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Online Auction Moves Properties
GRAND RAPIDS — The former Birchwood Care Center became the first piece of West Michigan commercial real estate to be offered to the market through an Internet auction last month.
Located on 20 acres in Marne at 15140 16th Ave., the 76,600-square-foot health-care facility was on the market for four years and was represented by several commercial real estate brokers before Grubb & Ellis/Paramount began marketing it for Internet auction.
“We’ve had more activity in the last 24 hours than it has seen in the last four years,” said Office Adviser Chris Beckering last week. “The auction process creates a sense of urgency and the low minimum bid on this property generates a lot of attention. Everybody is taking a look at it — there is a possibility this property could be stolen.”
The $100,000 minimum bid is a fraction of the seller’s suggested $1.8 million price.
“When people take the time to look at it,” Beckering said, “they realize it’s a great property and then put in a more realistic number.”
Beckering also is the liaison for California-based The LFC Group of Companies, the strategic partner of Paramount parent Grubb & Ellis Co. that is administering the Internet auction. The program is already a success on the national and international levels, Beckering said, citing one German property with a 330,000 euro price selling for more than 900,000 euros.
“It’s been exceeding our expectations as far as exposure,” Beckering said.
By tracking geographic URLs, Paramount has real-time visibility of where its leads are coming from, and can follow up immediately if visitors register to view property details or place a bid.
“This is another tool that we have to help our clients,” Beckering said. “It’ll never replace conventional brokerage, but it is an excellent tool for very specific property types. There are some properties that a conventional brokerage approach can’t tackle, and LFC plugs in nicely.”
“We’re bringing a proven tool to the market while adding another unique resource to our broad base of customized real estate services,” added Duke Suwyn, president and CEO of Paramount.
Candidates for Internet auction are properties on either extreme of the supply/demand curve, Beckering said — those with extremely low or high interest. This is consistent with Internet auctions as a whole, as the most successful offerings usually are perceived bargains and unique or rare finds.
Vacant land, functionally obsolete properties and corporate surpluses are excellent candidates. Because of its transparency and finite period of sale, trustees have found it attractive for bankruptcy and foreclosed properties. Triple net lease properties also are good investments through the program, he said.
“Any property with a story,” Beckering said of the likely candidates for Internet auction. “If it takes you more than a couple sentences to describe a property, this is a great way to ensure you’re getting fair market value. You can clean the last dollar off the table from the landlord or the seller’s perspective.”
LFC does general marketing to attract people to its site.
Meanwhile, Paramount has a specific marketing plan for each property auctioned, including public relations and advertising efforts.
The Birchwood facility can be found online at www.lfc.com/604G1