What should I do with my 30 acres of commercial property?

Question

Hello, two of my brothers, my Dad and I just closed on a 30 acre corner lot that sits on two state routes. There is a small town a mile down the road as well as a pretty big factory.

So what we have is a restaurant that sits on the corner now that is old and showing its age along with a 1600 sq/ft house next to it that is in pretty decent shape. The rest of the ground (~28 acres) is farm ground currently.

Our plan so far is to continue to farm the tillable acres until we do something with it. We are also cleaning out the house to rent it out.

I am looking for suggestions on how we should continue with the rest of the acreage as well as the restaurant in the corner that is currently sitting idle.

Joel Owens · Answer

Doesn't say what state you are in.

If you go to most state DOT ( department of transportation ) they have yearly traffic counts by road interactive maps. You can then see trending if road is decreasing cars per day, the same, or increasing and by what percent. Most retailers have a minimum cars per day and income levels they want to see.

Is your property in city or county limits? You need to look at current and future land use maps and see what the city or county desires for development in the future for that corridor.

You have what the city or county planning wants, what you might want, what the public wants, what the potential tenant wants, and what the developer might want to build there. All of these things can clash with each other.

Jason Turgeon · Answer

From what you've said above, are we talking about this property at the intersection of US 36 and OH 235?This being a farm, there is probably a maxim about shutting the barn door after the horse has left that applies here. In general, you should only buy property that you have a plan for. But it's a bit late for that now.

On the other hand, it sounds like your family has the skills & experience to farm it and make some level of profit until you develop a plan. But farming is not really real estate investment, which is what we talk about here. Very few of us will be in a position to tell you whether it makes more sense financially to keep farming the land vs developing the land.

It seems like that's a somewhat busy corner by area standards and there are some businesses around there. A few thoughts if you don't want to use it for permanent farmland:

• Rent out the restaurant on a triple-net lease (tenants pay all the improvements), offering it up very cheaply to anyone who is willing to make a go of it. There's an established place across the street and you aren't far from the KTH factory so maybe anotherrestaurant owner could make a go of it on lunches and dinners. Figure out what comparable rents for restaurant space are and offer it at 15-20% less. Any income you can make out of it is better than nothing at this point.
• Alternately, maximize the benefit of that corner location and see if you can entice a gas station/convenience store owner to put something up there. Go talk to several of the local owners of this kind of business and see what they look for in a new location and if you can make a deal with them. Maybe you can become part owner and share in the risk/profit instead of a straight lease.
• Maximize that 1000' of frontage on a busy intersection with some sort of commercial rentals. What businesses are doing well in your local area? Cater to those that would be looking to expand into some sort of relatively inexpensive commercial space that you can build. 
• Find out what the local rules about billboards and cell phone towers are. If you're allowed to put either of these up, sell a lease to a company that specializes in this kind of thing (or learn how to DIY if you feel up for a challenge).
• Since you are on town water/sewer, this might make a good spot for an apartment building or mobile home park - just make sure to situate it well behind the prime commercial space since most people don't want to live on a busy intersection and most businesses are looking for high traffic space.
• Looks like you are just down the road from Kiser Lakes State Park. I see a lot of signs around for camp wood, too. Is there a demand for boat storage, a general store type business that sells marine supplies, outdoor recreational supplies, and camping gear of the type that would be in demand at the state park? Is your land close enough/desirable enough to start a seasonal campground or RV facility to take advantage of the park?

I also see on the village website that "The Village of St. Paris Planning Commission holds regularly scheduled monthly meetings at 7:30 P.M. the first Thursday of each month. The meetings are held at the Village of St. Paris Municipal Building located at 135 West Main Street."  You should think about attending a few of these meetings to meet the local officials and ask some questions about what kind of development they want to see and what they think the area will support. The next meeting is just a couple of days from now.Good luck!

Bjorik Mutize · Answer

Sell it to a developer.

Jason Turgeon · Answer

Yes, rent to businesses.

Troy Baker · Answer

@Charles Kao

Its zoned commercial and the farm ground is in CAUV

Troy Baker · Answer

@Jason Turgeon

Yes that is the property. We did have some plans for it before buying, I just wanted to see how they lined up with other peoples opinions.

When you say commercial rentals, what exactly are you talking about? Find a business, build them a building and lease it to them?

Charles Kao · Answer

@Troy Baker Need alot more info. What is zoning and what is highest and best use for area?

Troy Baker · Answer

These roads are definitely the main roads for the area. Honestly I thought the numbers from DOT were low but i didnt go count cars lol. There is 28 of the 30 acres tillable and we are farming it ourselves. It is city sewer and water. I really appreciate you guys being so understanding, I am new to all of this. I am 23 and have only bought farm ground to farm before this venture. Interested to see where it goes.

Josh Ridpath · Answer

Based on my experience in Ohio and your location, it sounds like you are located outside of an incorporated city in a township, which means no public water/sewer service. Very few townships in Ohio have their own public utilities outside of little pockets in the major MSAs that were never annexed. How close are you to city limits? Could you petition to have the city annex your site, giving you access to water/sewer service? I’m assuming that your site is near Urbana?

Andy Bauman · Answer

@Troy Baker - I'm with @Joel Owens, so much of this is local.  Take a look at your city and counties land use plans to see what their plans are.  You really haven't provided enough information for people to help you beyond general information.  Is your area growing?  Are there any large developments planned in the area that are already committed to?  Is this on the fringes of a city where the neighboring city is growing?  Are businesses moving here?  What businesses are already in the area?  What can you build on the lot?  What is in demand?  What is missing from supply?

What should I do with my 30 acres of commercial property?

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