Divaris disposes of two Merchant’s Tire stores in Virginia Beach for Heafner Tire Group as part of a portfolio of 11 surplus properties. Eight buildings are sold and three are awaiting sale-leasebacks.

Divaris Undertakes National Disposition of Surplus Properties

HAMPTON ROADS, VIRGINIA –  Divaris Real Estate, Inc., a national leader in the field of surplus disposition and repositioning strategies, is continuing to sell and/or lease excess property for retailers and owners, regardless of the circumstance.  Former Heafner Tires, Hechinger, Rite Aid and Hannaford stores are prime examples of the diverse types and sizes of surplus real estate that Divaris is handling.  One company is in foreclosure subsequent to bankruptcy, one is undertaking expansion repositioning and one needs to satisfy the Federal Trade Commission fair trade agreement after a corporate buy-out.    Whatever the reason, Divaris will make sure everything must go!

Hechingers

In 1999, Hechingers/HQ. A Largo, Maryland-based home improvement store chain, closed its doors, the result of a Chapter 11 reorganization. When all was said and done, the owners needed to dispose of 17 sites located in several eastern states. Sandy Cohen, principal and chief operating officer of Divaris, is heading up the assignment.  “We’ve sold nine of the properties at prices exceeding their appraised value,” he says. “With the slowing economy we have seen more and more retailers cutting back on expansion plans, sitting tight or contracting. Hechinger was one of those that contracted all the way."

The properties, both freestanding and in-line stores, comprise over 1.5 million square feet of indoor and garden center space in diverse markets, including Birmingham, Alabama: Glen Burnie, Maryland; Syracuse, New York; Greensboro and Fayetteville, North Carolina; Columbus, Ohio; Philadelphia and Pittsburgh, Pennsylvania; Greenville, South Carolina; and Burke, Fredericksburg, Newport News, and Roanoke, Virginia. 

“When we inherited the properties, they were in varying degrees of occupancy," says Cohen. "In addition, some of them had fixtures, some had equipment and some were empty.  We consolidated all of the equipment and fixtures and sold and disposed of those first."

The buildings range in size from 60,000 to over 100,000 square feet and have a market value of approximately $50 million. Buyers include Sears Roebuck, Home Depot, Roadside Development, Highland Development and Burlington Coat Factory.

“Surplus property comes with its own unique set of challenges,” says Cohen.  “In this case, it’s been difficult consolidating ownership interests. With various parties having ownership in the properties, it’s been complicated getting clear title to convey interest.

“The key to our success has been marketing the property to the right buyer,” Cohen states.  Many former retail locations are just not suitable for traditional retailers anymore.  Finding alternative uses is critical in a successful marketing effort to drive the highest price.”

Heafner Tire Group

Heafner Tire Group has surplus property also, but while Hechingers closed its doors due to corporate bankruptcy, Heafner has doors opening in many locations. The largest independent marketer of tires and tire-related projects, Heafner has been undergoing a major expansion program, purchasing competitors in existing markets. Now, because they own so much property, they need to determine and dispose of redundant buildings.

Last year, Heafner appointed Divaris Real Estate to market 11 surplus properties throughout the Southeast, and to date, DRE has already sold eight.  The other three are sale-leasebacks and we’re just waiting for the ‘okay’ to continue.  In total, DRE has sold 134,990 square feet for the company. 

So far, Divaris has sold a 25,000-square-foot building in Knoxville, Tennessee for $700,000; a 25,000-square-foot property in Roanoke, Virginia for $735,000; a 22,500-square-foot distribution building in Richmond for $613,000; a 13,750-square-foot center in Pensacola, Florida for  $80,000; a 16,000-square-foot facility in Texarkana, Texas for $170,000; and a 20,000-square-foot building in Chesapeake, Virginia for $645,500. Divaris also disposed of an 8,000 and a 4,740-square-foot Merchant’s Tire retail building in Virginia Beach, both of which were acquired by Heafner several years ago.  There are more sites for sale in Tallahassee, Florida and Salisbury, Maryland. These will be sold and then leased back to Heafner Tire. 

Headquartered in Charlotte, North Carolina, Heafner comprises three divisions: after-market sales, with four regional divisions selling and distributing tires, wheels, equipment and other products; Heafner Worldwide, the international division that sells the company’s proprietary brands; and Winston Tires, the company’s retail division. From 240 outlets in California, Arizona, Nebraska and Kansas, Winston Tires sells all major brands including Michelin, BF Goodrich, Uniroyal, Goodyear and Firestone. Heafner also operates 5 million square feet of warehouse space throughout the country. Manassas, Virginia-based Merchant’s Tire sold its wholesale division to Heafner, rolling nine more locations and 200 more employees into the already enormous company.

Marketing several different properties in various markets means covering all your bases through whatever channels the local brokers would normally utilize to market buildings. This means putting up signs, advertising in local trade journals, and contacting local brokers.   And marketing these properties today takes advantage of all the benefits of technology. The Heafner deals are a good example of doing real estate in the modern world because the properties were spread out throughout the southeastern portion of the country, the Internet was instrumental in providing the information between client and broker.

Hannaford Bros. 

Hannaford operates 112 supermarkets located throughout Maine, New  Hampshire, Vermont, New York and Massachusetts, operating under the names of Shop 'n Save and Hannaford Food and Drug Superstores.  When the company decided to make its way to the Carolinas, it purchased the Wilson grocery store chain as part of its entry into the market, and it built a number of new stores. But when Delhaize America, Inc. bought Hannaford, the company was forced to exit Virginia and the Carolinas to gain approval from the Federal Trade Commission.  So Hannaford called on Divaris Real Estate, which had initially worked on Hannaford's entry into the Southeast region, to help with disposition. 

Divaris was retained to dispose of 16 Hannaford properties in the Carolinas and four in Virginia. So far, six stores have been sold.  The closed Hannaford deals include a nine-acre site at Park Road and Woodlawn Road in Charlotte that was sold to a local developer, and ten acres of land in Wilmington, North Carolina, that was sold to Hanover Realty.  Four local investors acquired a ten-acre site in Lumberton, North Carolina, a 43,000-square-foot facility at Twin Oaks Plaza, also in Lumberton, and a 35,000-square-foot building in Conway, South Carolina, was purchased by Edens & Avant. 

Charles Owens, vice president of retail leasing in DRE's Charlotte office, is marketing the Hannaford stores in North Carolina.  He worked through Divaris' corporate databank and networked with DRE's offices and affiliates to accomplish his goals quickly and effectively.