First, let me take a moment to thank everyone involved in supporting our recent 5 Day Sale auction effort on the four (4) selected loft units. As discussed in the prior thread, it was a successful effort given current market conditions.
The builder built this project for over $225/SF and delivered it to market in August of 2008. Like many buyers, flippers, investors, and other builders, this fellow did all the right things at the wrong time in developing this eclectic urban infill 16 unit project.
We marketed the units for nearly 3 weeks and had over 20 pre-registrations, 4 pre-auction sealed bid entries, and had over 70 groups come through the project during the two week inspection period. By Sunday night we had 15 bidders on four units.
The round robin bidding session lasted 4.5 hours utilizing both phone and our online virtual auction room.
We had final and best bids for all units. We had great interest and success bidding up the 1 bedroom units, but the market didn’t react favorably to the two bedroom unit given the project’s limitation of one underground parking space per unit. It’s obvious that in a good market property defects or project design flaws do not appear to have as detrimental an impact on pricing. In a down-market such defects or flaws are glaringly obvious, come under great scrutiny, and have a significant detrimental impact on pricing.
On two of the one bedroom units we achieved roughly 83% and 85% of the builders target price and he is holding firm (a mistake for market reasons too numerous to address in this email, but that will be addressed in the case study) and while everyone is still talking, I do not believe those two potential transactions will occur. However, it appears that we are going to contract on the the fourth unit, 3D.
The builder was extremely happy with the 5 Day Sale undertaking, as it generated great market interest and exposure for the project, created buyer activity where none existed before, produced excellent direct market feedback on the project’s attributes and limitations, resulted in 15 offers for the 4 units, and may still conclude with the sale of a unit in an extremely dysfunctional marketplace.
We’ll continue to keep you posted as events unfold and will post a new case study on the site soon.
It really works …
Kyle Cascioli
www.AuctionByBuilder.com
Tags: 5 Day Sale Success, Builder Sales Activity Increases, Successful Denver Loft Auction, www.AuctionByBuilder.com
