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Land deals and business decisions are changing the look of Dual Highway

September 01, 2013|By ARNOLD S. PLATOU | arnoldp@herald-mail.com
  • Will Perryman, left, President of Sharrett Auto Stores, has sold his Dual Highway location to Asad Ghattas.
By Joe Crocetta / Staff Photographer

A Washington County developer has purchased land along Hagerstown’s Dual Highway where cars have been sold for generations, and is planning to build a large office and commercial building there in about two years.

The four-acre site, long the home of the Sharrett car dealership and now still one of its two locations, was sold early this summer to Asad M. Ghattas, both Ghattas and Sharrett President Will Perryman said last week.

Ghattas paid $2,259,500 for the site, according to deed records at the Washington County Courthouse. Perryman said the land is several lots, stretching from 1317 to 1397 Dual Highway, bought over the years by his grandfather, Sharrett founder Ralph Sharrett.

Under the latest deal, Sharrett Auto Sales now is leasing the dealership site from Ghattas as the car dealership continues to do business there, as well as at its I-70 Auto Mall site further east on Dual Highway along Interstate 70. The lease expires about 18 months from now, Ghattas said.

The decision to sell and eventually move from the site was bittersweet, Perryman said.

“There is and there isn’t (sadness) in leaving,” Perryman said. “Obviously, we have a lot of history there and I kind of hated to leave it. But too many things were hindering us (there, with the dealership) getting bigger and being able to serve customers the way we would like.”

This fall, Sharrett is planning to break ground for the construction of a state-of-the-art collision center, replacing its current one at the Dual Highway site it sold to Ghattas. The current center is off the Mount Aetna Road back side of the site.

The new collision center will be built on about 4.5 acres of undeveloped land at the auto mall, which Perryman’s father, Paul Perryman, launched in about 1989.

The mall contains the Sharrett Auto Stores dealership, as well as those for Hagerstown Honda and Hagerstown Kia. Sharrett’s franchises include Buick, GMC, Mazda, Volkswagen and Subaru.

After all of Sharrett’s operations have been moved to the auto mall, Will Perryman said he expects his overall employment number to remain steady. He said he has 40 to 50 employees at the older location, plus 50 to 60 at the auto mall.

The new collision center, as well as Ghattas’ plans to build the four-story office and commercial building, is among the latest signs that the county’s economy, particularly along Dual Highway, is beginning to show vigor, business leaders said.

But compared to the residential real-estate market, the local commercial market still is slow in coming out of the recession and its weak recovery, some of them said.


The early years

Ralph Sharrett was 26 years old when he purchased a Ford dealership in 1936 in Manassas, Va., where he had grown up.

Four years later, he bought a Ford dealership at 30 E. Baltimore St. in Hagerstown and sold the one in Manassas.

In 1953, he opened a dealership at 1317 Dual Highway, selling European imports — Saabs, Volvos, Triumphs and Renaults. Soon, he added Volkswagens, becoming the brand’s second dealership in America.

In 1966, a new showroom was built at 1333 Dual Highway. And, over the years, other car franchises were added.

Perryman, who joined the company in 1992, said Sharrett officials began realizing “as many as five years ago, we had pretty much outgrown the collision center there. With the layout and the land, it just wasn’t working for us there anymore.”

At first, Perryman said, the company considered “refurbishing, rebuilding what we had there. (But) it just didn’t make sense. So we started looking into possibilities of building elsewhere.”

The 1317-1397 Dual Highway site was put up for sale about a year and a half ago, Perryman said.


Eyeing the property

Ghattas, who is president of Ghattas Enterprises in Hagerstown and has undertaken many local development projects, said he has been interested in Sharrett’s older location for a long while.

“I had my eye on it for years,” Ghattas said. “I like it very much. Excellent location — it’s on a point. And there’s a high traffic count. And with all the improvements that’s going on with the new hospital, the new medical center and it’s close to (Interstate) 70, it’s an entrance to town.”

After Sharrett leaves the property, Ghattas said, the plans are “to demolish the existing structures and build another beautiful office building four stories high.”

The structure, which still is being designed, will be built into the hillside there, with two stories visible from the Dual Highway side and four stories visible on the Mount Aetna side, he said. Tenants are being sought for office space on the upper three floors and for retail on the first floor, he said.

He said he hopes to have the building finished by late 2015.

Its site is diagonally across Dual Highway from the United Center, the $9 million, triangular-shaped, three-story office building that Ghattas finished building in 2011. Its biggest tenant is United Bank.

So, in that sense, the new building will “be facing the new United Bank building,” Ghattas said. “They’ll be like bookends. And what a nice thing to do for the entrance of Hagerstown.”


Filling a building

Opened in spring 2011, the United Center now is filled, having just landed three more business tenants, Ghattas said.

In addition to United Bank, which has the entire first floor and part of the second, the Cardiovascular Center of Hagerstown leases 3,500 square feet on the second floor, he said.

Also moving into 1,200 square feet on the second floor will be Next Evolution Marketing, he said. The company, which couldn’t be reached for comment for this story, is “a marketing company that performs outsourced sales and marketing, including corporate promotions on behalf of our clients,” according to its website.

