30 Condos Hit the Auction Block in Suburban N.J.
- Mar 03, 2010
Eugene Gilligan, Contributing Editor
East Orange, N.J.–A total of 30 condominium residences located in East Orange, N.J. will be offered at a developer close out auction on April 18th by Sheldon Good & Co.
Originally priced in the $100,000 to $399,000 range, the studio, one-bedroom and two –bedroom homes are being offered at suggested opening bids as $35,000. Fifteen, or half of the residences, will be sold “Absolute,” regardless of price.
The developer, GLC Group LLC, is using the auction process for the condominium, 60 Parkway, as part of its business plan, says Jeff Hubbard, senior managing director at Sheldon Good.
“They want to accelerate the sales process, so they can move on to their next project,” Hubbard says.
Many condominium developers are using the auction process at all stages of the marketing process, from beginning to end, Hubbard says. Developers are using auctions to meet certain sales thresholds so buyers can become eligible for FHA financing, or to meet covenants set by their construction lenders, or as part of loan workouts between borrowers and lenders.
The auction process also is an efficient way to establish price ranges for condominium units in a slow-velocity sales environment, according to Hubbard. “Many buyers are not sure what to pay,” Hubbard says.
But, while the pool of condominium buyers is definitely shallower than in recent years, Hubbard says they are still out there, and credited low interest rates and the federal government’s first time homebuyer tax credit with helping to spur sales.
Auctions also come in all shapes and sizes. Later this month, Sheldon Good & Co. will auction five apartment buildings located in Trenton, N.J. and Allentown, Pa., owned by Connolly Properties. Suggested opening bids for the properties range from $500,000 to $6.5 million. The assets will be sold separately and “Absolute,” regardless of price.
The auction is part of a workout agreement between Connolly Properties and its lender, Hubbard said, noting that the owner has identified the properties as “non-core” assets.