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HomeGrocer Won't Use Former Thrifty Center

E-commerce: Webvan, which acquired the online grocery service in June, says the distribution complex doesn't fit its model.

October 17, 2000|BRAD BERTON | SPECIAL TO THE TIMES won't be sending its signature peach-adorned grocery delivery vans from the big former Thrifty Payless distribution center near Baldwin Hills after all.

HomeGrocer had signed a 15-year lease for the 380,000-square-foot complex at La Brea Avenue and Rodeo Road not long before the company was acquired in June by another fledgling online grocery delivery specialist, Foster City-based Webvan Group. Webvan has opted to sublet the 1960s-vintage complex with the assistance of real estate consultant Trammell Crow Co.

The building doesn't fit Webvan's model for a distribution center because of such drawbacks as low ceiling height and poor column layout, said Allen Arthur, Webvan's director of real estate. HomeGrocer will continue to serve Westside customers from its facilities in Carson and Azusa.

Webvan's common stock closed at $1.81 a share Monday, down 6 cents, on the Nasdaq Stock Market, a fraction of its 52-week high of $34 last November but up a bit from the 52-week low of $1.38 set last week.

Like other so-called "instant delivery" specialists, Webvan has sought to cut costs and conserve capital amid dwindling cash reserves and a jittery stock market. It recently delayed planned expansions into large Northeast marketplaces. The company did announce construction of a big nationwide customer service center in North Las Vegas last week.

HomeGrocer serves Southern California, Dallas-Fort Worth, Seattle and Portland. Webvan serves the Bay Area and Sacramento as well as Atlanta and Chicago.

Webvan's agents are in talks with prospective subtenants, Arthur said.

Webvan shouldn't have much trouble finding subtenants for the La Brea building amid the Southland's strong economy, said Matthew Miller, a real estate broker at Cresa Partners in Brentwood who specializes in helping e-commerce companies.

However, Webvan's real estate agents are likely to see more interest from industrial companies than traditional or online retailers, who tend to locate their distribution centers in less-populated areas where real estate is cheaper, Miller said.

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