Auctioning Commercial Real Estate - UPDATE

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As a seller of commercial real estate your considerations are many but filter down to two primary concerns - selling for the highest price in the shortest period of time.

Selling for the most money results from a bevy of buyers beating a path to your property - with pockets full of pennies - willing to pay you promptly.

Closing quickly - shortest period of time - involves choosing the RIGHT buyer from the pool of potential purchasers.

OK, you say. How do I insure I check both boxes - selling for the most dollars possible and in the shortest period of time? Answer. Consider auctioning your commercial real estate!

Recently, I wrote about the auction process. If you want to read what I had to say, click here.

Drawn was the following conclusion:

"Auctioning is something to consider if you are selling a partially or fully leased commercial building. Your commercial real estate will be exposed to the broadest market. If your goal is to sell your commercial real estate to an owner occupant, auctioning is not the best avenue - currently. But, stay tuned. The process will evolve and is worthy of a look in the future."

The process has in fact evolved as Ten-X, the nation's largest commercial real estate auction company, now caters to all genre of sellers - lenders who have foreclosed, equity owners whose properties have income, and equity owners whose property will be sold vacant. Ten-X still offers their live bid platform but have expanded their program to include the managed bid and offer select, alternatives. 

Conventionally, if a seller wanted to sell, he engaged a commercial real estate broker and listed the property. The broker - through his marketing channels - publicized the offering to potential buyers and cooperating brokers, conducted tours, solicited and fielded offers, negotiated the terms, entered escrow - and assuming all was as advertised - closed. If all went well - and the property had few warts - the process generally could be accomplished in 90-150 days. 

Now, a seller can engage Ten-X and a broker to market his commercial real estate for sale. No additional cost is borne by the seller as Ten-X charges the buyer a transaction fee of 1.5%-5% depending upon the platform chosen - managed bid, offer select or live bid. 

How does a seller benefit from this arrangement? The widest possible net is cast for potential buyers - competition is created - and the highest possible price is achieved. With the Ten-X platform, certainty of close is established. Buyers are carefully vetted and hefty penalties ensue if the buyer fails to perform. So, you sell for the most money in the shortest period of time. 

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