The other two tenants just announced are RE/MAX Results, a real-estate brokerage, which is leasing 4,100 square feet on the third floor, and Madison Settlement Services, which is leasing 1,900 square feet on the third floor. Both companies are to move in in about October.

Ghattas said it’s a sign of economic importance for such a large building to have been filled with tenants little more than two years after it opened.

“It’s remarkable to fill it up that quickly because the economy is still struggling big-time,” Ghattas said. “The housing market is showing signs of recovery, but the commercial market is still weak.”

Ghattas, who also built the modern three-story Susquehanna Financial Center along Dual Highway, said top-notch office space along the highway “is very much in demand from people outside the area.”


A future of growth

Both Sandy Fouche, owner of RE/MAX Results in Frederick, Md., and David Breschi, president of the Hanover, Pa.-based Madison Settlement Services, have high hopes for their business entries in Washington County.

“With Hagerstown on that (Interstate) 81/70 corridor, I feel for future growth, that’s going to be good,” Fouche said. “I do think there are a lot of opportunities for investors” in Washington County, she said.

Fouche said one strong sign is that the number of houses for sale in the county now is about six times the number sold in the latest month. That’s what Realtors call a six-month inventory, “and that’s a healthy market,” she said.

By contrast, she said, “Frederick and Montgomery (counties) are back down to a three-month supply,” as the sales pace outstrips the number still on the market.

“Montgomery is down to, like, a two-and-a-half month supply. That makes prices go up,” Fouche said. “That means people will want to tip back over into Washington County” to look for houses to buy, she said.

In addition, Fouche said, a large commercial and residential development has just been approved along U.S. 340 in the Frederick County area.

“It’s a good opportunity for jobs,” she said. “Those people will need places to live, I would imagine.”

Asked why her brokerage would want to open an office in Hagerstown when there already is another RE/MAX brokerage here, Fouche said at least one other RE/MAX brokerage operates in both counties.

When RE/MAX looks “at certain areas that have growth opportunity, they feel if they can capture more market share, they are seeking out broker owners that they feel would be a good fit, and allowing them to open up new franchises,” she said.

She said her brokerage, which has 86 agents in Frederick, handled the largest share — about 30 percent — of the real-estate sales in Frederick County from August 2012 through this month. In addition, she said, because agents affiliated with her office cover a wide area, about 13 percent of her brokerage’s sales were in Washington County.

Fouche said she hopes her satellite office in Hagerstown will attract “30 to 40 agents” — each an independent contractor, choosing the brokerage with which to affiliate.


‘Very, very optimistic’

For Breschi, the reasons for opening a Hagerstown office are similar.

“We have a lot of agents, mortgage folks, that are working in Maryland and the Hagerstown area, so we started exploring the possibility of opening” here, Breschi said.

When his company was looking at office space in the United Center building and heard that with RE/MAX Results moving in, “there would be 40 or 50 (real estate) agents down the hallway, we’re like, ‘Well, this looks like a much more attractive space than it did before,’” Breschi said.

Realtors often direct their customers to settlement companies, so the tie seemed perfect, he said.

In addition, Breschi said, the I-81 corridor from his company’s Chambersburg, Pa., office south to Hagerstown and beyond is a busy lane for business development.

“There isn’t a month that goes by that you don’t see some announcement of some distribution center opening up in that corridor,” he said. “We are very, very confident that Hagerstown is a growth corridor. Not only 81, but the growth from Frederick.

“We see the 81 corridor feeding distribution jobs, like solid middle-class type of job growth in that area. Other thing we’re seeing is a Frederick market that is very hot (and) the overflow from Frederick to Hagerstown, for folks that work in those offices. We think there are double forces that are at play. So we’re very, very optimistic of the growth of Hagerstown.”

He said the company, which has “between 40 and 50” employees total at its six offices in central Pennsylvania, will begin with two employees in Hagerstown. Depending on the pace of growth, it eventually could expand to as many as six workers, he said.


Housing sales jump

The latest figures out for Washington County’s housing market show that total sales exploded here in July, jumping more than 75 percent higher overall than in July 2012.

But the growth in sales and rentals of commercial buildings has been far less exciting than the recent euphoria on the residential side of the real-estate market, according to longtime commercial specialist Syd Machat.

Commercial real estate is “in a recovery mode and everybody has their opinion about it,” said Machat, senior adviser for Sperry Van Ness/Miller Commercial Real Estate, with an office in Keedysville. “It’s not time to get out the helium and the balloons to have a celebration. It’s trailing the residential market.”

Machat said values and activity in the commercial market depend on other factors, such as how much income a property has produced. And for business deals, “you need the bank’s confidence and the banks, obviously, suffered” during the recession.

Commercial “brokers would tell you phones are ringing, more activity out there, but it’s still not pre-2008,” when the worst of the recession hadn’t yet hit. “I like to characterize the market to the landlord and tenants, it’s recovering. Classic bell curve, starting back up,” but still a ways to go, he said.

Compared to a year ago, the demand for commercial space in the county “is on the upswing. There are more property tours taking place,” Machat said.

He said one place of strong interest is Eastern Boulevard, which intersects Dual Highway.

The boulevard, which Machat likens to a commercial corridor, has a good amount of modern commercial and office space appealing to an established company, a medical professional or a business outside Maryland that wants to open a branch here, he said. Right now, that supply is “on the tight side,” he said.

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