In June 2010, I analyzed CoStar Group (CoStar) data on industrial, office, retail and multi-family auction sales over a 17 month period. I recently reached out to our friends at CoStar to check out the recent 10 month period, July 2010 through April 2011. The research provided by CoStar reflects auction sales of only those properties listed with CoStar.
So, what has occurred since then? What sectors are hot?
From February 2009 to June 2010, 102 multi family properties were sold at auction and the variance between asking and sell price was 90%. From July 2010 to April 2011, the variance was 82%. More sales occurred however, with 132 multi-family properties with a total value of over $2 Billion sold at auction in just a ten month period.
The number of office properties sold at auction increased significantly. While only 108 office properties sold at auction during the February 2009 to June 2010 timeframe, the number increased to 202 sold during the recent ten month timeframe. The total dollar volume was just over $1 Billion. During the earlier period, the variance between asking and sell price was 75%. The gap closed during the most recent period, with average asking versus average sell at 99%. The data suggests that the overall average does not reflect steady monthly occurrences but rather sharp peaks with average sales prices surging in some months and dropping in others.
Industrial/flex property auction sales are up as well. Last year, when we compared half year 2010 sales to 2009 sales, we found a ten percent increase in number of transactions brought to market. During the entire earlier period, 132 industrial/flex properties sold at auction and average asking price to average sales price was 65%. When we look at just a recent 10 month period, the number jumps to 174 industrial/flex properties valued at just over $300 Million traded at auction. Prices during the earlier period were becoming more aligned and have continued. The former data showed a slight increase in the variance between asking and sell price, or 67%. Of interest is that the gap has narrowed in the most recent 10 month period with average asking to sell prices showing a variance of just 81%.
Retail property auction sales are also up. Retail properties being offered for auction dropped by more than 40% during the first half of 2010 as compared to the last six months of 2009 and were 20% less than the first half of 2009. During a 17 month period, 341 retail properties sold at auction and the variance between asking and sell prices at 70%. More consistency is found over the recent 10 month period when 299 retail properties with a total value of $1.1 Billion were sold at auction. We witness sharp peaks with high average selling prices surging in some months and dropping in others, with overall “average prices” suggesting a gap of just 1% or a variance of 99% when comparing average asking to sell prices.
While we had not considered land sales at auction last year, there were 191 transactions with a total value of over $1 Billion during the July 2010 to April 2011 timeframe. Average sell prices were 65% of average asking prices.
NAI Global has also witnessed increased interest in auction sales, with greater activity in sealed bid PowerSale, live and online auctions programs over the same period.
To learn more about NAI Global’s accelerated marketing program, visit www.nairgv.com or www.naiglobal.com/powersale