Poland Avenue Industrial Properties Sell for $7.4M
BOARDMAN, Ohio — Bidding opened strong at a live auction Thursday for five parcels of industrial property along Poland Avenue formerly owned by Allied Consolidated Industries Inc. and its affiliates.
The first parcel up for bid – 25,000 square feet of class A office space and another 215,257 square feet of manufacturing/warehouse space at 2100 Poland Ave. – drew the most attention. Many of the some 40 registered bidders attending the auction at the Holiday Inn Boardman called a bid for the property, which opened at the published reserve price of $2,445,000. Things stalled when the price got above $3.25 million.
“Folks, this property has about $30 million in it,” said auctioneer Michael Berland, principal and managing director of Hanna Commercial Real Estate in Cleveland. “It’s a steal at this price.”
A final volley between two bidders brought the final sale price to $4.9 million for the parcel, with the winning bid made by a buyer from San Francisco. The office space was built in 2000, and the warehouse, built between 2006 and 2010, includes ceilings up to 40 feet high, crane runways and heavy power, on-site electrical substation, switchgear and subs, six drive-in doors with industrial lifts and three docks.
The buildings sit on more than 46 acres and are essentially new construction, “which is hard to find in northeast Ohio in general,” said Chris Hondlik, senior vice president, Hanna Commercial. “Especially at a price point which it was being offered at.”
As construction costs have risen in the last three to four years, constructing a comparable building today would likely run $150 to $200 per square foot, Hondlik said. “They’re getting a great deal,” he said.
The auction concluded after about 30 minutes with all five parcels selling for a total $7,475,000. The San Francisco bidder walked away with two of the remaining parcels: a 525,000-square-foot manufacturing/warehouse space on 60 acres of property at 1290 Poland Ave., and a 20,000-square-foot scrapyard with storage and maintenance buildings and rail service on 8.93 acres at 2100 Poland Ave. Final bids for those parcels were $1.4 million and $325,000, respectively.
Other parcels included a 3,800-square-foot storage building on 6.75 acres of land at 2039 Poland Ave., and 115 acres of land with rail service at 2057 Poland Ave. Those parcels sold for $100,000 and $750,000, respectively.
The court-ordered auction was under the jurisdiction of the U.S. Bankruptcy Court, and all parcels were subject to published reserve prices “that we believed were below market,” Berland said.
All parcels sold for “significantly more” than the court-approved published reserve prices, “which means that we don’t need court approval to bless these sales,” he said. “It’s already been given, assuming we hit the published reserves or went beyond, which we did.” All sales will close in 34 days, the auctioneer said.
Hanna Commercial advertised and marketed the properties for about six weeks leading up to the auction, he said. Between the five parcels, the auction drew some 40 registered bidders from nine states, including Ohio, Pennsylvania, New York, California, Kentucky and Indiana, he said.
“I think the minimum bids were designed to create interest,” Hondlik said. “With all five properties, I think there was a little something for everybody in the industrial user market.”
In general, prices for industrial properties in northeast Ohio increased a bit “because there is a lack of inventory out there,” and after the downturn in 2008, “there was really no construction being done,” he said.
“Finally, it’s starting to move a little bit,” Hondlik continued. As companies invest in constructing new buildings and move out of their existing space, more inventory will come online, he said, “but many businesses are doing quite well and they’re out looking and they can’t find what they need.”
Selling points for the Allied property include land for redevelopment or rail usage, small buildings for mom-and-pop operations and larger properties “where a user sees the value,” he said. Although some of the properties need some work, “a lot of the characteristics were useful for many users,” he said.
“You’re getting a deal compared to elsewhere in the United States,” he said. “You got great infrastructure in that whole area, as far as power and accessibility to the highways and everything.”
The properties are located in close proximity to Interstates 680, 76 and 80 and fall under the New Market Tax Credit Program. Some are also within the Federal Opportunity Zone and Foreign Trade Zone.
Founded in 1973, Allied Erecting and Dismantling Co., the primary subsidiary, specialized in the selective and mass dismantling of complex industrial structures, according to its website.
The parent company filed Chapter 11 bankruptcy in April 2016. At the time, U.S. Steel held a secured claim against the corporation of approximately $10.6 million arising from the amended judgment handed down in March 2016 by U.S. District Court. That lawsuit centered on U.S. Steel’s claim that Allied Erecting failed to “perform certain manufacturing and fabrication work after U.S. Steel paid Allied $10 million in 2004 to perform that work,” bankruptcy court documents state.
On July 10, U.S. Judge John P. Gustafson ordered the sale of all remaining real property owned by Allied Consolidated Industries.
The company is owned and operated by John R. Ramun who owns numerous patents for industrial dismantling equipment, including for the “Allied Gator” machine. Ramun wants the court to recognize his property rights as the patent holder on machinery, equipment and parts of Allied Gator that the successful bidders could scrap or dismantle. The motion was filed Aug. 13 and as of this posting has not been heard by the court.
Pictured above: Parcel at 1290 Poland Ave. includes 525,000 square feet of manufacturing/warehousing space on about 60 acres. Its published reserve price was $1M, and it sold at auction for $1.4M.
Copyright 2022 The Business Journal, Youngstown, Ohio.