Sun Products facilities demolition begins

A former Baltimore industrial site is being demolished to make room for warehouse distribution space increasingly in demand near Baltimore’s port.

Chesapeake Real Estate Group LLC started demolishing a portion of the former Sun Products facility on Thursday. The company made detergents at the site, but announced it was closing in early 2014 and laid off 300 workers.

“Since acquiring this parcel and existing buildings in April, our team has generated a tremendous amount of interest from end-users that are attracted to this one-of-a-kind site with directly proximity to major transportation axes,” Jim Lighthizer, founder and owner of Chesapeake Real Estate Group, said in a statement announcing the start of demolition. “We are focused on executing our development plan and making this project site-ready as quickly as possible to respond to the e-commerce and warehouse/manufacturing demand.”

This spring Chesapeake, with investment partner USAA Real Estate Co., announced it had purchased the site. Its redevelopment plans include the demolition of five buildings that combined will provide more than 600,000 square feet of space. In their place, Chesapeake plans to build two new warehouse and distribution facilities that will total more than 550,000 square feet.

Plans also include retrofitting an existing 500,000-square-foot distribution facility that will be marketed toward businesses interested in being near Interstate 95, the Port of Baltimore or both.

The project is being developed in three phases.  The first phase is the renovation of the existing distribution facility that will include new heating, lighting and roof. The next phase will be the construction of a 400,000-square-foot “cross-dock” industrial and warehouse building. The final phase of building includes constructing a 100,000-square-foot industrial and warehouse building.

Demolition is expected to be finished in December and the new buildings are expected to be delivered in the summer of 2016.

There has been a surge in interest in industrial projects in the Baltimore and Washington, D.C., areas, especially in the Interstate 95 corridor. Demand is being driven in large part by e-commerce businesses attracted by easy access to highways to ship projects.

According to a second quarter report by JLL, despite 1.1 million square feet of new deliveries in the Baltimore and Washington corridor vacancy for warehouse and distribution space fell to 11.2 percent — a nine-year low.

The Baltimore area in particular has also drawn more interest because of improvements made at the Port of Baltimore to accommodate the larger ships arriving as a result of the Panama Canal expansion. Beyond the Sun Products site, nearby Sparrows Point is also being developed as a warehouse and distribution hub that has easy access to the port and I-95.