Recently, Starboard TCN along, with affiliate Chartwell Group TCN, sold the Albion Castle in San Francisco at auction. This property is so unique—and is located in a undesirable area—that appraisers and banks could not determine a fair value for financing. This “jewel in the rough” was a one-of-a-kind purchase.
After meeting with the owner, we determined that an auction would be the best way to market this property. Although in the Bay Area the auction has not often been used as a vehicle to sell properties, it is widely used in other parts of the country; in some other countries, auctions are a mainstay in selling both residential and commercial properties.
At TCN, the majority of our clients are well-capitalized corporations, financial institutions, investment groups, and individuals. Their objectives are to maximize value on certain real estate holdings while at the same time planning the sales of those properties and controlling the terms and conditions of the sale. These professional real estate owners recognize that negotiated contracts frequently take many months to finalize. They seek noncontingent contracts that offer the expectation of obtaining the best possible price in a predetermined period of time. Starboard’s high-profile real estate auction programs are accomplished in a 45- to 60-day period, and bring prospects from a wide geographic area.
Here are some reasons to consider selling a building through auction.
1. The seller wishes to conduct a sale in a particular fiscal quarter or calendar year.
2. The seller is seeking to redeploy or redistribute capital assets.
3. Certain unique properties have a seasonal window in which purchasers will consider acquiring them.
4. The seller requires a conspicuous sale in which equal opportunity is given to all interested parties to aggressively pursue acquisition. The question as to favoritism of selling to one party and not another is eliminated by the open nature of an auction offering.
5. Buyers or sellers have already entered into a Starker Exchange for the acquisition or disposition of assets, and they must identify and exchange property and close during the required tax-filing period. The ready availability of certain assets offered at auction allows parties to immediately complete a tax-free exchange and justify market-level valuation.
6. The value of the property has started to decline because the marketplace begins to discount value after the property has been available for purchase for more than 120 days.
7. Purchasers are unsure as to the true value of a particular asset or wish to negotiate detailed purchase agreements with numerous contingencies. When these sales do not proceed, the marketing program for the asset must be restarted after many weeks or months have elapsed.
If you have a property anywhere in the United States that you think might be a candidate for an auction, give us a call we will be happy to give you a free assessment. |
