The new owners of a prominent 52-acre parcel of land in White Marsh said Monday they will scrap plans for an outlet shopping center and instead build warehouses aimed at retailers who want to store goods for quick turnaround for customers.
Baltimore-area developers Atapco Properties and Chesapeake Real Estate Group LLC said the shift is a response to demand for warehouse space along the Interstate 95 corridor from retailers.
The partners bought the land at Route 43 and Interstate 95 last month for $15.3 million from Paragon Outlets Baltimore, according to CoStar Group, a real estate information company.
They plan to have offices and some retail on the property, and expect to have more specific plans soon.
“This site is shovel-ready and we intend to leverage the existing pent-up demand for strategically located office-warehouse and e-commerce space along the Interstate 95 corridor,” said Jim Lighthizer, founder and owner of Chesapeake Real Estate Group.
“Few sites in the Mid-Atlantic region can match this project’s outstanding highway visibility and access from Interstate 95, proximity to several ports including Baltimore, Philadelphia and Wilmington and access to nearly one-third of the United States population within a one-day truck drive,” he said. “We have recently begun marketing the site to end-users and it is being extremely well-received.”
Paragon bought the site in 2015 for $18.6 million from Corporate Office Properties Trust, according to CoStar.
Retail experts said an outlet mall was a good use for the site when it was proposed. But it ran into opposition from residents and nearby White Marsh Mall. That led to a lawsuit and a dispute over zoning, though voters eventually supported a zoning bill allowing the outlets to proceed.
Paragon, however, disbanded early last year amid a shifting retail landscape and decided to sell the property after getting a number of inquiries.
Real estate experts say the market for industrial properties has been brisk, as retailers look for fulfillment centers along the I-95 corridor and elsewhere. Several deals have been done recently to buy and develop properties.
The greater Baltimore metro region absorbed 6 million square feet of warehouse space in 2017, well above the tally for the previous year, and demand continues this year, according to Bill Pellington, senior vice president of CBRE.
He cited companies including Amazon, FedEx, FILA, Sephora Americas, Pier 1 Imports and Under Armour signing large leases in the region. Amazon, FedEx and Under Armour all built warehouses on the site of the former Sparrows Point steel mill being redeveloped by TradePoint Atlantic.
Blackstone Real Estate Partners also recently bought a 40-site collection of industrial properties in the Baltimore-Washington corridor from FRP Development Corp. for $347.2 million.
Chesapeake Real Estate Group and Atapco Properties have partnered on other projects, including Patuxent Range Road in the Baltimore Washington Industrial Park and Antrim Commons Business Park in Pennsylvania.
The White Marsh site is ideal for industrial and some office and retail uses, said Lighthizer, who expects the first building to be ready next summer. The property is within a 10-mile radius of about 750,000 consumers and within a 50-mile radius of almost 7 million people, he said. More than 160,000 vehicles a day pass the property, which is also close to the port of Baltimore and not far from ports in Wilmington and Philadelphia.
He said demand has been building for warehouses, many much larger than those traditionally built for retailers in the area, because of Americans’ changing buying habits. People want goods in a day or two, or even an hour or two, he said. And, he said, “You can’t get something in two hours if it’s three hours away.”
The White Marsh site will allow for that kind of turnaround, and add fulfillment jobs to the region, as well as some office and IT positions. The site is also visible from the highway, which will be appeal to some companies that want the advertising or want to lure people to retail outlets.
With few undeveloped parcels left in the region, he said developers likely will eye more existing retail or industrial properties that are unused or underused.
“This property was slated to be retail 20 years ago and now the demand is for office-warehouse space,” he said. “We’ll start seeing more redevelopment of older, existing buildings that will either be torn down or repositioned. There just are not a lot of green fields.”