Editor’s Note: This blog post is part of SVN’s August focus on Accelerated Sales, and was submitted by David E. Gilmore, CCIM, CAI, AARE and Louis Fisher III, CAI.
The commercial real estate market is always changing, and each SVN Advisor should consider every area of possible sales and income. Following we discuss two segments of the market that most may not have considered but which often lead to big commissions: government real estate auctions and bankruptcy auctions. Following are case studies to illustrate how these work.
Government Real Estate Auctions: SVN Alta Commercial and UDOT
CASE Chet Barber, Managing Director, and Tia Shim, Esq. of SVN Alta Commercial in Salt Lake City, Utah had a client relationship with the Utah Department of Transportation (UDOT) and heard about an upcoming Request for Proposal (RFP) for Real Estate Auctions. Chet immediately called in David E. Gilmore, CCIM, CAI, AARE and Louis Fisher III, CAI of the SVN Accelerated Sales Team to review the RFP. Dave and Louis put together an 85-page proposal illustrating the team’s ideas and qualifications and how local market experts, SVN Alta Commercial, would be integrated into the team. The combined team made it to the oral presentation phase and won the five-year contract to provide auction services to UDOT.
In the first six months of the contract the SVN Accelerated Sales/SVN Alta Team held two online events, offered 27 UDOT properties, closed 10 properties for $7.8 million, and had another 14 properties under contract for more than $10 million. And, the third and fourth online auction event are schedule to happen before the end of the year, and it’s only the first year of the five-year assignment.
Bankruptcy Auction: SVN Miller Commercial Real Estate’s Retail Client
Bankruptcy is a fact of life, and it could affect your clients. However, bankruptcy doesn’t mean that you necessarily lose the listing.
Brent Miller, CCIM, CPM of SVN Miller Commercial Real Estate in Salisbury, Maryland was the property manager of a Class A neighborhood retail center with national anchor tenants such as Outback Steakhouse, Chico’s and Talbots.
Once Brent was notified of the shopping center’s Chapter 7 filing, he contacted Louis Fisher and Dave Gilmore to make a proposal to auction the property for the Bankruptcy Court. The combined team of SVN Accelerated Sales and SVN Miller submitted the proposal, won the assignment, then conducted a live auction with simultaneous online bidding in the bankruptcy courtroom. With four bidders in the courtroom and five bidding online, the auction began at $4,200,000 and quickly rose to the final sale price of $5,925,000 which happened to be $1,325,000 more than the appraisal.
The bottom line
SVN Advisors should be aware of solicitations and RFPs for auction services from local municipalities and states. They should also be looking for bankruptcy opportunities.
SVN’s Accelerated Sales team has recently won contracts with the FDIC, UDOT, State of Rhode Island, State of Louisiana Land Trust, State of Michigan, and 18 Bankruptcy Districts across the United States.