Land Values Shoot Up in Lordstown
MidMarch 2021 Jeremy Lydic
LORDSTOWN – Massive economic development projects in Lordstown are driving a surge in that area's commercial real estate market, with values rising rapidly and inquiries increasing from domestic and foreign buyers.
Signs posted along Bailey Road promote developable industrial land, with acreage ranging from less than 20 to more than 100. Brokers are seeing plenty of inquiries from developers and companies looking to set up shop in close proximity to the area's three high-profile projects – Lordstown Motors Corp., Ultium Cells LLC and the TJX Companies Inc. HomeGoods distribution center.
And while there have always been eyes on industrial and commercial properties in Lordstown, the questions now are who's buying, for what reason and for how much?
"I know that two of the inquiries that I have are directly working with Ultium," says Dan Crouse, a broker with Platz Realty Group. "People are going there because Ultium is there. They have contracts with Ultium."
The Ultium Cells construction project, above, and the startup of Lordstown Motors Corp. helped Ohio lead the nation in new corporate facility projects per capita in 2020. The distinction was announced March 1 by Site Selection, a corporate real estate economic development magazine.
Buyers are looking at property priced anywhere from $10,000 an acre to $30,000 depending on the property, its attributes and its proximity to the three big projects, Crouse says. Typically, the 100-acre-plus parcels are being offered at around $30,000 an acre, he says.
Before Ultium, the same properties would have likely sold for $5,000 to $7,000 an acre, according to Crouse. A few years ago, he recalls that land for the Lordstown Energy Center on Henn Parkway was sold for $6,000 or $7,000 an acre, he says.
Records posted on the Trumbull County Auditor's website show in 2016, Clean Energy Future Lordstown LLC closed on about 14 acres at 1853 Henn Parkway for $369,442. That compares to the 15.57-acre former Magna Seating property – which notably includes an industrial light manufacturing building and office – that sold for $5.4 million to M&M Industries Inc. in December 2020.
"Ultium is changing everything," Crouse says.
This land on Ellsworth Bailey Road, 4.45 acres, is listed for sale at $155,750.
The projects and the national attention they've courted were enough to draw Eric Silver to the area. The president and broker of the Beachwood-based Ag Real Estate Group took a listing for nearly 80 acres of industrial-zoned property on Lyntz Townline Road SW, and currently has it under contract with an out-of-state buyer.
The asking value of $12,000 an acre is "100% driven" by what's going on with Ultium, Lordstown Motors and TJX, Silver says.
"In many ways, that reminded the world about Lordstown," he says. "That reminded the world about what a great distribution location it is, proximity to [Interstate 80] and the East Coast and other distribution hubs around."
The property has been owned for at least two generations by a family that is spread out across the country, he says. One of the family members who lives in Cleveland approached Silver last year and said "Lordstown's changing," and maybe it was time to sell the property, Silver says.
The broker did his due diligence and liked the property. In fact, if it weren't for projects in the village, Silver wouldn't have even considered taking on the project, he says.
"I don't think there was enough activity that it would make sense for a guy from Cleveland to be marketing that property in Lordstown," he says.
But with the national attention Lordstown is getting, he could have been anywhere in the country and driven national buyers to the property. The activity reminds him of cities like Solon that, in its early stages of development, was very business-friendly. The city's administration is always looking to bring industry to the city and has great infrastructure, he says.
In the past, Lordstown's access to the Ohio Turnpike, utilities and site-ready locations were always a selling point, says Shea MacMillan, director of economic development projects with the Youngstown/Warren Regional Chamber. But the trend he's seeing now is interest in Lordstown as a destination for companies that look to work directly with Ultium, he says.
"The moment the announcement came, we started getting inquiries as early as last year for entities that wanted to be in close proximity to Lordstown," MacMillan says. "We were mapping access routes to Lords-town. It's a new line item on the request when they're asking about sites in our area."
At least half a dozen companies inquiring about properties "are clearly being represented by entities that work with Korean companies," MacMillan says, particularly those in the electric vehicle supply chain. Many of them "already have a relationship with LG Chem," the South Korean company that's part of the Ultium joint venture with General Motors, "or are trying to get that first come, first served when it comes to fulfilling any niche Lordstown Motors needs to fill," he says.
Platz's Crouse agrees. Of the inquiries he's received, all are companies that have niches to fill with electric vehicles. "I needed a translator for two of them," he says.
Earlier this month, Crouse sold a property just north of Palmyra Road that was offered at "well over $500,000," he says. While the property was mainly farmland and wetlands, "it leapt off the market," he says.
"That is unusual. You can go look in Howland or anywhere, Cortland, and there are very little large transfers that are developable land," he says. "It just doesn't exist."
One challenge that might be accelerating the cost of land is the supply of usable industrial buildings in the market, of which "there is very little," MacMillan says.
As companies do their initial site searches and confirm needed buildings don't exist, property owners are seeing increased numbers of inquiries for new construction, he says.
Edward J. Lewis Inc. lists nearly 20 acres for sale on Ellsworth-Bailey Road.
"No building is going to fall from the sky," MacMillan says. "Construction is the only option."
To assist, the chamber is creating resources to support speculative development and is promoting the Ohio Site Inventory Program, which provides grants and low-interest loans for spec site and building development projects with no identified end user. "It's a fantastic tool for exactly what we're talking about," he says.
The property Ag Real Estate Group's Silver has under contract is with a "large national developer who is looking at the property on a speculative basis," he says.
"My understanding is that it would be their intention to buy the property; develop it as some sort of a business park," he says. "Then look to parcel off and either sell parcels or build-to-suit for end users of the property."
The buyer has "a lot of insight" into what's going on in Lordstown, and recognizes "there are going to be a lot of businesses needed to support Lordstown Motors and the other related activities there," including parts manufacturers and IT professionals, he says.
Platz's Crouse says the big projects and the spin-off business "isn't a one trick pony." Long-term, he expects things to get much, much busier.
"The battery plant is not a three- to five-year pop and it's gone," Crouse says. "This could literally have a generational effect. There's no doubt."
Pictured at top: Truck traffic is light March 9 in Lordstown. Two years from now, that certainly won't be the case.
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