AG Agrees to Sale-Leaseback of Warehouse

SEATTLE -- Associated Grocers here said Friday it has reached agreement with Sabey Corp., also based here, on a sale-leaseback of its headquarters and distribution center. AG said its board of directors voted unanimously to accept Sabey's offer pending finalization of contract terms. The companies did not disclose the sale price. The sale-leaseback plan will allow AG to continue serving its customers from the 1 million-square-foot distribution center on the property while pursuing strategic options that could include developing a more efficient and cost-effective distribution center at a different location. According to AG, the property is one of the largest contiguous commercial land parcels ever made available for sale in the Seattle metropolitan area -- a property "that has appreciated in value beyond what makes good business sense for a grocery distribution operation," John Runyan, AG's president and chief executive officer, said. He also said the buildings on the property, including a grocery and fresh foods warehouse and office space, are over 54 years old, "and their design and layout is inefficient compared to today's distribution standards." AG had announced in December it had hired GVA Kidder Matthews, a commercial real-estate firm in the Pacific Northwest, to market the property. -- Elliot Zwiebach