Auctions are a Hot Topic Right Now, Here’s Why
There is a lot of conversation in commercial real estate circles about a potential wave of distressed assets hitting the market this year. Due to the effects of the pandemic on the economy, we can reasonably expect an influx of new auction listings to hit the market at the beginning of 2021 as owners look to liquidate assets.
Let’s dig into the specific reasons for why this will happen, and what brokers can do to stay ahead.
The pandemic effect
Since March 2020, many commercial properties have been vacant or not operating at full capacity due to the COVID-19 pandemic. Businesses are either closing for good or continuing to operate under various restrictions that can make it difficult to collect rent from their tenants. Without this reliable income from their tenants, property owners can have a hard time paying mortgages and other bills. Retail, hospitality, and mixed-use properties are 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.
How you can prepare
With the increase in auctions expected to hit the market soon, now is the time to start preparing. Being in a position to help your clients requires a solid understanding of how different properties are being impacted in your area. With every state, and even counties and cities, mandating different restrictions and guidelines, the impact may vary in the different cities you serve. For example, some offices have been empty since early 2020, allowing their employees to work from home, while others have been operating with reduced staff in the office. Regarding retail, you may notice that certain kinds of stores are affected differently. Essential retail, like grocery stores and pharmacies, are not as negatively impacted like retail shopping malls. It’s important to understand the factors that impact your market and the property classes that are likely to change hands so that you can get out ahead of the competition in your area.
Normally, property owners prefer a traditional sale when selling their assets. In situations where a client’s property is no longer profitable, however, 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.
Auctions can also be a solid business strategy for properties that are not in distress. With increased opportunities and distinct advantages for buyers and sellers, you can provide value by presenting the auction platform to your clients who may not have otherwise considered this option.
Auction where the buyers are
RCM LightBox offers brokers a distinct advantage when it comes to commercial real estate auctions. With over 300,000 active participants and 80,000 pre-qualified buyers, our platform can help you sell your listings faster. Maintain full control over every aspect of your auction, keep your branding at the forefront, and assess bidder activity in real-time with RCM LightBox. All due-diligence can easily be conducted within our Virtual Deal Room and your properties can go live within 24 hours. Plus, we offer flexible and competitive pricing compared to other digital auction platforms. Throughout the auction process, you are in the driver’s seat with control from start to finish.
Our industry-leading tools have reinvented the online auction process, making it easy to manage the entire auction process. From property marketing and due diligence to bidding and closing, all aspects of your online auction happen within a single online solution. Whether you want to run a single asset auction or bring a multi-property portfolio to market, 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.
Learn more about the RCM LightBox auction platform, and contact us today to schedule a demo.