U2 CAN BUY COMMERCIAL PROPERTIES @ AUCTION

August 23, 2009 on 12:01 am | In Fascinating Information, Finance, Investment Opportunities, Lights Camera Transaction, Trends, Uncategorized, all |

U2 CAN BUY COMMERCIAL PROPERTIES @ AUCTION

By Jodi Summers

Going, going, gone…with the commercial loan market in such a pathetic state, auctions are the fastest way for banks to unload undesired commercial property assets.

“Sellers are coming to the realization that the price point they had in mind is not a reality. That’s where auctions are so useful in determining value — bringing people together through competitive bidding,“ observed National Auctioneer Association spokesman Chris Longly. “Our membership is seeing more energy and movement this year on the commercial real estate side.“

The National Association of Auctioneers estimates that $58.6 billion in real estate was sold in private live-auction bidding in the U.S. in 2008, up 38.5% from five years ago. Auctions in residential real estate have risen 47.7%, raw land (including agriculture) 36.8%. Commercial real estate is up 31.3%, to $15.5 billion in gross auction sales for 2008. Last year, banks were dealing with residential real estate issues, now, banks are confronting commercial property asset issues.

While the foreclosure moratorium was on in residential, banks were able to reassess their commercial assets. You’ll note that auction activity growing in the 2nd half of 2009, with major online commercial auction events. In the second half of July, NAI Global offered 75 investment properties in 21 states valued at more than $250 million. The timed online auction will include 58 properties — including the historic State Theatre in South Bend, IN, which still bears bullet holes from the nearby shootout following John Dillinger’s final bank robbery on June 30, 1934 — and 14 other properties. In late July, Sperry Van Ness/Guardian held an auction at the Hyatt Regency in Los Angeles includes more than $100 million in real-estate owned (REO), bank-ordered and developer close-out assets in six Western states.

Among the high profile properties going up for sale is the historic Watergate Hotel made infamous during President Nixon’s wiretapping antics. (http://www.socalofficerealestateblog.com/?p=669). Other noteworthy pieces of real estate hitting the auction market include development sites in the metro Washington, DC area, retail sites in Highland Park, IL, and Spokane, WA, the historic theater redevelopment in South Bend, IN, and an infill site in Flint, MI; an upscale hotel/golf resort in Beecher, WI, and a fully entitled multifamily development tract in Navarre Beach, FL, plus lots of excess and partially developed inventory.

Even the government is getting into it. As you know, the state has been selling off their legacy assets - http://www.santamonicapropertyblog.com/?p=1188, and take a cursory glance @ what the U.S. government might be auctioning off in California, and we find industrial properties in Laguna Nigel, Morro Bay and Red Bluff.

“We’re probably seeing a 30 to 40% increase this year” in office, retail, industrial, multifamily and land auction inquiries, remarked Paul Rogers, senior vice president @ Inland Real Estate Auctions, Inc. “With bank activity in particular, we’re going to be busy for the rest of this year — and probably well into next year.”

This trend echoes the real estate slump of the 1990s and early 2000s, with commercial properties following residential foreclosure auctions after they have been mainstays in the downturn. Companies auctioning properties note that it is an opportunity to sell assets quickly, reduce holding costs, and secure true market value under unpredictable market conditions.

**

Sources:

http://www.costar.com/News/Article.aspx?id=F9243DEB83153259F95525F184C9EEE8&ref=100&iid=140&cid=383F14EEE265B182474DA2442BACBBBF

http://fasrp.sc.egov.usda.gov/fasrp/mainAction.do;jsessionid=804CCE54F02BBCC115D4B0BA22A910FF?pageAction=GetCounties&state=CA&stateName=California

http://www.philly.com/inquirer/world_us/20090720_Watergate_auction_drawing_interest.html

http://www.socalofficerealestateblog.com/?p=669

http://media.commercialappeal.com/mca/content/img/photos/2009/04/16/b17auction.jpeg

http://ethicalforeclosurefortunes.com/wp-content/themes/thesis/rotator/govt_auctions_sm.jpg

http://i.ehow.com/images/GlobalPhoto/Articles/5117276/237446-main_Full.jpg

http://www.unitedcountry.com/picturesx/10086-10099-1576957.jpg

http://www.ritholtz.com/blog/wp-content/uploads/2009/06/foreclosures-may-o9.png

http://www.mccallauctions.com/auctions/photos/1074/p12368596779029.jpg

8 Comments »

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  1. [...] This post was Twitted by kenkap [...]

    Pingback by Twitted by kenkap — August 23, 2009 #

  2. When owners of two famed modernist houses recently decided to sell, they both turned to fine-art auctioneers—with surprising results.

    In May, Christie’s sold Richard Neutra’s Kaufmann House for $16.84 million, but the sale was terminated by the owners days later. The same week, Wright auction house tried to sell Louis Kahn’sEsherickHouse for $2million, but found no bidders.

    Comment by Preservation Nation — August 25, 2009 #

  3. At least six hotel chains are negotiating to buy the shuttered Watergate Hotel in Washington, D.C., according to PB Capital, which is offering the landmark property for sale as part of foreclosure proceedings. PB, which holds a $40 million loan against the 251-room hotel, said the potential buyers are assessing how much it would cost to restore the property. A venture of Monument Realty and Lehman Brothers Holdings, which acquired the property in 2004 for $55 million, defaulted on the debt in July. PB made a
    $25 million credit bid for the Watergate after an auction in July failed to attract acceptable offers.

    Comment by CRE News — August 26, 2009 #

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  5. Saving energy in buildings and other non-transportation initiatives could reduce the nation’s energy consumption by 23 percent by 2020, generating 900,000 jobs, saving the U.S. economy $1.2 trillion and reducing greenhouse gas emissions by 1.1 gigatons a year, according to a new study.

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    Comment by Seattle Pi — September 12, 2009 #

  6. [...] The National Association of Auctioneers estimates that $58.6 billion in real estate was sold in private live- auction bidding in the U.S. in 2008, up 38.5% from five years ago. Auctions in residential real estate have risen 47.7%, …Continue [...]

    Pingback by Southern California Office Real Estate Blog » U2 Can Buy … — October 14, 2009 #

  7. The Watergate Hotel has found a new owner close to a year after it was taken back by the lender. New York-based Euro Capital Properties has acquired the closed 251-key landmark property for $45 million, according to the Washington Business Journal. The sale closed Wednesday, the paper reported.

    Last summer, PB Capital Corp., which held the $44.3-million loan, took the hotel back when there were no bidders for the property. Monument Realty, which acquired the hotel in 2004, had defaulted on the note.

    Comment by Erika Morphy — May 27, 2010 #

  8. Thanks for best news!

    Comment by how to invest in silver — June 24, 2010 #

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