What Property Types Work Well for an Auction: Maximizing Success in Commercial Real Estate Auctions

CRER Broker

Written by: Ashley Dillard, CCIM | CRER Senior Director | Auction Specialist

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What Property Types Work Well for an Auction: Maximizing Success in Commercial Real Estate Auctions

Commercial real estate auctions have gained popularity as an effective method for buying and selling properties.

 

But not all property types are equally suited for auction. Understanding which property types work well in an auction environment is crucial for sellers looking to maximize their chances of success.

In this article, we will explore property types that are particularly well-suited for commercial real estate auctions, helping sellers make informed decisions and achieve optimal results.

Vacant Commercial Properties: Vacant commercial properties are often prime candidates for auction. These properties may include vacant lots, buildings, or office spaces. Auctions provide an opportunity to attract a wide range of potential buyers, including developers, investors, or businesses seeking expansion. The competitive bidding environment of an auction can help sellers achieve market value for their vacant properties quickly and efficiently.

Distressed or Bank-Owned Properties: Distressed or bank-owned properties, including foreclosures or properties in bankruptcy, are well-suited for auctions. These properties often require a prompt sale to mitigate financial losses or meet legal obligations. Auctions attract investors interested in distressed assets and create a transparent process for selling these properties. The competitive nature of auctions can generate higher bids and provide an efficient way to liquidate distressed assets.

Specialty Properties: Specialty properties with unique characteristics or specific target markets can benefit greatly from auction sales. Examples include hotels, resorts, recreational facilities, or healthcare properties. Auctions allow sellers to attract a diverse range of potential buyers who may have a particular interest or expertise in these specialized property types. The competitive bidding environment helps determine the true market value and enables sellers to achieve favorable outcomes.

Development Opportunities: Properties with development potential, such as vacant land or properties with underutilized structures, are ideal candidates for auction. Developers often seek opportunities to acquire properties with growth potential, and auctions provide a platform for them to compete and bid on these assets. Auctions can create a sense of urgency, ensuring a swift and efficient sales process for development opportunities.

Portfolio Liquidation: For sellers looking to liquidate a portfolio of properties or a portion of their real estate holdings, auctions offer an efficient solution. Auctions enable simultaneous sales of multiple properties, attracting a broader range of potential buyers. This approach streamlines the sales process, allowing sellers to efficiently divest assets and reallocate capital for other strategic investments.

 

When considering a commercial real estate auction, understanding the property types that work well in this environment is crucial for sellers. Vacant properties, distressed properties, specialty properties, development opportunities, and portfolio liquidation all align well with the competitive and transparent nature of auctions.

By leveraging the benefits of auctions for these property types, sellers can increase their chances of success and achieve optimal results.

Consulting with CRER can provide valuable guidance and expertise throughout the process.

Contact us today to explore how auction sales can benefit your commercial property and set you on the path to a successful auction experience.

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