Reasons for an Auction
Most Effective Uses for Accelerated Sales
The majority of our TCN clients have been well-capitalized corporations, financial institutions, investment groups, and individuals. Their objectives have been to maximize value on certain real estate holdings while at the same time specifically planning the actual time when those properties will be sold and to also control the terms and conditions under which the properties will be put under a definitive agreement for sale. These professional real estate owners recognize that negotiated contracts frequently take many months to finalize an agreement. They are seeking non-contingent contracts that offer the expectation of obtaining the best possible price in a predetermined period of time. Our high profile real estate auction programs are accomplished in a 45- to 60-day period, and bring prospects from a very wide geographic area. The effective use of an Accelerated Sale would be best utilized in the following cases:
- The seller wishes to affect a sale in a particular fiscal quarter or calendar year.
- The seller is seeking to redeploy capital assets or redistribute them to parties at interest.
- Certain unique, one-of-a-kind properties have a seasonal window when purchasers will consider acquiring them.
- The seller requires a conspicuous sale in which equal opportunity is given to all interested parties to aggressively pursue acquisition. The question as to favoritism of selling to one party and not another is eliminated by the open nature of the auction offering.
- Buyers or Sellers have already entered into a Starker Exchange for an acquisition or disposition of assets, and they are in a time constraint to identify an exchange property and close during the required tax-filing period. The ready availability of certain real estate assets offered at auction allows them to immediately complete a tax-free exchange and justify market level valuation.
- The marketplace begins to discount the value of a property that is available for purchase for more than 120 days in a conventional negotiated sale.
- Purchasers are unsure as to the true value of a particular asset or wish to negotiate detailed purchase agreements with numerous contingencies. When these sales do not proceed, the marketing program for the subject asset must be restarted after many weeks or months have elapsed.