Auction Marks Turning Point for Nashville Condo Property
- Nov 15, 2011
Nashville, Tenn.—There were few takers when Fifth and Main, a 129-unit condominium building in East Nashville, first opened its doors in 2010, but the tide has turned. A team spearheaded by The Marketing Directors has stepped in with a new strategy—involving a recent auction—that has resulted in big results literally overnight.
Only a handful of people called Fifth and Main home when ACG Equities acquired the asset in a foreclosure action in February. The new owner’s subsidiary, ACG Management, tapped a local team to commence a re-launch the high-rise condominium complex at 501 Main St., but sales activity remained lackluster until The Marketing Directors came aboard.
“The project basically had a bad reputation in the national market for not selling,” David Tufts, president and founder of The Marketing Directors, tells MHN. “It had already had an unsuccessful start and there was a second attempt to restart, but that hadn’t gotten any traction. So when faced with those two issues, we decided as a team that it would be a better marketing strategy to come up with a plan that sold a large amount of units at one time.”
That team includes auction specialists Impact Real Estate Solutions, and on November 5th the partners held a public auction for Fifth and Main, effectively sparking the renaissance of the condominium community.
“We had a very, very, very successful auction,” Tufts notes. “Really the whole idea of an auction is that the public sets the price. It’s really a true sense of what the market believes the price should be.” In terms of the level of success, the numbers tell the story. Twenty-six homes sold on auction day, and in the days since, nearly 10 more sales have been lined up for closing. ACG acquired the property at a discount, and the condo seekers who are snapping up the flats, lofts and townhomes at the six-story building are getting a good deal, too. “People buying at Fifth and Main today are buying at half of replacement cost. You could not build the style of construction with the finished level at Fifth and Main at the same price today.”
Good deal or no, the marketing team will have to sell more units before it reaches the halfway point, which would allow the property to meet the thresholds to get Federal Housing Administration and Fannie Mae financing. The Marketing Directors, putting faith in the desirability of the premier condo destination, expects to reach that goal sooner rather than later. “Sales have certainly not been off the charts but I think that’s really just a function of the economy. There’s not any indication that would show that these residences would not be a good investment for someone. I think that the indication is quite the opposite. Just look at the past; buying something that’s at half the price of replacement cost, you’re probably going to do pretty well in the future.”
All in all, The Marketing Directors is more than pleased with the plan it’s pursuing at Fifth and Main. “We’re going to maintain auction pricing through the end of the year,” Tufts says. “Our traffic has been incredible. It’s a great re-launch strategy and I think it has legs. We’d love the idea to be used on many different levels, so it is something that is definitely in our bag of tricks.”