When Hechinger Co. threw in the towel yesterday, Spence Mehl's phone started ringing with calls from people who were interested in the real estate that would be abandoned.
Retailers, developers, investors--they all wanted to know as much as possible about what will happen to Hechinger's stores. "I hear from everyone," said Mehl, vice president of Retail Consulting Services Inc., the New York firm charged with disposing of Hechinger's real estate assets on behalf of the bankruptcy court.
The company has already set up an auction next month to dispose of the 94 properties that Hechinger had said earlier it was going to close; yesterday's announcement added 117 properties to auction off in the coming months after the going-out-of-business sales end.
In the Washington area, the Hechinger closings mean that some of the most prominent retail sites in the Washington area will be available soon.
The 88-year old local business has about two dozen stores sprinkled throughout the region, including spots in some of the area's wealthiest and more densely developed neighborhoods.
Aware of Hechinger's troubles, retailers have been looking at the ailing company's properties for many months, said David Ward, a broker with H&R Retail.
Only a handful of Hechinger's local stores are big enough to accommodate a Home Depot or Lowe's. A Lowe's spokesman said his company is more interested in Hechinger employees than the store sites. So in most cases, residents should not expect a big hardware store as a replacement. Supermarkets or other types of retailers are more likely.
But plenty of those are likely to be interested. "I think, when you look at all the assets of Hechinger, my opinion is they have some very prime retail--good traffic counts, good demographics and all those things," said Gary Lawrence, a retail broker with Insignia/ESG.
"I would say generally they're good sites, because many of the Hechinger locations were established a long time ago, and a long time ago, certain areas they're in were not as developed as they are now," said John Asadoorian of Asadoorian Retail Real Estate.
For instance, he said, the Reston store opened at a time when many still considered that community the outer edge of suburban Washington, rather than the center of an emerging high-tech economy. Finding another big empty space at such a heavily trafficked intersection would be nearly impossible.
"As the region has grown, it has grown around these Hechinger sites," he said.
The Hechinger store on upper Wisconsin Avenue NW, a two-story building that once housed Sears, is also a prime spot, "the queen jewel of them," said Ray Whalen, a retail broker with Transwestern Carey Winston.
"Any big box will kill for that site inside the District," he said of the warehouse retailers. "That's the slam dunk location. All the big boxes are trying to find a way to move into the District."
Not all of the sites are desirable, said Peter Framson, a retail broker with Trammell Crow.
The Gaithersburg location, for instance, is zoned for a furniture or home improvement retailer--not a supermarket or other type of store. That limits the property's use, Framson said.
In Rockville, the Hechinger store is small, doesn't face the road and has limited parking. Another store in Dale City is not in the center of retail activity.
"It's in a good market, but it's on the fringe," Framson said.
Most of Hechinger's stores nationally are leased. The company owns 11 of the 117 sites and the Hechinger family, which had sold the chain to an investment firm, owns a handful of others. Either way, they will be sold to bring in money to pay off creditors, according to Mehl. A lease with good terms, he said, is a valuable asset, while a bankrupt debtor such as Hechinger has the right to walk away from an unfavorable lease.
Properties can be sold as packages or individually, he said, "whatever brings the most value to the debtor's estate."
As a package, the most likely buyers are "vulture funds," investors who search out under-priced assets. "The vulture funds all the time look at these properties," he said. "It happened in the Levitz case, it happens in all these cases."
CAPTION: On the rooftop garage of the Wisconsin Avenue store, longtime Hechinger shopper Joe Gatling is saddened by the chain's end.