A large industrial warehouse in Hanover County, Virginia, has recently changed hands in a significant real estate transaction. The 1.1 million-square-foot facility, which serves as a key distribution hub for SanMar Corp., was sold for $128 million in September. This deal involves a buyer with close family ties to the current tenant, bringing a new dynamic to the property's ownership.
Key Takeaways
- The SanMar Richmond distribution center sold for $128 million.
- The buyer, Lake Washington Partners, has family connections to SanMar's CEO.
- The 190-acre property, formerly Graymont Industrial Park, will be renamed Hickory Hill Industrial Park.
- SanMar invested at least $50 million and employs nearly 1,000 workers at the site.
- The property offers expansion potential for additional structures.
New Ownership for Key Distribution Hub
The property, located at 10462 Hickory Hill Road, was acquired by J & J Hickory Hill, an LLC linked to Seattle-based commercial real estate firm Lake Washington Partners. Jordan Lott, president of Lake Washington Partners, confirmed the acquisition. Notably, Jordan Lott is the brother of Jeremy Lott, who is the CEO of SanMar Corp., the facility's current tenant.
This transaction closed on September 22. The sale includes both the massive 1.1 million-square-foot building and the expansive 190-acre site. The new owners plan to rename the property from Graymont Industrial Park to Hickory Hill Industrial Park.
"We have purchased buildings that they’ve been in and developed properties that they ultimately leased in the future," Jordan Lott stated, referring to SanMar. "We have a history of working with them. There’s a family connection."
Property Details
- Address: 10462 Hickory Hill Road, Hanover County
- Building Size: 1.1 million square feet
- Property Size: 190 acres
- Purchase Price: $128 million
- Previous Name: Graymont Industrial Park
- New Name: Hickory Hill Industrial Park
SanMar's Significant Investment in Hanover
SanMar Corp., a wholesale supplier of promotional apparel, designated this Hanover facility as its primary East Coast distribution hub in 2023. The company committed to a substantial investment of at least $50 million into the facility. This investment was projected to create nearly 1,000 jobs in the region, highlighting the economic importance of the center.
Hanover County assessed the property this year at over $77 million. This marks an increase from just under $74 million when SanMar first moved into the building two years ago. SanMar employs more than 5,000 workers across the U.S. and distributes apparel from over 30 brands.
Development History of the Site
The facility was originally developed on spec by Indiana-based Becknell Industrial. Becknell had purchased the Hickory Hill property in 2021 for approximately $4.7 million. The building's construction was completed in 2022, despite an initial half-year delay due to a stop-work order issued by the county. This order was a result of land disturbance work beginning before necessary permits were in place.
The original planned tenant for the building was home improvement retail giant Lowe's. However, Lowe's ultimately opted for a comparably sized facility in Richmond's Deepwater Industrial Park instead.
About SanMar Corp.
SanMar Corp. was founded in 1971 by Marty Lott. It has grown into a major wholesale supplier of imprintable clothing and accessories. The company offers products from over 30 brands and is known for its extensive range of T-shirts and other apparel.
Strategic Location and Future Expansion
This acquisition marks Lake Washington Partners' first venture into Virginia. The firm's portfolio currently includes 38 properties, totaling 11 million square feet across 10 states, with a majority in Washington state. Lake Washington Partners specializes in developing and investing in office, industrial, distribution, and multifamily properties.
Jordan Lott expressed the firm's interest in the Hickory Hill property due to its strategic East Coast location and its potential for future expansion. The site, which once housed the Camptown Races horse racing track, is situated north of Hickory Hill Road along the west side of Interstate 95, just north of Ashland.
"We think that the Hanover County market and its proximity to the Eastern Seaboard, that I-95 corridor up and down the East Coast, is really a market for industrial that tenants are going to want to be in for decades," Jordan Lott explained. He added, "We think this is the type of asset that tenants are going to want to be in for the very long term."
Room for More Development
The 190-acre property provides ample space for potential growth. While the existing 1.1 million-square-foot building is already substantial, it is designed for expansion. Furthermore, the site could accommodate additional structures, although there are no immediate plans for further development at this time.
The purchase price for the Hickory Hill property aligns closely with other major industrial real estate deals in the region. For instance, the Lowe’s distribution center at Deepwater, a 1.2 million-square-foot warehouse on 110 acres, sold for $127 million in 2023 to Realty Income Corp.
A Thriving Industrial Real Estate Market
The industrial real estate market in the greater Richmond region has remained robust. Recent transactions underscore this trend:
- Last month, Lingerfelt sold a 188,000-square-foot warehouse in Meadowville Technology Park in Chesterfield for $31 million.
- Earlier this year, Lingerfelt also sold Port 801, a 240,000-square-foot distribution warehouse in Chesterfield, to LBA Logistics for $35 million.
- In Chesterfield, New York-based PNK Group is constructing an 846,000-square-foot industrial facility at 1640 Ashton Park Drive. They acquired the 86-acre site for $12 million.
- Over the past year, Ares Management Corp. purchased 619,000 square feet of warehouse space in eastern Henrico for nearly $67 million.
These figures highlight the continued strong demand for large-scale industrial and distribution properties, driven by e-commerce growth and supply chain needs. The Hanover transaction further solidifies the region's position as a critical logistics hub on the East Coast.
