[Via La Citta Vita]
Auction fatigue? Paddled out? Condo conked? No matter. Lee Homes president Jeff Lee tonight confirmed that downtown's Market Lofts will hold an auction on November 14th, all part of an attempt to move the last 55 units at the 267-unit building at 9th and Flower streets. But Lee says not to compare this auction to Concerto's recent sale. Market Lofts' construction loan is paid off and both developer CIM and Lee Homes (joint partners on Market Lofts), are on "solid financial ground," according to Lee. "This auction is really a close-out sale of a project that’s not financially distressed," he said, adding that 212 units in the building, which opened in 2007, are already occupied.
Asked if the success of other downtown auctions was a factor in deciding to hold the event (some might argue that buyers are only motivated in this real estate climate by big sales events), Lee specifically mentioned the sell-out of the Dalton in Pasadena, an auction held this past August. That sales event, held by Kennedy-Wilson, saw 34 condos move. Starting bids ranged from $165,000 to $395,000 at that event. Kennedy-Wilson will also operate the Market Lofts auction.
"This is a business in which a developer wants to sell their units as fast as they can, and for as much as they can," says Lee, adding that he believes buyers want to get back into the market. "[Lee Homes] and CIM made a decision to do this auction...it wasn't taken lightly."
Additionally, the developers have an obvious financial stake in seeing Market Lofts sell out: Homeowners association and property fees must be paid for on the unsold units, and marketing staff must be employed.
But to the all important question of prices: More information about starting bids and the auction itself ("It'll be slightly different than the Rowan," according to Lee), will be made available in the next few days, but we're told that starting bids for one-bedrooms (roughly in the 740 square foot range) will start in the $140,000-$160,000 range.
That's a big drop (but keep in mind the word "auction" can be used loosely by developers).
But here's the contrast to current prices: The web site for Market Lofts is advertising one-bedrooms starting in the $300,000s. The last big sale we covered at Market Lofts was back in summer 2008, when prices dropped $60,000-$80,000.
Updates on the auction and how it'll go down will be posted this weekend.