PhillyBurbs.com - March 9, 2009
The Burlington Coat Factory has put its massive Cooper Street distribution center and its Burlington Township corporate headquarters up for sale but plans to lease back most of the space once the buildings are sold.
The company has hired Jones Lang LaSalle, a Chicago-based financial and professional services firm, to market and sell the combined 1.25 million-square-foot, two-building industrial portfolio, according to a news release posted on JLL's Web site.
The corporation's Burlington facility, located on Route 130 North, will be partially occupied and leased back by Burlington Coat Factory as its corporate headquarters for a term of 10 years with renewal options, according to the release. The release also states about 380,000 square feet of warehouse space at the Burlington facility is expected to become available to another tenant in July.
The release indicated the Edgewater Park facility would be leased back to Burlington Coat Factory if sold.
Brian Smith, a spokesman for JLL, said last week his firm is not prepared to discuss any further details regarding the properties.
Construction on the Edgewater Park distribution center began in 2001 at a cost of $30 million and the facility opened in 2003, shipping merchandise to 427 stores in 44 states and Puerto Rico.
The formerly family-owned Burlington Coat Factory was sold to a private equity firm, Boston-based Bain Capital Partners, for $2.06 billion in 2006.
Edgewater Park entered into a 30-year tax-abatement program or PILOT (payment in lieu of taxes) agreement with Burlington Coat Factory in 2002. Under the agreement, the Coat Factory paid the township $147,500 a year for the first five years. Payments increase 3.3 percent a year (beginning in 2008) until the 31st year, 2034, when the property will be subject to the township's regular tax rate.
Mount said even if the building ultimately ends up being owned by another company, it should not affect the agreement as long as the building still serves the same purpose.
According to the JLL release, the Edgewater Park facility is undergoing $21 million in capital investments including new racking and sprinkler systems, mechanical and electrical upgrades and other site work expected to be completed by the third quarter of this year.
According to CoStar Group, a commercial real estate information company, 2009 has seen a flurry of industrial transactions as national retailers looked to unload corporate headquarters and distribution facilities.
CoStar reports that partial leaseback transactions - in which a company sells an entire building or portfolio but only leases back certain buildings or portions of buildings - are on the rise as shrinking companies work to economize on space and operating costs.
Sphere: Related Content