CoStar Reports Auction Sales Since Early 2009
Open the Wednesday real estate section of The Wall Street Journal or an email communication from one of the major real estate business journals and you can’t miss seeing that dozens of commercial real estate auctions occurring weekly throughout the United States.
Commercial real estate buyers and agents have told me that they find it difficult to gather information on property sales at auction, the types of properties selling and whether sales prices are going up.
CoStar Group (CoStar) is a leading provider of information, marketing and analytic services to commercial real estate professionals and one of the few sources that provides data on industrial, office, retail and multi-family auction sales. Thanks to our friends at CoStar, I am able to provide some insight into how auction sales have fared in each of these sectors. The research provided to me by CoStar reflects sales through June 30, 2010 of only those properties listed with CoStar.
Multi-family properties sold at auction showed a slight increase year-to-date over the 2009 data and nearly a 50% increase from the same time period last year. The average asking price in June exceeded any one month average recorded since February 2009. From February 2009 to June 2010, 102 multi-family properties were sold at auction and the variance between asking and selling price was 90%.
Looking at office property auction sales, only a small gap between average asking price and average selling price was seen since February 2009. The CoStar data does indicate a sharp drop in properties going to sale at auction in 2010 when compared to 2009. During the same 16 month period tracked, 108 office properties sold at auction and the variance between asking and selling price was 75%.
Year-to-date, industrial/flex property auction sales remained stable when comparing number of auction sales in 2009 for this property type. Of interest is that asking prices and selling prices are beginning to closely align as asking prices have dropped from a June 2009 peak. Comparing year-to-date 2010 to the same period one year ago, we find a 10% increase in number of transactions brought to market. During a 17 month period, 132 industrial/flex properties sold at auction and average asking price to average sales price was 65%. Year-to-date, the data shows a slight increase in the variance between asking and selling price, or 67%.
Retail properties being offered for auction dropped by more than 40% during the first half of 2010 as compared to the last six months of 2009 and were 20% less than the first half of 2009. During a 17-month period, 341 retail properties sold at auction and the variance between asking and selling price was 70%. However, for the first six months of 2010, the variance between asking and selling price was dropped to 60%.
Patricia Faulkner is Senior Vice President of Client Development at NAI Global and an auction specialist on NAI Global’s Special Asset Solutions team.
About the author
Scope of Responsibilities: Patricia Faulkner is a real estate executive with more than 25 years experience in the industry. Currently, Patricia coordinates live and online auctions for members and their clients and is the primary staff contact for NAI Global Auction Services. Patricia works closely with financial institutions and private property owners to develop programs to sell surplus and underutilized assets. NAI Global puts the people, processes and systems in place to help execute a clients' real estate plan. From 2001 through 2005, Patricia led the Corporate Communications department at NAI Global headquarters and coordinated the 2005 branding campaign which has been well received throughout the world. Patricia was awarded with an Outstanding Achievement Award for her major contributions relative to NAI branding efforts. Patricia was an account executive with the Corporate Services Group from 1996 to 2000, where she was awarded the Global Vision Award, recognizing her for the highest value of outgoing projects internationally in the Corporate Services Group. During that time, she was the account executive for ABB, Air Products & Chemicals, Inc., Bank of New York, GTECH and The Stanley Works. Background & Experience: Patricia has been with NAI Global for over 16 years. From 1991 to 1995, Patricia served as the Northeast Auction Sales Coordinator and Asset Marketing Specialist for the Resolution Trust Corporation, Valley Forge, Pennsylvania. She initiated 25 national marketing programs and recruited, trained and supervised staff and contractors responsible for the sale of more than $2 billion in real estate and non-performing loans. While with the RTC, Ms. Faulkner received merit awards for active contributions to real estate sales in excess of $4 billion and designation to the National Land Sales Task Force, Washington, D.C., a ten person national team of land specialists who developed unique marketing programs and national seller financing guidelines for RTC's land portfolio, the largest single asset type under its control. Patricia was also associated with Calton, Inc., Freehold, New Jersey for two years as Director of Acquisitions, where she led site acquisition efforts and land development in New Jersey and Pennsylvania for the national homebuilder. Patricia also served as Director of Real Estate for Levitt Corporation (Division of Starrett Housing) and was responsible for their re-entry and development efforts during the mid to late 80's in Long Island, New York and Southern New Jersey. Her real estate career began as a salesperson with NAI Eric Bram & Company, (now NAI DiLeo Bram) an NAI Member firm since 1982, based in Central New Jersey.
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