NAI West Michigan takes auctions online
Hard times call for innovative measures. In the 1990s, when commercial real estate took a hit, NAI Global, a worldwide commercial real estate service company, held property auctions at various locations for real estate listings all across the nation.
Last Friday, May 1, NAI planned to hold its first PowerSale global auction of properties, and this time, the auctions were online.
“It’s been a major benefit, I think, for sellers to get national exposure, but also for buyers. … They can bid on something right in their hometown or something clear across the country,” said John Haney, general manager of Higgenbotham Auctioneers, the auctioneer partner with NAI Global.
“We’re going to offer these properties in a live online auction, where the bidders can not only see and hear the auctioneers, but also have a real-time bidding screen.”
Haney tipped his hat to services such as eBay and traditional auctions that have been taking place for decades.
“I think we’re combining the best of both worlds in the auction process, and then using the process, basically, as a vehicle for sales for moving commercial real estate in this current market.”
When the real estate market picked up after the mid-1990’s slump, the global auctions NAI was holding ceased. Now NAI is turning to them once again.
“(NAI) really looked at bringing back the process in this current real estate market as a way to move properties. For sellers, it allows them an accelerated process to sell the property now, get today’s market value for it, and sell it on a very clear and concise set of terms and conditions,” said Haney.
“For the buyers, there’s a similar benefit. We all know what a property is worth by what a person is willing to pay for it in cash. This process allows buyers to do exactly that: The competitive bidding process determines the value of the property.”
Haney added that the closing process is usually much quicker, as most properties involving cash close within 45 days.
Kurt Kunst, principal and broker at NAI West Michigan, commented on motivating factors behind the sales.
“The economic climate is lending itself to the current situation,” said Kunst. “If you have a seller that is motivated, that is a time-sensitive seller that needs a property closed in a specific period of time, this will hopefully allow them to do that.”
What will help move properties is the national campaign coupled with local advertising that NAI Global does.
“What you’re doing is getting the collective resources from all the different companies on a global basis that are participating in this sale. We pool together our advertising dollars and run a national ad campaign,” said Kunst. “You’re going to see ads in the Wall Street Journal. Instead of doing just a local feel, we’re getting access to buyers across the globe.”
The May 1 auction was scheduled to showcase 50 properties in 22 states, including two in Holland. The process for determining which properties qualify for the PowerSale auction is somewhat selective, said Kunst.
“If we have a property that makes a lot of sense, it will absolutely be on the auction block,” he said. “What we try to do is put properties on the auction that are realistic sales. If somebody is going to have a high reserve on a property, we will discourage them from trying to sell it.”
NAI has plans for four to six more PowerSale auctions this year, but Kunst said it may not have the need.
“I think it’s truly going to be market driven,” aid Kunst. “If we start to see some recovery and people are not pressing us to have time-sensitive dates of sale, they’ll probably go away. In the interim, until the economy turns, I think we’ll continue this.”
Kunst said that, in the last couple of months, he has noticed more activity in the commercial real estate market, and while it does tend to be cyclical, he is optimistic that there is a glimmer of hope.