Commercial Real Estate Auctions
There has been a lot of conversation about commercial real estate auctions lately. While auctions have long been a part of the CRE industry, there is reason to expect an influx of new auction listings to hit the market within the next 6-18 months as owners are looking to liquidate assets. Let’s dig into why this is the case, and what brokers need to do to stay ahead of the market.
The Impact of COVID-19
Due to the COVID-19 pandemic, many commercial properties have been vacant since March 2020. Several property owners are struggling to collect rent from their existing tenants as businesses operate under mandated restrictions or close their doors for good. Without consistent rental income, property owners may find it difficult to cover their mortgage and operational expenses. While every property type is facing a different set of limitations, retail, hospitality, and mixed-use properties are currently being hit the hardest. This combination of rent insecurity and severely impacted asset classes means that sellers will be motivated to get properties off of their books quickly, making auctions more appealing than traditional managed sales.
While we are anticipating an influx of commercial real estate auctions over the next several months, now is the time to prepare yourself. You want to be in a position to help your clients in the best way possible, so it is essential that you have a solid understanding of how each property type is being affected in your area. Different states – and counties – have varying restrictions and guidelines, so the impact may vary in the different cities you serve. In some areas, office workers have been working remotely from home since March 2020, while in other areas businesses are operating with reduced staff in the office. With retail, many stores have been closed for months, while other retail centers are operating under the “new normal” with social distancing guidelines in place. Understand the factors that impact your market and the property classes that are likely to change hands, and you can get out ahead of the competition in your area.
Many property owners may think their best option is to do a traditional sale, however, an online auction may yield a higher price and faster closing – which is a win-win for your clients. In situations where properties in a client’s portfolio are no longer profitable, the mere promise of a quick close may be the top priority. A commercial auction with a reasonable reserve price gives brokers and their sellers much more certainty of close than a traditional managed sale. Keep in mind that auctions are not just for distressed assets; they can be a solid sales strategy that can take your business to the next level. As a commercial real estate broker, you can provide value by presenting the auction platform to your clients who may not have otherwise considered this option. A commercial real estate auction provides increased opportunity and distinct advantages for both buyers and sellers.
Where The Buyers Are
When it comes to commercial real estate auctions, RCM LightBox offers brokers a distinct advantage. With over 300,000 active participants and 80,000 pre-qualified buyers, the platform can help you sell your listings faster. The RCM LightBox auction platform gives you full control over every aspect of your auction, the ability to put your brand at the forefront, and access to bidder activity in real-time. Plus, with significantly lower fees compared to other digital auction platforms so you make more money on each transaction. With RCM LightBox, your properties can go live within 24 hours and all due-diligence can easily be conducted with the virtual data room. Throughout the auction process, you are in control from start to finish.
We have reinvented the commercial real estate online auction platform to bring you everything you need to succeed. Our industry-leading tools make it easy to manage the entire auction process from property marketing and due diligence to bidding, and closing – all within a single online solution. Whether you want to run a single asset auction, or sell a multi-property portfolio, our platform helps you keep more of what’s yours. Sell performing, pre-default, and non-performing assets and loans with the RCM LightBox auction platform. Being prepared for the upcoming wave of commercial real estate auctions will give you a significant advantage and allow you to offer a distinct level of service to your clients.
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