases, and a sale and leaseback challenge, these creative solutions were proposed, negotiated, and resolved in an expedited manner.”

Alliance HSP has already begun a capital improvement plan at 2925 Market Street, and anticipates an April 2016 completion date. With an all new roof, enhanced loading docks and improved truck circulation, the remaining 136,000-square-foot vacancy at 2925 Market Street will offer a combination of quality and price point currently unavailable in the York County industrial market.

“We believe it’s a good time to market a well-located, institutional-quality block of industrial space in York County,” says Matt Handel, director of acquisitions for Alliance HSP. “We look forward to executing our investment strategy in York, and I look forward to Alliance HSP acquiring additional industrial properties, including excess corporate real estate in Central Pennsylvania, in 2016.”

Alliance HSP’s acquisition in York follows its purchase of a 500,000-square-foot, rail-served industrial project at the Port of Baltimore; its redevelopment of a 350,000-square-foot warehouse project in Spartanburg, SC; and its "reimagining" of a 225,000-square foot warehouse project encompassing a full city block in Philadelphia into a mixed-use, residential, office and retail complex. All of these projects will require extensive redevelopment, environmental remediation, capital improvements and repositioning/re-leasing.

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