Bush completes sale-leaseback deal on Erie, Pa., facility
Thomas Russell -- Furniture Today, December 13, 2011
JAMESTOWN, N.Y. — Ready-to-assemble home office and home entertainment specialist Bush Inds. has announced a sale-leaseback deal involving its Erie, Pa. distribution center.
Bush will lease about 500,000 square feet of the 1.1 million square foot building from Lord Corp., a supplier of adhesive products. Terms of the sale, including the purchase price were not disclosed.
Bush said it will continue to use the space as a core U.S. distribution center. CEO Jim Sherbert said the distribution operations, including its automated storage and retrieval systems, will not be affected by the transaction, nor will it affect current or planned employment levels at the facility.
The facility was built in 1996 and sits on 87.5 acres, according to online commercial real estate resource LoopNet.
Bush originally used it as a manufacturing plant, but eventually consolidated production into its Jamestown, N.Y., plant, where the company is based. It has not been used for manufacturing since 2008, Sherbert said, and has been up for sale since 2009.
"When it was originally built ... it was designed to be a high volume and low cost manufacturing facility," he said. "It was very difficult to make this facility competitive without run (lot) sizes nearly 10 times what is common today."
Sherbert also said that the opening of facilities such as the company's Reno, Nev., distribution center has reduced the space requirements in Erie.
"Based on this, we made a strategic decision to sell the property and lease back the space we currently use, so that we can reinvest the proceeds in our growth initiatives for Bush Furniture and BBF (Bush Business Furniture)," he said.
Due to confidentiality agreements with Lord Corp. he declined to comment on the sales price, other than to say that "nothing seems to be selling for the asking prices these days."
The building was recently listed at $30.47 million, or $27.39 a square foot.
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