Dan Rafter from Midwest Real Estate News interviews Friedman’s National Director of Investment & Loan Sale Advisory Services, Barry Swatsenbarg, on the growing popularity of the online auction format in selling commercial real estate:
Barry Swatsenbarg is a believer in the online commercial real estate auction. And so is the company for which he works as a director, Farmington Hills, Mich.-based Friedman Integrated Real Estate Solutions.
The Michigan company has sold several commercial properties through the auction format, many thanks to a partnership with Auction.com. Most recently, Friedman closed a three-day online auction of 13 multi-family assets made up of 3,000 units in four states, Ohio, Tennessee, Arizona and Alabama.
The online sale generated an aggregate dollar volume of more than $160 million.
Swatsenbarg says that the online auction format brings benefits to both sellers and buyers.
“Look at it from the point of view of the buyers. In the auction format, buyers are bidding only against themselves,” Swatsenbarg says. “They don’t have to worry about brokers making deals with competing buyers.”
Then there’s the transparency of the auction format. There are no surprises for buyers.
“You see in real time what people are bidding,” Swatsenbarg said. “If you get the winning bid, you don’t feel that you were duped into paying above what the market bears.”
For sellers, the online auction format offers the lure of the guaranteed sale, something not to be taken for granted in today’s challenging commercial real estate market.
The online auction format has been so effective for Friedman, Swatsenbarg says that he expects the company to rely on it more frequently in the coming years.
“This format has the potential to be a game-changer in this industry,” Swatsenbarg said. “In the auction format, thanks happen fairly and they happen fast. People in the industry appreciate that.”