Houston Apartment Complexes Slated for Online Auction
- May 28, 2010
Houston—Cushman & Wakefield is planning a fully online auction for the sale of a group of multifamily apartment complexes in the metro Houston area. It isn’t completely a novel approach, even for commercial real estate, since a number of real estate web sites conduct online auctions, very often involving undeveloped land or foreclosed properties. The C&W multifamily property auction is, however, unusual in its size and scope.
The auction, which has been dubbed the Mega Auction, will be held in conjunction with auctioneer AuctionPoint. All together, seven communities will be put up for bid online, with minimum bids ranging from $1.4 million to $6.35 million. The property with the highest minimum bid is the 176-unit Fountain Park Apartments, in Stafford, Texas.
Also for sale at auction are the 298-unit Oak Villa Apartments, the 250-unit Yale Court Apartments, the 52-unit Bayou View Garden Apartments, the 67-unit Redstone Apartments and the 222-unit Oakbrook Apartments, all in Houston, as well as the 276-unit Cedar Ridge Apartments in Baytown, Texas.
“Traditional ‘oral outcry’ auctions typically limit the buyer pool to those who can physically attend the auction, and their initial set-up cost is too onerous for most property owners, especially those in distress,” Ed Nwokedi, director of Cushman & Wakefield Apartment Brokerage Services Group of Houston, tells MHN. “Online auctions offer an unlimited global buyer pool, which provides a much better opportunity for the seller to obtain true market value.”
Nwokedi posits that although there are signs of stabilization in the economy, there’s still an uphill battle being fought in the distressed commercial real estate arena. Having sold other Texas properties by online auction recently, he asserts that this kind of auction gets deals done more quickly than traditional selling methods in the current environment.
“By having a set sale date, qualifying investors act on the seller’s time schedule, not their own,” Nwokedi asserts. “Investors can perform preliminary due diligence online 24/7 using their laptops, thereby achieving a more efficient acquisition cost per transaction.”