Rhode Island’s largest vacant industrial building has a taker.
The former Collyer Insulated Wire Company building in Lincoln – empty since 1989 – will soon become the national distribution center for the Chinet Company, the maker of disposable plates and other goods.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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The 460,000-square-foot facility on 100 Higginson Ave. is owned by a Florida development company, which recently leased a majority of the space out to Rhode Island-based Dean Warehouse Services.
Dean beat out national competitors to win a contract from Chinet’s parent company, Huhtamaki, to take over the role of national distribution center.
“If this building wasn’t available, we would have taken our business out of the state. This is a good thing for economic development here in Rhode Island,” said Greg Foreman, vice president of operations for Dean. Dean is owned by local businessman Brad Dean.
Foreman said the company was selected for the Chinet deal because of its reputation in the industry and location. Huhtamaki does most of its business in the Northeast.
With the new space, Dean has decided to close its North Smithfield warehouse – one of the six it occupies across the state.
Since landing the Chinet contract several months ago, Dean’s workforce has increased by 150 percent to 50 employees.
Aside from providing more jobs, the project is bringing life to a building that has become a giant eyesore in the area. Maintenance at the building has been minimal since Collyer was relocated, leaving behind almost a half-million square feet of building and 30 acres of land.
The building was purchased for $1.4 million in June by Miami-based Coastal Properties. It was formerly owned by LI Development, a partnership of Procaccianti Group, based in Cranston, and Essex Capital Partners, based in Danvers, Mass.
The deal was brokered by Michael Giuttari of NAI MG Commercial Real Estate of Providence. Giuttari said over the last 12 years plenty of developers have expressed interest in the building, especially Boston companies looking for a building priced far below greater Boston level.
Usually following some research, Giuttari said, the companies determined that they couldn’t get the rent that would cover the cost of renovations and make the venture profitable.
“It didn’t help that as time passed by that the building started falling into disrepair,” said Giuttari.
He said the Florida group originally purchased the property to use parts of it for self-storage, which would generate some income to invest later into renovations and then rent it out further.
However, following several months of negotiations, Dean convinced Coastal to allow them to rent out almost all of the building.
Dean needed enough space to make it economical for them to move several operations to the building. Coastal benefits because with only one major tenant, renovation costs will be reduced.
“If you have 10 tenants that requires an investment in corridors, fire doors and other things needed to accommodate those tenants,” he said.
Furthermore, Coastal has acres and acres of land to build self-storage structures around the main building, when the building starts generating income.
Dean has started moving into the facility and expects to occupy 250,000 square feet of it by Jan. 1. By February, the company will occupy a total of 430,000. The remaining space will be rented out to another company.
Foreman said Dean doubled in size in a matter of three months after winning the contract with Chinet. Ironically, a year ago Dean had considered buying the Collyer building on its own, but decided it couldn’t justify the investment.
“By the time the (Huhtamaki) contract came through it was already purchased by this group in Florida. It worked out,” said. Foreman.
